Announcement PDF IMPACT MINERALS LIMITED (and Controlled Entities) ABN 52 119 062 261 HALF-YEAR FINANCIAL REPORT 31 December 2022 CONTENTS DIRECTORS’ REPORT ........................................................................................................................................................... 2 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................. 6 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 .......................................... 7 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 ............................................................................................................................................................. 8 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 ............................................................................................................................................. 9 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 ........................................................................................................................................................... 10 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 ........................................................................................................................................... 11 DIRECTORS’ DECLARATION............................................................................................................................................ 19 INDEPENDENT AUDITOR’S REVIEW REPORT ........................................................................................................... 20 HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 1 of 21 DIRECTORS’ REPORT Your Directors submit the financial report of the consolidated entity for the half-year ended 31 December 2022. DIRECTORS The names of directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated. • • • • Peter Unsworth – Non-Executive Chairman Michael Jones – Managing Director Paul Ingram – Non-Executive Director Frank Bierlein – Non-Executive Director PRINCIPAL ACTIVITIES The principal activity of the Group during the financial year was exploration for deposits of nickel, gold, copper and platinum group elements mostly within Western Australia. REVIEW OF OPERATIONS Arkun Nickel-Copper-PGM Project, WA (IPT 100%) The following work has recently been completed across the Arkun-Beau-Jumbo Project areas: 1. An extensive airborne HELITEM electromagnetic and magnetic survey comprising 920 line kilometres was completed on 7 blocks covering the priority soil geochemistry targets identified at Beau and Arkun. Final survey data has now been received and further processing and interpretation of the data is underway. 2. Extensive time has been spent completing Land Access Agreements with landowners through the Beau and Arkun areas. A total of 25 agreements have been signed which cover the majority, of the Ni-Cu-PGE targets in the northern part of the project area and negotiations are underway for the remaining targets in the southern part of the area. In general, there has been a very good response from landowners in allowing exploration to commence. 3. As a result of the Land Access Agreements, Impact has been able to complete several campaigns of field checking, soil geochemistry and rock chip sampling across some of the priority targets for Ni-Cu-PGE. A total of 949 soil samples and 171 rock chip samples have been collected and submitted for assay. Further soil geochemistry is in progress. 4. Reconnaissance field checking and rock chip sampling has been completed along the main access road at Jumbo to follow up first pass soil geochemistry results. These samples have also been submitted for assay. Four significant soil geochemistry anomalies have been identified at Beau. The geological terrain, which is very poorly explored, is permissive for significant mineralisation of the types identified, and Impact considers the results from its exploration targeting work in this region thus far highly encouraging. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 2 of 21 DIRECTORS’ REPORT Commonwealth Gold-Silver-Zinc-Lead-Copper Project, NSW (IPT 100%) Impact agreed to sell a 75% stake in its Commonwealth Project in the Lachlan copper-gold province of NSW to Burrendong Minerals Limited, a private company looking to list on the ASX in 2023 (ASX Release 8th August 2022). Burrendong has until 29 March 2023 to raise seed capital for an IPO. Broken Hill Project, NSW (IPT 100%) IGO Joint Venture (IGO earning a 75% interest in EL7390 and EL8234) One diamond drill hole was completed at the Yellowstone prospect, part of the greater Platinum Springs project area, which lies at the southern end of the Moorkai Trend, a nine-kilometre-long ultramafic to mafic dyke and chonolith complex that is very poorly explored (ASX Release 16th November 2022). The drill hole tested a significant electromagnetic (EM) conductor identified by IGO in an extensive ground EM survey completed across the project area earlier this year (ASX Release 3rd March 2022). The drill hole intersected a narrow zone of sulphide breccia comprising pyrrhotite and pyrite with trace copper sulphide and zinc sulphide. Assays, are expected late this Quarter. IGO has indicated that it will now complete a further ground EM survey over the Little Darling Creek prospect and await assays before deciding on the next steps. BHP XPLOR Impact recently announced that it had been selected as one of the inaugural participants in the BHP Xplor programme, principally to fund exploration at the Company’s Broken Hill Project. Impact was one of just 7 successful (out of 249) applicants. The Company sees this as a strong endorsement of both the quality of the application and the proposed program. BHP Xplor, an accelerator program introduced by BHP in August 2022, is designed to help provide participants with the opportunity to accelerate their growth and the potential to establish a long-term partnership with BHP and its global network of partners. Impact will receive up to US$500,000 in cash payments from BHP over the next six months and gain access to a network of internal and external experts to help guide development in the company's technical, business and operational aspects. The BHP Xplor funding will be used to identify new target areas for copper and other energy metals around the Broken Hill area, where Impact has been quietly adding to its ground position for several years. Impact believes that there is significant untapped exploration potential at Broken Hill for copper mineralisation and has been working with world-renowned geologist Prof. Tony Crawford on a new model for copper associated with mafic intrusions that are part of the Broken Hill Group rocks. This is a different exploration model to that being pursued by Impact’s joint venture partner IGO Limited on EL7390 and EL8234, which are excluded from the program and comprise a tiny portion of Impact’s tenements in the area (ASX release 9th November 2021). The funding, to be spent over the next six months, will be primarily directed at developing a new, detailed three-dimensional model of the geology of the region based on new insights gained by Impact during its work there over the past ten years, together with an interpretation of magnetic and gravity data. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 3 of 21 DIRECTORS’ REPORT Under the Xplor program agreement between BHP and Impact, BHP does not acquire an equity interest in Impact or any project. However, Impact commits to certain exclusivity and pre-emption regimes concerning investments in Impact or its projects and data sharing provisions about the six-month program. Hopetoun, WA (Impact earning 80%) The Hopetoun Joint Venture lapsed in the December quarter. Narryer, WA (Impact 80%) Two field visits to the Narryer project, prospective for REE, gold and lithium, were completed with reconnaissance field checking, soil geochemistry sampling and grab sampling completed. Assays are due in March 2023. Other Projects (Impact 80%) Work progressed on analysing the previous exploration results at the Dinninup, Mineral Hill, Dalgaranga and Narryer projects. At Doonia soil geochemistry results, along with drill assay results were received and are being interpreted. FINANCIAL PERFORMANCE AND FINANCIAL POSITION During the half-year the Group reported an operating loss after tax of $2,015,967 (half-year to 31 December 2021: loss of 1,083,540). As at 31 December 2022 the Group had net assets of $16,851,514 (30 June 2022: $18,557,017) including $2,109,147 of cash and cash equivalents (30 June 2022: $3,816,089). HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 4 of 21 DIRECTORS’ REPORT AUDITOR’S DECLARATION Section 307C of the Corporations Act 2001 requires our auditors, Hall Chadwick WA Audit Pty Ltd, to provide the directors of the company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on the following page and forms part of this directors’ report for the half-year ended 31 December 2022. This report is signed in accordance with a resolution of the Board of Directors. Peter Unsworth Chairman Perth, 8 March 2023 Competent Person’s Statement The review of exploration activities and results contained in this report is based on information compiled by Dr Mike Jones, a Member of the Australian Institute of Geoscientists. He is a director of the Company and works for Impact Minerals Limited. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Dr Jones has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears. Forward Looking Statements This document may contain certain forward-looking statements. Forward-looking statements include but are not limited to statements concerning Impact Minerals Limited’s (Impact’s) current expectations, estimates and projections about the industry in which Impact operates, and beliefs and assumptions regarding Impact’s future performance. When used in this document, words such as “anticipate”, “could”, “plan”, “estimate”, “expects”, “seeks”, “intends”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. Although Impact believes that its expectations reflected in these forward-looking statements are reasonable, such statements are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the control of Impact and no assurance can be given that actual results will be consistent with these forwardlooking statements. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 5 of 21 To the Board of Directors AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 As lead audit director for the review of the financial statements of Impact Minerals Limited for the half-year ended 31 December 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of: • the auditor independence requirements of the Corporations Act 2001 in relation to the review; and • any applicable code of professional conduct in relation to the review. Yours faithfully, HALL CHADWICK WA AUDIT PTY LTD Dated this 8th day of March 2023 Perth, Western Australia MARK DELAURENTIS CA Director CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 CONSOLIDATED Notes 31 Dec 2022 $ 31 Dec 2021 $ Interest and other income 3 22,192 2,840 Other income 3 5,000 114,859 27,192 117,699 Employee benefits expense (474,749) (746,778) Corporate and administration expenditure (446,515) (349,932) Depreciation and amortisation expense (9,297) (8,505) Occupancy (33,538) (40,297) (1,079,060) (55,727) (2,015,967) (1,083,540) - - (2,015,967) (1,083,540) (13,750) 367,500 Other comprehensive income (net of tax) (13,750) 367,500 Total comprehensive loss for the period (2,029,717) (716,040) Total comprehensive loss attributable to the owners of Impact Minerals Limited (2,029,717) (716,040) Cents per share Cents per share (0.08) (0.05) Impairment of exploration expenditure 7 Loss before income tax expense Income tax expense Net Loss from continuing operations Other comprehensive income / (loss) Items that will not be reclassified to profit or loss Change in the fair value of financial assets 6 Loss attributable to the owners of Impact Minerals Limited Basic Profit/(Loss) per share 13 The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 7 of 21 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 CONSOLIDATED Notes 31 Dec 2022 $ 30 Jun 2022 $ Current Assets Cash and cash equivalents 2,109,147 3,816,089 Trade and other receivables 78,813 107,172 Other current assets 49,147 76,013 3,482,942 3,482,942 5,720,049 7,482,216 208,750 222,500 18,413 27,710 11,173,359 11,195,288 289,055 273,055 Total Non-Current Assets 11,689,577 11,718,553 TOTAL ASSETS 17,409,626 19,200,769 Trade and other payables 414,193 508,446 Short-term provisions 143,919 135,306 Total Current Liabilities 558,112 643,752 TOTAL LIABILITIES 558,112 643,752 16,851,514 18,557,017 Assets held for sale 4 5 Total Current Assets Non-Current Assets Financial assets at fair value through other comprehensive income 6 Property, plant and equipment Exploration expenditure 7 Other non-current assets Current Liabilities NET ASSETS EQUITY Issued capital 8 58,426,867 58,426,867 Option reserve 8 1,643,830 1,406,016 Financial asset reserve 9 58,750 72,500 (1,161,069) (1,161,069) Accumulated losses (42,116,864) (40,187,297) TOTAL EQUITY 16,851,514 18,557,017 Transactions with non-controlling interest The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 8 of 21 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 Transactions with nonFinancial asset controlling reserve interest Issued capital Option reserve $ $ $ 53,787,639 901,996 45,000 Loss for the period - - - - (1,083,540) (1,083,540) Other comprehensive income - - 367,500 - - 367,500 Total comprehensive loss for the half-year - - 367,500 - (1,083,540) (716,040) Balance at 1 July 2021 $ Accumulated losses Total equity $ $ (1,161,069) (37,940,790) 15,632,776 Transactions with owners in their capacity as owners Fair value of options issued - 581,000 - - - 581,000 Fair value of options expired - (152,800) - - 152,800 - Balance at 31 December 2021 53,787,639 1,330,196 412,500 (1,161,069) (38,871,530) 15,497,736 Balance at 1 July 2022 58,426,867 1,406,016 72,500 (1,161,069) (40,187,297) 18,557,017 Loss for the period - - - - (2,015,967) (2,015,967) Other comprehensive income - - (13,750) - - (13,750) Total comprehensive loss for the half-year - - (13,750) - (2,015,967) (2,029,717) Transactions with owners in their capacity as owners Fair value of options issued - 324,214 - - - 324,214 Fair value of options expired - (86,400) - - 86,400 - 58,426,867 1,643,830 58,750 (1,161,069) (42,116,864) 16,851,514 Balance at 31 December 2022 The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 9 of 21 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 CONSOLIDATED 31 Dec 2022 $ 31 Dec 2021 $ (670,012) (571,160) 6,891 3,217 (663,121) (567,943) - (5,467) Payments for exploration activities (1,093,821) (1,418,365) Proceeds from the sale of tenements 50,000 165,000 - (110,000) (1,043,821) (1,368,832) Proceeds from issue of shares - - Share issue costs - - NET CASH FLOWS FROM FINANCING ACTIVITIES - - Net increase/(decrease) in cash and cash equivalents (1,706,942) (1,936,775) Cash and cash equivalents at beginning of the period 3,816,089 3,415,778 2,109,147 1,479,003 Notes CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received NET CASH FLOWS USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Payments for the acquisition of tenements NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 4 The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 10 of 21 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES a) Basis of Preparation These general-purpose financial statements for the interim half-year reporting period ended 31 December 2022 have been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting. This interim report is intended to provide users with an update on the latest annual financial statements of Impact Minerals Limited and its controlled entities (the consolidated entity). As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the consolidated entity. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the consolidated entity for the year ended 30 June 2022, together with any public announcements made during the half-year. Except for Note 1(b) the accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. The half-year financial statements have been prepared on the historical cost basis, except where stated. For the purpose of preparing the half-year financial statements, the half-year has been treated as a discrete reporting period. b) New accounting standards and interpretations The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an annual accounting period that begins on or after 1 July 2022. The adoption of the new and revised Standards and Interpretations have not had a material impact on this half-year financial report. c) Going Concern The interim financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Consolidated Group generated a loss for the period of $2,015,967 (2021: loss of $1,083,540) and net cash outflows from operating activities of $663,121 (2021: $567,943). As at 31 December 2022 the Consolidated Group had a cash balance of $2,109,147 (30 June 2022: $3,816,089). The ability of the Consolidated Group to continue as a going concern is principally dependent upon the ability of the Company to secure funds by raising capital from equity markets and managing cashflow in line with available funds. These conditions indicate a material uncertainty that may cast significant doubt about the ability of the Company to continue as a going concern. In the event the above matters are not achieved, the Company will be required to raise funds for working capital from debt or equity sources. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 11 of 21 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 The directors have prepared a cash flow forecast which indicates that the Consolidated Group will have sufficient cash flows to meet all commitments and working capital requirements for the 12-month period from the date of signing this financial report. Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate. In particular, given the Company’s history of raising capital to date, the directors are confident of the Company’s ability to raise additional funds as and when they are required. Should the Consolidated Group be unable to continue as a going concern it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due. NOTE 2: SEGMENT REPORTING Management has determined that the Group has one material reportable segment, being mineral exploration in Australia. The Board has considered the requirements of AASB 8 Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Managing Director) in allocating resources and have concluded at this time that there are no separately identifiable segments. NOTE 3: INTEREST AND OTHER INCOME Interest income Gain on sale of tenements Other income 31 Dec 2022 $ 31 Dec 2021 $ 22,192 5,000 2,840 114,859 - 27,192 117,699 31 Dec 2022 $ 30 Jun 2022 $ 184,147 1,925,000 3,791,089 25,000 2,109,147 3,816,089 NOTE 4: CASH AND CASH EQUIVALENTS Cash at bank and on hand Short-term deposits HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 12 of 21 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 NOTE 5: ASSETS HELD FOR SALE Tenements held for sale 31 Dec 2022 $ 30 Jun 2022 $ 3,482,942 3,482,942 3,482,942 3,482,942 In April 2022, the Company announced that it had sold Mining Lease ML 2386 to Peter Campbell FT PtyLtd (“PCFT”) an unrelated Company for $30,000. The Company also granted PCFT an option (“Option”) to buy all of the shares in Blackridge Exploration Pty Ltd (“Blackridge” a wholly owned subsidiary of Impact). The assets of Blackridge are three exploration licences EPM26806, EPM27410 and EPM27571. PCFT paid the non-refundable Option Fee of $50,000 in August 2022 and has two years to exercise the Option. Upon exercise of the Option, PCFT will pay $350,000 for the shares in Blackridge and the Company will retain a 1% gross gold royalty after the first 5,000 ounces have been recovered from any of the tenements. At 31 December 2022 the Blackridge tenements were held at their fair value ($342,942). In August 2022 the Company announced that it had agreed to implement a Share Purchase Agreement (“SPA”) with Burrendong Minerals Limited (“Burrendong”) whereby Burrendong would acquire 75% of the shares in Impact’s wholly owned subsidiary Endeavour Minerals Pty Ltd (“Endeavour”). The principal assets of Endeavour are the Commonwealth Project tenements (EL8504, EL8505, EL5874, EL8212 and EL8252). Burrendong intends to list on the ASX. Burrendong paid Impact an initial non-refundable exclusivity fee of $25,000 for eight weeks. This exclusivity period has since been extended to 29 March 2023. At 31 December 2022 the Company’s 75% interest in the Commonwealth tenements was held at their fair value ($3,140,000). NOTE 6: FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME 31 Dec 2022 $ 30 Jun 2022 $ Opening balance Additions Change in fair value 222,500 (13,750) 145,000 50,000 27,500 Closing balance 208,750 222,500 The fair value of listed financial assets at fair value through profit and loss has been determined directly by reference to published price quotations in an active market, with movement in fair value recognised in other comprehensive income. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 13 of 21 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 NOTE 7: EXPLORATION EXPENDITURE Capitalised cost at the beginning of the period Exploration expenditure incurred during the period Sale of the Blackridge Project Sale of 75% interest in the Commonwealth Project Impairment expense for the period 31 Dec 2022 $ 30 Jun 2022 $ 11,195,288 1,057,131 (1,079,060) 11,993,262 3,939,357 (475,420) (3,140,000) (1,121,911) 11,173,359 11,195,288 Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Of the total impairment charge of $1,079,060, $964,233 relates to the Hopetoun Project. The Hopetoun Project was a joint venture with a private company in which Impact was earning an 80% interest. A significant drill programme was completed to test priority targets in early to mid-2022 as part of an option to proceed to a full joint venture agreement. No significant results were returned from the programme and Impact elected not to proceed to the full joint venture. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 14 of 21 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 NOTE 8: ISSUED CAPITAL Ordinary shares fully paid 31 Dec 2022 $ 30 Jun 2022 $ 58,426,867 58,426,867 a) Movements in ordinary shares on issue HALF-YEAR ENDED 31 DEC 2022 No. $ At the beginning of the period YEAR ENDED 30 JUN 2022 No. $ 2,481,370,556 58,426,867 2,023,794,919 53,787,639 (a) - - 166,666,667 2,000,000 - Rights issue - - 290,908,970 3,199,999 - - - (560,771) 2,481,370,556 58,426,867 2,481,370,556 58,426,867 - Placement (b) - Transaction costs At the end of the period (a) In March 2022, the Company raised $2,000,000 (before costs) via a placement of 166,666,667 new shares at an issue price of 1.2 cents each. (b) In June 2022 the Company completed a Renounceable Rights Issue raising $3,199,999 (before costs) via the issue of 290,908,970 new shares at an issue price of 1.1 cents each together with one free attaching listed option exercisable at $0.02 on or before 2 June 2024 for every two new shares subscribed for (145,454,389 Listed Options). A further 12,800,000 listed options were issued to the underwriter as part consideration for their services. b) Movements in options on issue HALF-YEAR ENDED 31 DEC 2022 No. $ YEAR ENDED 30 JUN 2022 No. $ At the beginning of the reporting period 365,754,389 1,406,016 157,000,000 901,996 Options issued - unlisted 85,000,000 324,214 90,500,000 606,900 - - 158,254,389 49,920 (20,000,000) (86,400) (40,000,000) (152,800) 430,754,389 1,643,830 365,754,389 1,406,016 Options issued - listed Options expired At the end of the reporting period HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 15 of 21 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 NOTE 9: FINANCIAL ASSET RESERVE 31 Dec 2022 $ 30 Jun 2022 $ Financial asset reserve Opening balance Financial assets at fair value through other comprehensive income (Note 6) 72,500 45,000 (13,750) 27,500 Closing balance 58,750 72,500 NOTE 10: SHARE BASED PAYMENTS On 24 November 2022, 53,000,000 unlisted options were granted to Directors (or their nominees) following shareholder approval at the 2022 Annual General Meeting. On 7 December 2022, 32,000,000 unlisted options were issued to employees under the Company’s Director and Employee Acquisition Plan. The fair value of options granted was determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share and the risk-free rate for the term of the option. The following table lists the model inputs for the options granted during the half-year ended 31 December 2022: Inputs Issue 50 Issue 51 Number of options 53,000,000 32,000,000 Exercise price $0.0125 $0.0125 Grant date 24 Nov 2022 7 Dec 2022 Expiry date 30 Nov 2025 30 Nov 2025 Vesting date Immediate 6 Dec 2023 Share price at grant date $0.009 $0.008 Historical volatility 114% 115% Risk-free interest rate 3.16% 3.07% Expected dividend yield 0% 0% The share-based payment expense for the half-year was $324,214 (2021: $581,000). NOTE 11: CONTINGENCIES There has been no change in contingent liabilities or assets since the annual reporting date. HALF-YEAR FINANCIAL REPORT 31 DECEMBER 2022 Page 16 of 21 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2022 NOTE 12: COMMITMENTS In order to maintain an interest in the