Alara Resources Limited
Annual Report 2023

Plain-text annual report

Alara Resources Limited Suite 1.02, 110 Erindale Road, Balcatta, Western Australia 6021 T +61 8 9240 4211 / E info@alararesources.com www.alararesources.com Annual Report 30 June 2023 Alara Resources Limited Suite 1.02, 110 Erindale Road, Balcatta, Western Australia 6021 T +61 8 9240 4211 / E info@alararesources.com www.alararesources.com Annual Report 30 June 2023 REGISTERED OFFICE: Suite 1.02, 110 Erindale Road Balcatta, Western Australia 6021 PO Box 963 Balcatta, Western Australia, 6914 T I +61 8 9240 4211 F I +968 2449 2491 E I info@alararesources.com W I www.alararesources.com SHARE REGISTRY: 110 Stirling Highway Nedlands, Western Australia 6009 PO Box 1156 Nedlands, Western Australia 6909 T I + 61 8 9389 8033 F I + 61 8 9262 3723 E I admin@advancedshare.com.au W I www.advancedshare.com.au Level 6, 225 Clarence Street Sydney, New South Wales 2000 PO Box 01736, 0ueen Victoria Building New South Wales 1230 T I +61 2 8096 3502 ASX Code: AUQ Alara Resources Limited A.B.N. 27 122 892 719 Annual Report Annual Report 2023 MISSION STATEMENT To increase shareholder value as a leading explorer and producer of base metals and other minerals in the Middle East. Managing Director’s Letter............................................ ............................................ Projects Overview ............................................................. ............................................................. Board of Directors ............................................................. ............................................................. Management Team ......................................................... ......................................................... Directors' Report ............................................................... ............................................................... Auditor's Independence Declaration ....................... ....................... Consolidated Statement of Profit or Loss ............... ............... Consolidated Statement of Financial Position ........ Consolidated Statement of Changes in Equity .... .... Consolidated Statement of Cash Flows ................. ................. Notes to the Financial Statements ............................ ............................ Auditor's Report to Shareholders .............................. .............................. Securities Information .................................................... .................................................... Compliance Information ............................................... ............................................... Corporate Directory ......................................................... ......................................................... 04 05 24 28 39 63 64 65 67 69 70 111 106 108 116 Contents 1 Annual Report Annual Report 2023 2 Core Values i Excellence We will pursue excellence and will strive for best practice combined with a fit-for- purpose approach through continuous improvement and teamwork in all aspects of our business. To achieve our goals, we will ensure our employees and business partners have the appropriate skills and resources to perform their work effectively and efficiently. We will foster an open and supportive environment in all activities and relationships. Integrity Alara and its employees are committed to fairness and honesty and operate with transparency and accountability across all levels of business. Respect Alara values and shows consideration for its employees, business partners, custom- ers, suppliers, governments, communities, and the social and economic environment in which it operates. Managing Director’s Letter DEAR SHAREHOLDERS It’s an exciting time for Alara Shareholders and Management, with copper concentrate production from our flagship Al Wash-hi – Majaza Copper-Gold project in Oman to begin shortly. There is a buzz of excitement around the team as it grows rapidly in preparation for the transition to operations mode. On behalf of the Alara Resources Board of Directors I thank AHRL CEO Avigyan Bera and his Project team, along with our Omani partners Al Naba and Al Tasnim, for their skilful and tireless efforts which have enabled us to approach the first major milestone in our growth vision –achieving production status. Alara acknowledges the strong support of His Majesty Sultan Haitham bin Tariq, Sultan of Oman and his government, particularly the Ministry of Energy and Minerals, in bringing this Project to its current advanced state of construction. The Omani Government in general has taken a proactive approach in facilitating the development of mining in that country. Alara has also enjoyed ongoing support from local communities around the Wash-hi Majaza mine. They are keenly awaiting commencement of production in the expectation that they will share in the benefits which it will bring to the area. Alara’s future is one of great opportunity. Although the short-term copper price is off the historic highs of recent years, forecasts are for new records to be set from 2025 as the transition to a renewable energy future gains more momentum. Alara is well positioned to benefit from copper price upside, with the sale of all production from the Project for the first 8 years locked in, at a price based on market at the time of delivery. Once Al Wash-hi – Majaza Mine copper production is “bedded down”, the Company will renew its focus on growing and developing its mineral properties portfolio. Opportunities to be considered may include acquiring advanced-stage exploration assets. Cash flow from copper sales will enable Alara to ramp up the search for our next potential mine, as we move to implement our mission of becoming a mid-tier base metals production company in the Middle East. Alara has engaged a new investor relations team to more effectively promote our achievements to existing and potential new shareholders. The Company has adopted a new logo and image to coincide with the major milestone of transitioning to a mining producing company. I look forward to continuing to work to grow Shareholder value over the coming year as Alara undergoes a major uplift in its status and embarks on the next phase of its dynamic growth journey. Yours sincerely Atmavireshwar Sthapak Managing Director 4 Annual Report Annual Report 2023 Projects Overview JV partner AHI is part of Al Naba Services LLC Group, the leading integrated facility management company in Oman. owned joint venture company Al Hadeetha Resources LLC (AHRL) 51% Alara’s 51% owned joint venture company Al Hadeetha Resources LLC (AHRL) is developing a 1Mtpa copper concentrator plant1 at the Al Wash- hi – Majaza Copper-Gold mine in Oman. The other shareholders in AHRL are Al Hadeetha Investment LLC (AHI) (holding a 30% share) and Al Tasnim Infrastructure (ATI) (holding 19%). AHI is part of the well-known Omani conglomerate Al Naba Services Group, owned by Sayyid Khalid bin Hamed Al Busaidi and family. JV partner AHI is part of Al Naba Services LLC Group, the leading integrated facility management company in Oman. ATI represents the Al Tasnim Group, one of the largest construction and infrastructure conglomerates in Oman. AHRL is the first JV with an international participant to be awarded a copper mining license in Oman. AHRL holds the Al Hadeetha Mining License at Wash-hi – Majaza covering 3km2, within the Wash-hi Exploration License area. Below: Copper-Gold processing plant construction in progress (mid-October 2023) 1 Alara’s ASX Announcements dated 1 April 2016 (Definitive Feasibility Study results initial announcement), 24 January 2017 (DFS update), 28 June 2018 (NPV update) and 29 March and 7 April 2021 (NPV updates) contain the information required by ASX Listing Rule 5.16 regarding the stated production target. All material assumptions underpinning the production target as announced on those dates continue to apply and have not materially changed, except to the extent that a relevant assumption in an earlier announcement referred to above has been updated by an assumption in a later announcement referred to. 5 Annual Report Annual Report 2023 Key components of the copper concentrate production unit are nearing completion. The following is the progress to completion of the major disciplines: Mechanical Installation – 92.55% Steel Erection – 96.98% Electrical Works – 68% Instrumentation – 43% Pipe Erection – 48% Overall construction progress achieved so far – 84.35% (as of 07 October, 2023). Project commissioning is scheduled to commence in Q4 2023 from the Primary Crushing Section. The following section of this Report depicts key aspects of Project infrastructure construction. 6 Annual Report Annual Report 2023 Wash-hi – Majaza Copper-Gold Project Retaining wall & ROM Pad 7 Annual Report Annual Report 2023 Mine-site accommodation camp The mine site accommodation village, which can accommodate 325 personnel, was opened in January 2022. It currently houses the mine-site construction workforce. When infrastructure is complete the village will house the permanent mine workforce. The village comprises a range of facilities including gymnasiums, sporting fields, a prayer hall (mosque), recreation halls, mine operations offices and a testing laboratory. The accommodation village is designed for a minimum life of 12 years. This is comfortably above the current estimated Project life of 10.4 years, giving the Company increased flexibility if further copper discoveries are made along the strike zone or in nearby areas. Process water supply The water supply requirement identified in the feasibility study was reduced by amending the Project design to adopt a dry tailings system. AHRL has executed a binding agreement with Oman Water & Wastewater Services Company SAOC (OWWSC) to secure the daily 1200 cubic-meters of process water supply required for the life of the Project. Under this agreement (OWWSC) will supply water to the copper concentrator plant from its sewage treatment plants (STP) located close to the Wash-hi Majaza project site, at a fixed charge for the first five years. Under the agreement AHRL has invested in upgrading the capacity of an STP located at Al Mudhaibi town to 1800 cubic-meters per day capacity. Upgrading the STP is now complete. AHRL’s investment in the upgrade will be recovered over the life of the contract through discounted water charges. An 18,000 cubic-metre water storage reservoir has been constructed on site. As part of its ESG program, AHRL is engaging with local communities; offering them contracts for water tankers to transport the water from STP to the Project site. Power supply Project power requirements will be met by two feeders from Omani electricity company MZEC to a substation on the Project site. The testing and inspection of the incoming feeder lines and the substation is complete and a report has been submitted to MZEC for approval. Once approval is received, AHRL will submit the notification for shut down to enable the final connection to be made, followed by energising the substation. The adoption agreement with MZEC is expected to have been executed by the time this Report goes to print. Mining Mining commenced in March 2022, to begin stockpiling ore in readiness for processing infrastructure completion. Topsoil from the mining pit is stockpiled for post-mining rehabilitation. Mining activities are conducted in two 10- hour shifts per day. As of the end of September 2023, approximately 7.5 million tonnes of overburden had been removed and approximately 31,000 tonnes of copper ore had been mined, in addition to approximately 533,000 tons of oxidized ore (gossan) mined and stockpiled separately. Excavation in the ore body is now proceeding rapidly. A total of 300,000 tons of copper ore is projected to be mined by the end of calendar 2023. The image on the right shows mining pit excavation. Alara’s 35% owned JV company Alara Resources LLC (ARL) has a contract to perform mining services for AHRL over ten years, at a cost of approximately USD 126m (AUD 190.9m). 8 Annual Report Annual Report 2023 3D pit limits and orebody view. (Looking east-northeast. Wash-hi gossan in background) Below: Al Wash-hi – Majaza mine pit (mid-October 2023) 9 Annual Report Annual Report 2023 PROJECT ECONOMICS Copper price outlook The copper price has fallen this year due to global inflationary concerns. Despite that, the path to a sustained and dramatic increase in world demand for this metal is locked in, to meet the urgent need to decarbonise the economy. Insufficient new projects are scheduled to come online in the medium term to meet this demand. Leading financial services company Citi predicts that demand will outstrip supply by approximately 6 Mtpa, a quarter of forecast demand, by 2030. Source: Citi Definitive feasibility study results Alara completed an initial definitive feasibility study (DFS) for the Project in 2016. The DFS financial model was revised in 2018 and in 20212 to take account of copper price rises. Revised DFS projected returns at 29 March 2021 based on a range of copper price scenarios are set out in the table below. As a comparison, the LME spot copper price was USD 8000 per tonne on 12 October 2023. The table shows, however, that if the copper price returns to USD 9500 per tonne, below its 2022 high of USD 10,000, predicted Project NPV would increase by approximately 150%. If the best-case medium-term price forecast is met, predicted NPV will increase by approximately 350%. Additional parameters from the revised DFS are set out in the Directors' Report, at page 40. 2 See Alara’s ASX announcements dated 29 March and 7 April 2021. The Announcements dated 1 April 2016 (initial Definitive Feasibility Study results announcement), 24 January 2017 (DFS update), 28 June 2018 (NPV update) and 29 March and 7 April 2021 (NPV updates) contain the assumptions and other information required by ASX Listing Rule 5.17 regarding forecast financial information in this section of this Report. All material assumptions underpinning the forecast information as announced on those dates continue to apply and have not materially changed, except where to the extent that a relevant assumption in an earlier announcement has been updated by an assumption in a later announcement in the list. Project Parameter Value (USD) Copper Price (per tonne) 7,000 7,500 8,000 8,500 9,000 9,500 10,000 12,000 15,000 Revenue (m) 569 604 639 674 709 743 778 918 1127 EBITDA (m) 208 241 273 306 338 370 403 533 727 NPV (m) 54 71 88 104 121 137 154 221 321 IRR (%) 24 24 33 36 40 43 46 58 73 10 10 Annual Report Annual Report 2023 Annual Report Annual Report 2023 Projects Overview Omani Copper Portfolio OMANI COPPER LICENCES In addition to its interests in the Al Wash-hi – Majaza Project licences, Alara holds four other mining license applications pending grant, totalling 7km2. In total, Alara has joint-venture interests in five Copper-Gold exploration licenses in Oman, covering an area of 1,186km2. The figure below shows the locations of the Company’s exploration licenses in Oman, including JV license areas. The Company’s current understanding is that all existing Exploration Licenses (ELs) were merged with new exploration blocks recently announced by the Government of Oman, which it proposes to re-award by a competitive bid process. Alara has secure tenure over areas for which it has applied for Mining Licenses within its existing EL areas. Alara is lobbying the Government to have its existing ELs renewed in the course of preparing new proposals for the award of certain, larger EL blocks. Alara has secured tenure over areas for which it has applied for Mining Licenses within its existing Exploration License (EL) areas. Oman Copper Block & Alara JV Exploration Licenses in Oman Alara has joint-venture interests in five Copper- Gold exploration licenses in Oman. 1,186km 2 11 11 Annual Report Annual Report 2023 The Ministry of Energy and Minerals of the Sultanate of Oman announced it will auction four exploration blocks for the grant of mining concessions. Alara and its partners in AHRL have submitted bids for all four blocks, which are primarily designated for copper and base metal exploration and mining. Evaluation of these bids is currently in progress. Al Hadeetha Resources’ projects The AHRL JV was formed in 2011 by Alara and AHI to explore and develop the Wash-hi, Mullaq and Al Ajal copper-gold concessions and surrounding regions. Al Tasnim joined the JV in 2018. Since 2011, Alara-led exploration in these areas has identified substantial copper resources. Mining license applications have been submitted within each exploration license area. The Al Wash-hi – Majaza mining licence was granted in 2018. The table below shows the status of all AHRL licenses, which together form the Al Hadeetha Copper-Gold Project (also known as the Wash-hi – Majaza Project). Al Hadeetha JV licenses Licence Name License owner Alara JV Interest Exploration Licenses Mining License within EL Area Grant Date Expiry Date Status Area Application Date Status Wash-hi Majaza AHRL 51% 39km 2 Jan 2008 Jan 2016 Renewal in progress 3km 2 Dec 2012 Granted Mullaq AHRL 70% 41km2 Oct 2009 Oct 2016 Renewal in progress 1km 2 Jan 2013 Pending Al Ajal AHRL 70% 25km2 Jan 2008 Jan 2016 Renewal in progress 1.5km 2 Jan 2013 Pending Note: 1 The Company’s current understanding is that existing exploration licenses (ELs) were merged with new exploration blocks recently announced by the Omani Government, which it proposes to re-award by a competitive process. Alara has secure tenure over areas for which it has applied for Mining Licenses within its existing EL areas. Alara is lobbying the Government to have its existing ELs renewed in the course of preparing new proposals for the award of certain, larger EL blocks. Wash-hi Exploration Licence and Washi-hi Majaza Mining Licence areas The Wash-hi – Majaza copper deposit is within the Wash-hi Exploration License area, approximately 160 km SE of Muscat via a sealed road. It is distinguished by a gossan hill in the centre of a gravel plain. 12 12 Annual Report Annual Report 2023 Mineral reserves and resources AHRL has conducted an extensive exploration program in the mining licence area, resulting in the discovery of Mineral Resources and Ore Reserves specified below. The figures in the tables below are the results of a review of the Company’s Mineral Resources and Ore Reserves at 30 June 2023. There was no change to the figures in those tables over the 12 months to that date. Mineral resources summary – 0.25% Cu cut-off3 Ore reserve statement3 Additional copper potential The Wash-hi exploration license has significant potential for the discovery of additional copper deposits. Most of the area around the Wash-hi – Majaza mining licence is covered by ancient and recent alluvial fans. Based on the premise that sulfide mineralisation in the area is coincident with a distinct reduction in the magnetic susceptibility values of basaltic rocks, four other targets have been identified for further follow-up, as shown in the next figure. It is proposed to follow-up these areas with electrical geophysical methods (EM or IP) to confirm the target potential followed by drilling. Potential RTP magnetic regional exploration targets in Wash-hi licenses Resource Tonnes (m) Cu % Indicated 12.4 0.89 Inferred 3.7 0.79 Total 16.1 0.87 JORC Category Tonnes (m) Cu % Au g/t Probable Reserve 9.70 0.88 0.22 3 Refer to Alara’s 19 September 2016 ASX Announcement for full disclosure of the Mineral Resources and Alara’s 15 December 2016 ASX Announcement for full disclosure of the Ore Reserves, as required by the JORC Code 2012. The Ore Reserve is included within the Indicated Mineral Resource. Competent Statements for these Mineral Resources and Ore Reserves are on page 108 of this Report. 13 13 Annual Report Annual Report 2023 Mullaq mining license application in progress With the grant of a mining license and the development of a copper concentrator plant at the nearby Wash-hi Majaza, any high-grade deposit delineated at Mullaq could be developed on a “hub-and-spoke” basis, with ore from the project being trucked to the processing plant at the first mentioned project once it is complete. A mining license application at Mullaq submitted in 2013 has progressed through various Ministries in Oman. The Omani Ministry of Energy and Minerals (MEM), under its revision of the processes for granting mineral licences, is reviewing old mining license applications. There is a reasonable expectation that mining licenses over areas such as Mullaq, in which Alara has carried out exploration to identify mineralisation, will be secured for AHRL. Projects Overview Mullaq Exploration Licence The Mullaq Exploration License area is adjacent to Wash-hi Majaza Exploration License. The Mullaq prospect lies within the Oman Mountains, approximately 160 kilometres south-east of Muscat via sealed road. Previous explorers in the Mullaq License area discovered copper mineralisation in layered gabbro sequence, yet a large part of the tenement still remains unexplored. So far, no resource modelling has been conducted at Mullaq, however geophysical surveys and drilling campaigns by Alara have identified the presence of potential mineral deposits in the area. Exploration Targets – Mineralisation Exploration Targets at Mullaq are estimated purely based on the size, geological perception and structural interpretation of the geophysical target, and without any other obvious geochemical or lithological or geo-statistical support. Anticipated (conceptual) copper and gold mineralization targets in the Mullaq license area are shown in the following table. Geophysical surveys and drilling campaigns by Alara have identified the presence of potential mineral deposits in the area. South-East of Muscat via sealed road. 160km 14 14 Annual Report Annual Report 2023 RTP magnetics regional exploration targets in Mullaq license areas 15 15 Annual Report Annual Report 2023 Projects Overview Al Ajal Exploration Licence The Al Ajal Prospect is located near the village of Al Ajal in the Taww area, near the northern coast of the Sultanate of Oman and about 65km west of Muscat. Alara carried out ground geophysical surveys over limited areas to confirm the geophysical signatures of mineralisation. west of Muscat.. 65km Exploration potential – future opportunities Preliminary exploration confirmed the presence of two more areas of potential positivity in similar geological trends. The Al Ajal prospect is unique, as it is considered to be the only known mineral occurrence in Oman Mountains not to be associated with the ophiolite volcanics of Oman. Despite its small size and difficult terrain, in Geological map showing prospective areas within Al Ajal Exploration License 16 16 Annual Report Annual Report 2023 view of the high gold grades detected by previous explorers, this prospect warrants further exploration for copper and gold-bearing deposits. Mining License Application A mining license application at Al Ajal submitted in 2013 has progressed through various Ministries in Oman. AHRL considers the grant of a mining licence clearance as a key prerequisite to further exploration work in the area. The MEM, under its revision of the processes for granting mineral exploration licenses, is reviewing old mining license applications. There is a reasonable expectation that mining licenses over areas such as Mullaq, in which Alara has carried out exploration to identify mineralisation, will be secured for AHRL. The remainder of this page is intentionally blank. 17 17 Annual Report Annual Report 2023 Projects Overview Daris Resources LLC Copper-Gold Project OVERVIEW Daris Resources LLC is a 50-50 joint venture between Alara and Al Tamman Trading Establishment LLC. The Daris Project comprises of one exploration licence (Block 7) of ~587km2 located approximately 150km West of the Omani capital Muscat. By conducting extensive exploration programs in Block 7, the Daris JV has defined resources at Daris East Prospect to measured category under JORC, identified mineralisation at the Daris 3A5 prospect and several exploration targets. Two Mining Licence applications filed over Daris East and Daris 3A-5 prospects within the exploration licence remain pending. The table on the following page provides details of licenses at Daris. Recent site visits conducted by Ministry officials gave positive indications for these applications advancing towards issuance. Daris Resources LLC is a 50-50 joint venture between Alara and Al Tamman Trading Establishment LLC West of the Omani capital Muscat. 150km Block 7 Exploration License and Mining License application areas 18 18 Annual Report Annual Report 2023 Daris License details DARIS EAST PROJECT The Mineral Resources at the Daris East Project are outlined below. The figures in the table below are the results of a review of the Company’s Mineral Resources at 30 June 2023. There was no change to the figures in those tables over the 12 months to that date. Daris East Project copper resource4 The following drilling has been carried out at the Daris East Project: • A total of 21 rotary (624m) and 41 diamond core (4,654m) holes totalling 5,278m have been drilled by Alara to test shallow oxide mineralisation and to locate massive sulphide and stringer zones beneath the oxide cap at the Daris East prospect and to test geophysical targets in the vicinity. • In addition, historic drilling data from 44 holes totalling 4,353m has been included in the resource database. Ore type Cut-off grade Measured Indicated Measured and Indicated Inferred Cu% Tonnes Cu% Tonnes Cu% Tonnes Cu% Tonnes Cu% Sulphides 0.50 129,155 2.48 110,870 2.24 240,024 2.37 30,566 2.25 Oxides 0.50 96,526 0.77 86,839 0.66 183,365 0.72 1,712 0.61 4 The Mineral Resources at the Daris East Project were estimated under the JORC Code 2004 edition (JORC 2004) in effect at the time. The initial report of those Mineral Resources, in a manner required by JORC 2004, is in Alara's 2012 Annual Report released on ASX on 1 November 2012. The Competent Person’s statement for these Mineral Resources is on page 108 of this Report. Block Name Licence Owner Alara JV Interest Area Exploration Licence Mining Licence within EL Date of Grant Date of Expiry Status Area Date of Application Status Block 7 Al Tamman Trading and Est. LLC 50% (earn in to 70%) 587km2 Nov 2009 Feb 2016 Renewal pending* Daris 3A5 & East Resubmitted 2018 Pending Block 8 Awtad Resources LLC 10% (earn in to 70%) 597km2 Nov 2009 Oct 2013 Renewal pending NA NA NA 19 19 Annual Report Annual Report 2023 Preliminary drilling at Daris 3A5 has intersected high-grade copper mineralisation. Alara plans to conduct further drilling before making an updated resource estimation. The drill hole location map and intersection table are set out below. Daris 3A5 drillhole results are set out in the table below. Daris 3A5 Drill-hole locations Drill Hole Significant Mineralisation Mineralised Zone Intersections From (m) To (m) Length (m) Cu% Au (g/t) Ag (g/t) D3DC001 Primary 15 37.65 22.65 1.61 3.39 50.68 Inclusion 30 37.65 7.65 4.69 3.71 77.95 D3DC002 Primary 28.4 46.25 17.85 3.85 2.61 22.51 Inclusion 34.35 46.25 11.9 5.74 2.06 24.07 Primary 50.6 59 8.4 4.45 1.36 20.34 Inclusion 50.6 54.05 3.45 10.28 3.1 46.79 D3DC003 Primary 41 71.75 30.75 4.69 1.56 16.75 Inclusion 51.5 68.7 17.2 8.05 2.67 28.95 20 20 Annual Report Annual Report 2023 Daris 3A5 drillhole results continued: Significant intersections from core drilling – Daris 3A5 prospect Notes: • The cut-off grade is 0.2% Cu is in respect to intersections within the copper-rich zone. • The drill intercepts are reported as drilled. True thickness will be calculated at the interpretation and resource modelling stage. Next steps The grant of the Mining License and construction of mine and copper concentrator plant at Wash-hi Majaza has provided the Company with a basis to further develop its copper exploration programs at Daris. Optional analysis study and an advanced scoping study conducted in 2014 identified multiple options for Daris East resources to underpin further work in Block 7. Fresh negotiations with Ministry of Energy and Minerals are progressing well for grant of Mining Licenses at Daris East and Daris 3A5. The Ministry, in light of its intention to revise the processes of grant of mineral exploration licenses has taken up review of old applications for mining licenses. It’s an expectation that areas such as Daris where Alara has carried out exploration to identify copper mineralisation and resources shall be secured. The remainder of this page is intentionally blank. Drill Hole Significant Mineralisation Mineralised Zone Intersections From (m) To (m) Length (m) Cu% Au (g/t) Ag (g/t) D3DC008 Primary 23 35.8 12.8 0.74 6.62 31.11 Inclusion 33.5 35.8 2.3 3.92 5.2 106.37 D3DC009 Primary 21 31 10 0.07 3.34 5.41 Inclusion 23 25 2 0.06 7.13 23.67 Primary 36 39 3 0.85 0.01 1.23 D3DC010 Primary 57 67 10 5.62 1.16 17.82 Inclusion 59.35 65.7 6.35 8.58 1.78 27.48 21 21 Annual Report Annual Report 2023 Projects Overview Awtad Resources LLC Copper Project OVERVIEW The Awtad Project is located immediately adjacent to the Licence Area No. 7 (Block 7) comprising the Daris Copper-Gold Project and comprises a mineral exploration licence (Block 8) of approximately 497km2. Alara currently holds 10% interest and has the right to increase to 70% shareholding in Awtad Copper LLC. Alara has previously undertaken exploration activity on Block 8. Rock chip samples returned multi-elemental enrichment of up to 2.68% Cu, 2.4ppm Ag, and 0.1% Zn, indicating a potential base metal deposit under the surface. Alara expects to conduct further exploration on this property in the coming year. Alara has an initial 10% interest in the Project and a right to increase to a 70% shareholding. The Awtad Project is located immediately adjacent to the Licence Area No. 7 497km 2 Block 8 Exploration License location 22 22 Annual Report Annual Report 2023 Alara Resources LLC – Mining Services Company OVERVIEW Alara Resources LLC (ARL) is a Joint Venture between Alara Oman Operations Pty Ltd (35%), a wholly owned subsidiary of Alara Resources Limited, Southwest Pinnacle Exploration Ltd (SWPE) an established Indian exploration and mining Company listed on the National Stock Exchange India (35%) and Al Tasnim Infrastructure LLC (30%), a privately owned Omani company from the Al Tasnim group, one of the largest construction and general industrial conglomerates in Oman. Demand for exploration and general drilling in Oman returned to its usual level after a slow-down due to COVID-19. ARL has two drill rigs and associated accessories and is actively seeking and obtaining work in this sector. EXPLORATION AND MINING SERVICES ARL recently completed a two-phase drilling contract at a limestone license in Oman. ARL is also registered as an approved services provider to Minerals Development of Oman Company (MDO) the Omani Government’s exploration and mining company. ARL is receiving and responding to invitations to tender for exploration drilling for base metals and industrial minerals projects from MDO and various other projects from other parties in Oman. ARL was also awarded a ten-year mining contract at AHRL’s Wash-hi – Majaza project, as detailed further in the section of this report concerning that project, above. 23 23 Annual Report Annual Report 2023 Barrister and Solicitor of the High Court of Australia Appointed Non-Executive Chairman on 2 July 2020 Appointed Non-Executive Director on 28 June 2020 Non-Executive Director from 11 January to 22 November 2019 Experience Stephen Gethin has 30+ years of experience in the provision of corporate legal advice and 15+ years of experience in the provision of ASX-listed secretarial services in a range of industries, including resources, technology and investment. Prior to founding a private legal practice in 2013, he served as General Counsel and Company Secretary of Strike Resources Limited (ASX:SRK) and before that held the same roles at ERG Limited (ASX:ERG). Special Responsibilities Chairman of the Remuneration and Nomination Committee and Member of the Audit Committee Other Directorships in Listed Companies in Past 3 Years - Nil Bachelor of Applied Science and Master of Technology, Applied Geology Appointed Managing Director on 28 July 2020 Appointed Executive Director on 3 February 2016 Previously Non-Executive Director (22 September 2015 to 3 February 2016) Experience Atmavireshwar Sthapak is a geologist specialising in mineral resource exploration and evaluation studies. He joined Alara in 2011 as an Exploration Manager and led geological investigations in Oman. His contribution resulted in identification of copper mineralisation in four tenements, definitions of JORC resources at Wash-hi and Daris East, and applications for mining licences over five areas. AV was later instrumental in acquiring the mining license for the Al Hadeetha Copper-Gold Project in Oman. In July 2020, Mr Sthapak was appointed Managing Director, leading the company’s new future in copper production. Prior to joining the Company, Mr Sthapak’s career spanned 10 years with ACC/ ACC-CRA Ltd as exploration geologist and project manager, and 10 years with Rio Tinto (Australasia) Exploration and Rio Tinto Diamond, where he was awarded a Rio Tinto Discovery Award in 2009. He has worked on world- class deposits and mines in Australia, and gold and diamond mines on four continents. Mr Sthapak is an active member of AusIMM. Other Directorships in Listed Companies in Past 3 Years - Nil Board of Directors The names and details of the directors of the Company in office during the financial year and until the date of this report are as follows. STEPHEN GETHIN Non-Executive Director and Chairman ATMAVIRESHWAR STHAPAK Managing Director 24 24 Annual Report Annual Report 2023 MBA Appointed 6 April 2016 Experience Vikas Jain has 19 years of experience in the field of mineral exploration, mining, oil-field exploration and allied activities. He is currently Managing Director and CEO of the Indian Company South West Pinnacle Exploration Limited (SWPE), founded by him in 2006 and listed on the National Stock Exchange, India. Under his leadership and able guidance, SWPE has continued to grow and at present is a premier exploration company in India. Mr Jain also has wide experience in the open-cut mining of various minerals and allied activities through his earlier roles with other companies, as well as his current involvement in other family run businesses and interests. Special Responsibilities Chairman of the Audit Committee and Member of the Remuneration and Nomination Committee. Other Directorships in Listed Companies in Past 3 Years South-West Pinnacle Exploration Limited, listed on the National Stock Exchange, India. MBA (Finance & Marketing), IMT Ghaziabad, India; BE (Metallurgy), VNIT Nagpur, India Appointed 23 October 2020 Experience Sanjeev Kumar has extensive Australian and international business experience, with a specialisation in high-value asset finance lending. He is currently a director of Tradexcel Global Pty Ltd, an Australian company which he co- founded in 2017, that helps ANZ businesses in expanding into the overseas markets by assessing new markets, navigating entry barriers, business strategy & planning, local partnerships etc. His previous roles include Vice President at India Factoring & Finance Solutions (a subsidiary of Fimbank), Associate Vice President at Tata Capital Financial Services, India and Manager, Infrastructure Division at ICICI Bank Limited. Other Directorships in Listed Companies in Past 3 Years - Nil VIKAS JAIN Non-Executive Director SANJEEV KUMAR Non-Executive Director 25 25 Annual Report Annual Report 2023 Appointed 2 February 2022 Experience Ms. Khimji is the Managing Director of Al Tasnim Group. Al Tasnim is a major all-service group in the Omani construction industry, with over 30,000 employees. The Group leads the Omani construction industry in contracting, manufacturing of cement products, building finishes products and roads, asphalt and infrastructure works, among other product offerings. Ms. Khimji is experienced in leading and growing a wide range of businesses, establishing profitable relationships with clients and suppliers across the world. She has previously served as Managing Director of India Circus Pvt. Ltd, an online lifestyle products retailer in India. She is also a pioneer of fitness club/ gym management systems, becoming a very successful entrepreneur in the software and e-commerce industries. Other Directorships in Listed Companies in Past 3 Years - Nil Appointed 2 February 2022 Experience Mr Masani has 30+ years experience in the ever-evolving construction industry. He has a strong track record of creating and growing businesses in a competitive environment, with a commitment to the principles of excellence through innovation and teamwork. Mr Masani has extensive commercial expertise and in-depth knowledge of civil construction, HVAC, plumbing, firefighting, electrical systems design and project management. Other Directorships in Listed Companies in Past 3 Years - Nil DEVAKI KHIMJI Non-Executive Director FARROKH JIMMY MASANI Alternate Director Board of Directors (Continued) 26 26 Annual Report Annual Report 2023 DINESH AGGARWAL Company Secretary Company Secretary FCPA, CA, CMA, FTI, DipFS (Advanced) Appointed 2 July 2020 Experience Mr Aggarwal has over 20 years’ experience in accounting, finance and business management both in Australia and overseas, and is the Founder and Managing Director of Fortuna Advisory Group – an award-winning, multi- disciplinary practice with Tax & Business Advisory, Legal Services, Mortgage Broking and Financial Planning divisions. Mr Aggarwal advises clients in Australia and overseas on tax matters and business services, and advises the Australian operations of several multi- nationals. He also handles tax disputes with the ATO including appeals to the AAT. He is the former Chairman of the Public Practice Committee of CPA Western Australia and is currently a member of the National Public Practice Advisory Committee of CPA Australia. Named as one of Australia’s top three SME Tax Advisers in 2015 by the Tax Institute, Mr Aggarwal has also won the prestigious CPA Australia 40 Under 40 Young Business Leaders Award for 2012 and 2013, and has won numerous other awards. Other Directorships in Listed Companies in Past 3 Years - Nil 27 27 Annual Report Annual Report 2023 MOHAMMAD KHALID QAMAR General Manager- Operations (AHRL) B.Tech, Chemical Engineering Mr. Khalid has over 14 years of diverse experience in operations, projects, and commissioning of process plants in India and Oman. Prior to joining AHRL, he has worked with leading resource companies like Hindustan Zinc Limited and Strategic and Precious Metals Processing (SPMP), Oman. He has overseen a wide range of functions including manufacturing, industrial safety and project engineering. Currently he is working to develop the Operation and Maintenance team for AHRL’s Copper Processing plant and also overseeing the overall operational readiness for successful and sustainable operation of the processing plant. Management Support Team The names and details of the management of the Company in office during the financial year and until the date of this report are as follows. AVIGYAN BERA CEO (AHRL) BTech, PEngg (SAIMECHE) Mr. Bera has more than 17 years of experience in handling EPC Projects in India and overseas. He had been involved in projects right across the globe in various countries like India, Zambia, South Africa, Liberia, Namibia, Mongolia, Iran, UAE, Bulgaria and Morocco. He started his career in Process Engineering for Mineral Beneficiation Plants and Complex Chemical Process Plants, then migrated to Project Management & Business Development activities in India, Africa & Middle East regions. Mr Bera joined AHRL in June 2020. He brings in all the experience and technical know-how for executing Owner Managed Projects through his key knowledge in process engineering, project execution and overall management skills. 28 28 Annual Report Annual Report 2023 NISHU KHAN Mechanical Maintenance Lead (AHRL) B.Tech, Mechanical Engineering (Aligarh Muslim University) Mr. Nishu has 14+ years of diverse experience in maintenance, commissioning, and project operations. He worked with leading companies such as Hindustan Zinc Limited and Vedanta Resources, prior to joining AHRL. Nishu has wide experience in Alumina Refinery, Aluminium Smelter, Zinc and Lead Beneficiation Plant, Silver Refinery, Zinc & Lead Casting and Melting Unit and Thermal Power Plant. He has been engaged in initiating, implementing, and managing the plant maintenance program based on best practices in the industry, with an emphasis on planning & scheduling and preventive & predictive maintenance. He has a good command in ERP systems such as SAP PM and MM modules. He is certified in First Aid from the Red Cross Society, Aluminium Smelter Training Certification from Chalco Guangzhou - China, Hydraulics and Pneumatics Maintenance Certification from CRISP, Conveyor Maintenance Certification from Martin, Hydraulics Level-2 Maintenance Certification from EATON, Coating and Lining Certification by MARCEP and many others. MOBASHIRUL HUDA HSE Manager (AHRL) B.SC(Biotech), PG Dip In Industrial Safety Management, NEBOSH International Diploma Occupational Health & Safety (NVQ level 6), NEBOSH International General certification, IOSH Managing Safely, IMS Internal auditor (DNV Dubai) Mobashirul Hoda has over 15 years of experience in managing major projects of Oil & Gas, Aluminium Smelter, Civil construction, Cross Country Pipe line & process plant, Waste management & Water Treatment Plant in Qatar, Saudi Arabia, UAE & India He possesses strong working knowledge of HSE risks, opportunities, and requirements, good understanding of HSE-related national and international laws, municipality regulations and industry best practices, excellent communication skills and a strong personality with ability to implement procedures at sites and the ability to interact with site management and subcontractors in all HSE matters. 29 29 Annual Report Annual Report 2023 Management Support Team (Continued) LAKSHMAN R MUTHYAM Procurement Officer, Company Secretary (AHRL) B.Sc (C.S.) A.U. Mr. Muthyam has a wide range of experience in IT, Administration, Corporate Governance, and Procurement with 9+ years of experience in India and Oman. Mr. Muthyam joined AHRL in 2019 and currently oversees the Procurement and Corporate Governance and IT of AHRL and its affiliated group companies. He also has a key role in developing and improving corporate information management systems and infrastructure across all group companies. He leads the entire procurement effort for the Wash-hi Majaza Copper-Gold Project in Oman. Along with his bachelor’s degree in science, he also holds certified courses in Contract Law and Justice from Harvard University and Micro Masters in Business Management from IIM, Bangalore. REXIN KAMILAS Finance and Administrative Manager BACS, M.Com, Tally Mr. Kamilas is a Business Administration and Accounts Manager having 16+ years of Administration and Accounts experience in Oman and India. He joined Alara Resources in 2011 and has been involved in business activities related to company administration, banking, Insurance, finance, procurements, and logistics, tax compliance and tenders. Mr. Kamilas has utilised his experiences and skills in improving the administrative and finance system in the organisation and providing his full support to the team to build a robust management system as a solid foundation for future corporate developments. 30 30 Annual Report Annual Report 2023 AMJAD AL SHARJI HSE Manager Dip (Civil Engg.), IOSH, NEBOSH Mr. Amjad Al Sharji is an experienced HSE Manager with over 6 years of experience in various sectors in Oman. He joined AHRL in October 2021. Prior to this, he worked as a consultant with MMC and dealt with a number of electricity companies such as OETC and Mazoon. He holds a set of professional HSE training certificates. He has experience in electrical safety, stations, transmission lines, electrical transfers, hilly areas, construction, and food safety. He worked to reduce the incidence of accidents, risks and environmental damage and participated in developing safety standards, raising awareness of the importance of health and safety. B.Com, Chartered Accountant (CA) Rajesh Gandhi has over 11 years of experience in finance and accounting in India. He joined AHRL in March 2021 as finance controller. He has a key role in budgeting control, finance, MIS, VAT of AHRL. He was associated with an MNC company in India engaged in mining, processing & manufacturing of Bentonite minerals, bauxite & allied mineral products. He has been involved in various business operations related to the overall Finance function, MIS reports, forex transactions, Letter of Credit, taxation matters, finalization of financial statements, budget control, compliances with regulatory authorities & overall accounting. RAJESH N GANDH Finance Controller 31 31 Annual Report Annual Report 2023 Management Support Team (Continued) ZAHRA ALBATTASHI Electrical Maintenance Lead (AHRL) Dip Acctg. and Bus. Admin. (Muscat College) Ms. Albattashi has over 4 years’ experience in the field of reception, office administration and foreign exchange. She joined the company in March 2022. She handles SAP data entry and serves as the Company’s liaison with Government departments for project-related licences. Prior to joining AHRL she worked for the Superior Care C.O. LLC in administration and accounting and, prior to that, worked at an international currency exchange, handling exchange transactions and transferring money. MARWAN ABDULLAH AL BUSAIDI Project Control Manager / Govt Relations Office Bachelors in Arts and Science, Geography & Population Studies. Mr. Marwan Abdullah Al-Busaidi is an experienced in Technical and Administrative with over 6 years of experience in various sectors in Oman. He joined AHRL in August 2022 and has since been involved in many aspects of the business including managing the utilities providers in Oman, managing import- export requirements and customs clearance, taxation regulations, working with Oman Vision 2040 Implementation (ISFU), and major Ministries. Mr. Marwan plays in key role in maintaining infrastructure operations, ensuring compliance with government policies, control of project documentation and applications for government licenses and permits. Mr. Marwan holds a set of professional training certificates in Population and Social Statistics & Survey. 32 32 Annual Report Annual Report 2023 ASILA AHMED SAID AL HARTHY Environmental Engineer Chemical Engineer Ms. Asila Al-Harthy has been part of Al-Hadeetha Resources since November 2022 and is a Chemical Engineer with experience in oil refineries and environmental assessment. She has strong expertise in oil refineries and chemical industries. She has been involved in environmental research combating the environmental impact of mining. She focuses on monitoring Environmental Impact Assessment such as noise and emissions monitoring, air quality, ground water quality, handling chemicals and handling waste in most environmentally sustainable manner. Bachelors in Human Resources & Marketing Ms. Lujaina Al-Balushi is a Human Resources manager, she joined AHRL February 2023 after graduating from the Modern College of Business & Science with Bachelors in Human Resources & Marketing. Prior to working with AHRL, Ms. Lujaina worked in Customer Service in compliances such as Bank Dhofar and Al Saher Company. LUJAINA ALBALUSHI Human Resource Manager 33 33 Annual Report Annual Report 2023 MOHAMMAD IMROZ AHMAD Process Superintendent B.Tech (Chemical Engineering) and MBA (Business Analytics) Mr. Mohammad Imroz has 15+ years of diverse experience in project commissioning, operations, procurement, and technical services in the metal & mining industries in India. Before joining AHRL, he worked with leading metal & mining companies in India such as Hindalco Industries (Aditya Birla Group) where he was involved in process and technical services for 10+ years. Before ABG he was associated with Vedanta Resources Plc for 5 years and worked in different units like Pantnagar Precious Metal Plant, Vedanta Alumina Refinery, and Aluminium Smelter. He has extensive experience in greenfield and brawn field projects and commissioning. He has significant experience in CAPEX & OPEX planning, training & development, and system implementation in the plant. Management Support Team (Continued) MIRZA RIAJ BAIG Electrical Maintenance Lead (AHRL) B.Tech, Electrical Engineering Mr. Mirza has over 14 years of experience in Commissioning, Operations & Maintenance in Metal & Mining industries in India and Saudi Arabia. He has worked with leading companies like Kirloskar Ferrous, Vedanta Aluminium, Ma’aden Bauxite & Alumina Company, and Tata Power. He has an extensive background in plant maintenance activities in Metal, Mining & Power sector. He has been responsible for Critical Troubleshooting, Emergency Power Restoration and Maintenance work execution with utmost Safety standard. Currently he is leading the electrical team for overall plant operation and maintenance. 34 34 Annual Report Annual Report 2023 Mineral Licences AL HADEETHA AND DARIS COPPER-GOLD PROJECTS Alara has joint venture interests in five copper-gold deposits located within four Exploration Licences in Oman, extending over 692km2. These deposits are also covered by five Mining Licence applications pending grant, totalling approximately 9km2. The Wash-hi and Mullaq prospects are located approximately 160km South-Southwest of Muscat, the capital of Oman. The Al Ajal Prospect is located about 65 km Southwest of the Capital. The Daris Copper-Gold Project is located approximately 150km West of Muscat. These projects/prospects are all located on, or very close to, high-quality bitumen roads. The current status of all licences/applications for this project is presented in the table below. Copper Resources Cu % Cut off Tonnes(M) Tonnes(M) Tonnes (M) Copper (Cu) % Gold (Au) g/t Tonnes (M) Copper (Cu) % Gold (Au) g/t 0.20 12.40 0.89 0.22 3.70 0.78 0.23 0.25 12.40 0.89 0.22 3.70 0.79 0.23 0.30 12.40 0.89 0.22 3.70 0.79 0.23 0.40 12.20 0.90 0.22 3.50 0.81 0.24 0.50 11.40 0.93 0.23 3.00 0.88 0.25 35 35 Annual Report Annual Report 2023 Resource Tonnes (m) Cu % Indicated 12.4 0.89 Inferred 3.7 0.79 Total 16.1 0.87 Gossan hill mineralisation – Gold5 Note: Mineral Resources are not Mineral Reserves. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. Mineral Resources reported in accordance with the JORC 2012. The Cu-Au Resource is stated as having a 0.25% Cu cut-off grade. The gold resource in the Gossan hill (outside the main ore body) has a 0.25 g/t Au cut-off grade.   Wash-hi copper-gold resources summary @ 0.25% Cu cut-off6 5 The figures in this table are the results of a review of the Company’s Mineral Resources at 30 June 2023. There was no change to the figures in that table over the 12 months to that date. Refer to Alara’s 15 December 2016 ASX Announcement for initial disclosure of this Mineral Resource as required by the JORC Code 2012 edition. The Competent Person’s statement for this Mineral Resource is on page 108 of this Report. 6 Refer Alara’s 15 December 2016 ASX Announcement: Maiden JORC Ore Reserves – Al Hadeetha Copper-Gold Project Cu % Cut off Inferred Resource Kt Au g/t k/Oz 0.05 440 0.40 5.66 0.10 420 0.40 5.40 0.15 410 0.40 5.27 0.20 350 0.50 5.63 0.25 310 0.50 4.98 0.30 270 0.50 4.34 0.35 260 0.60 5.02 0.40 220 0.60 4.24 0.45 200 0.60 3.86 0.50 150 0.60 2.89 0.05 440 0.40 5.66 0.10 420 0.40 5.40 36 36 Annual Report Annual Report 2023 JORC Category Tonnes (m) Cu % Au g/t Probable Reserve 9.70 0.88 0.22 Indicated resources were converted to a probable ore reserve after the application of modifying factors, including pit optimisation, mine design and an economic evaluation7. The ore reserve estimate (based on a 0.3% Cu cut-off) and in-pit mineral inventory are shown in the tables below. Wash-hi ore reserve8 Wash-hi mining inventory The remainder of this page is intentionally blank. 7 Details of the modifying factors supporting the Ore Reserve are contained in Appendix 1 (JORC Code, 2012 Edition - Table 1) of the 15 December 2016 announcement. 8 The JORC competent person statement for the above resources and reserves is on page 108 of this Report. Classification Tonnes Mt Copper (Cu) % Gold (Au) g/t Ore reserve 9.7 0.88 0.22 Inferred resource 0.3 0.65 0.22 Total 10.00 0.87 0.22 37 37 Annual Report Annual Report 2023 Wash-hi – Majaza Copper-Gold Project Oxide ore in Wash-hi pit 38 38 Annual Report Annual Report 2023 Directors' Report The Directors present their report on Alara Resources Limited (Company or Alara or AUQ) and the entities it controlled at the end of or during the financial year ended 30 June 2023 (the Consolidated Entity). REVIEW OF OPERATIONS Al Wash-hi Majaza Copper-Gold Project - Oman (Alara - 51%: Al Hadeetha Investments LLC - 30%; Al Tasnim Infrastructure Services LLC 19% (AHRL)) PROJECT CONSTRUCTION NEARING COMPLETION Work on the Al Wash-hi Majaza copper-gold project in the Sultanate of Oman (Project) is nearing completion, which is scheduled for the final quarter of calendar 2023. When complete, the Project will produce copper concentrate through a 1 MTPA plant 9. The Project is owned by Alara's joint venture company Al Hadeetha Resources LLC (AHRL) in which the Company holds a 51% interest. As at 30 September 2023 (after the reporting period) mechanical equipment installation was 96% complete with electrical equipment installation 91% complete. Key components of the copper concentrate production unit, such as the reagent handling facility, had reached 95% completion in terms of mechanical installation. The primary crusher and concentrate dewatering reached 90%+ mechanical completion and the ROM pad and tailings dewatering had reached 85%+ completion. Other areas such as stockpile and reclaim, and grinding and classification are progressing rapidly. Dry commissioning of some of the key processing modules are also continuing. With commencement of production of copper concentrates, the Project will be a game-changer in the new era of copper mines being developed in the Sultanate of Oman in response to the rapidly growing world demand for copper to support the drive for sustainable energy. Copper offtake agreement signed In July 2023 (after the reporting period) AHRL signed an exclusive offtake deal (Offtake Agreement) with Trafigura Pte Ltd (Trafigura), a market leader in the global commodities industry. The long-term agreement covers production of copper concentrate from the Project (Project). The key commercial terms of the Offtake Agreement are: PROJECT FINANCE FACILITY As at the end of the reporting period, AHRL had an OMR 24.8m (AUD 97.327m) project finance facility from Sohar International to fund Project construction. The amount drawn down under the finance facility was OMR 16.9m (AUD 65.937m) at the end of FY 23. 9 Alara's ASX Announcements dated 1 April 2016 (initial Definitive Feasibility Study results announcement), 24 January 2017 (DFS update), 28 June 2018 (NPV update) and 29 March and 7 April 2021 (NPV updates) contain the information required by ASX Listing Rule 5.16 regarding the stated production target. All material assumptions under- pinning the production target as announced on those dates continue to apply and have not materially changed, except to the extent that a relevant assumption in an earlier announcement listed above has been updated by an assumption in a later announcement in that list. Eight years and two months from the commencement of copper concentrate production at the Project (Term). Full copper concentrate production of the Project for the Term Based on the official London Metal Exchange cash settlement quotation for Grade A copper at the time of delivery. TERM QUANTITY PRICING 39 39 Annual Report Annual Report 2023 PROJECT FINANCE FACILITY As at the end of the reporting period, AHRL had an OMR 24.8m (AUD 97.327m) project finance facility from Sohar International to fund Project construction. The amount drawn down under the finance facility was OMR 16.9m (AUD 65.937m) at the end of FY 23. DEFINITIVE FEASIBILITY STUDY (DFS) The Project DFS financial modelling was revised in the 2021 financial year 10 to take account of a copper price rise since the prior revision in 2018. Revised DFS projected returns, based on a range of copper price scenarios as at 29 March 2021 are set out in the table below. As a comparison, the LME spot copper price on 21 September 2023 was USD 8,345 per tonne: Copper Price Key Project parameters from the revised DFS are set out below: Project parameter Fundamentals Total pre-production capex USD 60m (including EPC, Project Management, STP & pipeline, power, road, and contingency) Mining method Open pit, 10.3 years Project construction 15 months First production 04 calendar 2023 11 Final production 2033 Processing rate 1 Mtpa Average annual concentrate production 35,000 (wmt) Total tonnes copper metal production 79,297 (t) Total gold ounces 21,825 (oz) Unit operating costs USD 31.2/t of processed material 10 See Alara's ASX announcements dated 29 March and 7 April 2021. 11 Revised from 04 calendar 2022 as a result of a Project schedule review. See Alara's ASX announcement dated 6 June 2022. Project Parameter Value (USD) Copper Price (per tonne) 7,000 7,500 8,000 8,500 9,000 9,500 10,000 12,000 15,000 Revenue (m) 569 604 639 674 709 743 778 918 1127 EBITDA (m) 208 241 273 306 338 370 403 533 727 NPV (m) 54 71 88 104 121 137 154 221 321 IRR (%) 24 24 33 36 40 43 46 58 73 40 40 Annual Report Annual Report 2023 Development of the mine is rapidly progressing at Alara's Wash-hi Majaza Copper-Gold Project 41 Annual Report Annual Report 2023 Licence Name License owner Alara JV Interest Exploration Licenses Mining License within EL Area Grant Date Expiry Date Status Area Application Date Status Wash-hi Majaza AHRL 51% 39km 2 Jan 2008 Jan 2016 Renewal in progress 3km 2 Dec 2012 Granted Mullaq AHRL 70% 41km2 Oct 2009 Oct 2016 Renewal in progress 1km 2 Jan 2013 Pending Al Ajal AHRL 70% 25km2 Jan 2008 Jan 2016 Renewal in progress 1.5km 2 Jan 2013 Pending Mineral Tenements The current status of all mineral tenements and applications for the Al Hadeetha Project is presented in the table below. Daris Copper-Gold Project - Oman (Alara - 50% with option to increase to 70%: Al Tamman Trading Establishment LLC - 50%, of Daris Resources LLC (DRL)) The Daris project comprises two high-grade copper deposits within the 587km2 exploration licence (Block 7), which includes two mining licence applications covering 4.5km2. This project fits well with Alara's preferred "hub and spoke" model, which provides for processing of Daris ore at the Wash-hi - Majaza copper concentration plant under construction. The Daris East Mining Licence application, which covers an area that includes measured, indicated and inferred JORC copper resources12, was opposed by the Ministry of Housing due to its proximity to recently allotted land. Review of a petition supporting the application lodged by Daris is now underway at the Ministry of Energy and Minerals and survey work has been proposed to resolve the objection from the Ministry. The Daris 3A5 Mining Licence application is progressing with the Government. Awtad Copper-Gold Project - Oman (Alara - 10% initially with option to increase to 70%; + existing local shareholders holding the balance of Awtad Copper LLC) The Awtad Project comprises an area of approximately 497 km2 (Block 8) and is located immediately adjacent to the Block 7 (Daris Copper-Gold Project). Alara has an initial 10% interest (potentially increasing up to 70%+) in the concession owner, Awtad Copper LLC. * The Company's current understanding is that all old exploration licenses (ELs) were merged with new exploration blocks recently announced by the Government of Oman. The areas within ELs held by Alara over which mining licences (MLs) had been applied for have been secured and are being processed separately as ML applications. Alara is lobbying the Government to get the old ELs renewed in the course of preparing new proposals for the award of certain, larger EL blocks. 12 The Company has disclosed full details of these resources to investors on various occasions in a form which complies with the 2012 edition of the JORC Code. See, for example, the Company's 2019 Annual Report to shareholders, pp 14-45 and 72-73. 42 42 Annual Report Annual Report 2023 Mineral Tenements The current status of all mineral tenements and applications for the Daris and Awtad Projects are presented in the table below. New Exploration - Oman The Omani Ministry of Energy and Minerals (Ministry) announced new process for issuing mining concessions based on competitive bids. The Ministry has divided Oman into eight major mineral blocks and several subblocks. It is seeking bids for seven of these blocks. Alara and several other companies have shown interest in participating in the process to bid for these new concession areas. Alara and its JV partners in Oman have lodged bids for mining concessions for copper, gold, silver, chrome and other related minerals. Previous exploration identified anomalies worthy of further exploration. The fact that prospective geological formations within the licence area are under cover of alluvial and aeolian deposits enhances the chances of further copper mineralisation. Detailed work plans have been submitted to the Ministry of Energy and Minerals for renewal of the exploration licence, which currently remain pending. Block Name Licence Owner Alara JV Interest Area Exploration Licence Mining Licence within EL Date of Grant Date of Expiry Status Area Date of Application Status Block 7 Al Tamman Trading and Est. LLC 50% (earn in to 70%) 587km2 Nov 2009 Feb 2016 Renewal pending* Daris 3A5 & East Resubmitted 2018 Pending Block 8 Awtad Resources LLC 10% (earn in to 70%) 597km2 Nov 2009 Oct 2013 Renewal pending NA NA NA * The Company's current understanding is that all old exploration licenses (ELs) were merged with new exploration blocks recently announced by the Government of Oman. The areas within ELs held by Alara over which mining licences (MLs) had been applied for have been secured and are being processed separately as ML applications. Alara is lobbying the Government to get the old ELs renewed in the course of preparing new proposals for the award of certain, larger EL blocks. 43 43 Annual Report Annual Report 2023 Corporate Information Alara is a company limited by shares incorporated in Western Australia. CASH POSITION The Company's cash position at the end of the reporting period was AUD 3.66m (prior period: AUD 2.45m). FINANCE During the reporting period Alara and its consolidated entities were parties to the following finance facility: In May 2023 Alara's 51% owned joint venture entity Al Hadeetha Resources LLC (AHRL) borrowed OMR 5.78 million (AUD 22.61 million at the exchange rate prevailing at the date of the loan) from Sohar International, and Omani bank. This loan was consolidated with AHRL's existing OMR 19 million loan facility with Sohar, bringing the total of that facility to 24.78 million (AUD 97 million13). PRINCIPAL ACTIVITIES The principal activities of entities within the Consolidated Entity during the year were the exploration, evaluation and development of mineral exploration licenses in Oman. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Consolidated Entity save as otherwise disclosed in this Directors' Report or the financial statements and notes thereto. DIVIDENDS No dividends have been paid or declared during the financial year. OPERATING RESULTS Consolidated 2023 AUD 2022 AUD Total revenue 25,297 11,169 Total expenses (2,757,689) (1,607,237 Profit/Loss before tax (2,732,392) (1,596,068) Income tax benefit - - Profit/Loss after tax (2,732,392) (1,596,068) 13 At the exchange rate prevailing at the date of the loan. 44 44 Annual Report Annual Report 2023 PROFIT/(LOSS) PER SHARE CASH FLOWS Consolidated 2023 2022 Basic profit/(loss) per share (cents) (0.27) (0.19) Diluted profit/(loss) per share (cents) (0.27) (0.19) Weighted average number of ordinary shares outstanding during the year used in the calculation of basic loss per share 715,810,289 705,429,239 Consolidated 2023 AUD 2022 AUD Net cash flow used in operating activities (1,554,524) (1,811,168) Net cash flow from investing activities (51,981,341) (17,590,507) Net cash flow provided by financing activities 54,690,693 17,359,449 Net change in cash held 1,154,828 (2,042,226) Effect of exchange rates on cash 52,126 250,202 Cash held at year end 3,656,745 2,449,791 45 45 Annual Report Annual Report 2023 Financial Position Outlined below is the Consolidated Entity's financial position and prior year comparison. Consolidated Entity 2023 AUD 2022 AUD Cash 3,656,745 2,449,791 Trade and other receivables 924,905 567,250 Exploration & evaluation 4,713,750 5,635,650 Mine properties & development assets 98,618,098 25,213,324 Investment in associates 151,558 98,920 Term deposits 802,710 1,036,625 Other current assets 142,440 194,451 Advances to subcontractors 5,990,040 9,145,263 Non-Current assets 2,660,045 645,927 Total assets 117,660,292 44,987,201 Trade and other payables 21,566,739 3,795,185 Unearned income - - Financial liabilities 66,837,435 18,151,549 Provisions 175,195 154,427 Total liabilities 88,579,369 22,886,040 Net assets 29,080,923 802,710 Issued capital 68,722,146 68,233,860 Reserves 14,254,956 12,469,929 Accumulated losses (59,292,998) (57,378,975) Parent interest 23,684,104 23,324,814 Non-controlling interest 5,396,819 (438,774) 46 46 Annual Report Annual Report 2023 Issued Capital Fully paid ordinary shares, listed options and unlisted options on issue in the Company as at the date of this report are as follows: 4,000,000 unlisted options held by chairman Mr. Stephen Gethin with an exercise price of $0.03 per share were exercised on 1 July 2022. Unlisted Options No unlisted options were issued during the reporting period. After the end of the reporting period 179,521,885 unlisted options were issued to Trafigura Pte Ltd, as security for a USD 3.45 million loan from Trafigura to Alara. These options are exerciseable only in the event of a default by Alara under that loan. Likely Developments and Expected Results During the 2023-24 financial year the Consolidated Entity intends to complete construction of mining and copper processing infrastructure for the Al Wash-hi Majaza Project, expected in October 2023. Upon project completion, the Company will commence the production and sale of copper and gold from the mine. Financial projections for the Al Hadeetha Project are set out on pages 87 - 88 of this Report. The Company intends to continue exploration, evaluation and development activities in relation to its other mineral exploration licences in Oman, and to apply for and participate in option processes for the award of further exploration licences in Oman and Saudi Arabia, in the 2023-24 financial year. The likely results of these activities will depend on a range of geological, technical and economic factors. Environmental Regulation and Performance The Consolidated Entity holds licences and abides by Acts and Regulations issued by the relevant mining and environmental protection authorities of the countries in which the Consolidated Entity operates. These licences, Acts and Regulations specify limits and regulate the management of discharges to the air, surface waters and groundwater associated with exploration and mining operations as well as the storage and use of hazardous materials. There have been no significant breaches of the Consolidated Entity's licence conditions. Fully paid shares quoted on ASX Listed options Unlisted options Total 718,087,541 - 187,020,885 723,309,289 Total 718,087,541 - 187,020,885 905,108,426 47 47 Annual Report Annual Report 2023 48 48 Annual Report Annual Report 2023 Alara is nearing completion of its 1 MPTA Copper Concentrate Production Unit as part of the Al Wash-hi Majaza Copper Gold Project 49 49 Annual Report Annual Report 2023 Directors' Interests in Shares and Options Director Fully Paid Ordinary Shares Options Stephen Gethin 1,500,000 - Atmavireshwar Sthapak 3,862,051 7,499,000 Vikas Jain 37,745,930 - Sanjeev Kumar - - Devaki Khimji - - Farrokh J Masani 10,676,187 - Directors' Meetings The number of meetings and resolutions of directors (including meetings of committees of directors) held during the year and the number of meetings (or resolutions) attended by each director were as follows: Name of Director Appointment / Resignation Board Audit Committee Remuneration and Nomination Committee Meetings Attended Max Possible Meetings Attended Max Possible Meetings Attended Max Possible Stephen Gethin Apptd. 28 June 2020 9 9 2 2 1 1 Atmavireshwar Sthapak Apptd. 22 September 2015 9 9 2 2 - - Vikas Jain Apptd. 6 April 2016 9 8 2 2 1 1 Sanjeev Kumar Apptd. 23 October 2020 9 9 - - - - Devaki Khimji Apptd. 2 February 2022 9 - - - - - Farrokh J Masani Apptd. 2 February 2022 9 9 - - - - 50 50 Annual Report Annual Report 2023 Audit Committee The Audit Committee currently comprises Non-Executive Directors Vikas Jain (Committee Chairman) (appointed 6 April 2016), Non-Executive Company Chairman Stephen Gethin (appointed 2 July 2020) and Managing Director Atmavireshwar Sthapak (appointed 28 September 2016). The Audit Committee has a formal charter to prescribe its objectives, duties and responsibilities, access and authority, composition, membership requirements of the Committee and other administrative matters. Its function includes reviewing and approving the audited annual and reviewed half-yearly financial reports, ensuring a risk management framework is in place, reviewing and monitoring compliance issues, reviewing reports from management and matters related to the external auditor. The Audit Committee Charter may be viewed and downloaded from the Company's website. The remainder of this page is intentionally blank. 51 51 Annual Report Annual Report 2023 Remuneration Report The information in this Remuneration Report has been audited. This Remuneration Report details the nature and amount of remuneration for each Director and Company Executive (being a Company Secretary or senior manager with authority and responsibility for planning, directing and controlling the major activities of the Company or Consolidated entity, directly or indirectly) (Key Management Personnel or KMP) of the Consolidated Entity in respect of the financial year ended 30 June 2023. Key Management Personnel Directors Stephen Gethin Chairman Atmavireshwar Sthapak Managing Director Vikas Jain Non-Executive Director Sanjeev Kumar Non-Executive Director Devaki Khimji Non-Executive Director Farrokh J Masani Alternate Director Executives Dinesh Aggarwal Company Secretary Avigyan Bera CEO, AHRL Appointed 15 October 2020) Remuneration and Nomination Committee The Remuneration and Nomination Committee currently comprises Non-Executive Board Chairman, Stephen Gethin (Committee Chairman, appointed 2 July 2020), Non-Executive Director, Vikas Jain (appointed 6 April 2016) and Managing Director Atmavireshwar Sthapak appointed 28 June 2016). The Remuneration and Nomination Committee has a formal charter to prescribe its purpose, key responsibilities, composition, membership requirements, powers and other administrative matters. The Committee has a remuneration function (with key responsibilities to make recommendations to the Board on policy governing the remuneration benefits of the Managing Director and Executive Directors, including equity-based remuneration and assist the Managing Director to determine the remuneration benefits of senior management and advise on those determinations) and a nomination function (with key responsibilities to make recommendations to the Board as to various Board matters including the necessary and desirable qualifications, experience and competencies of Directors and the extent to which these are reflected in the Board, the appointment of the Chairman and Managing Director, the development and review of Board succession plans and addressing Board diversity). The Remuneration and Nomination Committee Charter may be viewed and downloaded from the Company's website. Remuneration Policy The Board (with guidance from the Remuneration and Nomination Committee) determines the remuneration structure of all Key Management Personnel having regard to the Consolidated Entity's strategic objectives, scale and scope of operations and other relevant factors, including experience and qualifications, length of service, 52 52 Annual Report Annual Report 2023 market practice, the duties and accountability of Key Management Personnel and the objective of maintaining a balanced Board which has appropriate expertise and experience, at a reasonable cost to the Company. The Board recognises that the performance of the Company depends upon the quality of its Directors and Executives. To achieve its financial and operating objectives, the Company must attract, motivate and retain highly skilled Directors and Executives. The Company embodies the following principles in its remuneration framework: • Provide competitive rewards to attract and retain high calibre Executives. • Structure remuneration at a level that reflects the Executive's duties and accountabilities and is competitive. Remuneration Structure The structure of Non-Executive Director and Executive Director remuneration is separate and distinct. Director Remuneration OBJECTIVE The Board seeks to set aggregate remuneration (for Directors) at a level which provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders. STRUCTURE Each Non-Executive Director receives a fee for serving as a Director of the Company and on relevant Board Committees, if applicable. The level of each Non-Executive Director's fee is commensurate with the workload and responsibilities undertaken. According to the Company's Constitution and the ASX Listing Rules, the aggregate remuneration of Non-Executive Directors must not exceed an amount determined by the Shareholders from time to time at a General Meeting (Non-Executive Fee Pool). An amount up to the Non-Executive Fee Pool is then allocated among the Non- Executive Directors as Directors' fees, as determined by the Board on the recommendation of the Remuneration and Nomination Committee (Remuneration Committee). The Non-Executive Fee Pool, set by Shareholders at the Annual General Meeting held on 26 May 2011, is AUD 275,000 per annum. Shareholders determined the amount of the Non-Executive Fee Pool having regard to the recommendation of the Board. That recommendation was, in turn, based on the recommendation of the Remuneration Committee, made based on a consideration of fees paid to non- executive directors of comparable companies. Managing Director and Senior Executive Remuneration The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and so as to ensure total remuneration is competitive by market standards. Formal employment contracts are entered into with the Managing Director and senior executives. Details of these contracts are outlined later in this report. 53 53 Annual Report Annual Report 2023 Consequences of Company Performance on Shareholder Wealth In considering the Company's performance and creation of value for shareholders, the Board had regard to the following information in relation to the current financial year and the previous four years: Consolidated 2023 2022 2021 2020 2019 Total Equity (AUD) 29.1 22.9 21.5m 22.9m 21.8m Basic earnings/(loss) per share - (AUD) (0.27) (0.19) (0.24) 0.04 (0.07) Net Profit/(Loss) attributable to members (AUD) (1,914,019) (1,316,222) (1,622,329) 273,985 (454,577) Market Capitalisation (AUD) 20.1m 31.0m 9.9m 8.3m 15.1m Fixed Remuneration During the financial year, the Key Management Personnel of the Company are paid a fixed base salary/fee per annum plus applicable employer superannuation contributions, as detailed below (Details of Remuneration Provided to Key Management Personnel). Special Exertions and Reimbursements Pursuant to the Company's Constitution, each: • Non-Executive Director is entitled to receive payment for the performance of extra services, or the undertaking of special exertions, at the request of the Board for Company purposes. • Each Director is entitled to reimbursement of all reasonable expenses (including traveling and accommodation) which they incur for the purpose of attending Board and Board Committee meetings, the business of the Company, or in performing their duties as a Director. Post-Employment Benefits Other than employer contributions to nominated complying superannuation funds (where applicable) and entitlements to accrued unused annual and long service leave (where applicable), the Company does not provide retirement benefits to Key Management Personnel. The Company notes that Shareholders' approval is required where a Company proposes to make a "termination payment" (for example, a payment in lieu of notice, a payment for a post-employment restraint and payments made as a result of the automatic or accelerated vesting of share based payments) in excess of one year's "base salary" (defined as the average base salary over the previous 3 years) to a Director or any person who holds a managerial or executive office. Long-Term Benefits Other than early termination benefits disclosed in "Employment Contracts" below, Key Management Personnel have no right to termination payments, save for payment of accrued unused annual and long service and/or end of service leave (where applicable). 54 54 Annual Report Annual Report 2023 Details of Remuneration Provided to Key Management Personnel Key Management Person Performance based Fixed At risk STI Option related Short-term benefits Post-employment benefits Other long-term benefits Equity based benefits Total Cash payments Non-cash(ii) Other(iii) Super-annuation Termination Salary, and tees Allowances (i) Cash Bonus Other Options 2023 % % % % $ $ $ $ $ $ $ $ $ $ Executive Director: Atmavireshwar Sthapak - 100% - - 355,718 27,740 - - - - - 31,293 - 414,751 Non-Executive Directors: Stephen Gethin - 100% - - 75,000 - - - - - - - - 75,000 Vikas Jain - 100% - - 50,000 - - - - - - - - 50,000 Sanjeev Kumar - 100% 23,935 - - - - 2,523 - - - 26,458 Devaki Khimji - 100% - - 16,042 - - - - - - - - 16,042 Farrokh Masani - - - - - - - - - - - - - - Company Secretary: Dinesh Aggarwal (iv) - 100% - - 43,016 - - - - - - - - 43,016 Chief Executive Officer - AHRL Avigyan Bera - 100% - - 79,798 26,795 - - - - - 3,423 - 110,016 Notes: i. Allowances are based on the executive employment agreement and may include expat allowance, company car allowance, rent allowance and security bond and school-fee allowance received from subsidiaries and related joint venture entities. ii. Non-cash benefits include net leave and/or end of service gratuity accrued or paid to relevant labour laws. iii. Other short-term benefits consist of exchange gain/(loss) due to foreign currency translation from Oman Riyal to Australia Dollars on Mr. Bera's salary. iv. Remuneration, in his capacity as Company Secretary, paid to Fortuna Advisory Group. 55 55 Annual Report Annual Report 2023 Key Management Person Performance based Fixed At risk STI Option related Short-term benefits Post-employment benefits Other long-term benefits Equity based benefits Total Cash payments Non-cash(ii) Other(iii) Super-annuation Termination Salary, and tees Allowances (i) Cash Bonus Other Options 2022 % % % % $ $ $ $ $ $ $ $ $ $ Executive Director: Atmavireshwar Sthapak - 100% - - 290,633 27,973 - - - - - 23,204 - 341,810 Non-Executive Directors: Stephen Gethin - 100% - - 75,000 - - - - - - - - 75,000 Vikas Jain - 100% - - 50,000 - - - - - - - - 50,000 Sanjeev Kumar - 100% 22,831 - - - - 2,170 - - - 25,001 Company Secretary: Dinesh Aggarwal (iv) - 100% - - 39,105 - - - - - - - - 39,105 Chief Executive Officer - AHRL Avigyan Bera - 100% - - 66,757 22,668 - - - - - 3,423 - 89,425 Notes: i. Allowances are based on the executive employment agreement and may include expat allowance, company car allowance, rent allowance and security bond and school-fee allowance received from subsidiaries and related joint venture entities. ii. Non-cash benefits include net leave and/or end of service gratuity accrued or paid to relevant labour laws. iii. Other short-term benefits consist of exchange gain/(loss) due to foreign currency translation from Oman Riyal to Australia Dollars on Mr Richard's salary and Mr. Bera's salaries. iv. Appointed 2 July 2020. Remuneration, in his capacity as Company Secretary, paid to Fortuna Advisory Group. Equity Based Benefits The Company provided the equity based benefits (e.g. grant of shares or options) to Key Management Personnel during the financial year specified below. No shares were issued as a result of the exercise of options held by Key Management Personnel during the financial year. 1,666,000 options were issued to Managing Director Atmavireshwar Sthapak on 23 December 2021. Each option is exercisable over one fully paid, ordinary, share in the Company and has an exercise price of AUD 0.03 per share. 56 56 Annual Report Annual Report 2023 The options expire on 30 April 2024. 2,500,000 options were issued to Managing Director Atmavireshwar Sthapak on 23 December 2021. Each option is exercisable over one fully paid, ordinary, share in the Company and has an exercise price of AUD 0.03 per share. The options expire on 30 June 2024. 3,333,000 options were issued to Managing Director Atmavireshwar Sthapak on 23 December 2021. Each option is exercisable over one fully paid, ordinary, share in the Company and has an exercise price of AUD 0.03 per share. The options expire on 31 July 2024 Options Lapsed During the Year No options lapsed or were cancelled during the reporting period. Details of Shares Held by Key Management Personnel 2022 - 2023 Ordinary Fully Paid Shares Name of Director/KMP Balance at 1 July 2022 Balance at appointment1 Net change Balance at cessation1 Balance at 30 June 2023 Stephen Gethin - - 1,500,000 (0.27) 1,500,000 Atmavireshwar Sthapak 3,862,051 - - - 3,862,051 Vikas Jain 37,745,930 - - - 37,745,930 Sanjeev Kumar - - - - - Dinesh Aggarwal 6,055,725 - 2,500,000 - 8,555,725 Devaki Khimji - - - - - Farrokh J Masani 10,422,687 - 253,500 - 10,676,187 Note: 1 Applies where the Director was appointed, or ceased as a Director, during the reporting period. 57 57 Annual Report Annual Report 2023 2021-2022 Ordinary Fully Paid Shares Name of Director/KMP Balance at 1 July 2021 Balance at appointment1 Net change Balance at cessation1 Balance at 30 June 2022 Stephen Gethin - - - - - Atmavireshwar Sthapak 3,862,051 - - - 3,862,051 Vikas Jain 37,745,930 - - - 37,745,930 Sanjeev Kumar - - - - - Dinesh Aggarwal 6,055,725 - - - 6,055,725 Devaki Khimji - - - - - Farrokh J Masani - 10,422,687 - - 10,422,687 Note: 1 Applies where the Director was appointed, or ceased as a Director, during the reporting period. Details of Options Held by Key Management Personnel The only options held by Key Management Personnel are those disclosed above under the heading "Equity Based Benefits". Employment Contracts (A) MANAGING DIRECTOR - ATMAVIRESHWAR STHAPAK Atmavireshwar Sthapak was appointed Managing Director on 27 July 2020. The material terms of his contract in effect during the reporting period were as follows14: • Annual base salary of AUD 324,278 per annum; • Housing allowance of up to AUD 41,406 per annum; • Vehicle allowance - up to AUD 77,637 per annum, plus pay the costs of keeping the vehicle fuelled, maintained and registered; • Compulsory statutory "end of service" payments due under Oman Labour Law; • Standard annual leave (20 days) and personal/sick leave (10 days paid) entitlements plus any additional entitlements prescribed under Oman Labour Law; and • Either party may terminate the agreement by providing three months' notice. • Long-term incentive: The Managing Director's Options, as detailed on pages 13-14, above, comprise his long-term incentive. 14 Refer Alara's 3 February 2016 ASX Announcement: "Appointment of Executive Director". 58 58 Annual Report Annual Report 2023 Other Benefits Provided to Key Management Personnel No Key Management Personnel has during or since the end of the financial year, received or become entitled to receive a benefit, other than a remuneration benefit as disclosed above, by reason of a contract made by the Company or a related entity with the Director or with a firm of which he is a member, or with a Company in which he has a substantial interest. There were no loans to directors or executives during the reporting period. Employee Share Option Plan The Company has an Employee Share Option Plan (the ESOP) which was most recently approved by shareholders at the 2017 Annual General Meeting. The ESOP was developed to assist in the recruitment, reward, retention and motivation of employees (excluding Directors) of Alara. Under the ESOP, the Board will nominate personnel to participate and will offer options to subscribe for shares to those personnel. A summary of the terms of ESOP is set out in Annexure A to Alara's Notice of Annual General Meeting and Explanatory Statement for its 2017 AGM. Director's Loan Agreements There were no loan agreements with the Directors during the year. Securities Trading Policy The Company has a Securities Trading Policy, a copy of which is available for viewing and downloading from the Company's website. Voting and Comments on the Remuneration Report at the 2022 Annual General Meeting At the Company's most recent Annual General Meeting (AGM), a resolution to adopt the Remuneration Report for the previous reporting period was put to a shareholders' vote and passed unanimously on a show of hands with the proxies received also indicating 99.99% support for adopting the Remuneration Report.15 No comments were made on the Remuneration Report at the AGM. (B) OTHER EXECUTIVES KMP Position(s) Held Base Salary/Fees per annum Other Key Terms Stephen Gethin Chairman AUD 75,000 plus GST per annum. N/A Dinesh Aggarwal Company Secretary The Company pays Fortuna Advisory Group AUD 110,400 as a combined amount for Company Secretarial and Chief Financial Officer services. Mr Aggarwal is a consultant to Fortuna Advisory Group through Fortuna Accountants and Business Advisors, of which he is Managing Director. N/A 15 Refer Alara's 17 November 2017 ASX Announcement: Results of Meeting. 59 59 Annual Report Annual Report 2023 Engagement of Remuneration Consultants The Company did not engage a remuneration consultant during the year. The Board has established a policy for engaging external remuneration consultants. The policy includes a requirement for the Remuneration and Nomination Committee to: • approve all engagements of remuneration consultants; • receive remuneration recommendations from remuneration consultants (to the exclusion of persons not members of the Committee) regarding Key Management Personnel; and • ensure that the making of remuneration recommendations is free from undue influence by the member or members of the Key Management Personnel to whom the recommendation relates. This concludes the audited Remuneration Report. Directors' and Officers' Insurance The Company insures Directors and Officers against liability they may incur in respect of any wrongful acts or omissions made by them in such capacity (to the extent permitted by the Corporations Act 2001) (D&O Policy). Details of the amount of the premium paid in respect of the D&O Policy is not disclosed as such disclosure is prohibited under the terms of the policy. Directors' Deeds In addition to the rights of indemnity provided under the Company's Constitution (to the extent permitted by the Corporations Act), the Company has also entered into a deed with each of the Directors and the Secretary (each an Officer) to regulate certain matters between the Company and each Officer, both during the time the Officer holds office and after the Officer ceases to be an officer of the Company, including the following matters: • The Company's obligation to indemnify an Officer for liabilities or legal costs incurred as an officer of the Company (to the extent permitted by the Corporations Act). • Subject to the terms of the deed and the Corporations Act, the Company may advance monies to Officers to meet any costs or expenses of the Officer incurred in circumstances relating to the indemnities provided under the deed and before the outcome of legal proceedings brought against the Officer. Legal Proceedings on Behalf of Consolidated Entity (Derivative Actions) No person has applied for leave of a court to bring proceedings on behalf of the Consolidated Entity or intervene in any proceedings to which the Consolidated Entity is a party for the purpose of taking responsibility on behalf of the Consolidated Entity for all or any part of such proceedings and the Consolidated Entity was not a party to any such proceedings during and since the financial year. Auditor Details of the amounts paid or payable to the Company's auditors (Rothsay Audit & Assurance Pty Ltd for the year ended 30 June 2023 and RSM Chartered Accountants for the Oman entity audits) for audit and non-audit services provided during the financial year are set out below (refer to Note 5): Audit and Review Fees AUD Fees for Other Non-Audit Services AUD Total AUD 33,810 - 33,810 No non-audit services were provided by the Auditors during the year. 60 60 Annual Report Annual Report 2023 Auditor's Independence Declaration A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 forms part of this Directors Report and is set out on page 63. Events Subsequent to Reporting Date The Directors are not aware of any matters or circumstances at the date of this Directors' Report, other than those referred to in this Directors' Report or the financial statements or notes thereto, that have significantly affected or may significantly affect the operations, the results of operations or the state of affairs of the Company and Consolidated Entity in subsequent financial years. Signed for and on behalf of the Directors in accordance with a resolution of the Board: Atmavireshwar Managing Director 29 September 2023 The remainder of this page is intentionally blank. 61 61 Annual Report Annual Report 2023 62 62 Annual Report Annual Report 2023 AUDITOR'S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 As lead auditor of the audit of Alara Resources Limited for the year ended 30 June 2023, 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 audit; and • no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Alara Resources Limited and the entities it controlled during the year. Rothsay Audit & Assurance Pty Ltd Daniel Dalla Director 29 September 2023 63 63 Annual Report Annual Report 2023 Consolidated Statement of Profit or Loss and Other Comprehensive Income (FOR THE YEAR ENDED 30 JUNE 2023) Note 2023 AUD 2022 AUD Revenue 3 25,297 3,007 Other income 3 - 8,162 Gain/(Loss) on forex 3 (72,793) 54,239 Personnel (936,187) (765,089) Occupancy costs (46,225) (45,548) Finance expense (14,641) (13,811) Corporate expenses (204,750) (189,453) Administration expenses (1,535,731) (607,145) Share of profit/(losses) of associates 11 52,628 (40,430) PROFIT/(LOSS) BEFORE INCOME TAX (2,732,392) (1,596,068) Income tax benefit - - PROFIT/(LOSS) FOR THE YEAR (2,732,392) (1,596,068) Other comprehensive income: Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations 1,785,027 2,974,320 Total other comprehensive income/(loss) 1,785,027 2,974,320 TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR (947,365) 1,378,252 Profit/(loss) attributable to: Owners of Alara Resources Limited (1,914,019) (1,316,222) Non-controlling interest (818,373) (279,846) (2,732,392) (1,596,068) Total comprehensive income/(loss) for the year attributable to: Owners of Alara Resources Limited (128,992) 1,658,098 Non-controlling interest (818,373) (279,846) (947,365) 1,378,252 Earnings/Loss per share: Basic earnings/(loss) per share cents 6 (0.27) (0.19) Diluted earnings/(loss) per share cents 6 (0.27) (0.19) The accompanying notes form part of this consolidated financial statement. 64 64 Annual Report Annual Report 2023 Consolidated Statement of Financial Position (AS AT 30 JUNE 2023) Note 2023 AUD 2022 AUD CURRENT ASSETS Cash and cash equivalents 7 3,656,745 2,449,791 Trade and other receivables 8 924,905 567,250 Other current assets 9 142,440 194,451 Financial assets 10 802,710 1,036,625 TOTAL CURRENT ASSETS 5,526,800 4,248,117 NON-CURRENT ASSETS Financial assets 10 507,651 506,895 Investment in Associate 11 151,558 98,920 Borrowing cost 12 482 631 Property, plant and equipment 13 2,151,912 138,401 Mine properties & development assets 13 98,618,098 25,213,324 Exploration and evaluation 14 4,713,750 5,635,650 Advances to Subcontractors 5,990,041 9,145,263 TOTAL NON CURRENT ASSETS 112,133,492 40,739,084 TOTAL ASSETS 117,660,292 44,987,201 CURRENT LIABILITIES Trade and other payables 15 21,566,739 3,795,185 Provisions 16 175,195 154,427 Financial liability 17 19,791 17,218 TOTAL CURRENT LIABILITIES 21,761,725 3,966,830 NON CURRENT LIABILITIES Financial liabilities 17 66,817,644 18,134,331 TOTAL NON CURRENT LIABILITIES 66,817,644 18,134,331 TOTAL LIABILITIES 88,579,369 22,101,161 NET ASSETS 29,08,923 22,886,040 65 65 Annual Report Annual Report 2023 Annual Report Annual Report 2023 Consolidated Statement of Financial Position (Continued) (AS AT 30 JUNE 2023) The accompanying notes form part of this consolidated financial statement. 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Note 2023 AUD 2022 AUD EQUITY Issued capital 18 68,722,146 68,233,860 Reserves 19 14,254,956 12,469,929 Accumulated losses (59,292,994) (57,378,975) Parent interest 23,684,108 23,324,814 Non-controlling interest 5,396,815 (438,774) TOTAL EQUITY 29,080,923 22,886,040 66 66 Annual Report Annual Report 2023 Note Issued Capital AUD Options Reserve Foreign Currency Translation Reserve AUD Accumulated Losses AUD Transactions with minority interests AUD Non- Controlling Interest AUD Total AUD Balance as at 1 July 2021 68,233,860 - 901,756 (56,062,753) 8,593,853 (158,928) 21,507,788 Option expired - - - - - - - Foreign currency translation reserve - - 2,974,320 - - - (158,928) - - 2,974,320 - - - 2,974,320 Profit/(Loss) for the year - - - (1,316,222) - (279,846) (1,596,068) Total comprehensive income/ (loss) for the year - - 2,974,320 (1,316,222) - (279,846) 1,378,252 Transactions with owners in their capacity as owners: Share placement - - - - - - - Share placement costs - - - - - - - Balance as at 30 June 2022 68,233,860 - 3,876,076 (57,378,975) 8,593,853 (438,774) 22,886,040 Balance as at 1 July 2022 68,233,860 - 3,876,076 (57,378,975) 8,593,853 (438,774) 22,886,040 Options expired - - - - - - - Foreign currency translation reserve - - 1,785,027 - - - 1,785,027 Net income and expense recognised directly in equity - - 1,785,027 - - - 1,785,027 Transactions with minority interest - - - - - 6,653,962 6,653,962 Profit/(Loss) for the year - - - (1,914,019) - (818,373) (2,732,392) Total comprehensive income/(loss) for the year - - 1,785,027 (1,914,019) - 5,835,589 5,706,597 Transactions with owners in their capacity as owners: Share placement 19 488,286 - - - - - 488,286 Share placement costs 19 19 - - - - - - Balance as at 30 June 2023 68,722,146 - 5,661,103 (59,292,994) 8,593,853 5,396,815 29,080,923 Annual Report Annual Report 2023 67 67 Consolidated Statement of Statement of Changes in Equity (FOR THE YEAR ENDED 30 JUNE 2023) The accompanying notes form part of this consolidated financial statement. 68 68 Annual Report Annual Report 2023 Note 2023 AUD 2022 AUD CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (inclusive of GST) 18 68,722,146 68,233,860 Payments to employees 19 14,254,956 12,469,929 Interest received (59,292,994) (57,378,975) NET CASHFLOWS USED IN OPERATING ACTIVITIES 7b 29,080,923 22,886,040 CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment (3,020,712) (65,823) Payments for development and exploration expenditure (49,188,469) (17,470,734) Payments towards term deposits (22,160) (2001) Loan to other entity (repayment) - (51,949) Proceeds from disposal and redemption of financial assets 250,000 - NET CASHFLOWS USED IN INVESTING ACTIVITIES (51,981,341) (17,590,507) CASH FLOWS FROM FINANCING ACTIVITIES Capital contributed by non-controlling interests 6,653,964 - Proceeds from issuing ordinary shares 120,000 - Proceeds from borrowings 47,920,749 17,359,449 Cost of issuing ordinary shares (4,020) - NET CASHFLOWS PROVIDED BY FINANCING ACTIVITIES 54,690,693 17,359,449 NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS HELD 1,154,828 (2,042,226) Cash and cash equivalents at beginning of the financial year 2,449,791 4,241,815 Effect of exchange rate changes on cash 52,126 250,202 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 7 3,656,745 2,449,791 The accompanying notes form part of this consolidated financial statement. Consolidated Statement of Cash Flows (FOR THE YEAR ENDED 30 JUNE 2023) 69 69 Annual Report Annual Report 2023 Notes to the Financial Statements SUMMARY OF ACCOUNTING POLICIES 1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of these financial statements are set out below. The financial report includes the financial statements for the Consolidated Entity consisting of Alara Resources Limited and its controlled and jointly controlled entities. Alara Resources Limited is a company limited by shares, incorporated in Western Australia, Australia and whose shares are publicly traded on the Australian Securities Exchange (ASX). 1.1. BASIS OF PREPARATION These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Alara Resources Limited is a for-profit entity for the purposes of preparing the financial statements. Compliance with IFRS The consolidated financial statements of the Consolidated Entity, Alara Resources Limited, also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Reporting Basis and Conventions The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied. Going Concern Assumption The financial statements have been prepared on the going concern basis of accounting which assumes the continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business. The Group has incurred a loss for the year ended 30 June 2023 of AUD 2,732,392 (2022: Loss AUD 1,596,068) and cash inflows/(outflows) from operating and investing activities of (AUD 53,535,865) (2022: AUD 19,401,675)). As at 30 June 2023 the Group has a cash at bank balance of AUD 3,656,744 (2022: AUD 2,449,791) and bank deposits of AUD 813,985 (2022: AUD 1,047,144) and a deficiency in working capital of AUD (10,244,884) (2022: AUD 9,426,550). The directors have prepared a cash flow forecast, which indicates that the 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 forecast, the directors are satisfied that the going concern basis of preparation is appropriate. 1.2. PRINCIPLES OF CONSOLIDATION The consolidated financial statements incorporate the assets and liabilities of the subsidiaries of Alara Resources Limited as at 30 June 2023 and the results of its subsidiaries for the year then ended. Alara Resources Limited and its subsidiaries are referred to in this financial report as the Consolidated Entity. All transactions and balances between Consolidated Entity companies are eliminated on consolidation, including unrealised gains and losses on transactions between Consolidated Entity companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Consolidated Entity perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Consolidated Entity. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from 70 70 Annual Report Annual Report 2023 the effective date of acquisition, or up to the effective date of disposal, as applicable. Non-controlling interests, presented as part of equity, represent the portion of a subsidiary's profit or loss and net assets that is not held by the Consolidated Entity. The Consolidated Entity attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests. 1.3. FOREIGN CURRENCY TRANSLATION AND BALANCES Functional and presentation currency The functional currency of each entity within the Consolidated Entity is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency. Transaction and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in profit or loss. Consolidated entity The financial results and position of foreign operations whose functional currency is different from the Consolidated Entity's presentation currency are translated as follows: (a) assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; (b) income and expenses are translated at average exchange rates for the period; and (c) retained earnings are translated at the exchange rates prevailing at the date of the transaction. Exchange differences arising on translation of foreign operations are transferred directly to the Consolidated Entity's foreign currency translation reserve in the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed. 1.4. JOINT ARRANGEMENTS Joint arrangements exist when two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control, in the event the Company does not share control the financials are consolidated (or deconsolidated in the event of loss of control) (refer to 1.2 for further information). The Consolidated Entity's joint arrangements are currently of one type: Joint operations Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities relating to the arrangement. The activities of a joint operation are primarily designed for the provision of output to the parties to the arrangement, indicating that: • the parties have the rights to substantially all the economic benefits of the assets of the arrangement; and • all liabilities are satisfied by the joint participants through their purchases of that output. This indicates that, in substance, the joint participants have an obligation for the liabilities of the arrangement. 71 71 Annual Report Annual Report 2023 1.5. LEASES The Group has applied AASB 16 that is effective for annual periods that begin on or after 1 January 2019. AASB 16 introduced a single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases. The main changes introduced by the new Standard are as follows: • recognition of a right-of-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets); • depreciation of right-of-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components; • inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease liability using the index or rate at the commencement date; • application of a practical expedient to permit a lessee to elect not to separate non-lease components and instead account for all components as a lease; and • inclusion of additional disclosure requirements. The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial application. 1.6. COMPARATIVE FIGURES Certain comparative figures have been adjusted to confirm to changes in presentation for the current financial year. 1.7. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of the Consolidated Financial Statements requires Directors to make judgements and estimates and form assumptions that affect how certain assets, liabilities, revenue, expenses and equity are reported. At each reporting period, the Directors evaluate their judgements and estimates based on historical experience and on other various factors they believe to be reasonable under the circumstances, the results of which form the basis of the carrying values of assets and liabilities (that are not readily apparent from other sources, such as independent valuations). Actual results may differ from these estimates under different assumptions and conditions. Exploration and evaluation expenditure The Consolidated Entity's accounting policy for exploration and evaluation expenditure being capitalised include the Daris Project where these costs are expected to be recoverable 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 or otherwise of economically recoverable reserves. In the case of the Al Hadeetha project, a maiden reserve announcement was issued in December 2016. This policy requires management to make certain estimates to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure under the policy, a judgement is made that recovery of the expenditure is not possible, the relevant capitalised amount will be written off to profit or loss. Impairment of mine development expenditure The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the level of proved and probable reserves and measured, indicated and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes and changes to commodity prices. To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made. 72 72 Annual Report Annual Report 2023 Share-based payments transactions The Consolidated Entity measures the cost of equity- settled transactions with Directors and employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes options valuation model, taking into account the terms and conditions upon which the instruments were granted. The accounting estimates have no impact on the carrying amounts of assets and liabilities but will impact expenses and equity. 1.8. NEW, REVISED OR AMENDING ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED The Consolidated Entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Consolidated Entity during the financial year. 1.9. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED There are no forthcoming standards and amendments that are expected to have a material impact on the group in the current or future reporting periods, or on foreseeable future transactions. 73 73 Annual Report Annual Report 2023 2. PARENT ENTITY INFORMATION The following information provided relates to the Company, Alara Resources Limited, as at 30 June 2023. 3. PROFIT/(LOSS) FOR THE YEAR The operating profit before income tax includes the following items of revenue and expense: 2023 AUD 2022 AUD Statement of Financial Position Current assets 956,806 1,350,948 Non-current assets 9,497,133 9,502,972 Total assets 10,453,939 10,853,920 Current liabilities 27,751 326,261 Non-current liabilities 5,627 4,793 Total liabilities 33,378 331,054 Net assets 10,420,561 10,522,866 Issued capital 68,722,146 68,233,860 Accumulated losses (58,301,585) (57,710,994) Total equity 10,420,561 10,522,866 Profit/(loss) for the year (590,591) (479,056) Total comprehensive income /(loss) for the year (590,591 (479,056) 2023 AUD 2022 AUD Revenue Interest 25,297 3,007 Other income - 8,162 Unrealised forex gain/(loss) (72,793) 54,239 (47,496) 65,408 ACCOUNTING POLICY NOTE Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. All revenue is stated net of the amount of goods and services tax (GST) except where the amount of GST incurred is not recoverable from the Australian Tax Office. The following specific recognition criteria must also be met before revenue is recognised: • Interest revenue - Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets. • Other revenues - Other revenues are recognised on a receipts basis. 74 74 Annual Report Annual Report 2023 4. INCOME TAX EXPENSE The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax rate for the reporting period of 25% (prior period: 25%) and the reported tax expense in profit or loss are as follows: 2023 AUD 2022 AUD Tax expense comprises: (a) Current tax 206,768 - Deferred income tax relating to origination and reversal of temporary differences - Origination and reversal of temporary differences - - - Utilisation of unused tax losses previously unrecognised (206,768) - Under/(Over) provision in respect of prior years - - Tax expense - - (b) Accounting profit before tax (2,732,392) (1,596,068) Income tax expense to accounting profit: Tax at the Australian tax rate of 25% (prior period: 25%) (683,098) (394,579) Assessable amounts 579,557 103,274 Non-deductable expenses 68,922 83,965 Deferred tax asset losses not brought to account 23,769 - Non-assessable income - other - - Non-deductible items - - Utilisation of unused tax losses previously unrecognised (206,768) 109,026 Deferred Tax Asset Losses not previously brought to account, now brought to account 7,565 - Deferred tax assets recognised/ (not recognised) - (12,098) -Tax rate difference 217,998 110,412 Under Provision in respect of prior years (7,945) - Income tax expenses (benefit) - - (c) Recognised Deferred Tax Balances Deferred tax asset 13,798 7,738 Deferred tax asset (losses) 79,809 87,374 Set-off deferred tax liabilities (93,607) (95,112) - - 75 75 Annual Report Annual Report 2023 76 76 Annual Report Annual Report 2023 4. INCOME TAX EXPENSE (CONTINUED) The benefit of the deferred tax assets not recognised will only be obtained if: (i) The Consolidated Entity derives future income that is assessable for Australian income tax purposes and is of a type and an amount sufficient to enable the benefit of them to be realised; (ii) The Consolidated Entity continues to comply with the conditions for deductibility imposed by tax legislation in Australia; and (iii) There are no changes in tax law which will adversely affect the Consolidated Entity in realising the benefit of them. The Consolidated Entity has elected to consolidate for taxation purposes and has entered into a tax sharing and funding agreement in respect of such arrangements. ACCOUNTING POLICY NOTE Income Tax The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the notional income tax rate for each taxing jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses (if applicable). Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each taxing jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The amount of deferred tax assets benefits brought to account or which may be realised in the future, is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the Consolidated Entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in other comprehensive income or equity are also recognised directly in other comprehensive income or equity. Tax consolidation legislation The Consolidated Entity implemented the tax consolidation legislation. The head entity, Alara Resources Limited, and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right. In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or assets) and the deferred tax assets (as appropriate) arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group. Assets or liabilities arising under tax funding agreements within the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Consolidated Entity. Any differences between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly owned tax consolidated entities. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. 2023 AUD 2022 AUD (d) Deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognised are attributable to the following: Unrecognised deferred tax asset losses 1,089,449 1,292,096 Unrecognised deferred tax asset losses (capital) 409,991 409,991 Unrecognised deferred tax asset Oman losses 220,672 203,627 1,720,112 1,905,714 77 77 Annual Report Annual Report 2023 5. AUDITOR'S REMUNERATION During the year the following fees were paid or payable for services provided by the auditors to the Consolidated Entity, their related practices and non-audit related firms: 2023 AUD 2022 AUD Rothsay Audit & Assurance Pty Ltd - Auditors of the Consolidated Entity (Audit and review of financial reports) 29,000 27,500 RSM Chartered Accountants - Auditors of Oman-controlled entities (Audit and review of financial reports) 4,810 8,889 33,810 36,389 The remainder of this page is intentionally blank. 78 78 Annual Report Annual Report 2023 6. EARNINGS/(LOSS) PER SHARE 7. CASH AND CASH EQUIVALENTS Under AASB 133 "Earnings per share", potential ordinary shares such as options will only be treated as dilutive when their conversion to ordinary shares would increase loss per share from continuing operations. ACCOUNTING POLICY NOTE Basic Earnings per share is determined by dividing the operating result after income tax by the weighted average number of ordinary shares on issue during the financial period. Diluted Earnings per share adjusts the figures used in the determination of basic earnings per share by taking into account amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of options outstanding during the financial period. The effective interest rate on short-term bank deposits in the reporting period was 0.76% (prior period: 0.70%) with an average maturity of 90 days. (a) Risk exposure The Consolidated Entity's exposure to interest rate and foreign exchange risk is discussed in Note 23. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above. ACCOUNTING POLICY NOTE Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments and bank overdrafts. Bank overdrafts (if any) are shown within short-term borrowings in current liabilities on the statement of financial position. 2023 AUD 2022 AUD Basic earnings/(loss) per share cents (0.27 (0.19) Diluted earnings/(loss) per share cents (0.27) (0.19) Profit/(loss) $ used to calculate earnings/(loss) per share (1,914,019) (1,316,222) Weighted average number of ordinary shares during the period used in calculation of basic earnings/(loss) per share 2023 AUD 2022 AUD Cash in hand 1,991 972 Cash at bank 106,444 2,344,130 Term deposits (1,914,019) 104,689 3,656,745 2,449,791 79 79 Annual Report Annual Report 2023 8. TRADE AND OTHER RECEIVABLES (b) Reconciliation of Net Profit/(Loss) after Tax to Net Cash Flow From Operations 2023 AUD 2022 AUD Profit/(Loss) after income tax (2,732,392) (1,596,068) Gain/(loss) on forex (realised) 80,556 - Profit on sale of asset - - Gain/(loss) on disposal of subsidiary - - Share of (profits)/losses of associates and joint ventures (52,637) 40,430 Foreign exchange movement 173,196 (319,935) Depreciation 763,824 21,876 (Increase)/Decrease in Assets: Trade and other receivables (7,224) (45,978) Other current assets (19,377) (43,450) Borrowing cost 173 - Increase/(Decrease) in Liabilities: Insurance premium funding (other payables) (738) 6,329 Trade and other payables 225,171 65,203 Provisions 14,925 60,423 Net cashflows from/ (used in) operating activities (1,554,524) (1,811,168) Current 2023 AUD 2022 AUD Amounts receivable from: Sundry debtors 321,200 84,279 Goods and services tax recoverable 7,139 8,194 VAT receivable 596,566 474,777 924,905 567,250 (a) Risk exposure Information about the Consolidated Entity's exposure to credit risk, foreign exchange risk and interest rate risk is in Note 23. (b) Impaired receivables None of the above receivables are impaired or past due. ACCOUNTING POLICY NOTE Trade and other receivables are recorded at amounts due less any provision for doubtful debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when considered non-recoverable. 80 80 Annual Report Annual Report 2023 2023 AUD 2022 AUD Current Bank deposits 802,710 1,036,625 Non-Current Interest free loan to Alara Resources LLC 496,376 496,376 Bank deposits (more than one year) 11,275 10,519 1,310,361 567,250 9. OTHER CURRENT ASSETS 10. FINANCIAL ASSETS 2023 AUD 2022 AUD Prepayments 133,845 193,518 Diluted earnings/(loss) per share cents 8,595 933 142,440 194,451 81 81 Annual Report Annual Report 2023 11. INVESTMENT IN ASSOCIATES The movement for the year in the Group's investments accounted for using the equity method is as follows: 12. BORROWING COST 2023 AUD 2022 AUD Opening balance 98,920 139,350 Profit /(Loss) from equity accounted investments 52,637 (40,430) Subtotal 151,557 98,920 ACCOUNTING POLICY NOTE An associate is an entity over which the group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. Under the equity method, an investment in an associate is recognized initially in the consolidated statement of financial position at cost and adjusted thereafter to recognize the group's share of the profit or loss and other comprehensive income of the associate. When the group's share of losses of an associate exceeds the Group's interest in that associate, the group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. 2023 AUD 2022 AUD Borrowing cost 886 834 Less: Amortisation for the period (383) (203) Subtotal 482 631 82 82 Annual Report Annual Report 2023 13. PROPERTY, PLANT AND EQUIPMENT Motor Vehicles AUD Office Equipment AUD Plant and Equipment AUD Temporary Structure AUD Mine Properties& Development Assets - AUD Low Value Asset AUD Total AUD Year ended 30 June 2022 Carrying amount at beginning 75,935 22,216 497 - 12,383,033 - 12,481,681 Additions - 22,461 - 32,402 11,680,023 - 11,734,886 Disposal - - - - - - - Write-offs - - - - - - - Depreciation expense (11,784) (9,222) (171) (699) - - (21,876) Exchange difference 6,121 646 36 (37) 1,150,268 - 1,157,034 Closing amount at reporting date 70,272 36,101 362 31,666 25,213,324 - 25,351,725 Year ended 30 June 2022 Cost or fair value 102,558 209,341 23,497 32,402 25,213,324 - 25,581,122 Accumulated depreciation (32,286) (173,240) (23,135) (736) - - (229,397) Net carrying amount 70,272 36,101 362 31,666 25,213,324 - 25,351,725 Year ended 30 June 2023 Carrying amount at beginning 70,273 36,099 362 31,666 25,213,324 - 25,351,724 Additions - 229,291 76,603 2,303,282 72,425,882 175,826 75,210,884 Disposal - (2,434) (44) - - - (2,479) Write-offs - - - - - - - Depreciation expense (10,797) (47,434) (18,885) (652,288) - (34,420) (763,824) Exchange difference 2,516 440 (237) (7,453) 978,893 (456) 973,703 Closing amount at reporting date 61,992 215,962 57,779 1,675,208 98,618,098 140,950 100,770,009 Year ended 30 June 2023 Cost or fair value 106,439 430,943 98,357 2,336,910 98,618,098 175,826 101,766,573 Accumulated depreciation (44,447) (214,981) (40,558) (661,702) - (34,876) (996,564) Net carrying amount 61,992 215,962 57,799 1,675,208 98,618,098 140,950 100,770,009 ACCOUNTING POLICY NOTE All plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present value in determining recoverable amount. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Consolidated Entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. The depreciable amount of all fixed assets is depreciated on a diminishing value basis over the asset's useful life to the Consolidated Entity commencing from the time the asset is held ready for use. 83 83 Annual Report Annual Report 2023 The depreciation rates used for each class of depreciable assets are: The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of profit or loss and other comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. Mine properties and development assets Mine property and development assets include costs incurred in accessing the ore body and costs to develop the mine to the production phase, once the technical feasibility and commercial viability of a mining operation has been established. At this stage, exploration and evaluation assets are reclassified to mine properties. Mine property and development assets are stated at historical cost less accumulated amortisation and any accumulated impairment losses recognised. The initial cost of an asset comprises its purchase price or construction cost and any costs directly attributable to bringing the asset into operation. Any ongoing costs associated with mining which are considered to benefit mining operations in future periods are capitalised. 14. EXPLORATION AND EVALUATION Alara Oman Operations Pty Limited (a wholly owned Australian subsidiary) gained a 50% shareholding interest in a jointly controlled company, Daris Resources LLC (Oman), on 1 December 2010. The principal activity of this company is exploration, evaluation and development of mineral licences in Oman. The Consolidated Entity has a valid and legally enforceable contractual right to commercially exploit the Daris Project held by Daris Resources LLC (in which the Consolidated Entity has a 50% shareholding interest) and does not hold the legal title to the Class of Fixed Asset Depreciation Rate Office Equipment 15 - 37.5% Motor Vehicles 33.3% Plant and Equipment 15 - 33.3% 2023 AUD 2022 AUD Opening balance 5,635,650 4,910,968 - Exploration and evaluation expenditure 938 162,649 - Exchange differences 268,906 562,033 -Reinstatement of Foreign Reserve balance relating to prior years (1,191,744) - Closing balance 4,713,750 5,635,650 84 84 Annual Report Annual Report 2023 mineral exploration licence (which is held by the other 50% shareholder of Daris Resources LLC). The financial statements have been prepared on this basis. Should these legal rights not be enforceable, the carrying value of Exploration and Evaluation Expenditure attributable to the Daris Project would be impaired. The Consolidated Group has entered into a Heads of Agreement with Awtad Copper LLC, under which wholly owned subsidiary Alara Oman Operations Pty Ltd would become a 10% shareholder in the Awtad Block 8 Project. As part of the Heads of Agreement, Awtad acknowledges OMR 246,215 (AUD 812,316) previously spent on the project by Alara as the basis for Alara's interest in that project. ACCOUNTING POLICY NOTE Mineral Exploration and Evaluation Expenditure Exploration, evaluation and development expenditure incurred is accumulated (i.e. capitalised) in respect of each identifiable area of interest. These costs are only carried forward where they are expected to be recoverable through the successful development of the area or where activities in the area and includes areas that have not yet reached a stage that permits reasonable assessment of the existence or otherwise of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. Exploration and evaluation expenditure is written-off when it fails to meet at least one of the conditions outlined above or an area of interest is abandoned. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. When facts and circumstances suggest that the carrying amount exceeds the recoverable amount, the impairment loss will be measured in accordance with the Consolidated Entity's impairment policy (Note 1.7). This policy requires management to make certain estimates to future events and circumstances, in particular whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the expenditure under the policy, a judgement is made that recovery of the expenditure is not possible, the relevant capitalised amount will be written off to the statement of profit or loss and other comprehensive income. Impairment of Non-Financial Assets At each reporting date, the Consolidated Entity reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the profit or loss. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. 15. TRADE AND OTHER PAYABLES Due to the short-term nature of the trade and other payables, their carrying value is assumed to approximate their fair value. (a) Risk exposure Details of the Consolidated Entity's exposure to risks arising from current payables are set out in Note 23. ACCOUNTING POLICY NOTE These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. 2023 AUD 2022 AUD Current Trade payables 19,402,062 3,687,635 Other payables 2,164,677 107,550 21,566,739 3,795,185 85 85 Annual Report Annual Report 2023 16. PROVISIONS Amounts not expected to be settled within the next 12 months The entire annual leave obligation is presented as current as the Consolidated Entity does not have an unconditional right to defer settlement. The non- current provision for long service leave is a provision towards the future entitlements of employees who will have completed the required period of long service and that is not expected to be taken or paid within the next 12 months. ACCOUNTING POLICY NOTE Employee Benefits (i) Short-term obligations Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in other payables and accruals together with other employee benefit obligations. (ii) Other long-term employee benefit obligations The liability for long service leave and annual leave which is expected to be settled within 12 months after the end of the period in which the employee renders the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur. 2023 AUD 2022 AUD Current Employee benefits - annual leave 175,195 154,427 175,195 154,427 86 86 Annual Report Annual Report 2023 Financial liabilities 2023 AUD 2022 AUD Non-Current Loan - Sohar International Bank Opening balance 17,359,449 - Add: Addition during the year 47,467,823 17,050,752 Add: Interest 1,109,762 308,697 Closing balance 65,937,034 17,359,449 - Loan with unrelated third party Opening balance 732,568 651,442 Add: Addition during the year - - Add: Interest 60,523 23,319 Add/ Less: Foreign exchange differences 27,718 57,807 Closing balance 820,809 732,568 - Vehicle Loan Opening balance 42,314 50,277 Add: Addition during the year 30,047 - Less: Paid during the Year (7,944) - Less: Unexpired Interest on vehicle loan (2,783) (6,121) Add/less: Foreign exchange differences (1,833) (1,842) Closing balance 59,801 42,314 Total Financial Liabilities - Non-Current 66,817,644 18,134,331 Current - Vehicle Loan Opening balance 12,425 10,384 Add: Addition during the year 5,954 7,253 Less: Unexpired Interest on Vehicle Loan (3,569) (4,660) Add/ Less: Foreign exchange differences (646) (552) Closing balance 14,164 12,425 - Insurance Premium Funding Opening balance 4,793 11,025 Add: Addition during the year 56,271 56,271 Less: Payment during the year (55,437) (62,503) Closing balance 5,627 4,793 Total Financial Liabilities - Current 19,791 17,218 17. FINANCIAL LIABILITIES 87 87 Annual Report Annual Report 2023 17. FINANCIAL LIABILITIES (CONTINUED) I. On 16 April 2017, Al Hadeetha Resources LLC (AHR) (the joint venture company which conducts the Al Hadeetha Copper-Gold Project (Project), in which the Company is a 51% shareholder) entered into an unsecured loan agreement as borrower with Al Hadeetha Investments LLC (Lender) (an un-related company, which holds 30% of the shares in AHR). Under the agreement, AHR may draw down a maximum of USD 2 million (AUD 3,011,320 ; OMR 767,620 ) to assist with working capital for the Project (AHI to AHR Loan). The AHI to AHR Loan bears interest at LIBOR plus two percent per annum. The Loan will be in effect for the duration of the Project joint venture agreement, at which time AHR must repay any outstanding balance. AHR must make interim repayments equal to its available net cash profit (if any) at the end of each financial year. During the year AHR has not made any drawdowns under the Loan. The total amount drawn down (being the total amount owing by AHR under the Loan to the end of the year (after offsetting corresponding debit balance of OMR 18,095; AUD 70,548 ) OMR 210,525 (USD 545,148 ; AUD 820,809 ). If AHR determines at the end of any quarter or other period that it has a working capital shortfall it may draw down the whole or part of the shortfall, until the entire Loan amount is drawn down. The remaining, un-drawn balance of the Loan is OMR 543,759 (USD 1,408,048 ; AUD 2,120,035 ) (This is the undrawn balance based on the gross drawdown amount of loan without offsetting the corresponding debit balance of OMR 18,095; AUD 67,976). II. Although the AHI to AHR Loan is shown as a liability in the consolidated financial statements, loans by entities within the Alara Consolidated Entity to AHR, which is also within that Consolidated Entity (Consolidated Entity AHR Loans) are not shown in the consolidated financial statements. The Consolidated Entity AHR Loans total AUD 20.8 million and are subject to the same loan terms as the AHI to AHR Loan. The Consolidated Entity AHR Loans are repayable on the same basis as the AHI to AHR Loan. Therefore, if AHR makes a loan repayment to AHI, AHR will also be required to make a loan repayment to its lenders within the Alara Consolidated Group on a pro-rata basis.The Company's 51% owned joint-venture vehicle Al Hadeetha Resource LLC (AHRL) has a finance facility of OMR 24.8 million (AUD97.327 million) (Facility) from Sohar International Bank (Sohar) for construction of mining and processing infrastructure at AHRL's Wash- hi - Majaza copper-gold project. The Facility is secured over AHRL's mining property and mine development assets and by corporate guarantees by stakeholders of AHRL, including an Alara wholly owned subsidiary. The interest rate for the Facility is 6.5% per annum for amounts drawn in OMR and 5.15% per annum for amounts drawn in USD, reviewable annually. The Facility has a term of 9 years and 9 months, including a moratorium period of 2 years and 9 months in which only interest is payable. After the moratorium, the principal of the Facility is repayable in 28 equal quarterly instalments. Interest is payable monthly throughout the term. There have been no breaches of the covenants or other provisions of the Facility in the reporting period or subsequently to the date of this report. Sohar is a well-known and respected Bank in Oman. The Group's due diligence in connection with entering the Facility involved reviewing publicly available information regarding Sohar and making enquiries of other AHRL shareholders, which are large Omani conglomerates each with extensive knowledge of the Omani banking industry. III. In July 2023 the Company entered a loan agreement with Trafigura Pte Ltd for finance of USD 3.45 million (AUD 5.106 million, at a USD:AUD exchange rate of 1.48 at approximately the time of drawdown) (Trafigura Loan). The interest rate payable under the Trafigura Loan is SOFR +5.15% per annum. The Trafigura Loan has a maturity date of 30 June 2029 and a moratorium on principal payments until 30 September 2025. IV. The loan to Sohar International Bank is secured against the mine development asset. The facility has a debt to equity ratio covenant. There was no breach of the covenant during the year 88 88 Annual Report Annual Report 2023 89 89 Annual Report Annual Report 2023 18. ISSUED CAPITAL 2023 !! 2022 !! 2023 AUD 2022 AUD Fully paid ordinary shares 718,087,541 705,429,239 68,722,146 68,233,860 718,087,541 705,429,239 68,722,146 68,233,860 2022 2023 AUD 2022 AUD Balance as at 1 July 2021 705,429,239 68,233,860 - Share movement during the 2022 financial year - - - Share issue costs during the 2022 financial year - - Balance as at 30 June 2022 705,429,239 68,233,860 2023 AUD AUD Balance as at 1 July 2022 705,429,239 68,233,860 - Share movement during the 2023 financial year 12,658,302 492,306.61 - Share issue costs during the 2023 financial year - (4,020.44) Balance as at 30 June 2023 718,087,541 68,722,146 Each fully paid ordinary share carries one vote per share and the right to participate in dividends. Ordinary shares have no par value and the Company does not have a limit on the amount of its capital. Capital risk management The Consolidated Entity's objective when managing its capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain a capital structure balancing the interests of all shareholders. The Board will consider capital management initiatives as is appropriate and in the best interests of the Consolidated Entity and shareholders from time to time. The Consolidated Entity's financial liabilities as at 30 June 2023 are disclosed in Note 18. The Consolidated Entity's non-cash investments can be realised to meet accounts payable arising in the normal course of business. Accounting Policy Note Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration. 90 90 Annual Report Annual Report 2023 19. RESERVES 2023 AUD 2022 AUD Foreign currency translation reserve 5,661,104 3,876,076 Transactions with minority interests 8,593,852 8,593,853 14,254,956 12,469,929 Foreign currency translation reserve Exchange differences arising on translation of a foreign controlled entity's financial results and position are taken to the foreign currency translation reserve. The reserve is de-recognised when the investment is disposed of. Options reserve The number of unlisted options outstanding over unissued ordinary shares at the reporting date is as follows: 20. SHARE-BASED PAYMENTS 4 million shares were issued as a result of the exercise of any options during the year (2023: NIL). ACCOUNTING POLICY NOTE Director/Employee Options The fair value of options granted by the Company to directors and employees is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured as at grant date and is expensed in full as at their date of issue where they are 100% vested on grant and otherwise over their vesting period (where applicable). The fair value at grant date is determined using the Black- Scholes valuation model that takes into account the exercise price, the term of the option, the vesting criteria, the unlisted nature of the option, the share price at grant date and the expected price volatility of the underlying shares in the Company, and the risk-free interest rate for the term of the option. Upon the exercise of options, the balance of the reserve relating to those options is transferred to share capital. Grant date Number of options 2023 AUD 2022 AUD Listed options exercisable at $0.03: expiring 31 July 2024 - Atmavireshwar Sthapak 23 Dec 2021 3,333,000 99,990 99,990 Listed options exercisable at $0.03: expiring 30 June 2024 - Atmavireshwar Sthapak 23 Dec 2021 2,500,000 75,000 75,000 Listed options exercisable at $0.03: 30April 2024 - Atmavireshwar Sthapak 23 Dec 2021 1,666,000 49,980 49,980 718,087,541 7,499,000 224,970 224,970 91 91 Annual Report Annual Report 2023 92 92 Annual Report Annual Report 2023 Belt Conveyer System feeding to the Mill at Alara's Wash-hi Majaza Copper-Gold Site 93 93 Annual Report Annual Report 2023 21. SEGMENT INFORMATION The Board has considered the activities/operations and geographical perspective within the operating results and have determined that the Consolidated Entity operates in the resource exploration, evaluation and development sector within geographic segments - Australia, Saudi Arabia and Oman. ACCOUNTING POLICY NOTE Operating Segments The Consolidated Entity has applied AASB 8: Operating Segments which requires that segment information be presented on the same basis as that used for internal reporting purposes. An operating segment is a component of the Consolidated Entity that engages in business activities from which it may earn revenues and incur expenses. An operating segment's operating results are reviewed regularly by management to make decisions on allocation of resources to the relevant segments and assess performance. Unallocated items comprise mainly share investments, corporate and office expenses. 2023 Australia AUD Oman AUD Saudi Arabia AUD Total AUD Total segment revenues 24,546 752 - 25,297 Total segment loss/(profit)before tax (522,407) (2,188,930) 8,945 (2,732,392) Total segment assets 2,884,506 114,775,786 - 117,660,292 Total segment liabilities (445,794) (88,133,570) - (88,579,369) 2022 Australia AUD Oman AUD Saudi Arabia AUD Total AUD Total segment revenues 2,299 8,870 - 11,169 Total segment loss/(profit)before tax (491,950) (1,123,328) 19,210 (1,596,068) Total segment assets 3,190,631 41,796,570 - 44,987,201 Total segment liabilities (710,971) (21,390,190) - (22,101,161) (a) Reconciliation of segment information 2023 AUD 2022 AUD (i) Total Segment Assets Total Assets as per Statement of Financial Position 117,660,292 44,987,201 (ii) Total Segment Revenues Total Revenue as per Statement of Profit or Loss and Other Comprehensive Income 25,297 11,169 (iii) Total Segment profit/(loss) before tax Total Consolidated Entity profit/(loss) before tax (2,732,392) (1,596,068) 94 94 Annual Report Annual Report 2023 22. FINANCIAL RISK MANAGEMENT The Consolidated Entity's financial instruments mainly consist of deposits with banks, accounts receivable and payable, and investments. The principal activity of the Consolidated Entity is resource exploration, evaluation and development. The main risks arising from the Consolidated Entity's financial instruments are market (which includes price, interest rate and foreign exchange risks), credit and liquidity risks. Risk management is carried out by the Board of Directors. The Board evaluates, monitors and manages the Consolidated Entity's financial risk in close co-operation with its operating units. The financial receivables and payables of the Consolidated Entity in the table below are due or payable within 30 days. The financial investments are held for trading and are realised at the discretion of the Board. The Consolidated Entity holds the following financial instruments: (a) Market Risk i. Price risk The Consolidated Entity is exposed to equity securities price risk. This arises from investments held by the Consolidated Entity and classified in the statement of financial position at fair value through profit or loss. The Consolidated Entity is not directly exposed to commodity price risk. The value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all instruments in the market. The Consolidated Entity does not manage this risk through entering into derivative contracts, futures, options or swaps. Market risk is minimised through ensuring that investment activities are undertaken in accordance with Board established mandate limits and investment strategies. 2023 AUD 2022 AUD Financial assets Cash and cash equivalents 3,656,745 2,449,791 Financial instruments (term deposits) 813,985 1,047,144 Trade and other receivables 924,905 567,250 Financial asset 496,376 496,376 5,892,011 4,560,561 Financial liabilities at amortised cost Trade and other payables (21,566,739) (3,795,185) Financial liabilities (66,837,435) (18,151,549) (88,404,174) (21,946,734) Net Financial Assets (76,522,122) (8,240,910) 95 95 Annual Report Annual Report 2023 ii. Interest rate risk Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Consolidated Entity's exposure to market risk for changes in interest rates relate primarily to investments held in interest bearing instruments and its loan from third parties. The average interest rate applicable to funds held on deposit during the reporting period was 0.76 % (prior period: 0.70%). The Consolidated Entity has borrowings subject to interest rate risk. The possible impact on profit or loss or total equity on this exposure is displayed below: 2023 AUD 2022 AUD Cash at bank 3,548,380 2,344,130 Term deposits 106,444 104,689 Term deposits more than 90 days 813,985 1,047,144 Loan with unrelated third parties - - Current financial liabilities (19,791) (17,218) Non-current financial liabilities (66,817,644) (18,134,331) (62,368,626) (14,655,586) Financial Liability 2023 AUD 2022 AUD Change in profit Increase by 1% (668,374) (181,515) Decrease by 1% 668,374 181,515 Change in equity Increase by 1% (668,374) (181,515) Decrease by 1% 668,374 181,515 Revenue 2023 AUD 2022 AUD Change in profit Increase by 3% 109,702 73,494 Decrease by 3% (109,702) (73,494) Change in equity Increase by 3% 109,702 73,494 Decrease by 3% (109,702) (73,494) 96 96 Annual Report Annual Report 2023 iii. Foreign exchange risk The Consolidated Entity is exposed to foreign currency risk in cash held in Omani Riyals (OMR) by the Consolidated Entity's foreign controlled entity, foreign resource project investment commitments and exploration and evaluation expenditure on foreign exploration and evaluation. The primary currency giving rise to this risk is Omani Riyals (OMR). The Consolidated Entity has not entered into any forward exchange contracts as at reporting date and is currently fully exposed to foreign exchange risk. The Consolidated Entity's exposure to foreign currency risk at reporting date was as follows: The Consolidated Entity's exposure to foreign exchange risk is mitigated by having comparable asset and liability balances in OMR and US dollars. Therefore, a sensitivity analysis has not been performed. The Consolidated Entity enters into forward exchange contracts with its Australian bank from time to time to hedge against foreign exchange risk. (b) Credit risk: Credit risk refers to the risk that a counterparty under a financial instrument will default (in whole or in part) on its contractual obligations resulting in financial loss to the Consolidated Entity. Concentrations of credit risk are minimised primarily by undertaking appropriate due diligence on potential investments, carrying out all market transactions through approved brokers, settling non-market transactions with the involvement of suitably qualified legal and accounting personnel (both internal and external), and obtaining sufficient collateral or other security (where appropriate) as a means of mitigating the risk of financial loss from defaults. This financial year there was no necessity to obtain collateral. 2023 OMR 2022 OMR Cash and cash equivalents 705,902 293,850 Trade and other receivables 1,910,307 2,738,853 Trade and other payables (5,523,174) (922,501) Non-current financial liabilities - - (20,746,575) (2,719,432) 2023 US $ 2022 US $ Cash and cash equivalents 9,589 188,745 9,589 188,745 97 97 Annual Report Annual Report 2023 98 98 Annual Report Annual Report 2023 The credit quality of the financial assets are neither past due nor impaired and can be assessed by reference to external credit ratings (if available with Standard & Poor's) or to historical information about counterparty default rates. The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets as summarised below: The Consolidated Entity measures credit risk on a fair value basis. The carrying amount of financial assets recorded in the financial statements, net of any provision for losses, represents the Consolidated Entity's maximum exposure to credit risk. All receivables noted above are due within 30 days. None of the above receivables are past due. (c) Liquidity risk Liquidity risk is the risk that the Consolidated Entity will encounter difficulty in meeting obligations associated with financial liabilities. There is sufficient cash and cash equivalents and the non-cash investments can be realised to meet accounts payable arising in the normal course of business. The financial liabilities maturity obligation is disclosed below: 2023 AUD 2022 AUD Cash and cash equivalents BB- 3,654,824 2,448,819 No external credit rating available 1,921 972 3,656,745 2,449,791 Trade and other receivables (due within 30 days) No external credit rating available (66,817,644) (18,134,331) (62,368,626) (14,655,586) 2023 Less than 6 months AUD 6 - 12 months AUD 1 - 5 years AUD Total AUD Financial assets Cash and cash equivalents 3,656,745 - - 3,656,745 Financial instruments (term deposits) 767,231 35,479 11,275 813,985 Interest free loan to Alara Resources LLC - - 496,376 496,376 Trade and other receivables 924,905 - - 924,905 5,348,881 35,479 507,651 5,892,011 Financial liabilities Trade and other payables (21,566,739) - - (21,566.739) Other financial liabilities (12,541) (7,249) (66,817,643) (66,837,433) (21,579,280) (7,249) (66,817,643) (88,404,172) Net inflow/(outflow) (10,240,358) 28,230 (66,309,992) (76,522,120) 99 99 Annual Report Annual Report 2023 (d) Fair Value of Financial Assets and Liabilities The carrying amount of financial instruments recorded in the financial statements represents their fair value determined in accordance with the accounting policies disclosed in Note 1. The aggregate fair value and carrying amount of financial assets at reporting date are set out in Notes 7,8 and 10. The financial liabilities at reporting date are set out in Note 15 and (e) Fair value measurements The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The Consolidated Entity's financial assets and liabilities approximate their fair values. 18. ACCOUNTING POLICY NOTE Financial Instruments Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the entity commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately. Subsequent to initial recognition, these instruments are measured as set out below: • Financial assets at fair value through profit or loss - A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management and within the requirements of AASB 139: Recognition and Measurement of Financial Instruments. Realised and unrealised gains and losses arising from changes in the fair value of these assets are included in the profit or loss in the period in which they arise. • Loans and receivables - Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method. • Financial liabilities - Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation. Fair Value Estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Consolidated Entity is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation techniques, including but not limited to recent arm's length transactions, reference to similar instruments and option pricing models. The Consolidated Entity may use a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Other techniques, such as estimated discounted cash flows, are used to determine fair value for other financial instruments. The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair 2022 Less than 6 months AUD 6 - 12 months AUD 1 - 5 years AUD Total AUD Financial assets Cash and cash equivalents 2,449,791 - - 2,449,791 Financial instruments (term deposits) 1,002,439 34,186 10,519 1,047,144 Interest free loan to Alara Resources LLC - - 496,376 496,376 Trade and other receivables 567,250 - - 567,250 4,019,480 34,186 506,895 4,560,561 Financial liabilities Trade and other payables (3,795,185) - - (3,795,185) Other financial liabilities (10,852) (6,365) (18,134,332) (18,151,549) (3,806,037) (6,365) (18,134,332) (21,946,734) Net inflow/(outflow) 9,358,706 27,821 (17,627,437) (8,240,910) 100 100 Annual Report Annual Report 2023 value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Consolidated Entity for similar financial instruments. The Consolidated Entity's investment portfolio (comprising listed and unlisted securities) is accounted for as a "financial assets at fair value through profit or loss" and is carried at fair value based on the quoted last bid prices at reporting date. 23. COMMITMENTS 2023 AUD 2022 AUD (a) Lease Commitments Non-cancellable operating lease commitments: Within 1 year 14,073 17,403 1-5 years - - After 5 years - - Total 14,073 17,403 The Group leases office space under a non-cancellable operating lease. On renewal, the terms of the lease are renegotiated. The Group does not have an option to purchase the leased asset at the expiry of the lease period. During the year the Group has signed a sub-lease for the office space hence mitigating the outstanding lease commitments remaining on the lease. 101 101 Annual Report Annual Report 2023 24. CONTROLLED ENTITIES 25. JOINTLY CONTROLLED ENTITIES & INVESTMENTS IN ASSOCIATES 26. RELATED PARTY TRANSACTIONS Controlled and Jointly Controlled Entities Details of the interest in controlled entities and jointly controlled entities are set out in Notes 25 and 26. Investment in Controlled Entities Controlled entity Principal Activity Country of Incorporation Date of Incorporation Jun-22 Jun-21 Alara Resources Limited (AU0) Parent Exploration Australia 6-Dec-06 100% 100% Alara Peru Operations Pty Ltd (APO) AU0 Inactive Australia 9-Mar-07 100% 100% Alara Saudi Operations Pty Ltd (ASO) AU0 Management Australia 4-Aug-10 100% 100% Saudi Investments Pty Limited (SIV) AU0 Development Australia 14-Feb-11 100% 100% Alara Oman Operations Pty Limited (AOO) AU0 Management Australia 28-Jun-10 100% 100% Alara Kingdom Operations Pty Limited (AKO) AU0 Management Australia 5-Sep-11 100% 100% Alara Saudi Holdings Pty Limited (ASH) AU0 Inactive Australia 5-Jun-13 100% 100% Al Hadeetha Resources LLC AOO Exploration / Development Oman 6-Feb-07 51% 51% Alara Resource Ghana Limited AU0 Inactive Ghana 8-Dec-09 100% 100% Alara Peru S.A.C APO Inactive Peru 1-Mar-07 100% 100% Alara Operations LLC AOO Administration Oman 01-Feb-20 100% 100% Sita Mining Company LLC ASO Inactive Saudi Arabia - 70% 70% Khnaiguiyah Mining Company LLC AKO Inactive Saudi Arabia 10-Jan-2011 50% 50% Alara Saudi Ventures Pty Ltd AU0 Administration Australia 1 March 2022 100% 100% Investment in Controlled Entities Controlled entity Principal Activity Country of Incorporation Date of Incorporation Jun-22 Jun-21 Daris Resources LLC AOO Exploration Oman 1-Dec-10 50% 50% Alara Resources LLC AOO Mining Services Oman 2-Oct-10 35% 35% 102 102 Annual Report Annual Report 2023 Transactions with other related parties The following transactions occurred with related parties during the year ending 30 June 2023: $120,000 paid to Fortuna Advisory Group as a combined amount for Company Secretarial Services and Chief Financial Officer Services. Mr Dinesh Aggarwal is a consultant to Fortuna Advisory Group through Fortuna Accountants and Business Advisors, of which he is Managing Director (The above amount includes $43,016 which is paid for Company Secretarial services provided). Director loan agreements There was no outstanding Directors' loan during the year. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL Key Management of the Consolidated Entity are each Director and Company Executive being a company secretary or senior managers with authority and responsibility for planning, directing and controlling the major activities of the Company or Consolidated entity. Details of key management personnel individual remuneration are disclosed in the remuneration report section of the directors' report. Key Management Personnel remuneration includes the following expenses: 2023 AUD 2022 AUD Short term employee benefits: Remuneration including bonuses and allowances 698,044 594,968 Total short term employee benefits 698,044 594,968 Long term benefits 34,716 23,204 Total other long-term benefits 34,716 23,204 Post-employment benefits: Defined benefit pension plans - - Defined contribution pension plans 2,523 2,170 Total post-employment benefits 2,523 2,170 Termination benefits - - Share-based payments - - Total remuneration 735,283 620,342 103 103 Annual Report Annual Report 2023 27. CONTINGENT ASSETS AND LIABILITIES Contingent assets and liabilities exist in relation to certain exploration and evaluation of the Consolidated Entity subject to the continued development and advancement of the same, as described below. a) Directors' Deeds - The Company has entered into deeds of indemnity with each of its Directors indemnifying them against liability incurred in discharging their duties as directors/officers of the Consolidated Entity. As at the reporting date, no claims have been made under any such indemnities and accordingly, it is not possible to quantify the potential financial obligation of the Consolidated Entity under these indemnities. b) Loan to unrelated party (AHI) (Oman) - On 26 October 2017 Al Hadeetha Investments LLC (AHI) gave a bank guarantee of OMR 30,000 to the Omani Ministry of the Environment as security for performance of the environmental obligations of AHRL in connection with the Al Wash-hi Majaza Project mining licence. AHI was required to deposit the amount of the face value of the bank guarantee with its bank as security in the event that the bank guarantee is called upon. Pursuant to an agreement between the Consolidated Entity and AHI, the Consolidated Entity paid OMR 20,000 to AHI on or about that date, representing an approximation of its share of liability to contribute to the costs of remediating any unmet environmental obligations of AHR. This amount will be returned to the Consolidated Entity in the event that AHRL performs its environmental obligations in relation to that mining licence. c) Alara Oman Operations Pty Limited, a wholly owned subsidiary of Alara Resources Ltd has provided a guarantee to Sohar International SAOG (Sohar) for the full liability of Al Hadeetha Resources LLC (AHRL - Alara, 51%) under a loan facility of OMR 24.8 million (AUD 97.327 million) from Sohar International to AHRL (Sohar Loan), the proceeds of which AHRL is using to finance construction of the Al Wash-hi Majaza copper- gold project in Oman. d) Principals (Guarantors) of shareholders in AHRL which hold 30% and 19% of the shares in AHRL respectively have provided personal guarantees to Sohar in respect of the Sohar Loan (Guarantees) which correspond to the guarantee referred to in note (c). Alara Resources Limited has provided an indemnity to the Guarantors in respect of their liability under the Guarantee, limited to 49% of the amounts paid by the Guarantors to Sohar under the Guarantees. 28. SUBSEQUENT EVENTS Events occurring after the balance date are set out as below: 179,521,885 options were issued to Trafigura Pte Ltd after the reporting period as security for a loan of USD 3.45 million (AUD: 5.188 million) from Trafigura to Alara. Each option may be exercised only if Alara defaults under the loan. On a default, Trafigura may exercise a number of options up to the number equal to the amount outstanding under the loan divided by the exercise price of an option. Each option may be exercised at a 10% discount to the volume weighted price of an Alara share over the 30 days preceding the event of default which led to the right to exercise the options. If any options are exercised, Trafigura's liability to pay the exercise price of the options will be satisfied by Trafigura reducing the amount owing under the loan by a corresponding amount. Al Wash-hi Majaza Project ("Project") development The Company continued to develop the Project after the end of the reporting period, as detailed in the section of this report titled "Review of Operations". 104 104 Annual Report Annual Report 2023 Directors' Declaration (FOR THE YEAR ENDED 30 JUNE 2023) The Directors of the Company declare that: The Financial Statements, comprising the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows and accompanying notes as set out on pages 22 to 40, are in accordance with the Corporations Act 2001 and: a) Comply with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and b) Give a true and fair view of the Consolidated Entity's financial position as at 30 June 2023 and of its performance for the year ended on that date; In the Directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; The Remuneration Report disclosures set out (within the Directors' Report) on pages 11 to 15 (as the audited Remuneration Report) comply with section 300A of the Corporations Act 2001; The Company has included in the notes to the Financial Statements an explicit and unreserved statement of compliance with the International Financial Reporting Standards. The Directors have received the declarations required to be made to the Directors by the Managing Director (the person who performs the chief executive officer function) and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2023. This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act 2001. Atmavireshwar Managing Director 29 September 2023 105 105 Annual Report Annual Report 2023 Securities Information16 ISSUED SECURITIES DISTRIBUTION OF FULLY PAID, ORDINARY SHARES UNMARKETABLE PARCELS Quoted on ASX Unlisted Total Fully paid, ordinary shares 718,087,541 - Managing Directors’ Options17 - 7,499,000 Trafigura Options18 - 187,020,885 Totals 718,087,541 194,519,885 912,607,426 Min parcel size Holders Units Minimum $500.00 parcel at $0.036 per unit 13,888 - Spread of Holdings No. of Holders Number of Units % of Issued Capital 1 – 1000 829 267,173 0.037 % 1,001 – 5,000 249 586,254 0.082 % 5,001 – 10,000 140 1,164,876 0.162 % 10,001 – 100,000 461 18,379,616 2.560 % 100,001 + 284 697,689,622 97.159 % Total 1963 718,087,541 100% 16 Current at 12 October 2023. 17 See the Company’s Notice of Meeting for its 2021 Annual General Meeting, released on ASX on 22 November 2021, for the terms of the options issued to the Managing Director referred to above. Other than those options, there are no other Directors’ or employee options on issue by the Company. 18 The material terms of these options are fully set out in Alara's ASX announcement dated 26 July 2023 106 106 Annual Report Annual Report 2023 TOP 20 ORDINARY FULLY PAID SHAREHOLDERS ON-MARKET BUY BACK There is no current on-market buy back in progress. Rank Shareholder Shares Held % of Issued Capital 1. Al Tasnim Infrastructure LLC 99,650,067 13.877 2. Mr Vikas Malu 57,142,050 7.958 3. Ms Meng Meng 41,844,441 5.827 4. Citicorp Nominees Pty Limited 38,627,409 5.379 5. Mr Vikas Jain 37,745,930 5.256 6. Al Hadeetha Investment Services LLC 31,500,000 4.387 7. BNP Paribas Nominees Pty Ltd 26,916,191 3.748 8. Mr Piyush Jain 24,199,437 3.370 9. Mr Tyrone James Giese 17,705,960 2.466 10. Mr Mohammed Saleh Alalshaikh 16,875,925 2.350 11. Whitechurch Development Pty Ltd 15,094,134 2.102 12. Progesys International FZC 14,527,028 2.023 13. Mr Basam Nasir A Alaggal 13,299,396 1.852 14. Mr Farrokh Jimmy Masani 12,142,581 1.691 15. Ferguson Superannuation Pty Ltd 11,843,878 1.649 16. Mr Pradeep Kumar Goyal 10,609,742 1.477 17. Mr Anthony Cullen + Mrs Sue Cullen 9,950,851 1.386 18. Mr Peter Kelvin Rodwell 9,422,858 1.312 19. Mr Jay Hughes and Mrs Linda Hughes 9,000,000 1.253 20. AUM Family Super Pty Ltd 8,555,725 1.191 Total 506,653,603 70.556 % 107 107 Annual Report Annual Report 2023 Compliance Information JORC COMPETENT PERSONS' STATEMENTS AND JORC CODE INFORMATION The information in this announcement that relates to the feasibility study of the Al Hadeetha copper-gold project is based on information compiled by Mr Shanker Madan, who is a Member of the Australasian Institute of Mining and Metallurgy, and consultant to Alara Resources. Mr Madan has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code, 2012 edition. Mr Madan consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears. The information in this announcement that relates to Ore Reserve of the Al Hadeetha Project was compiled by Mr Harry Warries, who is a Fellow of the Australasian Institute of Mining and Metallurgy, and a consultant to Alara Resources. Mr Warries has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ In assessing the appropriateness of the Ore Reserve estimate, Mr Warries has relied on various reports, from both internal and external sources, in either draft or final version, which form part of or contribute to the Al Hadeetha Project Feasibility Study. These reports are understood to be compiled by persons considered by Alara to be competent in the field on which they have reported. Mr Warries consents to the inclusion in the report of the information in the form and context in which it appears. The information in this announcement that relates to Mineral Resources of the Daris Copper Gold Project and the Al Hadeetha Copper-Gold Project (Oman) are based on, and fairly represents, information and supporting documentation prepared by Mr Ravi Sharma, who is a Chartered Member of The Australasian Institute of Mining and Metallurgy, Registered Member of The Society for Mining, Metallurgy and Exploration. Mr Sharma was a principal consultant to Alara Resources and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking to qualify as a Competent Person as defined in the JORC Code, 2012 edition. Mr Sharma approves and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. This report refers to original ASX market announcements of Mineral Resources and Ore Reserves where those matters are discussed above. The Company is not aware of any new information or data that materially affects the information in those market announcements. All material assumptions and technical parameters underpinning estimates of Mineral Resources and Ore Reserves in those announcements continue to apply and have not materially changed. FORWARD-LOOKING STATEMENTS This report contains "forward-looking statements" and "forward-looking information", including statements and forecasts which include without limitation, expectations regarding future performance, costs, production levels or rates, mineral reserves and resources, the financial position of Alara, industry growth and other trend projections. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "is expecting", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes", or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might", or "will" be taken, occur or be achieved. Such information is based on assumptions and judgements of management regarding future events and results. The purpose of forward-looking information is to provide the audience with information about management's expectations and plans. Readers are cautioned that forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Alara and/or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others, changes in market conditions, future prices of gold and silver, the actual results of current production, development and/or exploration activities, changes in project parameters as plans continue to be refined, variations in grade or recovery rates, plant and/or equipment failure and the possibility of cost overruns. 108 108 Annual Report Annual Report 2023 Forward-looking information and statements are based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date such statements are made, but which may prove to be incorrect. Alara believes that the assumptions and expectations reflected in such forward-looking statements and information are reasonable. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Alara does not undertake to update any forward-looking information or statements, except in accordance with applicable securities laws. 109 109 Annual Report Annual Report 2023 110 110 Annual Report Annual Report 2023 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ALARA RESOURCES LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of Alara Resources Limited ("the Company") and its controlled entities ("the Group") which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended on that date and notes to the financial statements, including a summary of significant accounting policies and the directors' declaration of the Company. In our opinion the financial report of the Group is in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial performance for the year ended on that date; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under these standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of this report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (Including Independence Standards) (the "Code") that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 111 111 Annual Report Annual Report 2023 Key Audit Matter - Financial Liabilities The Group has significant financial liabilities as disclosed in Note 17 to the financial statements. This was considered to be a key audit matter due to its importance in financing future activities of the Group and complexities in determining whether financial covenants have been complied with, ensuring that the classification between current and non-current is accurate and in valuing the financial liabilities denominated in foreign currencies. Key Audit Matter - Capitalised Mine Properties ft Development Assets As disclosed in Note 13 to the financial statements, the Group's has capitalised mine development expenditure of $98,618,098. The recognition and recoverability of mine development was considered a key audit matter as: • the carrying value represents a significant asset to the Group; and • significant management judgement is involved in determining whether impairment indicators exist. How our Audit Addressed the Key Audit Matter Our procedures over the Group's financial liabilities included but were not limited to: • Reviewing financing agreements; • Agreeing significant financial liabilities to independent third-party supporting documentation; • Reviewing management's assessment of compliance with financial covenants related to the financial liabilities; and • We have assessed the appropriateness of the disclosures included in the financial report. How our Audit Addressed the Key Audit Matter Our procedures in assessing mine development expenditure included but were not limited to the following: • We reviewed the ownership rights to the tenements, against which the expenditure is capitalised, their expiry dates and if required commitments were met; • We assessed the reasonableness of capitalising mine development expenditure in accordance with Australian Accounting Standards; • We tested a sample of mine development expenditure items to supporting documentation to ensure they were bona fide payments; • We assessed the reasonableness of the management's assessment for the existence of impairment indicators; and • We reviewed the appropriateness of the related disclosures. 112 112 Annual Report Annual Report 2023 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ALARA RESOURCES LIMITED (CONTINUED) Other Information The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2023, but does not include the financial report and our auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Directors' Responsibility for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with the Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or cease operations, or have no realistic alternative but to do so. Auditor's Responsibility for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: www.auasb.gov.au/Home.aspx. We communicate with the directors regarding, amongst other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 113 113 Annual Report Annual Report 2023 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ALARA RESOURCES LIMITED (CONTINUED) We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe those matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communications. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the remuneration report included in the directors' report for the year ended 30 June 2023. In our opinion the remuneration report of Alara Resources Limited for the year ended 30 June 2023 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Rothsay Audit & Assurance Pty Ltd Daniel Dalla Director 29 September 2023 114 114 Annual Report Annual Report 2023 115 115 Annual Report Annual Report 2023 Corporate Directory DIRECTORS Stephen Gethin Atmavireshwar Sthapak Vikas Jain Sanjeev Kumar Devaki Khimji Farrokh J Masani Non-Executive Chairman Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Alternate Director 19 COMPANY SECRETARY Dinesh Aggarwal AUDITORS REGISTERED OFFICE AND BUSINESS ADDRESS AUSTRALIAN SECURITIES EXCHANGE CORPORATE GOVERNANCE STATEMENT SHARE REGISTRY 19 Mr Masani is an alternate director for Devaki Khimji Suite 1.02,110 Erindale Road Balcatta Western Australia 6021 Postal: PO Box 963 Balcatta Western Australia 6914 AUSTRALIA Telephone: +61 8 9240 4211 E-mail: info@alararesources.com Rothsay Audit & Assurance Pty Ltd Level 1 Lincoln Building, 4 Ventnor Avenue West Perth, Western Australia 6005 Telephone: +61 2 8815 5400 Website: www.rothsay.com.au ASX Limited Level 40, Central Park 152-158 St Georges Terrace Perth, Western Australia 6000 ASX Code: AUQ The Company's Corporate Governance Statement is available on the Company's Website: www.alararesources.com Advanced Share Registry Ltd 110 Stirling Highway Nedlands, Western Australia 6009 Level 6, 225 Clarence Street Sydney, New South Wales 2000 Telephone: +61 8 9389 8033 Facsimile: +61 8 9262 3723 E-mail: admin@advancedshare.com.au Website: www.advancedshare.com.au Telephone: +61 2 8096 3502 Website: www.alararesources.com Investors wishing to receive email alerts of all Company ASX Announcements can register their interest here by clicking "email alerts" at: www.alararesources.com/irm/content/ default.aspx or by emailing info@alararesources.com. 116 116 Annual Report Annual Report 2023 Digging Deeper Delivering Value “Alara Resources continues to grow from strength to strength and is set to continue its endeavors in Oman.” Atmavireshwar Sthapak Managing Director “Quote goes here, unt ut laoreet dolore magna aliquam erat volutpat.” Atmavireshwar Sthapak Managing Director

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