Bankinter Annual Report 2023

Plain-text annual report

ANNUAL FINANCIAL REPORT For the Year Ended 30 June 2023 Cover image is floatation froth from large scale pilot plant run in China in 2021. ABN: 59 094 551 336 CORPORATE DIRECTORY Directors: Richard Crookes Chairman Non-Executive John de Vries Chief Executive Officer, Managing Director Ian Murray Non-Executive Director Company Secretary: James Doyle Principle Place of Business and Registered Address: Level 1, 1 Walker Avenue, West Perth WA 6005 T: +61 (08) 6383 6200 blackrockmining.com.au Auditor: Deloitte Touche Tohmatsu Tower 2, Brookfield Place 123 St Georges Terrace Perth WA 6000 T: +61 (08) 9365 7000 F: +61 (08) 9365 7001 Share Registry: Computershare Investor Services Pty Ltd Level 17, 221 St Georges Terrace Perth WA6000 T: +61 1300 787 272 F: +61 (08) 9323 2033 E: web.queries@computershare.com.au Stock Exchange Listing: The Company’s shares are quoted on the Australian Securities Exchange (ASX). The Home Exchange is Perth. ASX Code: BKT – ordinary shares CONTENTS MAHENGE PROJECT SNAPSHOT PROJECT HIGHLIGHTS OF THE YEAR CHIEF EXECUTIVE OFFICER’S REPORT DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION FINANCIAL REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUUDITOR’S REPORT ADDITIONAL INFORMATION 2 3 4 10 25 26 27 28 29 30 31 58 60 66 BLACKROCK MINING ANNUAL REPORT | 2023 1 MAHENGE PROJECT SNAPSHOT Black Rock Mining Limited’s (Black Rock Mining) Mahenge Project in Tanzania hosts a multi-generational graphite resource and is one of the largest JORC-compliant flake graphite resources globally, with 212m tonnes @ 7.8% TGC and a reserve of 70m tonnes @ 8.5% TGC.1 The Mahenge Project is spread across 324 square kilometres of exploration tenements in Tanzania’s Ulanga district, approximately 250 km north of the border with Mozambique. 250 km west of the coastal port city of Mtwara on the Indian Ocean and 300 km southwest of Tanzania’s largest city, Dar es Salaam. Black Rock Mining’s Definitive Feasibility Study for the project considers a four-stage construction schedule to deliver up to 340,000 tonnes per annum of 98.5% graphite concentrate for 26 years of 98.5% LOI premium graphite flake concentrate with the ability to produce Ultra Purity flake of 99% LOI.2 Tier 1 Scale The Mahenge Graphite Project is very large… with a resource of over 200mt and the 2nd largest reserve in the world. More large flake Mahenge has a higher proportion of higher-value large flake than most of the mines in production – this is the equivalent of having a by product credit Black Rock Mining’s peers don’t have. 1st Quartile Costs Mahenge is expected to a very low-cost mine due to our access to low-cost hydro- dominated grid power at around 8 USc/kWh, which also means low-carbon footprint graphite products. Backed by POSCO is the largest global anode producer outside China and is Black Rock Mining’s major shareholder, offtake partner and now plans to provide up to USD50m to help fund project development. 1. Refer to ASX Announcement dated 3 February 2022 Black Rock Mining confirms 25% increase in Measured Mineral Resource, now the largest in class globally. This announcement contains the relevant statements, data and consents referred to this in this Report. The Company is not aware of any other new information or data that materially affects the information included in this Report and confirms that the material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. 2. Refer to ASX Annoucement dated 10 October 2022, Black Rock completes FEED and eDFS Update. All technical parameters, including in the estimation of Mineral Resources or Ore Reserves, underpinning the estimates continue to apply and have not materially changed. The estimated Ore Reserves and Mineral Resources underpinning the production and financial forecasts were prepared by Competent Persons in accordance with the requirements in Appendix 5A (JORC Code). BLACKROCK MINING ANNUAL REPORT | 2023 T O H S A N S T C E J O R P E G N E H A M 2 PROJECT HIGHLIGHTS OF THE YEAR Black Rock Mining signs binding offtake and US$10m Prepayment Agreements with POSCO Special Mining Licence awarded for Mahenge MOU signed with TAZARA for transportation of graphite Cash and cash equivalents at 30 June 2023 AUD 11.5m Sustainability and ESG Pricipals developed MOU signed with TANESCO for Grid Power Supply to Mahenge Strongly supported Placement of AUD10m at AUD 0.116 per share R A E Y E H T F O S T H G L H G H T C E J O R P I I BLACKROCK MINING ANNUAL REPORT | 2023 3 CHIEF EXECUTIVE OFFICER’S REPORT MAHENGE GRAPHITE PROJECT The 2023 financial year has seen us deliver further crucial milestones on the pathway toward completion of financing and subsequent development of the Mahenge Graphite Project (the Project or Mahenge). Following issuance of our Framework Agreement in December 2021, I was very pleased to see the Special Mining Licence (SML) for Mahenge awarded in September 2022. This is the last key permit required to secure debt finance. Mahenge Graphite Project Tanzania Dodoma Kidatu 204MW Morogoro Zanzibar Dar es Salaem a r a R ail w ay Line z a T Indian Ocean Towns/Cities Hydro Plant Roads Rail 220kV Lines Iringe Kihansi 180MW Ifakara MAHENGE GRAPHITE PROJECT I ’ T R O P E R S R E C F F O E V T U C E X E F E H C I I 4 BLACKROCK MINING ANNUAL REPORT | 2023 AFRICA SNAPHOT OF THE MAHENGE GRAPHITE PROJECT Simple open pit mine development with outstanding forecast returns.1 US$1.4b NPV 10 nom Post Tax, Post 16% FC 36% Post Tax, ungeard IRR 89ktpa Module 1 production* (1Mtpa) US$182m Module 1 development capex* 347ktpa Steady production (4 1Mtpa) 95-99% + TGC Purity 59%+ 80 mesh, 41%-80 Concentrate Product US$1,709/t Basket Graphite Price*** US$518/t All-In-Sustaining Cost** Shortly thereafter, in October 2022, we completed the Front End Engineering Design (FEED) and released the Updated eDFS (enhanced Definitive Feasibility Study) for Mahenge. This updated capital expenditure (Capex) and operating expenditure (Opex) estimates for the Project to a bankable level of confidence and corrected for cost changes since our original estimate in 2018. On completion of the eDFS, we opened our data room to potential lenders and activity in our debt process ramped up substantially. As part of the financing process, several independent expert reports were completed covering technical, environmental and social as well as graphite markets. One of the key elements of the independent expert report on the environmental and social aspects of the project was to ensure Project compliance with the International Finance Corporation Performance Standards and the current Equator Principles (EP4). At the end of the financial year, all three of our lead potential project debt lenders had completed site visits and substantially completed due diligence and are on track to deliver credit-approved debt term sheets in CY23. During the year, we completed the Resettlement Action Plan (RAP) compensation payments and signed Memorandum of Understandings (MOU) with Tanzania Electric supply Company Limited (TANESCO) for the Grid Power Supply to Mahenge and Tanzania Zambia Railway Authority (TAZARA) for the rail transportation of graphite from Ifakara to the port of Dar es Salaam. 26 years Initial Operating Life 1. See Black Rock ASX release dated 10 October 2022, Black Rock completes FEED and eDFS Update. All technical parameters, including in the estimation of Mineral Resources or Ore Reserves, underpinning the estimates continue to apply and have not materially changed. The estimated Ore Reserves and Mineral Resources underpinning the production and financial forecasts were prepared by Competent Persons in accordance with the requirements in Appendix 5A (JORC Code). *Excludes US$33m to upgrade the power line which the Company is contemplating building on behalf of TANESCO, the Tanzanian Govt power authority. Power costs are likely to be ~US8c/ kWh less a meaningful rebate to recoup the costs of the power line. Forecast Capex has been classified as a Class 2 estimate with accuracy of ±10% as defined by AACE. **Average over first 10 years. ***Expert Consensus based on the average forecast from Benchmark Mineral Intelligence, Fastmarkets and Wood Mackenzie over the first 10 years. I ’ T R O P E R S R E C F F O E V T U C E X E F E H C I I BLACKROCK MINING ANNUAL REPORT | 2023 5 Mahenge’s Enviable Competitive Advantages One of the key highlights of the eDFS Update was the industry analysis which highlighted Mahenge’s 1st quartile position on the global costs curve – a potentially bold claim when one considers ~70% of the world’s natural graphite is mined in China. While the Mahenge graphite deposit is Tier 1 scale and has a very low strip ratio of 0.77 life-of-mine, its key differentiating competitive advantages are access to low-cost hydro- dominated grid power in Tanzania and a much higher percentage of higher value per tonne large flake products than most peers While there is no premium associated with Mahenge’s low carbon footprint graphite products yet, we are already seeing new reporting requirements being introduced in Europe for the battery supply chain which require a detailed breakdown of the carbon footprint associated with each battery component. In the short term we expect Mahenge’s low carbon footprint products to provide enhanced market access in Europe and western markets, but longer term we see potential for Mahenge’s product to attract a premium or other fiscal incentives. MAHENGE IS ONE OF VERY FEW GRAPHITE PROJECTS IN THE WORLD EXPECTED TO HAVE BOTH 1ST QUARTILE COSTS AND VERY LOW CARBON FOOTPRINT GRAPHITE PRODUCTS DUE TO ACCESS TO LOW-COST HYDRO-DOMINATED GRID POWER IN TANZANIA. Deepening our relationship with POSCO During the year, we further deepened our relationship with our strategic alliance partner POSCO, signing full form binding agreements for the life-of-mine fines offtake for Mahenge Module 1 and the USD10m prepayment facility to help fund development. In addition, we also signed a MOU with POSCO’s steel division for 6ktpa of large flake, increasing POSCO’s potential offtake for Mahenge Module 1 to almost 40% of volume. In 2022, POSCO was the largest anode producer outside China by a considerable margin and, as the chart below illustrates, POSCO has ambitious plans to grow its anode business by 4.5x between 2022 and 2030. Subsequent to year end, we signed a non-binding MOU with POSCO for the fines from Module 2, in exchange for a potential investment from POSCO in Black Rock Mining Limited (Black Rock Mining) of up to USD40m or 19.9% (whichever is lower). The proceeds are to be used for the development of Module 1. Under the terms of the MOU, POSCO and Black Rock Mining will also explore additional opportunities for to cooperate further to develop an Inflation Reduction Act compliant anode supply chain. I ’ T R O P E R S R E C F F O E V T U C E X E F E H C I I 6 BLACKROCK MINING ANNUAL REPORT | 2023 Tanzanian Activities I’m pleased to note that during the period the Company completed the compensation process and initial resettlement activities pursuant to the Mahenge Graphite Project Resettlement Action Plan. Local engagement and project execution activities accelerated with the announcement of initial leadership appointments under Black Rock Mining’s subsidiary company, Faru Graphite Corporation Limited (Faru). Faru was established in partnership with the Photo 1 - The 2115MW Julius Nyerere Hydropower Project is expected to begin power generation soon I ’ T R O P E R S R E C F F O E V T U C E X E F E H C I I BLACKROCK MINING ANNUAL REPORT | 2023 7 Tanzanian Government to jointly develop the Mahenge Graphite Project. Tanzanian CEO, Mr Alimiya (Ali) Osman was appointed, along with Mr Asa Mwaipopo as Non-Executive Director. Mr Ted Silkiluwasha and Mr Danstan Mtajura Daud also joined as government appointed Directors, along with Black Rock Mining Directors Mr Ian Murray as Non-Executive Director and myself as Executive Chairman. Having worked closely with the government and our partners in Tanzania, the Company is fortunate to be able to attract and recruit world class Tanzanian citizens that supports our desire to co-develop local capability to drive positive outcomes for Tanzania and our investors. In parallel with our focus on developing Mahenge, the 2,115MW Julius Nyerere Hydropower Project was completed during the year and is expected to begin generating power soon. Grid power in Tanzania is currently generated by ~40% hydroelectricity / ~60% gas-fired power. Once the Julius Nyerere scheme is commissioned the percentage of grid power made up by hydroelectricity is expected to increase to up to 60-70%, which will make the Black Rock Mining’s Mahenge graphite products some of the lowest carbon footprint graphite products in the world. We are now on the cusp of completing our debt financing process for Mahenge and are hoping to raise the balance of equity required later in CY23 with construction of Mahenge expected to commence shortly thereafter. Corporate During the year, Black Rock Mining strengthened its balance sheet with a AUD10 million placement to new and existing institutional and sophisticated investors with cornerstone support from a large US Fund. This means that the Company is appropriately funded with AUD11.5 million in cash as it aims to finalise debt financing ahead of planned construction activities. With the focus on building-out organisational capabilities, Black Rock Mining made several key appointments through the year, including: Raelene Wyatt as General Manager, People, Culture and Sustainability. David Griffiths as General Manager, Mahenge (former GM of Syrah’s Balama graphite project). Environmental, Social and Governance The Company remains committed to maintaining the highest possible standards of Environmental, Social and Governance (ESG) and during the year the Company developed its ESG and Sustainability Principles. These Principles are designed to: Provide visibility on Black Rock Mining’s blueprint for confidence in the Project in both investment and offtake markets; Outline the Company’s unique advantages that provide a competitive position and underpin Black Rock Mining’s ability to deliver a real and sustainable operation; and Confirm its commitment to the sustainable economic transition of Tanzania through support for community and social development. The ESG and Sustainability Principles document and letter from the CEO can be found on the Black Rock Mining website in the Corporate Governance section. During the year the Company substantially progressed the critical path studies required to ensure compliance with the Equator Principals and International Finance Corporation Performance Standards to meet lender requirements for the associated facilities of the Transmission Line, the Lower Access Road and the Indenki resettlement area of Mdindo village. We believe compliance with these standards differentiates the Company in increasingly discerning offtake, investment and financial markets. Ultimately, we simply believe this is the right thing to do. On a personal note, I would like to thank you, our shareholders for your patience and ongoing support. Battery demand for graphite has been growing rapidly over the past few years and several experts expect battery demand to become the largest source of demand for graphite for the first time in 2023, representing a major structure shift in dynamics for graphite markets. I continue to believe that the expected global market demand will bring substantial opportunities for Black Rock Mining that will ultimately deliver value for all stakeholders. Graphite will play a critical role as part of global decarbonisation and clean energy strategies, and I look forward to executing on our plans over the next year as we aim to transition from developer to producer. John de Vries CEO & MANAGING DIRECTOR Forward Looking Statements Disclaimer This Report contains forward-looking statements that involve a number of risks and uncertainties. These forward looking statements are expressed in good faith and believed to have a reasonable basis. These statements reflect current expectations, intentions or strategies regarding the future and assumptions based on currently available information. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary from the expectations, intentions and strategies described in this report. No obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments. I ’ T R O P E R S R E C F F O E V T U C E X E F E H C I I 8 BLACKROCK MINING ANNUAL REPORT | 2023 Sustainability and ESG Principals ASX:BKT Naturally Better Graphite Sustainability and ESG Principals March 2023 Introduction “Our purpose is to sustainably enable global clean energy economies” At Black Rock, we are highly focused on delivering the best outcome on every metric that supports our mission to enable the world’s transition to sustainable energy. Our Mahenge Graphite Mine, located in Tanzania, is set to become a globally significant new source of graphite that is desperately needed for clean energy storage technologies including the electrification of transport. Benchmark Mineral Intelligence forecast that 97 new natural graphite mines will need to be built by 2035 to keep up with the exceptional demand for graphite. Developing a mine in Tanzania is multidimensional. Not only are we enabling a global transition to renewables, we are also enabling an economic transition in our immediate project area. This must be done responsibly and structured in a manner that supports a whole of community approach. Adherence to national standards and where appropriate the IFC Performance Standards and Version 4 of the Equator Principals results in Mahenge meeting the same standards as other Tier 1 resource developments. A policy of responsible resource development should result in our stakeholders having the confidence to support the project in both investment and offtake markets. John de Vries Managing Director and CEO Enterprise Strategy ESG Strategy ENVIRONMENT Direct and indirect impacts on emissions, pollution, waste, and resources. Natural Resources Whole of Supply Chain Operational Advantages Geological / Geographical KEY DIFFERENTIATORS AND FOCUS AREAS SOCIAL Direct and indirect impacts on societal well-being, justice, equity, and creating opportunities for societal Livelihood Restoration Create Growth Opportunities Social Licence Community Development GOVERNANCE Direct and indirect impacts on emissions, pollution, waste, and resources. Risk Mitigation Management KPI Linked Transparency & Visibility Government Engagement I ’ T R O P E R S R E C F F O E V T U C E X E F E H C I I BLACKROCK MINING ANNUAL REPORT | 2023 9 DIRECTORS’ REPORT The Directors of Black Rock Mining Limited (Company or Black Rock Mining) submit herewith the annual report of the Company and its subsidiary entities (Consolidated Entity or Group) for the financial year ended 30 June 2023. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: T R O P E R ’ S R O T C E R D I 10 BLACKROCK MINING ANNUAL REPORT | 2023 INFORMATION ABOUT THE DIRECTORS The names and details of the Directors of Black Rock Mining during the financial year are: NAME PARTICULARS Richard Crookes Non-Executive Chairman Ian Murray Non-Executive Director John de Vries Managing Director and CEO Mr Crookes has over 35 years’ experience in the resources and investments industries. He is a geologist by training having worked in the industry most recently as the Chief Geologist and Mining Manager of Ernest Henry Mining in Australia. Mr Crookes is Managing Partner of Lionhead Resources, a Critical Minerals Investment Fund and formerly an Investment Director at EMR Capital. Prior to that he was an Executive Director in Macquarie Bank’s Metals Energy Capital (MEC) division where he managed all aspects of the bank’s principal investments in mining and metals companies as well as the origination of numerous project finance transactions. Mr Crookes has extensive experience in deal origination, evaluation, structuring, and completing investment entry and exits for both private and public resource companies in Australia and overseas, as well as execution of Project Finance transactions in Africa. Mr Crookes is a member of both the Audit & Risk and Remuneration & Nomination Committees. Mr Crookes held directorships with the following listed companies in the three years immediately prior to the date of this report. NAME DATE APPOINTED DATE RESIGNED Highfield Resources Limited April 2013 Lithium Power International Ltd November 2018 Barton Gold Holdings Ltd February 2021 Vital Metals Limited August 2022 March 2022 Current May 2022 Current Mr Murray is a Non-Executive Director of Black Rock Mining. Mr Murray graduated with a Bachelor of Commerce (BCom) in 1987 from the University of Cape Town, is a fellow of the Institute of Chartered Accountants of Australia and New Zealand, and is a member of the Australian Institute of Company Directors. He has held senior management positions for companies such as KPMG, PricewaterhouseCoopers, Bioclones, DRDGold Ltd, and Gold Road Resources. More recently, as Chief Executive Officer and Managing Director, he successfully delivered Gold Road Resources’ (ASX:GOR) Gruyere Project, and has significant African experience through DRDGold. Mr Murray is the Chair of both the Audit & Risk and Remuneration & Nomination Committee. Mr Murray held directorships with the following listed companies in the three years immediately prior to the date of this report. NAME DATE APPOINTED DATE RESIGNED Matador Mining Ltd May 2020 Geopacific Resources Ltd September 2019 Todd River Resources Ltd September 2020 Jupiter Mines Limited February 2022 October 2022 July 2022 October 2021 Current Mr de Vries has over 30 years’ experience in the mining industry. He started his career in 1984 working for WMC Resources and held operational roles such as Underground Manager, Senior Mining Engineer and Manager Mining. In 1998, he moved to AMC Consultants to become a Principal Mining Engineer responsible for Mine Optimisation. In 2003, he joined Orica Mining Services as Global Business Manager, Advanced Mining Solutions, before moving to BHP Billiton in 2007 as the Manager Strategic Mine Planning. Most recently from 2011 to 2015, he was General Manager Technical Services for St Barbara. After his success with St Barbara, Mr de Vries took an 18-month sabbatical before joining Black Rock Mining. Mr de Vries holds a Bachelor of Engineering, Mining, a Master of Science in Mineral Economics, a Graduate Diploma in Economic Geology, a Graduate Diploma in Financial Markets and is Advisory Committee Member-Mining of MRIWA. Mr de Vries holds a WA First Class Mine Managers Certificate of Competency. He is a member of the AusIMM, a fellow of FINSIA and a member of SME. Mr de Vries does not currently hold any other directorships, nor has he in the past three years. T R O P E R ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 11 NAME PARTICULARS Gabriel Chiappini Non-Executive Director Mr Chiappini is an experienced ASX director and has been active in the capital markets for 18 years. Mr Chiappini has assisted in raising in excess of AUD400m in funding and has provided investment and divestment guidance to a number of companies. Mr Chiappini specialises in start-up companies and assists companies with their growth and strategic direction. Mr Chiappini is a member of the Australian Institute of Company Directors and Chartered Accountants Australia & New Zealand. Mr Chiappini was the Chair of the Audit Committee and a member of the Remuneration Committee up until the date of his resignation. Mr Chiappini held directorships with the following listed companies in the three years immediately prior to the date of this report. NAME DATE APPOINTED DATE RESIGNED Invictus Energy Limited August 2015 Eneabba Gas Limited September 2016 Gefen International A.I. Ltd July 2021 Black Dragon Gold Corp Ltd March 2022 Current April 2021 August 2022 Current The above-named directors held office during the whole of the financial year and since the end of the financial year except for Gabriel Chiappini who resigned effective 30 September 2022. INFORMATION ABOUT COMPANY SECRETARY James Doyle Mr Doyle is an experienced advisory and governance professional specialising in the provision of company secretarial and corporate advisory services to public and private companies across a range of sectors including resources, industrials and information technology. Mr Doyle is currently employed by Grange Consulting Pty Ltd, a corporate advisory, compliance and governance service provider, with clients predominantly in the mineral exploration, development and production sector and acts as company secretary to a number of ASX- listed companies. Mr Doyle holds a Bachelor of Commerce and graduate diploma in applied finance. PRINCIPAL ACTIVITIES Black Rock Mining is an Australian-based company listed on the Australian Securities Exchange. The principal activity of the Company during the year was to explore and develop mineral resources. REVIEW AND RESULTS OF OPERATIONS AND ACTIVITIES Results of Operations The consolidated loss after tax for the year ended 30 June 2023 was AUD9,347,559 (2022: AUD6,076,894). The principal activities during the year included: FEED process completed, reconfirming Mahenge as a significant Tier 1 scale project with attractive forecast returns; Conditional Framework Agreement signed with US cleantech graphite processing company, Urbix, Inc; SML awarded for Mahenge; Initial Tanzanian leadership appointments made with first Board constituted under subsidiary Company, Faru; MOU Signed with TANESCO for Grid Power Supply to Mahenge; Black Rock Mining’s Tanzanian subsidiary company, Faru, held stakeholder presentations in a whole of government forum in Dodoma, Tanzania; MOU signed with TAZARA for the transportation of graphite from the Mahenge Graphite Project; Other financing options being considered in parallel, including potentially bringing in a partner at the Project level as a less dilutive option than equity. Interest received from industry participants, OEMs, mining companies, mining private equity funds and sovereign wealth funds; ESG and Sustainability Principles developed to support the Company’s focus on transitioning the Mahenge Graphite Mine through to production; T R O P E R ’ S R O T C E R D I 12 BLACKROCK MINING ANNUAL REPORT | 2023 Binding agreements signed with Strategic Alliance Partner, POSCO, including: • USD10m prepayment agreement, repayable via delivery of product; and • Offtake agreement for 100% of planned life of mine graphite fines (-#100) for Module 1 production; MOU signed with POSCO for supply of up to 6,000 metric tonnes per annum of high-quality large flake natural flake graphite concentrate from Module 1, further deepening the relationship with POSCO; AUD10m raised at AUD0.115 per share in a strongly supported Placement to new and existing institutional and sophisticated investors, with cornerstone support received from a large US-based fund; Lenders hosted by Black Rock Mining management at the Mahenge Graphite Project site – all leading potential lenders have now completed site visits and have substantially completed due diligence; Significant progress has been made on supplementary studies for associated facilities (Transmission Line, Lower Access Roads and the Indenki resettlement area). Corporate and Financial Position Consolidated net assets at year end were AUD57,494,453 against AUD55,018,502 at the close of the prior year. Total cash held at year-end was AUD11,459,227 (2022: AUD26,093,637). DIVIDENDS No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current year. CHANGES IN THE STATE OF AFFAIRS Other than the above, there have not been any significant changes in the State of Affairs of the Company or Consolidated Entity. Black Rock Mining remains focused on developing its Mahenge Graphite Project in Tanzania. The Consolidated Entity is progressing towards completing the financing and commencing the development phase of the Project. SUBSEQUENT EVENTS Other than below, the Directors are not aware of any matter or circumstance that has significant or may significantly affect the operation of the Company or Consolidated Entity, or the results of those operations, or the state of affairs of the Company or Consolidated Entity in subsequent financial years. Subsequent to year end, a total of 21,351,022 options (AUD0.084 per option) and 591,118 performance rights (nil exercise price) were converted into ordinary fully paid shares. Effective 10 August 2023, 5,644,013 options (AUD0.084 per option) expired unexercised. Subsequent to year end, on 4 September 2023, the Company announced the signing of a non-binding MOU with POSCO in relation to the long-term offtake of fines from Module 2 of the Project, in exchange for a potential investment from POSCO in Black Rock Mining of up to USD40m or 19.9% (whichever is lower) with the proceeds to be used for the development of Module 1. FUTURE DEVELOPMENTS Black Rock Mining remains focused on developing its Mahenge Graphite Project in Tanzania. Subject to the Board of Black Rock Mining making a final investment decision, the Company or Consolidated Entity will move into its development phase and looks forward to executing on its strategy to develop and bring the Mahenge Graphite Project into production and in parallel, penetrate the battery materials supply chain. ENVIRONMENTAL REGULATION AND PERFORMANCE The Company is currently updating the Environment and Social Impact Assessment report in accordance with the legal and regulatory requirements of the Tanzanian Government and the relevant international finance institution environmental and social standards; namely the International Finance Corporation Performance Standards and the Equator Principles. Entities in the Consolidated Entity have complied with all environmental requirements up to the date of this report. T R O P E R ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 13 RISK MANAGEMENT The Board of Directors (Board) determines the Company’s “risk profile” and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control. The Board has delegated to the Audit and Risk Committee responsibility for implementing the risk management system. The responsibility for undertaking and assessing risk management and internal control effectiveness is delegated to management. Management is required to assess risk management and associated internal compliance and control procedures and report back at each Audit and Risk Committee at least annually. The Board will review assessments of the effectiveness of risk management and internal compliance and control at least annually. During the year, the Board completed a review of the Company’s risk management framework to satisfy itself that it continues to be sound. The key risks are summarised in the table below. KEY RISK SUMMARY MANAGEMENT RESPONSE Funding Risk Inability to secure equity and debt funding for the Project. Management have engaged high quality consultants specialising in the equity and debt markets. The Company has run a continuous process during the year to identify potential equity markets. A MOU has been signed with POSCO as a cornerstone investor for the Project capital raise. Potential lenders hosted by management at the Project site – all leading potential lenders have now completed site visits and have substantially completed due diligence. The Company is also advancing other financing options in parallel to the debt process. Binding USD10m prepayment agreement signed with Strategic Alliance Partner, POSCO, repayable via delivery of product. Cash Flow Risk Community Safety Risk Community Relations Risk Cash flow squeeze due to underestimation of working capital requirements. Endangerment of community members in entering construction area and operations. Budgets have been approved by the Board for the next 15 months. Management review monthly spend and work progress for any potential overruns. Operations design and statement of works have included fencing and site security including biometric access systems. Extensive training and education for all local communities will be undertaking. Install alternative routes for migrating communities on the mine lease areas. Fencing to be installed at the school prior to construction commencing. Compromise community relationships due to not delivering on agreements. RAP process is advanced and includes communication to the community on progress of construction and occupancy schedules. Interim Livelihood restoration report has been completed and recommendations have been implemented. Failure to achieve a Final Investment Decision will result in a loss of job opportunities and business for the local community. Environmental Risk – Water Contamination of water table. Water management plan completed and reviewed by technical expert. Ongoing water quality monitoring program being established prior to construction Industrial Market Risk Industrial market fall causing impact on price and demand. The Project is forecast to sit in the first quartile of the cost curve for graphite. Maintaining a low cost of product will protect the operations against potential falling commodity prices. Offtake agreement signed with Strategic Alliance Partner, POSCO, for 100% of planned life of mine graphite fines (-#100) for Module 1 production. Government Relationship Risk Unrealistic expectation of community infrastructure development and funding. Develop reporting metrics to support Board, Community and Government expectations. Ensure community and government updates are provided on a regular basis. T R O P E R ’ S R O T C E R D I 14 BLACKROCK MINING ANNUAL REPORT | 2023 SHARE OPTIONS AND RIGHTS Share options on issue The details of the options as at the date of this report are as follows: The key risks are summarised in the table below. CODE BKTAJ BKTAV BKTAX BKTAW BKTAY BKTAZ BKTAAB BKTAAC BKTAAD BKTAAE NUMBER OF SHARES UNDER OPTION CLASS OF SHARES EXERCISE PRICE OF OPTION EXPIRY DATE OF OPTIONS 11,000,000 1,000,000 1,500,000 1,500,000 3,000,000 1,500,000 509,709 509,709 509,708 28,985,513 50,014,639 Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary AUD0.116 AUD0.116 AUD0.200 AUD0.224 AUD0.290 AUD0.400 AUD0.000 AUD0.000 AUD0.000 AUD0.200 21 Dec 23 24 Jan 24 1 Jun 24 1 Jul 24 25 Oct 24 26 April 25 30 Jun 25 30 Jun 26 30 Jun 27 19 Jun 25 Option holders do not have any right by virtue of the option to participate in any share issue of the Company or any related body corporate. Details of shares issued by the Company during or since the end of the financial year as a result of the exercise of options are: CODE BKTAI BKTAU BKTAG NUMBER OF SHARES ISSUED CLASS OF SHARES 3,000,000 24,656,140 4,666,666 Ordinary Ordinary Ordinary AMOUNT PAID FOR SHARES AUD235,500 AUD2,071,116 AUD700,000 AMOUNT UNPAID ON SHARES AUD nil AUD nil AUD nil Performance rights on issue The details of the performance rights (Rights) as at the date of this report are as follows: CODE BKTAAA NUMBER OF SHARES UNDER RIGHTS 8,178,537 CLASS OF SHARES Ordinary EXPIRY DATE OF RIGHTS 30 Nov 27 Details of shares issued by the Company during or since the end of the financial year as a result of the exercise of performance rights are: CODE BKTAAA NUMBER OF SHARES ISSUED 591,118 CLASS OF SHARES Ordinary AMOUNT PAID FOR SHARES AMOUNT UNPAID ON SHARES AUD0.00 AUD0.00 T R O P E R ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 15 INFORMATION ABOUT THE DIRECTORS The following table sets out each Director’s relevant interest in shares, options or performance rights over shares of the Company as at the date of this report: DIRECTOR INSTRUMENT Richard Crookes Ordinary shares Unlisted Options Unlisted Options Unlisted Options Unlisted Options John de Vries Ordinary shares Unlisted Options CODE BKT BKTAJ BKTAAB BKTAAC BKTAAD BKT BKTAJ NUMBER EXPIRY DATE EXERCISE PRICE 6,479,229 2,000,000 21 Dec 23 AUD0.116 315,534 315,534 315,534 10,712,199 30 Jun 25 30 Jun 26 30 Jun 27 AUD0.000 AUD0.000 AUD0.000 5,000,000 21 Dec 23 AUD0.116 Unlisted Performance Rights BKTAAA 2,441,217 30 Nov 27 AUD0.000 Ian Murray Ordinary shares Unlisted Options Unlisted Options Unlisted Options Unlisted Options BKT BKTAJ BKTAAB BKTAAC BKTAAD 5,661,349 2,000,000 21 Dec 23 AUD0.116 194,175 194,175 194,174 30 Jun 25 30 Jun 26 30 Jun 27 AUD0.000 AUD0.000 AUD0.000 INDEMNIFICATION OF OFFICERS The Company gave indemnity and held the following liability cover in place during the course of the financial year: Agreements to indemnify Mr Richard Crookes (Non-Executive Chairman), Mr John de Vries (Executive Director), Mr Gabriel Chiappini (Non-Executive Director) and Mr Ian Murray (Non-Executive Director), in respect of any liabilities incurred by them while acting in the normal course of business as a Director of the entity and to insure them against certain risks they are exposed to as Directors of the Company. Pursuant to the above, the Company has paid premiums to insure the Directors and executive management against liabilities incurred in the conduct of the business of the Company and has provided right of access to the Company records. In accordance with common commercial practice, the insurance policy prohibits disclosure of the premium and the nature of the liability insured against. The Company has not provided any insurance for an auditor of the Company. DIRECTORS’ MEETINGS The following table sets out the number of Directors’ meetings (including meetings of committees of Directors) held during the financial year and the number of meetings attended by each Director (while they were Director, committee member or invitee). During the financial year nine Directors’ meetings were held: DIRECTOR BOARD MEETINGS AUDIT & RISK COMMITTEE MEETINGS REMUNERATION & NOMINATION COMMITTEE MEETINGS Richard Crookes Ian Murray John de Vries(i) Gabriel Chiappini A 5 5 5 2 B 5 5 5 2 A 2 2 0 1 B 2 2 2 1 A 4 4 0 1 B 4 4 4 1 A = Number of meetings held during the time the director held office during the year B= Number of meetings attended (i) Mr de Vries attended the Audit & Risk Committee meetings and the Remuneration & Nomination Committee meetings as an invitee T R O P E R ’ S R O T C E R D I 16 BLACKROCK MINING ANNUAL REPORT | 2023 NON-AUDIT SERVICES During the year no non-audit services were provided by the Auditor (or by another person or firm on the Auditors behalf). PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not party to any such proceedings during the year. REMUNERATION REPORT (AUDITED) This remuneration report, which forms part of the Directors’ report, sets out information about the remuneration of Black Rock Mining’s key management personnel (KMP) for the financial year ended 30 June 2023. The term ‘key management personnel’ refers to those persons having authority and responsibility for planning, directing and controlling the activities of the Consolidated Entity, directly or indirectly, including any Director (whether executive or otherwise) of the Consolidated Entity. The prescribed details for each person covered by this report are detailed below under the following headings: key management personnel remuneration policy relationship between the remuneration policy and Company performance remuneration of key management personnel key terms of employment contracts other information Key management personnel The key management personnel of the Consolidated Entity during or since the end of the financial year were: Richard Crookes Non-Executive Chairman Appointed 16 October 2017 Ian Murray Non-Executive Director Appointed 2 May 2019 John de Vries Chief Executive Officer & Managing Director Appointed 16 March 2017 Gabriel Chiappini Non-Executive Director Appointed 21 March 2012 Resigned 30 September 2022 Paul Sims Chief Financial Officer Appointed 26 April 2022 Remuneration policy The Remuneration & Nomination Committee of the Board of Directors (Remuneration Committee) is responsible for determining and reviewing remuneration arrangements for the directors and executives. The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of executives on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality, high performing director and executive team. The Remuneration Committee will recommend remuneration for the directors and executives to the Board of Directors for approval. Non-executive directors (NED) The Company’s policy is to remunerate NEDs at market rates for comparable companies for time, commitment and responsibilities. The maximum aggregate amount of fees that can be paid to NEDs is subject to approval by shareholders at the annual general meeting. The current fee pool amounts to AUD600,000 and was approved at the annual general meeting on 28 November 2022. Prior to this the fee pool amounted to AUD300,000. Fees for NEDs are not linked to the performance of the Group however to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company and are able to participate in the Company’s Employee Securities Incentive Plan. T R O P E R ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 17 The base fee for the Chair was increased from AUD110,000 to AUD152,000 per annum effective 1 September 2022. The fee is split into a cash component (AUD100,000 inclusive of superannuation) and an equity component (AUD52,000). Similarly, the base fees for other directors increased from AUD72,600 to AUD95,000 per annum, split between a cash component (AUD63,000 inclusive of superannuation) and an equity component (AUD32,000). In the prior year, there was no split in fees between cash and equity. Non-executive directors do not receive performance-related compensation and are not provided with retirement benefits apart from statutory superannuation (which is included in the base fee). Executives Black Rock Mining’s remuneration policy has been designed to align KMP objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific short and long term incentives based on key performance areas affecting the Group’s financial and operating results. The Board of Directors believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best KMP to run and manage the Group. The Board’s policy for determining the nature and amount of remuneration for directors and senior executives of the Group is detailed below: The remuneration policy, setting the terms and conditions for the executives, was developed by the Remuneration Committee. All executives receive a base salary or fee (which is based on factors such as length of service, performance and experience) and the equivalent statutory superannuation. The Remuneration Committee reviews executive packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The Board may exercise discretion in relation to approving incentives, bonuses and awards of equity. The policy is designed to attract and retain the highest calibre of executives and reward them for performance that results in long term growth in shareholder wealth. Executives are also entitled to participate in employee share, option and performance right arrangements. The executives receive a superannuation guarantee contribution required by the government, which was 10.5% for the 2023 financial year. Some individuals may choose to sacrifice part of their salary or fees to increase payments towards superannuation. All remuneration paid to KMP is valued at the cost to the Company and expensed. Shares issued are valued as the difference between the market price of those shares and the amount paid by the KMP. Options are valued using the Black Scholes methodology. Performance rights are valued using the share price on grant date. Performance rights that have market related vesting conditions are valued using the Monte Carlo simulation. Relationship between Remuneration Policy and Company Performance The table below sets out summary information about the Company’s earnings and movements in shareholder wealth for the five years to 30 June 2023: Interest income Net loss before tax Net loss after tax Share Price at start of year Share Price at year end Loss per share 2023 AUD$ 2022 AUD$ 2021 AUD$ 2020 AUD$ 2019 AUD$ 83,614 3,336 52,162 2,870 7,939 (9,347,559) (6,076,894) (2,850,250) (3,387,285) (2,864,024) (9,347,559) (6,076,894) (2,850,250) (3,387,285) (2,864,024) 0.145 0.110 0.140 0.145 0.048 0.140 0.084 0.048 0.037 0.084 0.0092 0.0074 0.0040 0.0054 0.0054 Remuneration, in the form of performance rights, is dependent on the performance of the Company, in particular the absolute total shareholder return (TSR) expressed as the movement in the Company’s share price. T R O P E R ’ S R O T C E R D I 18 BLACKROCK MINING ANNUAL REPORT | 2023 Remuneration of Key Management Personnel No non-monetary short-term benefits, prescribed retirement benefits or other post-employment benefits were paid. The following table discloses the remuneration of the Directors and executives of the Company: SHORT TERM EMPLOYEE BENEFITS – SALARY AND FEES AUD 92,081 121,446(i) 384,729 20,072 274,700 893,028 POST EMPLOYMENT BENEFITS - SUPER- ANNUATION AUD SHARE BASED PAYMENT AUD TOTAL AUD % LINKED TO PERFORMANCE 9,669 6,144 25,309 80,373 182,123 48,018 175,608 - - 85,049 696,483 24.9%(iv) OTHER AUD - - 201,396(ii) - - 1,563 21,635 - 19,615(iii) 221,011 25,300 66,422 103,101 422,716 8.3% 318,104 1,498,565 2023 Directors Richard Crookes Ian Murray John de Vries Gabriel Chiappini Executives Paul Sims (i) Included in Mr Murray’s fees is an amount of AUD62,935 relating to his non-executive director’s fees for Faru. (ii) Bonus awarded (AUD184,500), long service leave (AUD27,996996), sick leave benefit (AUD9,400) and annual leave net reduction (AUD20,500). (iii) Annual leave benefit (AUD19,615) (iv) Based on a weighted average SHORT TERM EMPLOYEE BENEFITS – SALARY AND FEES AUD 100,000 66,000 386,432 72,600 625,032 2022 Directors Richard Crookes Ian Murray John de Vries Gabriel Chiappini OTHER AUD - - 169,701(i) - POST EMPLOYMENT BENEFITS - SUPER- ANNUATION AUD SHARE BASED PAYMENT AUD TOTAL AUD % LINKED TO PERFORMANCE 10,000 6,600 23,577 34,900 144,900 32,914 105,514 - - 76,603 656,313 19%(ii) - 31,351 103,951 169,701 40,177 175,768 1,010,678 - - (i) Annual leave benefit (AUD46,057), long service leave (AUD23,644) and bonus awarded (AUD100,000). (ii) Calculated as a percentage of the 2021 financial year total remuneration. No KMP appointed during the year received a payment as part of their consideration for agreeing to hold the position. Key Terms of Employment Contracts The Directors and executives are employed under contracts, which have no fixed term. The contract binding the Executive Director may be terminated by the individual or the Board by giving six months’ notice in writing to terminate the Employment Agreement under which his services are contracted. The Non-Executive Directors are bound by letter of appointments. The contract of the Non-Executive Director may be terminated at any time by them by notice in writing or by shareholders acting by majority vote. T R O P E R ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 19 Managing Director and Chief Executive Officer Employment Contract Effective 10 September 2019, Mr John de Vries was promoted to the position of the Managing Director and Chief Executive Officer and was employed under an Executive Services Agreement with the material terms and conditions detailed below. Status Term Notice period Full time Rolling contract 6 months’ notice by either party, notice period extends to 12 months under certain circumstances Total Fixed Remuneration (TFR) AUD410,000 per annum Leave 20 days annual leave, 8 weeks long service leave after 10 years’ service Short Term Incentive (STI) Ability to earn up to 50% of TFR as an STI per annum. Long Term Incentives (LTI) Ability to earn up to 50% of TFR as an LTI. Other Benefits Indemnity & Access Deed D&O Insurance Chief Financial Officer Employment Contract Effective 26 April 2022, Mr Paul Sims was appointed to the position of the Chief Financial Officer and was employed under an Executive Services Agreement with the material terms and conditions detailed below. In July 2023, Mr Sims total fixed remuneration was revised to from AUD300,000 to AUD340,000. Status Term Full time Rolling contract Notice period 3 months’ notice by either party Total Fixed Remuneration AUD300,000 per annum (effective 1 July 2023 AUD340,000) Leave 20 days annual leave, 8 weeks long service leave after 10 years’ service Short Term Incentive Ability to earn up to 30% of TFR as an STI per annum. Long Term Incentives Ability to earn up to 45% of TFR as an LTI. Other Benefits Indemnity & Access Deed D&O Insurance 1.5 million Options granted and priced upon commencement date. Exercise price to be calculated at 40% premium to the ten-day volume weighted average share price of the Company for the ten days up to and including commencement date. Employee Securities Incentive Plan The Group implemented the Company’s Employee Securities Incentive Plan (the Plan) during the 2023 financial year which enables the provision of options or performance rights to employees and contractors of the Company. The Plan was approved by the Shareholders on 28 November 2022 at the Annual General Meeting of the Company. Each employee share option or performance right converts into one ordinary share of Black Rock Mining on exercise. No amounts are paid or payable by the recipient on receipt of the option or performance right. The options or performance rights carry neither rights to dividends or voting rights. Options or performance rights may be exercised at any time from date of vesting to date of their expiry. Options During the 2023 financial year, options, which vest subject to service conditions, were allocated to the non-executive directors and executives. No options were issued in the prior year. Non-executive directors’ options The non-executive directors’ options were issued in lieu of a portion of cash fees payable for the three year period beginning 1 July 2022 and ending on 30 June 2025. The options were issued in three equal classes and vesting is subject to continued employment on 30 June 2023, 30 June 2024 and 30 June 2025 respectively. Executive options The executive options issued will vest in three equal tranches subject to the service condition of continued employment on 25 April 2023, 25 April 2024 and 23 April 2025 respectively. T R O P E R ’ S R O T C E R D I 20 BLACKROCK MINING ANNUAL REPORT | 2023 Performance rights During the 2023 financial year, performance rights which will vest subject to pre-defined performance hurdles were allocated to executives. The grant of performance rights aims to reward executives in a manner that aligns remuneration with the creation of shareholder wealth. The performance rights were issued under a STI and LTI plan. Performance Measures to Determine Vesting of Performance Rights The vesting of performance rights is subject to the attainment of defined key performance indicators, chosen to align the interests of employees with shareholders, representing key drivers for delivering long term value. Vesting of the rights granted under the STI Plan are dependent on the following performance criteria being met: Project execution schedule Compliant (within % master schedule); >90% of Project expenditure to be tied into Project PO’s (Project budget v Project unbudget expenditure); Mahenge Module 1 Fully Financed (Debt & Equity in place); Strategy beyond module 1 and, business case on priority target; RAP implementation plan; and Publish an updated document on principles and program on ESG. These vesting conditions were assessed and tested subsequent to 30 June 2023 with the vesting of the relevant portion of these performance rights approved on 2 August 2023. Vesting of the rights granted under the LTI Plan are dependent on the following performance criteria being met: The Company announcing the completion of construction of the Black Rock Mining Mahenge Graphite Project: • Wet Commissioning (to be assessed on 31 December 2023) • Performance testing of plant (to be assessed 30 June 2024) One Growth project identified (to be assessed 20 June 2025); and Absolute TSR Measure (3 Year Assessment) (to be assessed on 1 January 2025). Termination and Change of Control Provisions Where an executive ceases employment prior to the vesting of an award, the incentives are forfeited unless the Board applies its discretion to allow vesting at, or post cessation of, employment in appropriate circumstances. In the event of a change of control of the Group, the performance period end date will generally be brought forward to the date of the change of control and the rights will vest in full, subject to ultimate Board discretion. No hedging of LTIs As part of the Company’s Securities Trading Policy, executives are prohibited from entering into arrangements to protect the value of unvested LTI awards. This includes entering into contracts to hedge exposure to options, performance rights or shares granted as part of their remuneration package. Details of share-based payments granted as compensation to key management personnel during the current financial year: NAME Richard Crookes Ian Murray John de Vries Paul Sims INSTRUMENT NUMBER GRANTED NUMBER VESTED % OF GRANT VESTED % OF GRANT FORFEITED DURING THE FINANCIAL YEAR Options Options Rights (STIP) Rights (LTIP) Options Rights (STIP) Rights (LTIP) 946,602 582,524 699,712 1,741,505 1,500,000 341,323 819,175 315,534 194,175 - - 33% 33% - - 500,000 33% - - - - - - - - - - - T R O P E R ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 21 Terms and conditions of share-based payment arrangements affecting remuneration of KMP in the current financial and future financial years: INSTRUMENT CODE GRANT DATE NUMBER VALUE PER RIGHT AT GRANT DATE (CENTS) EXERCISE PRICE (CENTS) EXPIRY DATE VESTING DATE Richard Crookes Options Options Options Options Ian Murray Options Options Options John de Vries BKTAG 28-Oct-19 800,000 BKTAAB 28-Nov-22 315,534 BKTAAC 28-Nov-22 315,534 BKTAAD 28-Nov-22 315,534 BKTAAB 28-Nov-22 194,175 BKTAAC 28-Nov-22 194,175 BKTAAD 28-Nov-22 194,174 Options BKTAG 28-Oct-19 1,200,000 Rights (STIP) BKTAAA 28-Nov-22 699,712 Rights (LTIP) BKTAAA 28-Nov-22 435,376 Rights (LTIP) BKTAAA 28-Nov-22 435,376 Rights (LTIP) BKTAAA 28-Nov-22 435,377 Rights (LTIP) BKTAAA 28-Nov-22 435,376 2.68 15.50 15.50 15.50 15.50 15.50 15.50 2.68 15.50 15.50 15.50 15.50 13.43 15.00 28-Oct-22 28-Oct-22(i) - - - - - - 30-Jun-25 30-Jun-23 30-Jun-26 30-Jun-24 30-Jun-27 30-Jun-25 30-Jun-25 30-Jun-23 30-Jun-26 30-Jun-24 30-Jun-27 30-Jun-25 15.00 28-Oct-22 28-Oct-22(ii) - - - - - 30-Nov-27 30-Jun-23 30-Nov-27 31-Dec-23 30-Nov-27 30-Jun-24 30-Nov-27 20-Jun-25 30-Nov-27 1-Jan-25 BKTAG 28-Oct-19 533,333 2.68 15.00 28-Oct-22 28-Oct-22(i) Gabriel Chiappini Options Paul Sims Options Options Options BKTAZ BKTAZ BKTAZ 11-Aug-22 500,000 11-Aug-22 500,000 11-Aug-22 500,000 Rights (STIP) BKTAAA 30-Nov-22 341,323 Rights (LTIP) BKTAAA 30-Nov-22 204,794 Rights (LTIP) BKTAAA 30-Nov-22 204,794 Rights (LTIP) BKTAAA 30-Nov-22 204,794 Rights (LTIP) BKTAAA 30-Nov-22 204,793 (i) These options expired during the year. (ii) These options were exercised during the year. 6.78 6.78 6.78 15.50 15.50 15.50 15.50 13.43 40.00 40.00 40.00 - - - - - 26-Apr-25 25-Apr-23 26-Apr-25 25-Apr-24 26-Apr-25 25-Apr-25 4-Mar-24 30-Jun-23 30-Nov-27 31-Dec-23 30-Nov-27 30-Jun-24 30-Nov-27 20-Jun-25 4-Mar-24 1-Jan-25 There has been no alteration of the terms and conditions of the above share-based payment arrangements since grant date. During the year, the following KMP exercised options that were granted to them as part of their compensation. Each option converts into one ordinary share of Black Rock Mining Limited: NAME John de Vries Gabriel Chiappini NO. OF OPTIONS EXERCISED NO. OF ORDINARY SHARES ISSUED AMOUNT PAID (AUD) AMOUNT UNPAID (AUD) 3,600,000 1,066,667 3,600,000 1,066,667 540,000 160,000 - - T R O P E R ’ S R O T C E R D I 22 BLACKROCK MINING ANNUAL REPORT | 2023 The following table summarises the number of options that expired during the financial year, in relation to options granted to KMP as part of their remuneration: NAME Richard Crookes Ian Murray FINANCIAL YEAR IN WHICH OPTIONS WERE GRANTED NO. OF OPTIONS EXPIRED DURING THE CURRENT YEAR 2020 2019 2,400,000 3,000,000 Equity instruments held by key management personnel Shareholdings The numbers of shares in the Company held during the financial year by each director of Black Rock Mining and other KMP of the Group, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation. BALANCE AT START OF THE YEAR RECEIVED DURING THE YEAR ON THE EXERCISE OF OPTIONS NUMBER ACQUIRED DURING THE YEAR NUMBER DISPOSED DURING THE YEAR OTHER CHANGES BALANCE AT END OF THE YEAR 6,266,150 5,466,801 10,460,078 11,004,807 - - 3,852,121 1,066,667 - - - - - - - - - (3,600,000) - - - - - 6,266,150 5,466,801 10,712,199 (12,071,474) - - 173,913 ORDINARY SHARES Directors Richard Crookes Ian Murray John de Vries Gabriel Chiappini (i) Executives Paul Sims (i) It should be noted that Mr Chiappini resigned on 30 September 2022. Accordingly, the movement in the shareholdings disclosed reflects only those movements which took place during the period that Mr Chiappini was a key management person. The balance of the shares held as at 30 June 2023 is nil as he is no longer a key management person and therefore the net change of 12,071,474 is not as a result of the sale/forfeiture of any shares whilst Mr Chiappini was a key management person. Option and Rights Holdings The numbers of options and rights over ordinary shares in the Company held during the financial year by each director of Black Rock Mining and other KMP of the Group, including their personally related parties, are set out below. BALANCE AT START OF THE YEAR GRANTED AS COM- PENSATION EXERCISED EXPIRED OTHER CHANGES BALANCE AT END OF THE YEAR VESTED AND EXER- CISABLE UNVESTED Directors Richard Crookes Options 4,613,079 946,602 Ian Murray Options 5,194,548 582,524 John de Vries - - (2,400,000) (3,000,000) Options 8,852,121 - (3,852,121) Rights - Gabriel Chiappini (i) 2,441,217 - - - - - - - Options 4,024,555 - (1,066,667) (533,333) (2,424,555) - 3,159,681 2,530,613 629,068 2,777,072 2,388,723 388,349 5,000,000 5,000,000 - 2,441,217 - - 2,441,217 - T R O P E R Executives Paul Sims Options Rights - - 1,500,000 1,160,498 - - - - 57,971(ii) 1,557,971 557,971 1,000,000 - 1,160,498 - 1,160,498 (i) It should be noted that Mr Chiappini resigned on 30 September 2022. Accordingly, the movement in the option holdings disclosed reflects only those movements which took place during the period that Mr Chiappini was a key management person. The balance of the options held as at 30 June 2023 is nil as he is no longer a key management person and therefore the net change of 2,424,555 is not as a result of the expiration of any options whilst Mr Chiappini was a key management person. (ii) Mr Sims received these options as part of his participation in the share placement in June 2023, Each participant was issued one for three free attaching options exercisable at AUD0.20 and expiring 24 months from issue. ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 23 Other information Financial Transactions with key management personnel During the financial year the following amounts were paid to key management personnel for services. These payments have been disclosed in the remuneration table above: DIRECTOR VALUE AUD VALUE AUD Gabriel Chiappini 20,072 Amounts to Laurus Corporate Services, a Company Mr Chiappini is a shareholder and Director of, for the provision of Non- executive Director services. Loans to Key Management Personnel There were no loans to KMP during the year. END OF REMUNERATION REPORT The Director’s report is signed in accordance with a resolution of Directors made pursuant to s. 298(2) of the Corporations Act 2001. On behalf of the Directors. Richard Crookes CHAIRMAN 28 September 2023 T R O P E R ’ S R O T C E R D I 24 BLACKROCK MINING ANNUAL REPORT | 2023 , AUDITOR S INDEPENDENCE DECLARATION Deloitte Touche Tohmatsu ABN 74 490 121 060 Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au The Board of Directors Black Rock Mining Limited Level 1, 1 Walker Avenue West Perth WA 6005 28 September 2023 Dear Board Members AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo BBllaacckk RRoocckk MMiinniinngg LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Black Rock Mining Limited. As lead audit partner for the audit of the financial report of Black Rock Mining Limited for the financial year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours sincerely DELOITTE TOUCHE TOHMATSU PPeenneellooppee PPiinnkk Partner Chartered Accountants Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. I N O T A R A L C E D E C N E D N E P E D N I ’ S R O T D U A I BLACKROCK MINING ANNUAL REPORT | 2023 25 FINANCIAL REPORT For the Year Ended 30 June 2023 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 27 28 29 30 31 T R O P E R L A C N A N F I I 26 BLACKROCK MINING ANNUAL REPORT | 2023 CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2023 AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Year Ended30 June 2023 Continuing operations Interest income Administration expenses Employee benefit expense Share based payment expense Consulting expense Depreciation and amortisation expense Net foreign currency exchange gain Travel expenses Other expenses from ordinary activities Write off exploration expenditure Loss before tax Income tax expense LOSS FOR THE PERIOD Other comprehensive income, net of income tax Items that may be reclassified subsequently to profit or loss: Foreign currency translation differences for foreign operations Other comprehensive income for the period (net of tax) CONSOLIDATED 30 JUNE 2023 30 JUNE 2022 NOTES AUD AUD 6 18 12 11 7 83,614 3,336 (420,237) (459,728) (4,210,992) (1,488,916) (501,651) (541,975) (3,311,091) (2,570,961) (285,695) 408,238 (723,848) (385,897) - (48,181) 423,581 (408,382) (298,425) (687,243) (9,347,559) (6,076,894) - - (9,347,559) (6,076,894) 626,049 1,423,068 626,049 1,423,068 TOTAL COMPREHENSIVE LOSS FOR THE PERIOD (8,721,510) (4,653,826) Loss for the period attributable to: Owners of the company Non-controlling interests Total comprehensive loss attributable to: Owners of the company Non-controlling interests Loss per share (9,053,234) (6,076,894) (294,325) - (9,347,559) (6,076,894) (8,421,652) (4,653,826) (299,858) - (8,721,510) (4,653,826) Basic and diluted loss per share (cents per share) 26 (0.92) (0.74) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 25 of 66 27 CONSOLIDATED STATEMENT OF AS AT 30 JUNE 2023 FINANCIAL POSITION CONSOLIDATED STATEMENT As at 30 June 2023 OF FINANCIAL POSITION Assets Current assets Cash and cash equivalents Other receivables Other assets Total current assets Non-current assets Exploration and evaluation asset Property, plant and equipment Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Lease liabilities Provisions Total current liabilities Non-current liabilities Lease liabilities Provisions Total current liabilities Total liabilities Net assets Equity Issued capital Foreign currency translation reserve Share based payment reserve Accumulated losses Equity attributable to owners of the Company Non-controlling interest Total equity CONSOLIDATED 30 JUNE 2023 AUD 30 JUNE 2022 AUD NOTES 8 9 10 11 12 15 13 16 13 16 17 18 18 19 20 11,459,227 26,093,637 1,319,022 481,182 761,288 234,348 13,259,431 27,089,273 46,793,567 29,748,305 1,265,247 595,788 48,058,814 30,344,093 61,318,245 57,433,366 2,083,033 207,933 1,002,773 1,688,230 52,085 68,106 3,293,739 1,808,421 478,413 51,640 484,619 121,824 530,053 606,443 3,823,792 2,414,864 57,494,453 55,018,502 111,535,841 100,907,652 1,978,805 1,488,262 1,347,223 1,318,908 (57,209,111) (48,555,281) 57,793,797 55,018,502 (299,344) - 57,494,453 55,018,502 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. T R O P E R L A C N A N F I I 28 BLACKROCK MINING ANNUAL REPORT | 2023 Page 26 of 66 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Year Ended30 June 2023 D U A L A T O T Y T I U Q E 8 4 0 , 3 6 1 , 3 3 , ) 4 9 8 6 7 0 6 ( , , 8 6 0 3 2 4 1 , , ) 6 2 8 3 5 6 4 ( , , 0 0 0 0 0 0 5 2 , 5 7 9 1 4 5 , , 9 6 5 9 3 3 2 , , ) 4 6 2 2 7 3 1 ( , - 2 0 5 , 8 1 0 , 5 5 2 0 5 , 8 1 0 , 5 5 ) 9 5 5 , 7 4 3 , 9 ( 9 4 0 , 6 2 6 ) 0 1 5 , 1 2 7 , 8 ( 0 0 0 , 0 0 0 , 0 1 0 3 1 , 3 1 2 , 1 2 7 2 , 9 6 5 - - ) 1 4 9 , 4 8 5 ( - - - - - - - - - - - - - - - - 4 1 5 ) 5 2 3 4 9 2 ( , ) 3 3 5 5 ( , ) 8 5 8 9 9 2 ( , D U A D U A D U A D U A T S E R E T N I T N E R A P E H T E V R E S E R G N I L L O R T N O C F O S R E N W O O T Y C N E R R U C E V R E S E R T N E M Y A P - N O N E L B A T U B R T T A I N G I E R O F D E S A B E R A H S D E T A L U M U C C A D E U S S I D U A S E S S O L D U A L A T I P A C e t o N 8 4 0 , 3 6 1 , 3 3 ) 5 4 8 , 5 7 ( 7 6 0 , 7 7 0 , 1 ) 1 2 5 , 8 7 7 , 2 4 ( 7 4 3 , 0 4 9 , 4 7 2 0 5 , 8 1 0 , 5 5 3 2 2 , 7 4 3 , 1 8 0 9 , 8 1 3 , 1 ) 1 8 2 , 5 5 5 , 8 4 ( 2 5 6 , 7 0 9 , 0 0 1 , ) 4 9 8 6 7 0 6 ( , - , 8 6 0 3 2 4 1 , , ) 6 2 8 3 5 6 4 ( , , 0 0 0 0 0 0 5 2 , , 9 6 5 9 3 3 2 , 5 7 9 1 4 5 , - , ) 4 6 2 2 7 3 1 ( , - - - - - , 8 6 0 3 2 4 1 , , 8 6 0 3 2 4 1 , , ) 4 3 2 3 5 0 9 ( , 2 8 5 1 3 6 , , ) 2 5 6 1 2 4 8 ( , , 0 3 1 3 1 2 1 , 2 7 2 9 6 5 , - ) 4 1 5 ( ) 1 4 9 4 8 5 ( , , 0 0 0 0 0 0 0 1 , - - - - - - - 2 8 5 1 3 6 , 2 8 5 1 3 6 , 2 0 5 , 8 1 0 , 5 5 , 3 2 2 7 4 3 1 , - - - - - - 5 7 9 1 4 5 , , ) 4 9 8 6 7 0 6 ( , - - - - - , ) 4 9 8 6 7 0 6 ( , - - - , 0 0 0 0 0 0 5 2 , , 9 6 5 9 3 3 2 , ) 4 3 1 0 0 3 ( , 4 3 1 0 0 3 , - d o i r e p e h t g n i r u d d e s i c r e x e / d e r i p x e s n o i t p O - s r o t c e r i D o t d e u s s i s t n e m y a p d e s a b e r a h s f o t s o C , ) 4 6 2 2 7 3 1 ( , d e u s s i l a t i p a c e r a h s f o t s o C l s e e y o p m e d n a - - - - - - - 2 7 2 9 6 5 , , 8 0 9 8 1 3 1 , , ) 4 3 2 3 5 0 9 ( , , ) 1 8 2 5 5 5 8 4 ( , - - - - ) 4 1 5 ( - , ) 4 3 2 3 5 0 9 ( , - - - , 2 5 6 7 0 9 0 0 1 , , 0 0 0 0 0 0 0 1 , , 0 3 1 3 1 2 1 , - - ) 1 4 9 4 8 5 ( , 0 2 , d o i r e p e h t r o f ) s s o l ( / e m o c n i e v i s n e h e r p m o c r e h t O x a t f o t e n s r o t c e r i D o t d e u s s i s t n e m y a p d e s a b e r a h s f o t s o C l s e e y o p m e d n a g n i l l o r t n o c - n o n o t t s e r e t n i % 6 1 f o e c n a u s s I d e s i c r e x e s n o i t p o – s e r a h s y r a n d r o f o e u s s I i d o i r e p e h t r o f s s o l e v i s n e h e r p m o c l a t o T s g n i s i a r l a t i p a c – s e r a h s y r a n d r o f o e u s s I i d e u s s i l a t i p a c e r a h s f o t s o C t s e r e t n i 2 2 0 2 e n u J 0 3 t a s a e c n a a B l 2 2 0 2 y l u J 1 t a s a e c n a a B l d o i r e p e h t r o f s s o L ) 8 1 9 9 9 3 ( , 8 1 9 9 9 3 , - d o i r e p e h t g n i r u d d e s i c r e x e / d e r i p x e s n o i t p O t e n , d o i r e p e h t r o f e m o c n i e v i s n e h e r p m o c r e h t O x a t f o d o i r e p e h t r o f e m o c n i / ) s s o l ( e v i s n e h e r p m o c l a t o T d e s i c r e x e s n o i t p o – s e r a h s y r a n d r o f o e u s s I i s g n i s i a r l a t i p a c – s e r a h s y r a n d r o f o e u s s I i 1 2 0 2 y l u J 1 t a s a e c n a a B l d o i r e p e h t r o f s s o L 3 2 0 2 E N U J 0 3 D E D N E R A E Y E H T R O F T N E M E T A T S D E T A D I L O S N O C Y T I U Q E N I S E G N A H C F O 3 5 4 , 4 9 4 , 7 5 ) 4 4 3 , 9 9 2 ( 7 9 7 , 3 9 7 , 7 5 5 0 8 , 8 7 9 , 1 2 6 2 , 8 8 4 , 1 ) 1 1 1 , 9 0 2 , 7 5 ( 1 4 8 , 5 3 5 , 1 1 1 3 2 0 2 e n u J 0 3 t a s a e c n a a B l 6 6 f o 7 2 e g a P . s e t o n g n i y n a p m o c c a h t i w n o i t c n u n o c n j i d a e r e b d u o h s l y t i u q E n i s e g n a h C f o t n e m e t a t S d e t a d i l o s n o C e v o b a e h T T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 29 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED STATEMENT For the Year Ended 30 June 2023 OF CASH FLOWS Cash flow from operating activities Payments to suppliers and employees Interest received NOTE FOR THE YEAR ENDED 30 JUNE 2023 AUD FOR THE YEAR ENDED 30 JUNE 2022 AUD (8,388,025) (4,137,798) 81,659 3,336 Net cash flows used in operating activities 8 (8,306,366) (4,134,462) Cash flow from investing activities Payments for exploration and evaluation expenditure 11 (16,563,203) (7,391,496) Payments for term and security deposits Proceeds on sale of property, plant and equipment Payments for property, plant and equipment (96,451) 810 (696,137) (5,892) - (63,821) Net cash flows used in investing activities (17,354,981) (7,461,209) Cash flows from financing activities Proceeds from issue of shares and options Payment of share issue costs 11,213,130 (584,941) 27,339,569 (1,372,264) Net cash flows provided by financing activities 10,628,189 25,967,305 Net (decrease)/increase in cash held Cash and cash equivalents at the beginning of the financial year Effect of exchange movement on cash balances (15,033,158) 26,093,637 398,748 14,371,634 11,298,422 423,581 Cash and cash equivalents at the end of the year 8 11,459,227 26,093,637 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. T R O P E R L A C N A N F I I 30 BLACKROCK MINING ANNUAL REPORT | 2023 Page 28 of 66 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 1. GENERAL INFORMATION Statement of compliance These financial statements are general purpose financial statements, which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations issued by the Australian Accounting Standards Board, and comply with other requirements of the law. The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards (IFRS Accounting Standards). The financial statements were authorised for issue by the Directors on 28 September 2022. Going Concern The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The Group has incurred net losses of AUD9,347,559 (2022: AUD6,076,894) and experienced net cash outflows from operating and investing activities of AUD25,661,347 (2022: AUD11,595,671) for the year ended 30 June 2023. As at 30 June 2023 the Group had net assets of AUD57,494,453 (2022: AUD55,018,502) and net current assets of AUD9,965,692 (2022: AUD25,280,852). As at 30 June 2023, the Group had a cash balance of AUD11,459,227 (2022: AUD26,093,637). The Directors have prepared a cash flow forecast for the period ending 30 September 2024. The forecast assumes expenditure on programmes required to advance the Mahenge Project towards a Final Investment Decision, however the cash flow forecast does not assume that development activities at Mahenge commence in the period ending 30 September 2024. Should a Final Investment Decision be made with respect to the Mahenge Project, the cash flow forecast will be updated to reflect any additional funding required for development, be this in the form of debt or equity, or a combination of both. This cash flow forecast indicates that the Group will be required to raise additional funding prior to September 2024 to meet the Group’s non -discretionary outflows. The Directors have reviewed the Group’s overall position and outlook in respect of the matters identified above, including the ability of the Group to secure additional funding, and are of the opinion that there are reasonable grounds to believe that the operational and financial plans in place are achievable and accordingly the Group will be able to continue as a going concern and meet its obligations as and when they fall due. Should the Directors not be successful in achieving the additional funding above, there is a material uncertainty that may cast significant doubt as to whether the Group will be able to continue as a going concern and, therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal course of business. The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. Page 29 of 66 T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 31 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 2. APPLICATION OF NEW AND REVISED ACCOUNTING STANDARDS New and amended Australian Accounting Standards that are effective for the current year The Group has adopted all the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2022. New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include:  AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018- 2020 and Other Amendments;  AASB 2021-7 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections (insofar as the Standard relates to editorial corrections that are effective for the current year. The adoption of these accounting standards and interpretations did not have any significant impact on the financial performance or position of the Group. New and amended Australian Accounting Standards that are not yet effective for the current year At the date of the authorisation of the financial statements, the Group has not applied the following new and revised Australian Accounting Standards, Interpretations and amendments that have been issued but are not yet effective for the current year that are relevant to the Group include:  AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between and Investor and its Associate or Joint Venture, , AASB 2015-10 Amendments to Australian Accounting Standards – effective date of Amendments to AASB 10 and AASB 128, AASB 2017-5 Amendments to Australian Accounting Standards – effective date of Amendments to AASB 10 and AASB 128 and Editorial Corrections, AASB 2021-7 Amendments to Australian Accounting Standards – effective date of Amendments to AASB 10 and AASB 128 and Editorial Corrections; AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current, AASB 2020-6 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-Current – Deferral of Effective Date, AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants;  AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale and Leaseback;  AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates;  AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction;  AASB 2022-7 Editorial Corrections to Australian Accounting Standards and Repeal of Superseded and Redundant Standards. T R O P E R L A C N A N F I I 32 BLACKROCK MINING ANNUAL REPORT | 2023 Page 30 of 66 Basis of preparation FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For the Year Ended 30 June 2023 3.1 The consolidated financial statements have been prepared on the basis of historical cost, except for certain properties and financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair values of the consideration given in exchange for goods and services. All amounts are presented in Australian dollars, unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2. In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:    Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs for the asset or liability. The principal accounting policies are set out below. Basis of consolidation 3.2 The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:    has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Revenue Recognition 3.3 Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Page 31 of 66 T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 33 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 Interest Income Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s fair value on initial recognition. Foreign currencies 3.4 The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Australian dollars (AUD), which is the functional currency of the Company and the presentation currency for the consolidated financial statements. In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non- monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:    exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; exchange differences on transactions entered into in order to hedge certain foreign currency risks; and exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items. For the purpose of presenting these consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into Australian dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate). On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss. In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss. Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income. T R O P E R L A C N A N F I I 34 Page 32 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 Employee benefits NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 3.5 A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave in the period the related service is rendered. Liabilities recognised in respect of short-term employee benefits, are measured at the undiscounted amounts of the benefits expected to be paid in exchange for the related service. Liabilities recognised in respect of long term benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date. Share-based payment transactions 3.6 Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 21. The fair value determined at the grant date of the equity-settled share-based payments is expensed, or where applicable capitalised to exploration and evaluation asset, on a straight-line basis over the vesting period, based on the Group’s estimate of the number of equity instruments that will eventually vest. At each reporting date, the Group revises its estimate of the number of equity instruments that will eventually vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to reserves. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. Taxation 3.7 Income tax expense represents the sum of the tax currently payable and deferred tax. Current tax 3.8 The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the consolidated statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred Tax 3.9 Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 33 of 66 35 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Current and deferred tax for the year Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination. Property, Plant and Equipment 3.10 Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Plant and equipment 3.11 Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If any such indication exists where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down to their recoverable amount. Depreciation 3.12 Depreciable non-current assets are depreciated over their expected economic life using the straight-line method. Profits and losses on disposal of non-current assets are taken into account in determining the operating loss for the year. The depreciation rate used for each class of assets sits between the following range: Plant and equipment Office equipment Motor vehicles 6%-33% 25% 10% Leased assets 3.13 A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Company assesses whether the contract meets three key evaluations which are whether:    the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group; the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; the Company has the right to direct the use of the identified asset throughout the period of use. The Company assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use. T R O P E R L A C N A N F I I 36 Page 34 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 Measurement and recognition of leases as a lessee NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 3.14 At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. On the statement of financial position, right-of-use assets have been included in property, plant and equipment. Exploration Expenditure 3.15 Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, costs associated with the resettlement action plan, sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs where they are related directly to operational activities in a particular are of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves, otherwise costs are expensed. No exploration and evaluation impairments arose in the year ended 30 June 2023. Accumulated costs in relation to an abandoned area are written off in full in which the decision to abandon the area is made. During the prior period AUD687,243 was written off in relation to prospecting licences 10426/2014 and 10111/2012. Both these tenements were surrendered in February 2022 following investigation into the tenement holding economically viable graphite deposits. Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and transferred to development properties, and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on a discounted basis. Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be completed within one year of abandoning the site. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 35 of 66 37 Impairment of tangible and intangible assets other than goodwill NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 3.16 At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. Cash and Cash Equivalents 3.17 Cash and cash equivalents includes cash on hand and deposits held at call which are subject to insignificant risk of changes in value. Financial Instruments 3.18 Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added or deducted from the fair value of the financial assets or financial liabilities, as appropriate on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Other Receivables Other receivables are recognized initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. If collection of amounts is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. As the majority of other receivables are short term in nature, their carrying value is assumed to be the same as their fair value. Impairment of financial assets T R O P E R L A C N A N F I I 38 Page 36 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.16 Impairment of tangible and intangible assets other than goodwill At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment Cash and cash equivalents includes cash on hand and deposits held at call which are subject to insignificant risk loss is treated as a revaluation increase. 3.17 Cash and Cash Equivalents of changes in value. 3.18 Financial Instruments Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added or deducted from the fair value of the financial assets or financial liabilities, as appropriate on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Other Receivables Other receivables are recognized initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. NOTES TO THE If collection of amounts is expected in one year or less, they are classified as current assets. If not, they are CONSOLIDATED FINANCIAL STATEMENTS presented as non-current assets. As the majority of other receivables are short term in nature, their carrying FOR THE YEAR ENDED 30 JUNE 2023 value is assumed to be the same as their fair value. For the Year Ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Impairment of financial assets The Group recognises a loss allowance for expected credit losses (ECL) in financial assets that are measured at amortised cost. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group recognises lifetime ECL on other receivables when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition the group measures the loss allowance for that financial instrument at an amount Page 36 of 66 equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. Trade and Other Payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. Goods and Services Tax 3.19 Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:   where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. 4. CRITICAL ACCOUNTING JUDGEMENTS IN APPLYING ACCOUNTING POLICIES In the application of the Group’s accounting policies, which are described in note 3, the Directors of the Company are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Recoverability of exploration and evaluation assets The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement to determine whether it is likely that future economic benefits are likely, from future either exploitation or sale or whether activities have not reached a stage with permits a reasonable assessment of the existence of reserves. This requires management to make certain estimates and assumptions as to future events and circumstances, including the maintenance of title, ongoing expenditure and whether an economically viable extraction operation can be established. Any such estimates and assumptions may change as new information becomes available. If, after expenditure is capitalised, information becomes available suggesting that the recovery of the expenditure is unlikely, the relevant capitalised amount is written off in profit or loss in the period when the new information becomes available. See note 11 for the disclosure on the carrying values of exploration and evaluation assets at reporting date. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 37 of 66 39 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 Accounting for Free Carried Interest (FCI) The Group has assessed the key terms and conditions in which the Special Mining Licence (SML) for Mahenge Graphite Project was granted and in its application of the relevant accounting standards has recognised the following accounting judgments:    The issue of shares to the Government of Tanzania for the issue of the SML has been valued using the indirect approach which has resulted in the determination of the FCI as a share-based payment in Faru. At the Group level, the FCI has been disclosed as a non-controlling interest (NCI)in the consolidated statement of financial position and the consolidated statement of changes in equity. Subsequent to acquisition, the carrying amount of NCI is the amount of those interests at initial recognition plus the NCI’s share of subsequent changes in equity. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the NCI. Total comprehensive income of the subsidiary is attributed to the owners of the Company and to the NCI even if this results in the NCI having a deficit balance. Share based payments The Consolidated Entities measure the cost of equity settled transactions with 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 an appropriate model based on assumptions detailed in note 21. 5. SEGMENT REPORTING Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses on the geographical location of resources being explored for and evaluated. The Group’s principal activity and focus is that of Graphite in Tanzania. Segment revenues and results 2023 Interest Total income Loss before tax Fixed asset additions Depreciation and amortisation Total segment assets Total segment liabilities 2022 Interest Total income Loss before tax Fixed asset additions Write-off of exploration expenditure Loss on disposal of equipment Depreciation and amortisation GRAPHITE CORPORATE CONSOLIDATED AUD - - AUD 83,614 83,614 AUD 83,614 83,614 (3,302,868) (6,044,691) (9,347,559) 923,405 (168,669) 22,452 (117,026) 945,857 (285,695) 49,118,757 (3,012,940) 12,199,488 (810,852) 61,318,245 (3,823,792) GRAPHITE - - CORPORATE 3,336 3,336 CONSOLIDATED 3,336 3,336 (1,708,162) (4,368,732) (6,076,894) - (687,243) (3,063) (3,500) 625,296 - (1,776) (44,681) 625,296 (687,243) (4,839) (48,181) Total segment assets Total segment liabilities 30,093,032 (387,912) 27,340,334 (2,026,952) 57,433,366 (2,414,864) T R O P E R L A C N A N F I I 40 Page 38 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 6. EXPENSES Employment benefit expense Director fees Wages and salaries Superannuation and National Social Security Fund Contributions Annual leave, long service leave and on costs 7. INCOME TAXES (a) Income tax (benefit)/expense Current tax Deferred tax (b) Numerical reconciliation of income tax expense to prima facie tax payable Loss for the year Loss from operations Prima facia tax benefit at 25% (2022: 25%) Difference arising on foreign tax rates Share based payments Non-deductible expenditure Exploration expenditure written off Movement in unrecognised temporary differences Unused tax losses for which no deferred tax asset has been recognised Income tax benefit (c) Recognised deferred tax assets and liabilities Recognised deferred tax assets comprise: Other temporary differences 40-880 tax balance Net ROU asset/liability Provisions and accruals Tax losses available for offset against future taxable income Recognised deferred tax liabilities comprise: Exploration and evaluation Unrealised foreign exchange movements Prepayments Other Net ROU asset/liability 30 JUNE 2023 AUD 947,542 2,215,596 247,423 800,431 30 JUNE 2022 AUD 796,949 452,498 89,403 150,066 4,210,992 1,488,916 30 JUNE 2023 AUD 30 JUNE 2022 AUD - - - - - - (9,347,559) (9,347,559) (2,336,890) (168,569) 125,413 322,604 - 2,057,442 - - - - 5,278 226,589 5,578,038 5,809,905 5,673,977 73,623 61,816 489 - 5,809,905 (6,076,894) (6,076,894) (1,519,223) - 135,494 325,934 108,634 (95,072) 1,044,233 - 44,427 531,991 - - 4,479,637 5,056,055 4,916,101 118,818 - - 21,136 5,056,055 T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 39 of 66 41 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 The Group recognizes deferred tax assets up to the level of deferred tax liabilities. Deferred tax assets recognized reverse in the same entity and jurisdiction as the deferred tax liabilities that they are offsetting. Unrecognised deferred tax assets Unused tax losses for which no deferred tax asset has been recognised are AUD40,493,026 (2022: AUD11,983,587). Potential tax benefit is AUD10,383,788 (2022: AUD2,995,897). Other deferred tax assets not recognized have a potential tax benefit of AUD402,177 (2022: nil). (d) Franking credits The Company has no franking credits available as at 30 June 2023 (2022: Nil). 8. CASH AND CASH EQUIVALENTS For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash on hand and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the consolidated statement of cash flows can be reconciled to the related items in the consolidated statement of financial position as follows: Cash and bank balances Reconciliation of loss for the year to net cash flows from operating activities Loss after income tax Depreciation and amortisation Share based payments Net foreign exchange gain Interest income Exploration write off Movements in working capital: Decrease in trade and other receivables Increase in trade and other payables Increase in provisions Net cash used in operating activities Non Cash transactions Operating Activity 30 JUNE 2023 AUD 11,459,227 11,459,227 30 JUNE 2022 AUD 26,093,637 26,093,637 (9,347,559) (6,076,894) 285,695 501,651 (408,238) (83,614) - 48,181 541,975 (423,581) (3,336) 687,243 (9,052,065) (5,223,076) (557,734) 438,950 864,483 745,699 (844,740) 1,848,782 84,572 1,088,614 (8,306,366) (4,134,462) Options expired/exercised during the year in relation to services rendered by employees and consultants 399,918 300,135 Investing Activity Additions to right of use assets 345,527 561,475 T R O P E R L A C N A N F I I 42 Page 40 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 9. OTHER RECEIVABLES Prepayments GST and VAT Other receivables Term deposits Balance at end of the year 10. OTHER ASSETS Tenement licence fee Balance at end of year 30 JUNE 2023 AUD 310,734 751,706 15,024 241,558 1,319,022 30 JUNE 2023 AUD 481,182 481,182 30 JUNE 2022 AUD 221,451 398,279 - 141,558 761,288 30 JUNE 2022 AUD 234,348 234,348 During the prior year the Company, through its subsidiary Mahenge Resources Limited (incorporated in Tanzania), entered into an option agreement for the purchase of copper tenements in Tanzania. Subsequent to year end, due diligence has been completed and the tenements are in the process of being transferred to Mahenge Resources Limited. As part of the option agreement, Mahenge Resources Limited is responsible for the tenement licence fees. 11. EXPLORATION AND EVALUATION ASSET In the exploration phase: Balance at beginning of year Expenditure incurred during the year (at cost) Expenditure written off during the year Foreign exchange effect Balance at end of year Reconciliation of Expenditure incurred during the year (at cost): Cash paid for exploration and evaluation (including GST and VAT) Trade payables and accruals in prior year Trade payables and accruals in current year Share-based payments capitalised Adjust for GST and VAT Total expenditure incurred during the year (at cost) (excluding GST and VAT) 30 JUNE 2023 AUD 29,748,305 16,203,262 - 842,000 30 JUNE 2022 AUD 22,164,704 7,460,495 (687,243) 810,349 46,793,567 29,748,305 30 JUNE 2023 AUD 16,563,203 (111,740) 935,967 67,621 (1,251,789) 16,203,262 30 JUNE 2022 AUD 7,391,496 (42,741) 111,740 - - 7,460,495 The ultimate recoupment of capitalised exploration expenditure is dependent upon the successful development and/or commercial exploitation or, alternatively through the sale of the respective underlying licenses. The balance of AUD46,793,567 (2022: AUD29,748,305) at reporting date represents the carrying value of its Graphite assets in Tanzania. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 41 of 66 43 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 12. PROPERTY, PLANT & EQUIPMENT COST As at 1 July 2021 Additions Disposals Exchange differences As at 30 June 2022 Additions Disposals Exchange differences As at 30 June 2023 ACCUMULATED DEPRECIATION As at 1 July 2021 Charge for the year Disposals Exchange differences As at 30 June 2022 Charge for the year Disposals Exchange differences As at 30 June 2023 CARRYING VALUE As at 30 June 2023 As at 30 June 2022 PLANT & EQUIPMENT OFFICE EQUIPMENT AUD 31,351 - (5,559) - 25,792 56,195 - 1,491 AUD 44,502 63,821 (5,660) - 102,663 235,222 (1,709) 2,951 MOTOR VEHICLES AUD - - - - - 308,913 - 4,100 RIGHT OF USE AUD - 561,475 - - 561,475 345,527 - 4,586 TOTAL AUD 75,853 625,296 (11,219) - 689,930 945,857 (1,709) 13,128 83,478 339,127 313,013 911,588 1,647,206 22,226 3,500 (3,110) 22,616 8,663 - 836 30,115 13,489 (3,270) 40,334 57,552 (899) 514 - - - - - 27,220 - 361 - 31,192 - - 31,192 192,260 - 1,310 52,341 48,181 (6,380) 94,142 285,695 (899) 3,021 32,115 97,501 27,581 224,762 381,959 51,363 241,626 285,432 686,826 1,265,247 3,176 62,329 - 530,283 595,788 T R O P E R L A C N A N F I I 44 Page 42 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE NOTES TO THE CONSOLIDATED CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS For the Year Ended 30 June 2023 13. LEASES (GROUP AS LESSEE) The Company has entered into leases for the current business premises both in Australia and Tanzania. These leases are reflected on the balance sheet as right of use assets and lease liabilities and are classified in a consistent manner to property, plant and equipment detailed at note 12. The average lease term is 1.8 years (30 June 2022: 2.5 years) Amounts recognised in profit and loss Depreciation expense on right of use assets Interest expense on lease liabilities (included in other expenses) Expense relating to short-term leases 30 JUNE 2023 AUD 192,260 36,265 1,857 At 30 June 2023, the Group is committed to AUD20,703 short-term leases (2022: AUDnil). Lease liabilities Maturity analysis Year 1 Year 2 Year 3 Year 4 Year 5 More than 5 years Less unearned interest Analysed as Current Non current 30 JUNE 2023 AUD 238,127 215,275 108,592 111,849 76,612 - 750,455 (64,109) 686,346 207,933 478,413 686,346 30 JUNE 2022 AUD 31,192 9,413 - 30 JUNE 2022 AUD 99,377 102,358 105,429 108,591 111,849 76,612 604,216 (67,512) 536,704 52,085 484,619 536,704 14. SUBSIDIARIES Details of the Group's material subsidiaries at the end of the reporting period are as follows: NAME OF SUBSIDIARY PLACE OF INCORPORATION AND OPERATION PROPORTION OF OWNERSHIP INTEREST AND VOTING POWER HELD BY THE GROUP 30 JUNE 2022 100% 30 JUNE 2023 100% Mahenge Resources Limited Tanzania Mahenge Resources Limited United Kingdom Faru Graphite Corporation Limited Tanzania 100% 84% 100% 84% T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 43 of 66 45 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE NOTES TO THE CONSOLIDATED CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS For the Year Ended 30 June 2023 15. TRADE AND OTHER PAYABLES Trade creditors Accruals Other liabilities Total current trade creditors and other payables 30 JUNE 2023 AUD 1,441,399 540,087 101,547 2,083,033 30 JUNE 2022 AUD 1,182,351 399,182 106,697 1,688,230 Included in trade creditors and accruals is an amount of AUD935,967 (2022: AUD111,740) relating to exploration expenditure. 16. PROVISIONS Current Employee entitlements Provision - Generali) 30 JUNE 2023 AUD 274,104 728,669 1,002,773 30 JUNE 2022 AUD 68,106 - 68,106 (i) The following provisions are included in the balance:  During the period, on 19 September 2022, the Group received a notice from Tanzania Revenue Authority (TRA) with respect to audit findings on employment taxes for the years of income 2018 to 2022. The TRA issued five Pay As You Earn assessments as a result of the tax audit. The Group has provided for this amount and is in the process of preparing an appeal to the Tax Revenue Appeals Board to review this matter and therefore uncertainty remains as to the probability, timing and amount of any future outflow of resources.  During the period, on 9 August 2022, the Company, and one of its subsidiaries, Mahenge Resources Limited (incorporated in Tanzania), received a form of referral of an employment dispute to the Commission for Mediation and Arbitration (the Commission) in Tanzania from a former Tanzanian based consultant (the Consultant). Subsequently, the Company made a settlement offer amounting to the equivalent of three months consultancy fees. This offer was rejected by the Consultant and the matter is currently at the arbitration stage before the Commission. The Group has considered the best estimate of any outflow of resources in relation to this matter and provided accordingly, but uncertainty remains as to the probability, timing and amount of any payments. Non-Current Employee entitlements 30 JUNE 2023 AUD 51,640 51,640 30 JUNE 2022 AUD 121,824 121,824 T R O P E R L A C N A N F I I 46 Page 44 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE NOTES TO THE CONSOLIDATED CONSOLIDATED FINANCIAL STATEMENTS FINANCIAL STATEMENTS For the Year Ended 30 June 2023 17. ISSUED CAPITAL 30 JUNE 2023 AUD 30 JUNE 2022 AUD 1,075,183,955 ordinary shares issued and fully paid (2022: 977,255,646) 111,535,841 100,907,652 Fully paid ordinary shares Balance at 30 June 2021 Shares issued under Placement 6 May 2022 (AUD0.24 per share) Shares issued upon exercise of options – (AUD0.10 per share) Shares issued upon exercise of options – (BKTAG AUD0.15 per share) Shares issued upon exercise of options – (BKTAU AUD0.084 per share) Less: capital raising costs Balance at 30 June 2022 Shares issued under Placement 19 June 2023 (AUD0.115 per share) Shares issued upon exercise of options – (BKTAG AUD0.15 per share) Shares issued upon exercise of options – (BKTAU AUD0.084 per share) Shares issued upon exercise of options – (BKTAI AUD0.0785 per share) Less: capital raising costs Balance at 30 June 2023 NUMBER OF SHARES 849,264,173 104,166,668 17,000,000 1,600,000 5,224,805 SHARE CAPITAL AUD 74,940,347 25,000,000 1,700,000 240,000 399,569 - (1,372,264) 977,255,646 100,907,652 86,956,525 10,000,000 4,666,666 3,305,118 3,000,000 700,000 277,630 235,500 - (584,941) 1,075,183,955 111,535,841 Options As at 30 June 2023, there were 77,007,674 unlisted options (2022: 63,898,153). UNLISTED OPTIONS CODE OPENING BALANCE EXERCISED IN PERIOD GRANTED IN PERIOD Expiring 28 October 2022 at AUD0.15 BKTAG No. 7,600,000 No. (4,666,666) No. - Expiring 18 November 2022 at AUD0.15 BKTAH 3,000,000 - Expiring 10 August 2023 at AUD0.084 BKTAU 30,298,153 (3,305,118) Expiring 4 November 2023 at AUD0.0785 Expiring 21 December 2023 at AUD0.116 BKTAI 5,000,000 (3,000,000) BKTAJ 11,000,000 Expiring 24 January 2024 at AUD0.116 Expiring 1 June 2024 at AUD0.20 BKTAV BKTAX 1,000,000 1,500,000 Expiring 1 July 2024 at AUD0.224 BKTAW 1,500,000 Expiring 25 October 2024 at AUD0.29 Expiring 26 April 2025 at AUD0.40 Expiring 26 June 2025 at AUD0.20 Expiring 30 June 2025 at AUD0.00 Expiring 30 June 2026 at AUD0.00 Expiring 30 June 2027 at AUD0.00 BKTAY BKTAZ BKTAAE BKTAAB BKTAAC BKTAAD 3,000,000 - - - - - EXPIRED / FORFEITED IN PERIOD No. (2,933,334) (3,000,000) CLOSING BALANCE No. - - - (2,000,000)(i) 26,993,035 - - - - - - - - - - - 11,000,000 1,000,000 1,500,000 1,500,000 3,000,000 1,500,000 28,985,513 509,709 509,709 509,708 - - - - - - - - 1,500,000 28,985,513 509,709 509,709 509,708 - - - - - - - - - - These options were forfeited during the year. (i) The weighted average exercise price of options at 30 June 2023 is AUD0.14 (2022: AUD0.12).The weighted average remaining contractual life of options as at 30 June 2023 is 1.57 years (2022: 1.59 years). 63,898,153 (10,971,784) 32,014,639 (7,933,334) 77,007,674 BLACKROCK MINING ANNUAL REPORT | 2023 Page 45 of 66 47 T R O P E R L A C N A N F I I NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 Performance Rights As at 30 June 2023, there were 8,769,655 unlisted performance rights (2022: NIL). UNLISTED PERFORMANCE RIGHTS CODE Expiring 30 November 2027 BKTAAA OPENING BALANCE No. - EXERCISED IN PERIOD No. - GRANTED IN PERIOD No. 8,769,655 EXPIRED IN PERIOD No. - CLOSING BALANCE No. 8,769,655 The weighted average remaining contractual life of performance rights outstanding at the end of the period was 4.4 years (2022: nil). Performance rights have nil exercise price. Refer to note 21 for terms of the Employee Securities Incentive Plan. 18. RESERVES Share based payments reserve (i) Foreign translation reserve (ii) (i) Share Based Payments Reserve 30 JUNE 2023 AUD 1,488,262 1,978,805 3,467,067 30 JUNE 2022 AUD 1,318,908 1,347,223 2,666,131 The share based payments reserve comprises any equity settled share based payment transactions and other options transactions. The reserve will be reversed against accumulated losses when the underlying rights are exercised or expire. Balance at the beginning of the year Add: Amounts expensed in the current year Add: Amounts capitalised to the exploration and evaluation asset in the current year Less: Options expired in the current year 30 JUNE 2023 AUD 1,318,908 501,651 67,621 (399,918) 1,488,262 30 JUNE 2022 AUD 1,077,067 541,975 - (300,134) 1,318,908 (ii) Foreign Translation Reserve The foreign translation reserve arises on the consolidation of the Group's overseas subsidiaries, Mahenge Resources Limited (incorporated in Tanzania), Faru Graphite Corporation Limited (incorporated in Tanzania) and Mahenge Resources Limited (incorporated in the United Kingdom). Refer to consolidated statement of changes in equity for reconciliation of movement. 19. ACCUMULATED LOSSES Balance at beginning of the year Net loss attributable to members Issuance of 16% interest to non-controlling interest Transfer from share-based payment reserve Balance at end of year 30 JUNE 2023 AUD 48,555,281 9,053,234 514 30 JUNE 2022 AUD 42,778,521 6,076,894 - (399,918) (300,134) 57,209,111 48,555,281 T R O P E R L A C N A N F I I 48 Page 46 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 20. NON-CONTROLLING INTEREST The Group incorporated Faru, a new Tanzanian company in which Black Rock Mining’s subsidiary, Mahenge Resources Limited (UK), holds an 84% interest and the Government of Tanzania holds a 16% free carried interest. The Framework and Shareholders Agreements were signed on 14 December 2021. Faru was incorporated to receive the SML for Mahenge which was issued on 5 September 2022. The Framework and Shareholders Agreements between Mahenge Resources Limited (UK) and the Government of Tanzania specify the key rights and obligations of the parties, as shareholders of Faru, with respect to the development and management of the Project. At the date of grant of the SML, 16% of the fair value of the Faru shares has been attributed to the Government of Tanzania and recorded as a non-controlling interest. Balance at beginning of the year Issuance of 16% interest to non-controlling interest(i) Loss for the year attributable to non-controlling interest Other comprehensive loss for the period attributable to non-controlling interest Balance at end of year 21. SHARE BASED PAYMENTS 30 JUNE 2023 AUD - 514 (294,325) (5,533) (299,344) 30 JUNE 2022 AUD - - - - - a. Employee Share Incentive Option Plan The establishment of the Black Rock Mining Employee Share Incentive Option Plan (the ESIOP) was initially approved by special resolution at a General Meeting of shareholders of the Company held on 21 November 2006 and approval renewed by shareholders on 18 November 2009 and 28 November 2013. All eligible Directors, executive officers and employees of Black Rock Mining are eligible to participate in the ESIOP. The Plan allows the Company to issue options to eligible persons. The options can be granted free of charge and are exercisable at a fixed price calculated in accordance with the ESIOP. The fair value of the equity-settled share options granted is estimated as at the date of grant using a Black Scholes model taking into account the terms and conditions upon which the options were granted. During the period, 1,500,000 options (2022: 4,500,000) with AUD0.40 exercise price (2022: AUD0.268) and an expiry of 2.7 years (2022: 3 years) were granted. The average fair value of the options granted during the period is AUD0.0678 (AUD0.086). Fair value of options granted The weighted average fair value of the options granted during the prior year was 5.3 cents. The price was calculated by using the Black-Scholes European Option Pricing Model taking into account the terms and conditions upon which the options were granted. Weighted average exercise price (cents) Weighted average life of the option (years) Weighted average underlying share price (cents) Expected share price volatility Risk free interest rate 30 JUNE 2023 40.0 2.7 19.5 82.6% 3.25% 30 JUNE 2022 26.8 3 20.4-22.4 81-87% 0.1-0.3% Historical volatility has been used as the basis for determining expected share price volatility as it is assumed that this is indicative of future trends, which may not eventuate. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 47 of 66 49 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 b. Employee Securities Incentive Plan The Group has provided benefits to employees of the Company in the form of performance rights under the Company’s Employee Securities Incentive Plan (ESIP) as approved at the annual general meeting on 28 November 2022, constituting a share-based payment transaction. The ESIP has replaced the ESIOP in the current year. During the year, 1,529,126 options with a nil exercise price and average expiry of 3.6 years were granted to non- executive Directors. The average fair value of the options granted during the period is AUD0.155. No options were granted under the ESIP in the year ending 30 June 2022. During the year, 8,769,655 performance rights with a nil exercise price and expiry of 5 years were granted. The average fair value of the performance rights granted during the period is AUD0.148. No performance rights were granted in the year ending 30 June 2022. Performance rights granted carry no dividend or voting rights. When vested, each performance right is convertible into one ordinary share of the Company with full dividend and voting rights. c. Summary of Share-Based Payments Details of the share options outstanding during the year are as follows: OPTIONS 2023 2022 Balance at the beginning of the financial year Granted during the financial year: Expired during the year Forfeited during the year Exercised Balance at the end of the financial year Vested and Exercisable at the end of the year NUMBER OF OPTIONS 33,600,000 3,029,126 (5,933,334) (2,000,000) (7,666,666) 21,029,126 17,509,709 WEIGHTED AVERAGE EXERCISE PRICE (CENTS) NUMBER OF OPTIONS 41,700,000 4,500,000 - - (12,600,000) 33,600,000 28,566,667 14.5 19.8 15.0 7.8 12.2 16.6 15.4 WEIGHTED AVERAGE EXERCISE PRICE (CENTS) 12.0 26.8 - - 10.5 14.5 13.3 The share options outstanding and exercisable at the end of the financial year under the Plan and ESIP had a weighted average exercise price of AUD0.166 (2022: AUD0.145) and a weighted average remaining contractual life of 1.7 years (2022: 1.2 years). PERFORMANCE RIGHTS Balance at the beginning of the financial year Granted during the financial year: Expired during the year Forfeited during the year Exercised Balance at the end of the financial year Vested and Exercisable at the end of the year 30 JUNE 2023 NUMBER OF PERFORMANCE RIGHTS - 8,769,655 - - - 8,769,655 - 30 JUNE 2022 NUMBER OF PERFORMANCE RIGHTS - - - - - - - The weighted average remaining contractual life of performance rights outstanding at the end of the year was 4.4 years (2022: nil). Performance rights have nil exercise price. T R O P E R L A C N A N F I I 50 Page 48 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 Share based payment arrangements relating to Directors and employees: EXPIRY DATE EXERCISE PRICE AUD NUMBER AT THE BEGINNING OF THE YEAR GRANTED THIS YEAR EXERCISED THIS YEAR EXPIRED/ FORFEIT THIS YEAR NUMBER AT THE END OF THE YEAR EXERCISABLE AT THE END OF THE YEAR FAIR VALUE AT GRANT DATE GRANT DATE OPTIONS 2/05/2019 2/05/2022 2/05/2019 2/05/2022 28/10/2019 28/10/2022 0.15 0.15 0.15 1,500,000 1,500,000 7,600,000 4/11/2020 4/11/2023 0.0785 5,000,000 23/11/2020 21/12/2023 25/01/2021 24/01/2024 1/06/2021 1/06/2024 1/07/2021 1/07/2024 25/10/2021 25/10/2024 11/08/2022 26/04/2025 28/11/2022 30/06/2025 28/11/2022 30/06/2026 28/11/2022 30/06/2027 PERFORAMNCE RIGHTS 28/11/2022 30/11/2027 28/11/2022 30/11/2027 30/11/2022 30/11/2027 30/11/2022 30/11/2027 21/6/2023 30/11/2027 0.116 0.116 0.20 0.224 0.29 0.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11,000,000 1,000,000 1,500,000 1,500,000 3,000,000 - - - - - - - - - - - (1,500,000) (1,500,000) (4,666,666) (2,933,334) (3,000,000) (2,000,000) - - - - - - - - - - - - - - - - - - 11,000,000 11,000,000 - - - - - - - - 1,000,000 1,000,000 1,500,000 1,500,000 1,500,000 1,000,000 3,000,000 2,000,000 1,500,000 509,709 509,709 509,708 500,000 509,709 - - - 1,500,000 - - - 509,709 509,709 509,708 33,600,000 3,029,126 (7,666,666) (7,933,334) 21,029,126 17,509,709 - 2,005,841 - 435,376 - 5,177,489 - 1,044,448 - 106,501 - 8,769,655 - - - - - - - - - - - - 2,005,841 435,376 5,177,489 1,044,448 106,501 8,769,655 - - - - - - 0.0271 0.0271 0.0268 0.0245 0.0388 0.1018 0.0646 0.0643 0.0968 0.0678 0.1550 0.1550 0.1550 0.1550 0.1343 0.1500 0.1343 0.1150 d. Shares issued to suppliers No shares were issued to suppliers during the current financial year (2022: Nil). e. Expenses arising from share-based payment transactions During the year, the shared based payments totalled AUD569,272 (2022: AUD541,975), with AUD501,651 (2022: AUD541,975) expensed and AUD67,621 (2022: NIL) was capitalised as part of exploration and evaluation. 22. KEY MANAGEMENT PERSONNEL COMPENSATION Details of the remuneration of key management personnel are set out as follows: Short-term employee benefit Post-employment benefits Share-based payments Bonus Other 30 JUNE 2023 AUD 893,028 66,422 318,104 184,500 36,511 30 JUNE 2022 AUD 625,032 40,177 175,768 100,000 69,701 1,498,565 1,010,678 T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 49 of 66 51 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 23. REMUNERATION OF AUDITORS During the year the following fees were paid or were payable for services provided by the Auditor of the Company, its network firms and non-related audit firms: Audit or review of the financial statements (Parent Auditor) Audit or review of the financial statements (Other group entities Auditor) The Auditor of Black Rock Mining is Deloitte Touche Tohmatsu. 30 JUNE 2023 AUD 96,865 41,458 138,323 30 JUNE 2022 AUD 74,553 13,139 87,692 24. RELATED PARTY TRANSACTIONS Remuneration details for Directors and Executives are included in the Remuneration Report and have been audited. Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. 25. EXPENDITURE COMMITMENTS a. Exploration The Group has certain commitments relating to the licence conditions with the Tanzanian Energy and Minerals Department. Outstanding exploration commitments are as follows: Within one year Within one to five years After five years(i) 30 JUNE 2023 AUD 293,698 1,093,293 5,319,310 30 JUNE 2022 AUD 301,881 1,083,451 5,328,533 6,706,301 6,713,865 (i) Relates to the Special Mining Licence granted for a period of 26 years. Minimum exploration expenditure commitments are required as original conditions to acquire the exploration licences. These have all been met by 30 June 2023. As part of the contract to acquire the graphite exploration licences, under certain milestone conditions the Company will be obliged to make additional payments. These payments are subject to the following conditions: Exploration licence PL10427/2014   AUD250,000 cash or equivalent number of fully paid Black Rock Mining shares (at the election of the vendor) upon announcement of a JORC compliant resource of greater than 250,000 tonnes of contained graphite at >9% TGC is announced. Issue price of shares to be calculated based on the preceding seven (7) day VWAP; and AUD375,000 cash and the equivalent value (AUD375,000) in Black Rock Mining shares to be paid when a JORC compliant Resource with greater than 1,000,000 tonnes of contained graphite at >9% total graphite content at any of the Projects is announced by Black Rock Mining on the ASX. The issue price of Black Rock Mining shares is to be calculated based on the VWAP of Black Rock Mining shares in the 5 days prior to the release of the announcement. The required targets have not been met and hence no liability has been recognised. Exploration Program There are no commitments to exploration as at the date of this report. T R O P E R L A C N A N F I I 52 Page 50 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 b. Capital Commitments As at 30 June 2023, the Group has capital commitments of AUD3,646,267 for the Resettlement Action Plan (2022: AUD11,543,397). Within one year One to five years After 5 years Lease Commitments c. Refer to note 13. 30 JUNE 2023 AUD 85,500 3,560,767 - 30 JUNE 2022 AUD 9,218,563 2,324,834 - 3,646,267 11,543,397 d. Contractual Commitments As at 30 June 2023, the Group had contractual expenditure commitments of AUD3,075,399 (2022: AUD1,277,429). 26. LOSS PER SHARE The following reflects the loss and share details used in the calculation of basic and diluted loss per share: 30 JUNE 2023 AUD 30 JUNE 2022 AUD Loss used in calculating basic and diluted loss per share (9,053,234) (6,076,894) Weighted average number of ordinary shares used in calculating basic and diluted loss per share: 984,387,383 822,569,805 Basic and diluted loss per share (cents per share) (0.92) (0.74) The Consolidated Entity’s options and performance rights potentially dilute basic earnings per share in the future. However, they have been excluded from the calculations of diluted earnings per share because they are anti- dilutive for the years presented. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 51 of 66 53 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 27. FINANCIAL INSTRUMENTS The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimisation of the debt and equity balances. The Group’s overall strategy remains unchanged from 2022. The Group holds the following financial instruments, all of which the fair value is equal to the carrying value: Financial assets Cash and cash equivalents Other receivables Total financial assets Financial liabilities Trade and other payables Lease liabilities Total financial liabilities Net financial instruments 30 JUNE 2023 AUD 30 JUNE 2022 AUD 11,459,227 26,093,637 256,582 761,288 11,715,809 26,854,925 (2,083,033) (1,688,230) (686,346) (52,085) (2,769,379) (1,740,315) 8,946,430 25,114,610 The capital structure of the Group consists of net debt (current liabilities offset by cash and bank balances as detailed in notes 8,13 and 15) and equity of the Group (comprising issued capital, reserves and accumulated losses as detailed in notes 17, 18 and 19). a. Capital Management The main focus of the Group’s capital management policy is to ensure adequate working capital to fund the development activities of its Mahenge Graphite Project. This is done through the close monitoring of cash flow projections. The Group’s working capital as at balance date was: Cash and cash equivalents Other receivables Trade and other payables 30 JUNE 2023 AUD 11,459,227 30 JUNE 2022 AUD 26,093,637 256,582 761,288 (2,083,033) (1,740,315) 9,632,776 25,114,610 Refer to Going Concern assumption disclosure for further details on working capital management. Financial risk management The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and interest rate), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to recognise potential adverse effects on the financial performance of the Group. The Group does not use derivative financial instruments. Risk management is the responsibility of the Board of Directors. Market risk Foreign exchange risk The Group transacts in US Dollars and Tanzanian Shillings in relation to its Tanzanian operations is exposed to foreign exchange currency movements arising from various currency exposures, primarily with respect to the US Dollar and the Tanzanian Shilling. T R O P E R L A C N A N F I I 54 Page 52 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations. The Group’s exposure to foreign currency risk at the reporting date was as follows: Group sensitivity The parent entity advances funds to the Tanzanian subsidiaries in US Dollars. The foreign exchange is recognised in the parent entity. The Consolidated E ntity’s pre-tax loss for the year would have been AUD231,278 higher/lower (2021: AUD109,927 higher/ lower) had the Australian dollar strengthened/weakened by 10% against the US Dollar. Cash flow and fair value interest rate risk The Group is exposed to interest rate risk through cash and cash equivalents AUD11,459,227 (2022: AUD26,093,637). At 30 June 2023, if the interest rates had weakened/strengthened by 100 basis points from the year-end rates with all other variables held constant, post-tax profit for the year would have been AUD8,361 lower/higher (2022: AUD334 lower/higher) mainly as a result of interest income deceases/increases. Credit risk Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents as well as credit exposures to customers, including outstanding receivables and committed transactions. Cash and cash equivalents are held with recognisable banking and financial institutions. The maximum exposure to credit risk for cash and cash equivalents is the carrying value. Other receivables are due from third parties considered credit worthy. The maximum exposure to credit risk for other receivables at the reporting date is the carrying amount. The ageing analysis of receivables is as follows: DEBTOR Other receivables Term deposits < 30 DAYS AUD766,730 AUD241,558 Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash to ensure that the Group’s liabilities can be settled as and when they become due. Maturities of financial liabilities The tables below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Refer to note 13 for maturity groupings for lease liabilities. CREDITOR Trade payables <1 MONTH AUD2,083,033 Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The carrying values of other receivables and trade payables are assumed to approximate their fair values due to their short-term nature. T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 53 of 66 55 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 28. CONTINGENT LIABILITIES During the period, on 11 October 2022, the Company issued a notice of demand for compensation for breach of the Consultant Services Agreement (the Agreement) between the Company and the Consultant(i) who was party to this Agreement. The breach of the Agreement relates to a conflict of interest, the failure to disclose said conflict and divulging intellectual property and confidential information of the Company. Subsequent to this, on 24 October 2022, the Group received a pre-litigation letter for defamation from the Consultant demanding compensation. The Consultant has not filed any court case in relation to this matter. The Board and Management, based on advice received from legal advisors, are of the opinion that the Consultant’s case has no reasonable prospect of success. Accordingly, no adjustment has been made to the financial report with respect to this matter. Other than reported above, there are no other contingent liabilities for the financial year (2022: nil). (i) Due to privacy the Consultant has not been named. 29. EVENTS AFTER THE REPORTING DATE Other than the below, the Directors are not aware of any matter or circumstance that has significant or may significantly affect the operation of the Consolidated Entity or the results of those operations, or the state of affairs of the Consolidated Entity in subsequent financial years. Subsequent to year end, a total of 21,351,022 options (AUD0.084 per option) and 591,118 performance rights (nil exercise price) were converted into ordinary fully paid shares. Effective 10 August 2023, 5,644,013 options (AUD0.084 per option) expired unexercised. Subsequent to year end, on 4 September 2023, the Company announced the signing of a non-binding MOU with POSCO in relation to the long-term fines offtake of graphite concentrate rom Module 2 of the Project, in exchange for a potential investment from POSCO in Black Rock Mining of up to USD40m or 19.9% (whichever is lower) with the proceeds to be used for the development of Module 1. T R O P E R L A C N A N F I I 56 Page 54 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 NOTES TO THE FOR THE YEAR ENDED 30 JUNE 2023 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2023 30. PARENT ENTITY INFORMATION The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements. Refer to note 3 for a summary of significant account policies. Financial Position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Equity Issued capital Retained earnings Reserves Total equity Financial performance Loss for the year Other comprehensive income Total comprehensive loss Commitments and contingent liabilities are consistent with Notes 25 and 28. 30 JUNE 2023 AUD 30 JUNE 2022 AUD 43,985,986 26,744,717 15,255,286 12,464,909 59,241,272 39,209,626 1,322,531 1,420,510 424,288 606,443 1,746,819 2,026,953 111,535,841 100,907,653 (57,625,970) (66,379,174) 3,584,582 2,654,194 57,494,453 37,182,673 30 JUNE 2023 AUD 6,044,649 - 30 JUNE 2022 AUD 4,503,134 - 6,044,649 4,503,134 T R O P E R L A C N A N F I I BLACKROCK MINING ANNUAL REPORT | 2023 Page 55 of 66 57 DIRECTORS’ DECLARATION For the Year Ended 30 June 2023 I N O T A R A L C E D ’ S R O T C E R D I 58 BLACKROCK MINING ANNUAL REPORT | 2023 , DECLARATION DIRECTORS Directors’ Declaration For the Year Ended 30 June 2023 In accordance with a resolution of the Directors of Black Rock Mining Limited, I state that: 1. In the opinion of the Directors: a. the financial statements and notes thereto of the Consolidated Entity are in accordance with the Corporations Act 2001 including: i. giving 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; and ii. complying with accounting standards and the Corporations Act 2001; and b. there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as and when they become due and payable. 2. 3. The attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 1 to the financial statements. The Directors have been given a declaration required by section 295A of the Corporations Act 2001 for the financial year ended 30 June 2023. On behalf of the Board Richard Crookes Chairman 28 September 2023 I N O T A R A L C E D ’ S R O T C E R D I BLACKROCK MINING ANNUAL REPORT | 2023 Page 56 of 66 59 INDEPENDENT AUDITOR’S REPORT For the Year Ended 30 June 2023 I ’ T R O P E R S R O T D U A T N E D N E P E D N I 60 BLACKROCK MINING ANNUAL REPORT | 2023 Deloitte Touche Tohmatsu ABN 74 490 121 060 Tower 2 Brookfield Place 123 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee mmeemmbbeerrss ooff BBllaacckk RRoocckk MMiinniinngg LLiimmiitteedd RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt Opinion We have audited the financial report of Black Rock Mining Limited (the Company) and its subsidiaries (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, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: • • 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 then ended; and 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 those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our 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 & 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. Material Uncertainty Related to Going Concern We draw attention to Note 1 in the financial report which indicates that the Group incurred net losses of $9,347,559, experienced net cash outflows from operating activities of $8,306,366 and net cash outflows from investing activities of $17,354,981 for the year ended 30 June 2023. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. 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 for 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. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. I ’ T R O P E R S R O T D U A T N E D N E P E D N I BLACKROCK MINING ANNUAL REPORT | 2023 61 KKeeyy AAuuddiitt MMaatttteerr HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr AAccccoouunnttiinngg ffoorr EExxpplloorraattiioonn aanndd EEvvaalluuaattiioonn AAsssseettss As at 30 June 2023, the carrying value of exploration and evaluation assets amounts to $46,793,567 including additions of $16,203,262 as disclosed in Note 11. Significant judgement is applied in determining the treatment of evaluation exploration expenditure including: and • treatment of exploration and evaluation expenditure during the year; • • o whether the capitalisation are satisfied; conditions for • o which elements of exploration and evaluation expenditure qualify for capitalisation; and o whether the costs associated with evaluation exploration expenditure is complete. and • whether the carrying value of exploration and evaluation assets is recoverable; o o o the Group’s intention and ability to proceed with a future work program; the likelihood of licence renewal or extension; and the expected or actual success of resource evaluation and analysis. • the classification of Exploration & Evaluation Assets vs. Development Assets. I ’ T R O P E R S R O T D U A T N E D N E P E D N I Our procedures associated with exploration and evaluation expenditure incurred during the year included, but were not limited to: obtaining an understanding of the Group’s key controls over the capitalisation or expensing of exploration and evaluation expenditure; and testing, on a sample basis, exploration and evaluation expenditure to confirm the nature of the costs incurred, and the appropriateness of the classification between asset and expense. the completeness of costs capitalised assessing including those relating to the resettlement action plan. Our procedures associated with the carrying value of exploration and evaluation assets included, but were not limited to: • • obtaining an understanding of the Group’s key controls relating to the identification of indicators of impairment; evaluating management’s indicator assessment, including consideration as to whether any events exist at the reporting date which may indicate that exploration and evaluation assets may not be recoverable: impairment o obtaining a schedule of the area of interest held by the Group and confirming whether the rights to tenure of that area of interest remained current at balance date; o holding discussions with management as to the status of ongoing exploration programs in the respective area of interest; and o assessing whether any facts or circumstances impairment testing was existed to suggest required. Our procedures associated with the classification of Exploration & Evaluation Assets included, but were not limited to: • • • holding discussions with management in relation to any commitments; review of board minutes and contracts to assess whether these would indicate that a final investment decision has been made; and performing subsequent events procedures to identify if any final investment decision has been made after the reporting date. We also assessed the adequacy of the disclosures in Note 4 and 11 to the financial statements. 62 BLACKROCK MINING ANNUAL REPORT | 2023 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 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 that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors 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 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 to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities 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 the 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. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. I ’ T R O P E R S R O T D U A T N E D N E P E D N I BLACKROCK MINING ANNUAL REPORT | 2023 63 • • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among 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. 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, actions taken to eliminate threats or safeguards applied. 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 these 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 communication. RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt Opinion on the Remuneration Report We have audited the Remuneration Report included on pages 15 to 23 of the Directors’ Report for the year ended 30 June 2023.. In our opinion, the Remuneration Report of Black Rock Mining 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. DELOITTE TOUCHE TOHMATSU PPeenneellooppee PPiinnkk Partner Chartered Accountants Perth, 28 September 2023 I ’ T R O P E R S R O T D U A T N E D N E P E D N I 64 BLACKROCK MINING ANNUAL REPORT | 2023 I ’ T R O P E R S R O T D U A T N E D N E P E D N I BLACKROCK MINING ANNUAL REPORT | 2023 65 ADDITIONAL INFORMATION For the Year Ended 30 June 2023 I N O T A M R O F N I I L A N O T D D A I 66 BLACKROCK MINING ANNUAL REPORT | 2023 ADDITIONAL INFORMATION For the Year Ended 30 June 2023 ADDITIONAL INFORMATION Additional information required by the Australian Securities Exchange and shown elsewhere in this report is set out below. The information is current as at 8 September 2023. Other Additional ASX Information Distribution – Ordinary Fully Paid Shares BLACK ROCK MINING LIMITED Range of Units As Of 08/09/2023 Range 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total ORDINARY FULLY PAID SHARES (Total) Composition : ORD Total holders 194 723 663 2,234 877 4,691 Units 55,071 2,447,661 5,383,836 90,631,106 998,608,420 1,097,126,094 % Units 0.01 0.22 0.49 8.26 91.02 100.00 Unmarketable Parcels Minimum AUD500.00 parcel at AUD0.0880 per unit 5,682 Minimum Parcel Size Holders 968 Units 2,775,039 Voting Rights The voting rights for each class of security on issue are: Ordinary Fully Paid Shares Each ordinary shareholder is entitled to one vote for each share held. Options The holders of Options have no rights to vote at a general meeting of the company. Page 61 of 66 I N O T A M R O F N I I L A N O T D D A I BLACKROCK MINING ANNUAL REPORT | 2023 67 ADDITIONAL INFORMATION For the Year Ended 30 June 2023 Largest Shareholders BLACK ROCK MINING LIMITED Top Holders (Grouped) As Of 08/09/2023 Rank Name POSCO LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED Other Additional ASX Information ORDINARY FULLY PAID SHARES (Total) Composition : ORD Units % Units 126,020,001 11.49 1 2 3 4 5 6 7 8 9 EYEON INVESTMENTS PTY LTD COPULOS SUPERANNUATION PTY LTD CITICORP NOMINEES PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 UBS NOMINEES PTY LTD DANIEL TURNER CAPITAL PTY LTD BNP PARIBAS NOMINEES PTY LTD 10 WESTPARK OPERATIONS PTY LTD 11 MR CHIN YONG CHONG 12 SPACETIME PTY LTD 13 GASMERE PTY LTD 14 JAWAF ENTERPRISES PTY LTD 15 DANIEL TURNER HOLDINGS PTY LTD 16 MR WARREN WILLIAM BROWN + MRS MARILYN HELENA BROWN 17 18 19 CITYWEST CORP PTY LTD TISDELL FAMILY SUPER PTY LTD E & E HALL PTY LTD 20 MR BASIL CATSIPORDAS 53,574,736 50,373,642 35,511,788 27,397,197 22,249,514 19,553,173 17,572,917 16,465,975 14,359,420 14,212,741 13,305,253 11,602,661 11,600,000 11,185,307 9,492,500 9,095,306 8,000,000 7,913,324 7,600,000 4.88 4.59 3.24 2.50 2.03 1.78 1.60 1.50 1.31 1.30 1.21 1.06 1.06 1.02 0.87 0.83 0.73 0.72 0.69 Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total) Total Remaining Holders Balance 487,085,455 610,040,639 44.40 55.60 Substantial Shareholders Substantial Shareholders as disclosed in substantial shareholder notices provided to the Company as at 8 September 2023. Holder POSCO1 Copulos Group2 1 As lodged on 10 June 2022 2 As lodged on 1 June 2022 Number of ordinary shares 126,020,001 118,720,679 % of Shares 12.90 12.15 Page 62 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 I N O T A M R O F N I I L A N O T D D A I 68 ADDITIONAL INFORMATION For the Year Ended 30 June 2023 Other Additional ASX Information Distribution – Unlisted Options Expiring 21/12/2023 at AUD0.116 Range 1 - 1,000 Total holders 0 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Rounding Total 0 0 0 4 4 1. Mrs Karen Gail de Vries holds 5,000,000 Options, comprising 45.54% % of this class. Distribution – Unlisted Options Expiring 24/01/2024 at AUD0.116 Range 1 - 1,000 Total holders 0 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Rounding Total 0 0 0 1 1 1. L39 Pty Ltd holds 1,000,000 Options, comprising 100.00 % of this class. Distribution – Unlisted Options Expiring 1/06/2024 at AUD0.20 Range 1 - 1,000 Total holders 0 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Rounding Total 0 0 0 1 1 1. IRX Advisors Pty Ltd holds 1,500,000 Options, comprising 100.00 % of this class. Distribution – Unlisted Options Expiring 1/07/2024 at AUD0.224 Range 1 - 1,000 Total holders 0 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Rounding Total 0 0 0 1 1 1. Mr Daniel Pantany holds 1,500,000 Options, comprising 100.00 % of this class. Units 0 0 0 0 11,000,000 11,000,000 Units 0 0 0 0 1,000,000 1,000,000 Units 0 0 0 0 1,500,000 1,500,000 Units 0 0 0 0 1,500,000 1,500,000 % Units 0.00 0.00 0.00 0.00 100.00 0.00 100.00 % Units 0.00 0.00 0.00 0.00 100.00 0.00 100.00 % Units 0.00 0.00 0.00 0.00 100.00 0.00 100.00 % Units 0.00 0.00 0.00 0.00 100.00 0.00 100.00 I N O T A M R O F N I I L A N O T D D A I BLACKROCK MINING ANNUAL REPORT | 2023 Page 63 of 66 69 ADDITIONAL INFORMATION For the Year Ended 30 June 2023 Other Additional ASX Information Distribution – Unlisted Options Expiring 25/10/2024 at AUD0.29 Range 1 - 1,000 Total holders 0 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Rounding Total 0 0 0 1 1 1. Mining Securities Pty Ltd holds 3,000,000 Options, comprising 100.00 % of this class. Distribution – Unlisted Options Expiring 26/04/2025 at AUD0.40 Range 1 - 1,000 Total holders 0 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Rounding Total 0 0 0 1 1 1. Mr Paul Raymond Sims holds 1,500,000 Options, comprising 100.00 % of this class. Distribution – Unlisted Options Expiring 19/06/2025 at AUD0.20 Range 1 - 1,000 Total holders 0 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Rounding Total 2 10 43 31 86 Units 0 0 0 0 3,000,000 3,000,000 Units 0 0 0 0 1,500,000 1,500,000 Units 0 6,093 78,098 1,449,290 27,452,032 28,985,513 % Units 0.00 0.00 0.00 0.00 100.00 0.00 100.00 % Units 0.00 0.00 0.00 0.00 100.00 0.00 100.00 % Units 0.00 0.02 0.27 5.00 94.71 0.00 100.00 1. HSBC Custody Nominees (Australia) Limited holds 10,724,638 Options, comprising 37.00 % of this class. On-market Buy-Back Currently there is no on-market buy-back of the Company’s securities. Securities Subject to Escrow As at 8 September 2023 there are no securities currently subject to escrow. Corporate Governance Pursuant to the ASX Listing Rules, the Company’s Corporate Governance Statement will be released in conjunction with this report. The Company’s Corporate Governance Statement is available on the Company’s website at: https://blackrockmining.com.au/about-us/#corporate-governance I N O T A M R O F N I I L A N O T D D A I 70 Page 64 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 ADDITIONAL INFORMATION For the Year Ended 30 June 2023 Annual Mineral Resources and Ore Reserves Statement Annual Mineral Resources and Ore Reserves Statement Black Rock Mining Limited (the Company or Black Rock Mining) presents its Mineral Resource Statement as at 30 June 2023 for the Mahenge Graphite Project (the Project). There has been no change to the Mineral Resource and Ore Reserve previously disclosed. The Company’s Exploration Results, Mineral Resource and Ore Reserve estimates are reported in accordance with the ASX Listing Rules and the requirements and guidelines of the 2012 edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves – the JORC Code. The Company’s Mineral Resource and Ore Reserve estimates for 30 June 2023 are listed in the tables below. As released on ASX on 3 February 2022 (refer to ASX Announcement: Black Rock Mining confirms 25% increase in Measured Mineral Resource, now the largest in class globally), following the completion of assays from the Company’s 2019 infill metallurgical drilling and bulk sampling program, the JORC Compliant Mineral Resource Estimate and Ore Reserve at the Project was updated. Those announcements contain the relevant statements, data and consents referred to this in this Mineral Resource Statement. The Company is not aware of any other new information or data that materially affects the information included in this Mineral Resource Statement and confirms that the material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. Mineral Resource Estimate Table as at 30 June 2023 Project Category Tonnes TGC Mahenge Graphite Project Measured Indicated Inferred TOTAL (MT) 31.8 84.6 96.7 213.1 Note: Appropriate rounding applied Ore Reserve Estimate Table as at 30 June 2023 Project Category Tonnes Mahenge Graphite Project Proved Probable TOTAL (MT) - 70.5 70.5 (%) 8.6 7.8 7.4 7.8 TGC (%) - 8.5 8.5 Note: Appropriate rounding applied Tenement Schedule as at 30 June 2023 Licence Type Licence Number Total Area Date Granted Expiry Date (SQ KM) Special Mining Licence SML676/2022 34.96 09.09.2022 08.09.2048 Prospecting Licence PL2139/2022 108.46 23.12.2022 22/12/2026 Prospecting Licence PL10427/2014 111.33 02.12.2014 01.12.2023 Contained Graphite (MT) 2.7 6.6 7.2 16.6 Contained Graphite (MT) - 6.0 6.0 BKT Ownership (%) 84% 84% 100% I N O T A M R O F N I I L A N O T D D A I BLACKROCK MINING ANNUAL REPORT | 2023 Page 65 of 66 71 ADDITIONAL INFORMATION For the Year Ended 30 June 2023 Annual Mineral Resources and Ore Reserves Statement Annual Mineral Resources and Ore Reserves Statement Governance and Internal Controls The Company’s geology department have a set of guidelines and working practices to control the Mineral Resources and Ore Reserves estimation and reconciliation process, as well as the quality of the data used. The Company’s risk management program includes assessment of the risks associated with the estimations of Mineral Resources and Ore Reserves and the controls in place to ensure that robust Resource and Reserve estimates are reported. The Company, through its senior geological and mining engineering staff ensures that all Mineral Resource and Ore Reserves estimations are subject to appropriate levels of governance and internal controls. Exploration results are collected and managed by a competent qualified geologist. All data collection activities are conducted to industry standards based on a framework of quality assurance and quality control protocols covering all aspects of sample collection, topographical and geophysical surveys, drilling ,sample preparation, physical and chemical analysis and data and sample management. Mineral Resources and Ore Reserve estimates are prepared by appropriately qualified Competent Persons. If there is a material change in the estimate of a Mineral Resource or Ore Reserve, the estimate and supporting documentation in question is reviewed by a suitably qualified Competent Person and announced to the ASX in accordance with the Listing Rules. The Company reports its Mineral Resources and Ore Reserves on an annual basis in accordance with the JORC Code 2012 Edition. The Company’s Competent Persons are members of the Australasian Institute of Mining and Metallurgy (AUSIMM) and qualify as Competent Persons under the JORC Code 2012. Competent Person Statement The information in this report that relates to reporting of Exploration Results have been prepared by Mr Prisin Moshi. Mr Moshi is an employee of Black Rock Mining and has supervised drilling and exploration programs at the Mahenge Graphite Project. Mr Moshi is a member of the Australian Institute of Mining and Metallurgy and have sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The information in this report that relates to Mineral Resources prepared by Mr Lauritz Barnes, consultant with Trepanier Pty Ltd. Mr Barnes is a member of the Australian Institute of Mining and Metallurgy and have sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. The information in this report that relates to the Ore Reserve Statement, has been compiled by Mr Beng Ko, under the direction of Mr John de Vries and in accordance with the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code – 2012 Edition). Mesrrs de Vries and Ko are both employees of Black Rock Mining and members of the Australasian Institute of Mining and Metallurgy. Mr de Vries takes overall responsibility for this information. Mr de Vries holds options in the company as part of his total remuneration package. Mr de Vries has the requisite experience in Ore Reserve estimation 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 2012 Edition of the JORC Australasian Code for Reporting of Mineral Resources and Ore Reserves”. Mesrrs Moshi, Barnes and de Vries consent to the inclusion in this report of the matters based on the information in the form and context in which they appear. I N O T A M R O F N I I L A N O T D D A I 72 Page 66 of 66 BLACKROCK MINING ANNUAL REPORT | 2023 Level 1 1 Walker Avenue West Perth WA 6005 T: +61 (08) 6383 6200 blackrockmining.com.au

Continue reading text version or see original annual report in PDF format above