Boab Metals Limited Annual Report 2021

Plain-text annual report

ABN 43 107 159 713 FORMERLY PACIFICO MINERALS LIMITED 2021 ANNUAL REPORT CORPORATE DIRECTORY DIRECTORS Gary Comb (Chairman) Simon Noon (Managing Director & CEO) Richard Monti (Non-Executive Director) Andrew Parker (Non-Executive Director) COMPANY SECRETARY Jerry Monzu REGISTERED OFFICE Level 1, 105 St Georges Terrace PERTH WA 6000 SHARE REGISTRY Automic Group Pty Ltd Level 2, 267 St Georges Terrace PERTH WA 6000 BANKERS Australian and New Zealand Banking Group Limited Level 1, 1275 Hay Street WEST PERTH WA 6005 AUDITOR Stantons International Audit and Consulting Pty Ltd Level 2, 1 Walker Avenue WEST PERTH WA 6005 STOCK EXCHANGE LISTING Boab Metals Limited shares are listed on the Australian Stock Exchange under the ticker code ‘BML’. WEBSITE ADDRESS www.boabmetals.com TABLE OF CONTENTS CHAIRMAN’S REPORT MANAGING DIRECTOR’S REPORT OPERATIONS REVIEW DIRECTORS’ REPORT AUDITOR’S INDEPENDENT DECLARATION 5 7 9 21 34 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 36 CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT SHAREHOLDER INFORMATION 37 38 39 40 69 71 77 FORWARD LOOKING STATEMENTS This Annual Report may contain forward looking statements. Such statements are only predictions, based on certain assumptions and involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control. Actual events or results may differ materially from the events or results expected or implied in any forward-looking statement. The inclusion of such statements should not be regard- ed as a representation, warranty or prediction with respect to the accuracy of the underlying assumptions or that any forward-looking statements will be or are likely to be fulfilled. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstanc- es after the date of this document (subject to securities exchange disclosure requirements). The information in this document does not consider the objectives, financial situation or needs of any person. Nothing contained in this document constitutes investment, legal, tax, or other advice. CHAIRMAN’S REPORT 5 ANNUAL REPORT 2021BOAB METALS LIMITED Dear Shareholders, On behalf of your Board of Directors, I am delighted to present the 2021 Annual Report and recap on the signiﬁcant progress that Boab Metals has made over the past ﬁnancial year. In January 2021, the company was pleased to bring into eﬀect a name change from Paciﬁco Minerals Ltd to Boab Metals Ltd. The change of company name was not a decision taken lightly, but was made in order to reﬂect our commitment to the Sorby Hills Project and to align our company to a symbol which connects to the Kimberley community in which we plan to operate for many years. The 2021 ﬁnancial year began with the delivery of a Pre-Feasibility Study (PFS) for Sorby Hills conﬁrming a project with robust economic outcomes and it ended with a Deﬁni�ve Feasibility Study (DFS) well underway and due for delivery in the ﬁrst half of CY 2022. We were able to establish a ﬁnancial pla�orm to execute the extensive work for delivering the DFS by successfully comple�ng a strongly supported $12m capital raise in September 2020. This funding has enabled Boab and our Joint Venture partner, Yuguang, to embark on a Phase V drilling program which is designed to increase the mineral inventory at Sorby Hills. Pleasingly, the success of this drilling program to date may allow the JV to consider an increase in the project’s overall scale. From a project funding perspec�ve, Boab has advanced discussions with key Australian Government debt funding organisa�ons, whilst also progressing discussions with several commercial banks to ensure the project’s capital requirements are underwri�en for a ﬁnancial investment decision in Q2 CY 2022. During the ﬁnancial year we’ve welcomed several new highly experienced professionals to complement a team and a project in which I have great conﬁdence will develop a base metal mine with a�rac�ve C1 costs and signiﬁcant returns to shareholders. The Board is grateful for the support of all shareholders and would like to commend all staﬀ on their hard work and dedica�on during the year. We look forward to a year of substan�al milestones for Boab as the company progresses the Sorby Hills project towards a development outcome. Gary Comb Chairman MANAGING DIRECTOR’S REPORT I’m pleased to report that ﬁnancial year 2021 was an extremely successful period for Boab Metals with our commi�ed team pushing to progress our 75% owned Sorby Hills Project to become a long-term and highly proﬁtable mining company. In August 2020, we were delighted to report an updated Pre-Feasibility Study (PFS) on the Sorby Hills Project which conﬁrmed the following robust ﬁnancial outcomes: Pre-produc�on capital spend of $183m to be paid back from outstanding early cash ﬂows within 1.6 years. A project NPV of $303m and IRR of 46% using conserva�ve assump�ons for commodity prices. A project life of 10 years with an average of $127m EBITDA over the ﬁrst two years of opera�ons. These outstanding PFS results have given your Board and our JV partner conﬁdence to progress to a Deﬁni�ve Feasibility Study (DFS) which is fully funded for comple�on and due to be delivered in 1H CY 2022. In April 2021 we announced an interim Mineral Resource Es�mate (44.9Mt at 3.2% Pb, 0.5% Zn and 37g/t Ag) following a very successful Phase IV drilling program which mostly focussed on securing metallurgical and geotechnical samples to support the DFS. The results from this program also conﬁrmed several material extensions outside of the proposed open pits in the PFS. These results gave us conﬁdence to include a further phase V drilling program to inves�gate the poten�al to expand the mining and processing capacity in our DFS. Post 2021 FY, the company has been able to report encouraging drilling results from the Phase V campaign (s�ll ongoing at �me of wri�ng) which are expected to contribute to an increased mining inventory at Sorby Hills. Boab was able to add to our asset por�olio by acquiring the Manbarrum Zinc-Silver-Lead Project in July 2021. The 100% owned Manbarrum Project is located approximately 25km east of the Sorby Hills Project and the company will inves�gate how Manbarrum may be incorporated into Boab’s regional produc�on strategy. The Board was pleased to acquire the services of Mr David English as Chief Opera�ng Oﬃcer during the ﬁnancial year. David brings extensive experience from his �me working in senior roles in the development of some of Australia’s premier mining opera�ons such as Sandﬁre’s Dugrussa Mine and IGO’s Nova Bollinger Mine. Corporately, the Company is fully funded to deliver the Sorby Hills DFS. Boab is ac�vely engaged with government funding agencies (such as NAIF and EFA) and commercial banks alongside advanced nego�a�ons with several poten�al oﬀ-take partners as the Sorby Hills Project moves rapidly towards a ﬁnal investment decision in 1H CY 2022. We were pleased to have eﬀected a name change to Boab Metals Ltd during FY 2021, which be�er reﬂects our commitment to the Kimberley region in which we operate. Coinciding with the name change, Boab also conducted a capital reconstruc�on. From a community perspec�ve, Boab was delighted to be able to secure the naming rights of the Ord Valley Muster. Our sponsorship of this iconic event underlines our company’s commitment to the town of Kununurra and the broader Kimberley community. I’d like to take this opportunity to acknowledge all of our staﬀ and their families for their con�nued hard work and extend my apprecia�on to my fellow Board members for their invaluable guidance over the 2021 ﬁnancial year. Lastly, I express a deep thanks to our loyal shareholders as we look forward to a rewarding ﬁnancial year ahead for Boab Metals. Simon Noon Managing Director & CEO 7 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW OVERVIEW The Financial Year 30 June 2021 has seen Boab Metals Limited (“Boab”) or the (“Company”) take signiﬁcant steps towards reaching a Decision to Mine at its 75% owned Sorby Hills Project (“Sorby Hills” or “the Project”), located within the Kimberley Region of Western Australia. The Company undertook a range of Technical, Project Execu�on and Corporate ac�vi�es that have laid a solid founda�on to leverage into what is shaping to be a transforma�onal FY22. Key Technical activities completed during period include: release of an op�mised Pre-Feasibility Study on the Sorby Hills Project (“PFS”); commencement of the Sorby Hills Deﬁni�ve Feasibility Study (“DFS”); comple�on of a Phase IV drilling program aimed obtaining metallurgical and geotechnical samples and further de-risking the exis�ng Sorby Hills mining inventory ahead the DFS; commencement of the DFS Metallurgical Testwork program; release of an updated Mineral Resource Es�mate incorpora�ng the Phase IV drilling results; and commencement of a high impact Phase V drilling program aimed at expanding Sorby Hills mining inventory and increasing the proposed processing plant capacity adopted in the DFS; Key Project Execution activities completed during the period include: successful progression to the Due Diligence stage of the ﬁnancing approval and assessment process of the Northern Australia Infrastructure Facility (“NAIF”); receipt of a Le�er of Support from Export Finance Australia (“EFA”) with respect to the provision of debt ﬁnance for the Sorby Hills Project; the appointment of highly experienced Mr David English as the Companies inaugural Chief Opera�ng Oﬃcer; agreement with Joint Venture partner Henan Yuguang Gold and Lead Co., Ltd to fast track the ﬁnalisa�on of a Mining Joint Venture Agreement to govern the development and opera�on of Sorby Hills following a Decision to Mine; produc�ve ini�al soundings with Tier 1 o�akers conﬁrming the high saleability of the Lead-Silver concentrate to be produced from Sorby Hills; and successful Lender engagement where Boab presented and received posi�ve feedback from poten�al Commercial Bank ﬁnanciers on the Sorby Hills Project and indica�ve ﬁnancing structure. 9 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW Key Corporate activities completed during the period include: a A$15 million Placement, Share Purchase Plan (“SPP”) and Op�on Exercise Program to fully fund the Company to a Decision to Mine at Sorby Hills; undertaking a Company name change from Paciﬁco Minerals Limited to Boab Metals Limited (ASX: BML); undertaking 25 to 1 consolida�on of share capital reducing outstanding shares form 3.8 billion to 152 million; becoming the naming rights sponsor of the renowned Ord Valley Muster; and subsequent to the year end, undertaking the strategic acquisi�on of the Manbarrum Zinc-Silver-Lead Project located 25km east of Sorby Hills. Technical Ac�vi�es Release of the Sorby Hills Pre-Feasibility Study On 25 August 2020, the Company released the results of the Op�mised PFS on the Project. The PFS conﬁrmed the Project is technically and economically robust, underpinned by detailed test work and growing demand for Lead and Silver as part of the global transi�on to clean energy. The PFS ﬁndings strengthen the Company’s convic�on to develop the deposit into a proﬁtable mine. Highlights of the PFS included: Low-risk Open Pit project underpinned by a well-deﬁned large-scale Mineral Resource, 92% Ore Reserves and conven�onal crush-mill-ﬂoat processing circuit delivering high metal recoveries; Mining and processing of 14.8Mt of ore from four deposits at a rate of 1.5Mt per annum over an ini�al 10-year mine life producing an average 50kt Lead and 1.5Moz of Silver per annum in a high quality 62% Lead concentrate product; Gross Revenue of A$1.85 billion with revenues from Lead and Silver contribu�ng approximately 77% and 23% respec�vely over the Life of Mine (‘LoM’); C1 cash costs of US$0.40/lb payable Pb (including a net Silver credit of US$0.27lb/ payable Pb) delivering a LoM opera�ng margin of 40%; Total LoM opera�ng cash ﬂow of A$747 million and average EBITDA of A$75 million per annum (including A$127 million per annum over the ﬁrst 2 years of produc�on); Upfront Capex of A$183 million comprising: o Pre-Produc�on Mining capex of A$24 million; o Process Plant and Infrastructure of A$126 million; o Owners Costs of A$13 million; and o Con�ngency of A$20 million. 10 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW 11 ANNUAL REPORT 2021BOAB METALS LIMITED Strong Pre-Tax NPV8 of A$303 million, genera�ng an IRR of 46% with a payback period of ~1.6 years (assuming conserva�ve average 10-year Lead (US$2,095/t) and Silver (US$21.1/oz) prices and an A$:US$ exchange rate of 0.70. Following the posi�ve PFS results, the Company decided to immediately commence workstreams related to the comple�on of a DFS on the Sorby Hills Project. Figure 1: Sorby Hills PFS Base Case key metrics. 1) Life on mine average 2) NPV based on 10-year average commodity prices. Lead US$0.95/lb, Silver US21.10/oz. AUDUSD FX rate of 0.70 Phase IV Drilling Program On the back of the posi�ve PFS result, a Phase IV drilling program comprising 4,803m was undertaken to advance the Project towards DFS status. The bulk of the Phase V drilling (3,340m) was appor�oned to genera�ng material for metallurgical and geotechnical testwork with the balance targe�ng Resource extensions and brown-ﬁelds explora�on (~1,460m). Assay results from the Phase IV drilling not only achieved the primary DFS objec�ves but also conﬁrmed up and down-dip extensions of mineralisa�on outside the exis�ng Mineral Resource envelope and open pit designs. The new results allowed previously excluded historic intercepts to be incorporated into the Sorby Hills Mineral Resource and encourage the Company to embark on a Phase V program to further assess high impact opportuni�es revealed by the Phase IV program. Updated Mineral Resource Es�mate In April 2021, an updated Mineral Resource Es�mate was undertaken by CSA Global incorpora�ng the results of the Phase IV drill program. The updated Mineral Resource Es�mate comprised 44.9Mt at 3.2% Pb, 0.5% Zn and 37g/t Ag using a cut-oﬀ of 1% Pb. A comprehensive breakdown of the Mineral Resource by Resource classiﬁca�on and deposit is shown in Table 1. The updated es�mate resulted in an increase in Measured and Indicated Tonnes of 1.3Mt (6%), 24Kt contained Lead (3%) and 1.2Moz contained Silver (5%). Importantly, the update saw the conversion of 4.0Mt of Indicated Resources to Measured Resources (an increase of 56%) and a signiﬁcant increase in shallow Resource tonnes (<60m). OPERATIONS REVIEW Table 1: Updated Sorby Hills Mineral Resource Es�mate – Pb Domains only. Classifica�on by Deposit A Inferred Sub Total B Measured Indicated Sub Total Omega Measured Indicated Inferred Sub Total Norton Measured Indicated Inferred Sub Total Alpha Indicated Inferred Sub Total Beta Inferred Sub Total Total Resource Measured Indicated Inferred Total Mt 0.6 0.6 1.0 1.3 2.3 7.3 6.5 2.9 16.7 2.8 2.2 15.0 20.0 1.0 1.0 2.0 3.3 3.3 11.1 11.0 22.8 44.9 Pb % 5.1% 5.1% 4.0% 3.8% 3.9% 3.4% 3.5% 3.0% 3.4% 4.1% 3.2% 2.4% 2.7% 2.8% 3.4% 3.1% 4.6% 4.6% 3.6% 3.4% 2.9% 3.2% Grade Zn % Ag g/t Pb Eq. % 0.9% 0.9% 0.3% 0.3% 0.3% 0.4% 0.4% 0.5% 0.4% 0.3% 0.5% 0.5% 0.4% 0.6% 1.4% 1.0% 0.4% 0.4% 0.3% 0.4% 0.5% 0.5% 22 22 21 22 22 36 33 32 34 76 37 28 36 50 85 67 61 61 45 34 36 37 5.7% 5.7% 4.6% 4.4% 4.5% 4.4% 4.4% 3.9% 4.3% 6.2% 4.2% 3.2% 3.7% 4.2% 5.8% 5.0% 6.3% 6.3% 4.9% 4.3% 3.9% 4.3% Contained Metal Zn kt 5 5 3 5 7 26 28 15 69 9 10 70 89 6 13 19 14 14 Ag koz 411 411 673 936 1,608 8,517 6,760 2,956 18,233 6,745 2,606 13,716 23,067 1,627 2,625 4,251 6,476 6,476 Pb Eq. kt 34 34 45 59 105 324 283 111 718 173 94 479 745 42 56 98 208 208 Pb kt 30 30 40 51 91 250 225 85 560 114 71 360 545 28 33 61 152 152 404 375 660 1,438 38 49 117 203 15,934 11,929 26,184 54,046 542 478 887 1,907 Note: Tonnes and Grade are rounded. Reported at a 1.0% Pb Cut-Oﬀ. Discrepancy in calculated Contained Metal is due to rounding. See Compliance Statements for Metal Equivalent calcula�on method. Lead Equivalent calcula�on excludes Zinc. The Mineral Resource associated with the Zinc domains of the Alpha deposit (Table 2) was not included in the latest Mineral Resource update and remains as previously released (ASX release 2 June 2020). 12 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW Table 2: Sorby Hills Mineral Resource Es�mate – Alpha Deposit Zn Domains only. Classiﬁca�on by Deposit Alpha Indicated Inferred Sub Total Mt 1.7 3.4 5.1 Pb % 0.3 0.5 0.5 Zn % 2.5 2.9 2.7 Ag g/t 21 31 28 Pb kt 5 17 22 Zn kt 43 105 148 Ag Moz 1.1 3.4 4.5 Note: Tonnes and Grade are rounded. Reported at a 1.0% Zn Cut-Oﬀ (ASX release 2 June 2020). Discrepancy in calculated Contained Metal is due to rounding. Phase V Drilling Program On the back of posi�ve results from the Phase IV drilling program, Boab formed the view that a signiﬁcant opportunity existed to materially expand the Sorby Hills mining inventory ahead of the DFS through a high impact Phase V drilling program. The Phase V drilling program commenced in May 2021 with a planned objec�ve of comple�ng a minimum of 4,200m across 48 holes with speciﬁc targets including: high impact targets iden�ﬁed in the Phase IV drilling program located proximal to the current Sorby Hills open-pit designs; inﬁll and extensional drilling of the Zinc-rich Alpha and high Silver Beta deposits for the ﬁrst �me since Boab’s acquisi�on of the Project in 2018; further drill tes�ng of the Lead mineralisa�on previously intersected at the Wildcat target; and inaugural tes�ng of the highly prospec�ve Eight Mile Creek Project, located immediately south of Sorby Hills. Preliminary results encouraged the Company to extend the Phase V drilling program with a total of 59 diamond drill holes ul�mately being completed for a total of 5,284m. Ini�al assay results from 24 of the Phase V diamond drills holes have conﬁrmed observed mineralisa�on in the drill core with selected results including: SHMD070: 17m @ 3.39% Pb & 15g/t Ag from 58m SHMD073: 17m @ 3.02% Pb &13g/t Ag from 75m SHMD066: 5m @ 6.77% Pb & 26g/t Ag from 100m SHMD066: 4.5m @ 2.39% Pb & 102g/t Ag from 31m SHMD074: 5m @ 7.08% Pb & 91g/t Ag from 108m Results from the remaining 29 diamond drill holes are pending at this point in �me. 13 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW Following the release of the diamond drill rig, Boab made the decision to undertake an addi�on 15 reverse circula�on holes to �ghten drill spacing aimed at increasing Resource conﬁdence at the Beta Deposit and test conceptual targets at the Eight Mile Creek (E80/5317) immediately south and along strike of Sorby Hills. The results of the Phase V diamond drill program will dovetail with those of the ongoing DFS Metallurgical program and act as inputs to an inves�ga�on into the poten�al to expand the currently proposed processing capacity at Sorby Hills. Figure 2: Drill hole loca�ons 14 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW DFS Metallurgical Test work In February 2021, Boab commenced the DFS Metallurgical Testwork Program. Key ac�vi�es of the program have included: Materials Handling testwork – to deﬁne bulk solids ﬂow proper�es to provide materials handling design details. Comminu�on testwork - to deﬁne crushing and grinding characteris�cs as a func�on of ore type and loca�on in the processing schedule. Heavy Liquid Separa�on testwork - to deﬁne op�mum crush size for DMS beneﬁcia�on of lower grade ore and variability response. Flota�on testwork - to deﬁne op�mal grind size, reagent regime and ﬂota�on circuit design as a func�on of ore type and loca�on in the processing schedule, including locked cycle tests for the schedule composites. Dewatering testwork - including tailings and concentrate thickening and ﬁltra�on vendor equipment selec�on/sizing testwork. Lead-Silver Concentrate testwork - including Transportable Moisture Limit measurement and the provision of concentrate product to support the securing of binding Of�ake agreements. Results of the Metallurgical Testwork Program are expected to be ﬁnalised during September 2021. Project Execu�on Ac�vi�es Appointment of Chief Opera�ons Oﬃcer On 12 January 2021, Mr David English was appointed as the inaugural Chief Opera�ng Oﬃcer of the Company. The appointment represented a signiﬁcant milestone in the progress towards a decision to mine and is a testament to the ambi�on and ongoing growth of the Company. Mr English brings to Boab a wealth of experience gained from nearly 40 years in opera�ons and project development across some of Western Australia’s most prominent resource projects and processing opera�ons including Independence Group’s Nova Nickel Project, Sandﬁre’s Degussa Project and BHP Billiton-Nickel West Mount Keith Opera�on. Engagement with NAIF On 14 September 2020, Boab announced they had engaged with NAIF in regard to debt ﬁnancing for the development of Sorby Hills. NAIF is an Australian Federal Government organisa�on with an aggregate of A$5 billion of debt ﬁnance which may be lent on concessional terms to support infrastructure development that generates public beneﬁt for northern Australia. Sorby Hills Project, located 50 kilometres north-east of Kununurra in the Kimberley Region of Western Australia, will deliver employment opportuni�es and economic ac�vity to the Kimberley region, with a peak of 200 plus construc�on personnel and over 170 opera�ons personnel during the life of the Project. 15 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW Sorby Hills has passed through the Stage 1 Ini�al Review of NAIF’s Assessment and Approval process and con�nues to have an open dialogue with NAIF as the Project advances the Sorby Hills DFS and toward the Stage 2 Detailed Review. Engagement with EFA During the period, Boab received a Le�er of Support conﬁrming that, subject to further due diligence and credit assessment, EFA would consider par�cipa�ng in the project ﬁnancing of Sorby Hills. EFA is Australia’s export credit agency. It provides ﬁnancial solu�ons to support Australian exporters, including loans, bonds and guarantees. EFA ﬁnance complements debt ﬁnance from commercial lenders and works alongside other Commonwealth ﬁnancing bodies to fund commercially viable projects. Projects which boost the ability to extract and process minerals in Australia for export, such as the Sorby Hills Project, may be eligible for support from EFA. Engagement with Commercial Banks During the ﬁnal quarter of the period, Boab undertook a Lender Roadshow where the Sorby Hills Project was introduced to a suite of Commercial Banks. Presenta�ons involved showcasing the results of the PFS, outlining the Companies pathway to a Decision to Mine and discussing indica�ve debt ﬁnancing structures. The response from Commercial Banks was very posi�ve and provided an opportunity for early feedback for Boab to consider incorpora�ng into the DFS and project execu�on workstreams. O�ake Discussions During the period, Boab undertook Preliminary O�ake Soundings process with a suite of leading base metals customers with respect to Boab’s 75% share of the Lead-Silver concentrate to be produced at Sorby Hills. The purpose of the Preliminary O�ake Soundings was: to build rela�onships between Boab and a range of Tier-1 o�ake partners; to receive indica�ve o�ake terms for the concentrate to be produced from Sorby Hills; and canvas customer feedback to inform the ongoing Sorby Hills Deﬁni�ve Feasibility Study. The preliminary soundings were extremely posi�ve and demonstrated signiﬁcant demand for the Lead-Silver concentrate to be produced at Sorby Hills. The Company intends to undertake a compe��ve o�ake tender for the O�ake Rights over the coming months with the aim of concluding a binding o�ake agreement ahead of release the Sorby Hills DFS. Joint Venture Discussions The Sorby Hills Project is a Joint Venture with Henan Yuguang Gold and Lead Co., Ltd, (“Yuguang”) the largest Lead smel�ng company and Silver producer in China. 16 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW During the period, Boab and Yuguang agreed to accelerate ﬁnalisa�on of the Mining Joint Venture Agreement that will replace the exis�ng Joint Venture agreement and govern the development and opera�on of Sorby Hills following a Decision to Mine. Advancing the Mining Joint Venture Agreement will help facilitate engagement with poten�al ﬁnanciers and enable smooth transi�on from the DFS project development and construc�on. Corporate Ac�vi�es Name Change and Share Consolida�on The Company held its AGM on 23 December 2020. Key Shareholder Approvals from the AGM were received for: the change of Company name to Boab Metals Limited (previously Paciﬁco Minerals) with a new ASX �cker code of ASX: BML – the new name was chosen to be�er reﬂect the loca�on of the Company’s ﬂagship Sorby Hills Project, located in the Kimberley Region of Western Australia; and the consolida�on of share capital on a twenty-ﬁve (25) to one (1) basis resul�ng in a capital structure be�er suited for the ﬁnancing of the Sorby Hills Project. Naming Rights Sponsor of the Ord Valley Muster Boab was announced as the naming rights sponsorship for the Ord Valley Muster in 2022 and 2023. The iconic Kimberley event, which celebrated its 20th year in 2021, brings together the vibrant Kununurra community and a�racts thousands of visitors to experience the stunning landscape, cultural diversity and famous Kimberley hospitality. Taking on the naming rights sponsorship from Rio Tinto and the Argyle Diamond Mine is a big step for Boab Metals and one that the Company is incredibly proud of. Strategic Acquisi�on of Manbarrum Zinc-Silver-Lead Project Post the ﬁnancial year end, Boab announced it had entered into a binding agreement with Todd River Metals Pty Ltd to acquire the Manbarrum Zinc-Silver-Lead Project for a total considera�on of: A$500,000 in Boab shares at an issue price of A$0.4214 per share (30 day VWAP); and a Net Smelter Return Royalty of 1.25% on future revenue generated from minerals extracted from the Manbarrum Project. Boab has the right to buy-back the Royalty at market value following the comple�on of a Pre-Feasibility Study on the Manbarrum Project. The Manbarrum Project is located 25km east of Sorby Hills and covers geology that is gene�cally related to that found at Sorby Hills allowing for an eﬀec�ve transfer of technical knowledge to maximise explora�on and Resource development poten�al. The Manbarrum Project comprises four tenements including 2 granted mining leases and mul�ple deposits that have been the subject of Mineral Resource Es�mates (see Todd River Resources prospectus dated 4 April 2017) and conceptual open pit mining studies (see Todd River Resources announcement dated 10 April 2018). 17 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW While the Company remains focussed on the development of the Sorby Hills Project, the strategic acquisi�on of the Manbarrum Project provides an opportunity to inves�gate a broader regional produc�on strategy that leverages the clear synergies between the two projects. No explora�on ac�vites were carried out during the ﬁnancial year at the Borroloola West JV project in the Northern Territory or at the company’s 100% owned explora�on projects in Colombia. Share Placement and Op�on Exercise Program On 18 September 2020, the Company announced that it had received ﬁrm commitments from sophis�cated and professional investors to raise A$10 million (before costs) though the issue of 555,555,920 ordinary shares at 1.8 cents per Share, the placement was completed on 24 September 2020. Furthermore, on 9 October 2020 the Company announced that it had raised A$240,000 from a SPP, through the issue of 13,333,322 ordinary shares at 1.8 cents per share. An Op�on Exercise Program was also completed during the period whereby A$4.8 million was raised. Funds raised from the Placement, op�ons exercise and SPP have and will be used to execute the DFS workstreams and focus on further de-risking, value-adding and explora�on opportuni�es aimed at progressing Sorby Hills toward a Decision to Mine. Conclusion The Company ﬁnished Financial Year 2021 with a cash posi�on of A$12.9 million and is well placed to con�nue the execu�on of Project workstreams aimed at delivering a high-quality DFS in early 2022 and moving swi�ly toward a Decision to Mine. Compliance Statements Informa�on included in this Annual Report rela�ng to Explora�on Results has been extracted from the ASX Announcement �tled “Assays Conﬁrm Success at Sorby Hills” dated 25 August 2021 and available to view at www.boabmetals.com. The Company conﬁrms that it is not aware of any new informa�on or data that materially aﬀects the informa�on included in the original market announcement. The Company conﬁrms that the form and context in which the Competent Person’s ﬁndings are presented have not been materially modiﬁed from the Mineral Resource Es�mate. Informa�on included in this Annual Report rela�ng to Mineral Resources has been extracted from the Mineral Resource Es�mate dated 6 April 2021, available to view at www.boabmetals.com.au. The Company conﬁrms that it is not aware of any new informa�on or data that materially aﬀects the informa�on included in the Mineral Resource Es�mate and that all material assump�ons and technical parameters underpinning the es�mates, con�nue to apply and have not materially changed. The Company conﬁrms that the form and context in which the Competent Person’s ﬁndings are presented have not been materially modiﬁed from the Mineral Resource Es�mate. Informa�on included in this Annual Report rela�ng to Ore Reserves, Produc�on Targets and Financial Forecasts has been extracted from the Pre-Feasibility Report and Ore Reserve Statement dated 25 August 2020, available to view at www.boabmetals.com.au. The Company conﬁrms that it is not aware of any new informa�on or data that materially aﬀects the informa�on included in the Ore Reserve Statement and that all material assump�ons and technical parameters underpinning the es�mates, produc�on targets and ﬁnancial forecasts con�nue to apply and have not materially changed. The Company conﬁrms that the form and context in which the Competent Person’s ﬁndings are presented have not been materially modiﬁed from the Ore Reserves Statement. 18 ANNUAL REPORT 2021BOAB METALS LIMITED OPERATIONS REVIEW Metal Equivalent Calcula�on Method The contained metal equivalence formula is based on the Sorby Hills PFS including: Lead Price US$2,095/t; Lead recovery of 93.3% (weighted average of oxide and fresh Pb recoveries); Lead Payability rate of 95%; Silver Price US$21.1/oz; Silver recovery of 80.3% (weighted average of oxide and fresh Ag recoveries); and Silver Payability rate of 95%. It is Boab’s opinion that all elements included in the metal equivalent calcula�on have a reasonable poten�al to be recovered and sold. The formula used to calculate lead equivalent grade is: where R is the respec�ve metallurgical metal recovery rate, S is the respec�ve smelter return rate, V is metal price/tonne or ounce, and G is the metal commodity grade for the suite of poten�ally recoverable commodi�es (i) rela�ve to the primary metal (pri). Metal equivalents are highly dependent on the metal prices used to derive the formula. Boab notes that the metal equivalence method used above is a simpliﬁed approach. The metal prices are based on the PFS values adopted and do not reﬂect the metal prices that a smelter would pay for concentrate nor are any smelter penal�es or charges included in the calcula�on. Owing to limited metallurgical data, zinc grades are not included at this stage in the lead equivalent grade calcula�on. 19 ANNUAL REPORT 2021BOAB METALS LIMITED DIRECTORS’ REPORT 21 ANNUAL REPORT 2021BOAB METALS LIMITED Your Board of Directors (“Board” or “Directors”) present their report on the consolidated en�ty (referred to herea�er as the Group) consis�ng of Boab Metals Limited and the en��es it controlled at the end of, or during, the year ended 30 June 2021. FINANCIAL AND OPERATING REVIEW FINANCIAL REVIEW The Group began the ﬁnancial year with a cash reserve of $2,908,551. During the year total explora�on expenditure incurred by the Group amounted to $3,822,870 (2020: $2,124,010). In line with the Group’s accoun�ng policies, all explora�on expenditure incurred in the ordinary course of opera�ons was expensed. The result for the year was an opera�ng loss a�er income tax of $5,038,982 (2020: $3,132,179). During the year, Boab completed capital raisings for $15,360,929 before costs. As at 30 June 2021, available cash funds totalled $12,896,960 (2020: $2,908,551). OPERATING RESULTS Summarised opera�ng results for the year are as follows: 2021 Revenues Results Geographic Segments $ $ Australia Revenues and (loss) from ordinary ac�vi�es before income tax expense 515,622 (5,055,394) Colombia Revenues and proﬁt from ordinary ac�vi�es before income tax expense 6 16,412 Revenue/(Loss before income tax) 515,628 (5,038,982) Shareholder Returns 2021 2020 Basic Loss per share (cents per share) (3.55) (2.81) SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS During the year there were no signiﬁcant changes in the state of aﬀairs of the Group other than as disclosed in this report. DIRECTORS’ REPORT 22 ANNUAL REPORT 2021BOAB METALS LIMITED MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR On 21 July 2021, Boab announced that it had signed a Binding Agreement with Todd River Metals Pty Ltd to acquire 100% of the Manbarrum Project including associated mining leases, mining lease applica�ons, explora�on licences, and mining informa�on (“Sale Assets”). Consideration for the purchase of the Sales Assets comprises: a) The issue and allotment by Boab to Todd River (or its nominee) of A$500,000 of fully paid ordinary shares (“Considera�on Shares”) in the Company upon Comple�on of the transac�on at an issue price of A$0.4214 per share (being equal to the 30 day VWAP prior to the execu�on of the Binding Agreement); b) The Considera�on Shares will be issued out of the Company’s exis�ng capacity in accordance with ASX Lis�ng Rule 7.1 and will be subject to a voluntary escrow period of 12 months; and c) Net Smelter Return (NSR) Royalty of 1.25% payable on future revenue generated from the sale of minerals extracted from the Manbarrum Project. The royalty will be secured by a mining mortgage over the Manbarrum Project tenements that may be subordinated to poten�al project ﬁnanciers provided certain condi�ons are met. Boab has retained the right to buy-back the royalty at market value subject to the comple�on of a Pre-Feasibility Study on the Manbarrum Project. On 31 August 2021, the Company announced that all condi�ons precedent had been met and that the Manbarrum aquisi�on was now complete. The Company has se�led the considera�on for the purchase being A$500,000 in the form of 1,186,521 fully paid ordinary shares (“Considera�on Shares”). The Considera�on Shares have been issued out of the Company’s exis�ng capacity in accordance with ASX Lis�ng Rule 7.1 and are subject to a voluntary escrow period of 12 months. LIKELY DEVELOPMENTS AND EXPECTED RESULTS The Group will con�nue explora�on and development ac�vi�es and to assess commercial opportuni�es for corporate growth, including the acquisi�on of interests in projects, as they arise. Due to the unpredictable nature of these opportuni�es, developments may occur at short no�ce. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group is subject to substan�al environmental regula�on regarding its explora�on ac�vi�es. The Group endeavours to maintain an appropriate standard of environmental care through awareness of, and compliance with, new and exis�ng environmental legisla�on. The Directors are not aware of any breach of environmental legisla�on for the year under review. DIRECTORS’ REPORT 23 ANNUAL REPORT 2021BOAB METALS LIMITED RISK MANAGEMENT The Board is responsible for ensuring that risks and opportuni�es are iden�ﬁed on a �mely basis and that ac�vi�es are aligned with these. The Board has not established a separate risk management commi�ee under the belief that it is crucial for all Board members to be a part of this process. The Board has several mechanisms in place to ensure that managements’ objec�ves are aligned with Board iden�ﬁed risks. Mechanisms include board approval of a strategic plan (designed to meet stakeholders’ needs and reduce business risk), and Board approved opera�ng plans and budgets (with progress monitored by the Board). CORPORATE GOVERNANCE The Directors support and adhere to the principles of corporate governance, recognising the need for the highest standard of corporate behaviour and accountability. The Directors are focused on fulﬁlling their responsibili�es individually, and as a Board, for the beneﬁt of all Company stakeholders. That involves recogni�on of, and a need to adopt, principles of good corporate governance. The Board supports the guidelines on the ‘Principles of Good Corporate Governance and Recommendations – 4th Edition’ established by the ASX Corporate Governance Council. Given the size and structure of the Group, the nature of its business ac�vi�es, the stage of its development and the cost of strict and detailed compliance with all of the recommenda�ons, it has adopted a range of modiﬁed systems, procedures and prac�ces which enable it to meet the principles of good corporate governance. The Groups’ prac�ces are consistent with the guidelines and where these do not directly relate to the recommenda�ons in the guidelines the Group considers that its adopted prac�ces are appropriate. Corporate Governance policies can be found on the Company website. INSURANCE OF DIRECTORS AND OFFICERS During the ﬁnancial year, the Group has paid an insurance premium in respect of a Directors’ and Oﬃcers’ Liability insurance contract. The insurance premium relates to liabili�es that may arise from an oﬃcer’s posi�on, except for conduct involving a wilful breach of duty or improper use of informa�on or posi�on to gain personal advantage. The contract of insurance prohibits the disclosure of the nature of the liabili�es and the amount of premium. DIRECTORS MEETINGS The following table sets out the number of directors’ mee�ngs held during the ﬁnancial year and the number of mee�ngs a�ended by each director while they held the posi�on. During the ﬁnancial year, 5 board mee�ngs were held (2020: 4). Board of Directors Directors Eligible A�ended Gary Comb 5 5 Simon Noon 5 5 Richard Mon� 5 5 Andrew Parker 5 5 DIRECTORS’ REPORT 24 ANNUAL REPORT 2021BOAB METALS LIMITED INFORMATION ON DIRECTORS GARY COMB BE(Mech), BSc, Dip Ed. Chairman Gary was appointed 9 March 2020. Gary is an engineer with over 30 years’ experience in the Australian mining industry, with a strong track record in successfully commissioning and opera�ng base metal mines. Interests in Shares, Op�ons and Performance Rights (Post-consolida�on) 560,237 Ordinary Shares. 120,000 Class “B” Unlisted Performance Rights 140,000 Class “C” Unlisted Performance Rights 160,000 Class “D” Unlisted Performance Rights Other Directorships in Listed En��es in the past three years Ironbark Zinc Limited and Cyprium Metals Limited. SIMON NOON MAICD, AFAIM Managing Director & CEO Simon was appointed 19 October 2013. Simon is an experienced execu�ve having spent the past 10 years’ managing listed resources companies. Simon has a strong background in strategic management, business planning, ﬁnance and capital raising, and experience with a variety of commodi�es. Simon’s career highlights include managing Groote Resources Limited from a market capitalisa�on of less than $5M, to market highs in excess of $100M as the Execu�ve Director. A�er leaving Groote, Simon co-founded West Rock Resources Limited where he held the posi�on of Managing Director un�l the company was acquired by Boab in 2013. While managing West Rock, Simon secured and operated joint ventures and strategic alliances with mid and top �er miners. As Boab’s Managing Director & CEO, Simon has led the company from a greenﬁelds explorer to a company that has the poten�al to become a signiﬁcant global lead and silver producer. Simon is a passionate member of the WA resources industry, a member of the Australian Ins�tute of Company Directors and an Associate Fellow of the Australian Ins�tute of Management. Interests in Shares, Op�ons and Performance Rights (Post-consolida�on) 1,817,119 Ordinary Shares 480,000 Class “B” Unlisted Performance Rights. 480,000 Class “C” Unlisted Performance Rights. Other Directorships in Listed En��es in the past three Years Nil. DIRECTORS’ REPORT 25 ANNUAL REPORT 2021BOAB METALS LIMITED RICHARD MONTI BSc (Hons), Grad Dip AppFin., MAusIMM Non-Execu�ve Director Richard was appointed 12 October 2009 and resigned as Non-Execu�ve Chairman on 6 March 2020, from this date Richard assumed the role of Non-Execu�ve Director. Richard is a geologist with a successful career of over thirty years in the interna�onal mineral resource industry resul�ng in broad industry knowledge and strong strategic planning capabili�es. Richard has over forty-six director-years’ experience on thirteen ASX and TSX listed mining and explora�on companies from micro-caps through to mid-size miners and has built and managed teams of up to seventy personnel. Richard was principal of a corporate advisory ﬁrm, Ventnor Capital, from 2005 to 2010 and is currently principal of Terracognita which supplies advice to resource industry companies. Interests in Shares, Op�ons and Performance Rights (Post-consolida�on) 1,324,982 Ordinary Shares. 100,000 Class “B” Unlisted Performance Rights. 100,000 Class “C” Unlisted Performance Rights. Other Directorships in Listed En��es in the past three years Zinc of Ireland NL, Black Dragon Gold, Alto Metals Limited and Caravel Minerals Limited. ANDREW PARKER LLB Non-Execu�ve Director Andrew was appointed 12 October 2009,and holds a law degree from the University of Western Australia and has signiﬁcant experience in the explora�on and mining industry and a wealth of exper�se in corporate advisory, strategic consultancy, and capital raisings. Before joining Boab, he co-founded Trident Capital Pty Ltd, a corporate advisory and venture capital ﬁrm where he held the posi�on of Managing Director un�l 2008. Interests in Shares, Op�ons and Performance Rights (Post-consolida�on) 369,005 Ordinary Shares. 80,000 Class “B” Unlisted Performance Rights. 80,000 Class “C” Unlisted Performance Rights. Other Directorships in Listed En��es in the past three years Nil. JERRY MONZU FGIA, CPA, Bbus Company Secretary Jerry is a corporate execu�ve with over 25 years’ experience in corporate governance, ﬁnance and accoun�ng across various industry sectors globally ac�ng as Company Secretary, Chief Financial Oﬃcer and Director of several private and listed ASX, JSE and AIM companies throughout his career. DIRECTORS’ REPORT 26 ANNUAL REPORT 2021BOAB METALS LIMITED REMUNERATION REPORT (AUDITED) Our remunera�on report is set out under the following main headings: A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION; B. DETAILS OF REMUNERATION; C. SERVICE AGREEMENTS; D. SHARE-BASED COMPENSATION; and E. ADDITIONAL INFORMATION. The informa�on provided under headings A-E includes disclosures that are required under Accoun�ng Standard AASB 124 Related Party Disclosures. These disclosures have been transferred from the ﬁnancial report and have been audited. A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION Remuneration Policy The remunera�on policy of the Group aligns Directors and execu�ves with shareholder and business objec�ves by providing a ﬁxed remunera�on component and oﬀering speciﬁc long-term incen�ves based on key performance areas aﬀec�ng the Group’s ﬁnancial results. The Board believes the policy is appropriate and eﬀec�ve in its ability to a�ract and retain high calibre execu�ves and Directors. The Board’s policy for determining the nature and amount of remunera�on for Directors and execu�ves of the Group is as follows: All execu�ves receive a base salary (based on factors such as experience) plus statutory superannua�on. The Board reviews execu�ve packages with reference to the Group’s performance, execu�ve performance and informa�on from relevant industry sectors and comparable listed companies. Independent external advice is sought where required. The Board may exercise discre�on in rela�on to approving incen�ves, bonuses, and the issue of op�ons. All remunera�on paid to Directors and execu�ves is valued at the cost to the Group and expensed. The maximum aggregate amount of fees that can be paid to Non-Execu�ve Directors is subject to approval by shareholders at the Annual General Mee�ng (currently $200,000). Director fees are not linked to the performance of the Group however, to align Director and shareholder interests, the Directors are encouraged to hold Company shares. Performance Based Remuneration The Group has issued performance rights which form part of the Directors and Execu�ve remunera�on packages. These performance rights have various ves�ng condi�ons based on market and opera�onal hurdles being met. Group Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration The Group’s remunera�on policy encourages the alignment of personal and shareholder interests through the issue of op�ons to Directors and execu�ves. The Board believes this policy is eﬀec�ve in increasing shareholder wealth. The Group currently benchmarks remunera�on paid against other peer group companies and the Board acts in its capacity as the Remunera�on Commi�ee in assessing Execu�ve remunera�on, the Company did not use any external remunera�on consultants in the ﬁnancial year. DIRECTORS’ REPORT 27 ANNUAL REPORT 2021BOAB METALS LIMITED REMUNERATION REPORT (AUDITED) (CONTINUED) Voting and comments on the Remuneration Report at the 2020 Annual General Meeting At the Company’s 2020 Annual General Mee�ng (“AGM”), a resolu�on to adopt the 2020 remunera�on report was put to a vote and passed unanimously on a show of hands with proxies received also indica�ng majority. 99.98% of validly appointed proxies were in favour of adop�ng the remunera�on report. No comments were made on the remunera�on report at the AGM. B. DETAILS OF REMUNERATION Details of the remunera�on of the Directors and Key Management Personnel as deﬁned in AASB 124 Related Party Disclosures of the Group are set out in the following table. Given the size and nature of opera�ons of the Group, no other employees are required to have their remunera�on disclosed in accordance with the Corpora�ons Act 2001. Salary & Fees Non-Monetary (1,2) Superannua�on Op�ons/ Performance Rights Total Propor�on of remunera�on performance related Director $ $ $ $ $ G. Comb 2021 50,000 50,000 (1) 4,750 8,040 112,790 7% 2020 31,666 - 3,008 14,079 48,753 29% S. Noon 2021 283,539 56,280 (2) 25,935 91,339 457,093 20% 2020 240,000 15,037 22,800 83,888 361,725 23% R. Mon� 2021 40,200 - 3,819 29,401 73,420 40% 2020 40,842 - 4,121 17,476 62,439 28% A. Parker 2021 40,200 - 3,819 28,480 72,499 39% 2020 32,677 - 3,335 13,981 49,993 28% D. English 2021 169,615 9,581 (2) 16,113 9,340 204,649 5% 2020 - - - - - - Totals 2021 583,554 115,861 54,436 166,600 920,451 2020 345,185 15,037 33,264 129,424 522,910 (1) Relates to compensation paid through shares, 126,903 shares were issued to Gary Comb in lieu of directors fees. (2) Relates to the movement in leave provisions for the period. No re�rement beneﬁts are payable post-employment under the Group’s execu�ve services agreements. DIRECTORS’ REPORT 28 ANNUAL REPORT 2021BOAB METALS LIMITED REMUNERATION REPORT (AUDITED) (CONTINUED) C. SERVICE AGREEMENTS Material terms of the Execu�ves service agreements are as follows: Gary Comb – Execu�ve Chairman Remunera�on payable of $100,000 per annum plus statutory superannua�on; At the Boards discre�on up to 50% of the Execu�ve Chairman’s remunera�on may be payable in shares, subject to shareholder approval; The right to par�cipate in the Company’s Employee Share Incen�ve Plan as approved by the Board; and The right to resign with no formal resigna�on period. Simon Noon – Managing Director Remunera�on payable of $320,000 per annum plus statutory superannua�on; Either party may terminate the agreement without cause on three months’ wri�en no�ce; The right to par�cipate in the Company’s Employee Share Incen�ve Plan as approved by the Board; and The Managing Director will not be paid a separate Director’s fee for service to the Board. Richard Mon� – Non-Execu�ve Director Remunera�on payable of $48,000 per annum plus statutory superannua�on; The right to par�cipate in the Company’s Employee Share Incen�ve Plan as approved by the Board; and The right to resign with no formal resigna�on period. Andrew Parker – Non-Execu�ve Director Remunera�on payable of $48,000 per annum plus statutory superannua�on; The right to par�cipate in the Company’s Employee Share Incen�ve Plan as approved by the Board; and The right to resign with no formal resigna�on period. David English – Chief Opera�ng Oﬃcer Remunera�on payable of $350,000 per annum plus statutory superannua�on; Either party may terminate the agreement without cause on three months’ wri�en no�ce; The right to par�cipate in the Company’s Employee Share Incen�ve Plan as approved by the Board. D. SHARE-BASED COMPENSATION During the year 280,000 performance rights were issued to Directors and Key Management Personnel (2020: 2,740,000 post consolida�on). 142,699 shares were issued to Directors upon exercise of remunera�on op�ons during the year (2020: Nil). Performance Rights granted during the year: KMP Grant Date Number Granted Grant Date Fair Value $ Expiry Date Ves�ng Date D English (Class B) 16 Jan 2021 120,000 30,000 30 June 2022 30 June 2022 D English (Class D) 16 Jan 2021 160,000 80,000 06 March 2025 06 March 2025 280,000 110,000 DIRECTORS’ REPORT 29 ANNUAL REPORT 2021BOAB METALS LIMITED REMUNERATION REPORT (AUDITED) (CONTINUED) Performance Income as a Proportion of Total Compensation No performance-based bonuses were paid during the period (2020: Nil). E. ADDITIONAL INFORMATION Movements in Shares (Post-consolidation) Movement in the number of ordinary shares in the Company held (directly, indirectly or beneﬁcially) by each Director, including their related par�es, is shown below. There were 126,903 shares issued as part of Director remunera�on during the year (2020: Nil). KMP Held at 1 July 2020 Movement Held at 30 June 2021 G Comb 200,000 360,237 560,237 R. Mon� 1,108,751 216,231 1,324,982 S. Noon 1,160,000 657,119 1,817,119 A. Parker 215,370 153,634 369,004 D. English - - - 2,684,121 1,387,221 4,071,342 KMP Held at 1 July 2019 Movement Held at 30 June 2020 G Comb - 200,000 200,000 R. Mon� 908,751 200,000 1,108,751 S. Noon 1,056,000 104,000 1,160,000 A. Parker 215,370 - 215,370 P. Harold* 170,020 (170,020) - 2,350,141 333,980 2,684,121 *Number of ordinary shares held by Mr P Harold up to the date of his resignation on the 7 April 2020. Movements in Options (Post-consolidation) Movement in the number of op�ons in the Company held (directly, indirectly or beneﬁcially) by Directors and Key Management Personnel, including their related par�es, during the repor�ng period is as follows: KMP Held at 1 July 2020 Other Changes (1) Held at 30 June 2021 Vested at 30 June 2021 G. Comb - - - - R. Mon� 237,669 (237,669) - - S. Noon 424,000 (424,000) - - A. Parker 193,333 (193,333) - - D. English* - - - - 855,002 (855,002) - - DIRECTORS’ REPORT 30 ANNUAL REPORT 2021BOAB METALS LIMITED REMUNERATION REPORT (AUDITED) (CONTINUED) Fair Value of op�ons exercised KMP No of op�ons Exercised No of shares Issued Amount Paid $ Fair Value on Exercise $ G Comb - - - - R. Mon� 237,669 116,231 29,126 23,178 S. Noon 424,000 177,118 35,250 44,453 A. Parker 193,333 73,633 12,500 20,635 D. English* - - - - 855,002 366,982 76,876 88,266 The value of op�ons exercised during the year is calculated at the market price on the date of exercise a�er deduc�ng the price paid on the exercise the op�ons. The number of shares issued diﬀers from op�ons exercised due to the cashless issue of shares. *Mr. English joined as Chief Opera�ng Oﬃcer on the 6th of January 2021. (1) Shows op�ons converted to ordinary shares in the year. (2) Shows number of op�ons held by Mr P. Harold at the date of resigna�on 7 April 2020. KMP Held at 1 July 2019 Other Changes Held at 30 June 2019 Vested at 30 June 2020 G. Comb - - - - R. Mon� 237,669 - 237,669 237,669 S. Noon 424,000 - 424,000 424,000 A. Parker 193,333 - 193,333 193,333 P. Harold 160,000 (160,000)(2) - - 1,015,002 (160,000) 855,002 855,002 DIRECTORS’ REPORT 31 ANNUAL REPORT 2021BOAB METALS LIMITED REMUNERATION REPORT (AUDITED) (CONTINUED) Movements in Performance Rights (Post -consolidation) Movement in the number of Performance Rights in the Company held (directly, indirectly or beneﬁcially) by Directors and Key Management Personnel, including their related par�es, during the repor�ng period is as follows: KMP Held at 1 July 2020 Other Changes (1) Held at 30 June 2021 Vested at 30 June 2021 G. Comb 520,000 (100,000) 420,000 - R. Mon� 300,000 (100,000) 200,000 - S. Noon 1,440,000 (480,000) 960,000 - A. Parker 240,000 (80,000) 160,000 - D. English* - 280,000 280,000 - 2,500,000 (480,000) 2,020,000 - *Mr. English joined as Chief Opera�ng Oﬃcer on the 6th of January 2021. During the period, Mr. English was issued Performance Rights with various ves�ng condi�ons. (1) Nega�ve movements in Performance Rights are due to Performance Rights being exercised on achievement of milestones. KMP Held at 1 July 2019 Other Changes Held at 30 June 2020 Vested at 30 June 2020 G. Comb - 520,000 520,000 - R. Mon� - 300,000 300,000 - S. Noon - 1,440,000 1,440,000 - A. Parker - 240,000 240,000 - P. Harold(1) - - - - - 2,500,000 2,500,000 - (1) Mr P Harold held 6,000,000 Performance Rights up to the date of his resigna�on on 7 April 2020, these Performance rights were cancelled on his resigna�on date. KMP Number Granted Exercise Price Grant Date Fair Value at Grant Date $ Expiry Date D. English 280,000 Nil 16/01/2021 110,000 Various A total of 280,000 Performance Rights (2020:2,500,000) were issued during the period with variable ves�ng condi�ons based on the achievement of Performance milestones. END OF THE REMUNERATION REPORT DIRECTORS’ REPORT 32 ANNUAL REPORT 2021BOAB METALS LIMITED OPTIONS OVER ORDINARY SHARES No Op�ons were issued in 2021 (2020: Nil). Op�ons on issue at the date of the Directors Report had the following expiry dates and exercise prices: Performance Rights Performance rights on issue at the date of the Directors Report had the following expiry dates and exercise prices: NON-AUDIT SERVICES No non-audit services were provided by the auditor of the Group, Stantons Interna�onal Audit and Consul�ng Pty Ltd during the ﬁnancial year. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor's independence declara�on as required under sec�on 307C of the Corpora�ons Act 2001 is set out on the following page. Signed in accordance with a resolu�on of the Directors. Gary Comb Chairman 21 September 2021Expiry Date Status Exercise Price Op�ons No. 16/10/2021 Unlisted $0.50 400,000 Details Performance Rights Exercise Price Grant Date Expiry Date Class "B" Performance Shares 900,000 Nil 29/11/2019 30/06/2022 Class "C" Performance Shares 800,000 Nil 29/11/2019 30/06/2022 Class "D" Performance Shares 320,000 Nil Various 6/03/2025 2,020,000 AUDITOR’S INDEPENDENCE DECLARATION 34 ANNUAL REPORT 2021BOAB METALS LIMITED Liability limited by a scheme approved under Professional Standards Legislation PO Box 1908 West Perth WA 6872 Australia Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au Stantons Is a member of the Russell Bedford International network of firms 21 September 2021 Board of Directors Boab Metals Limited Level 1, 105 St Georges Terrace PERTH. WA. 6000. Dear Directors, RE: BOAB METALS LIMITED In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Boab Metals Limited. As Audit Director for the audit of the financial report of Boab Metals Limited for the year ended 30 June 2021, 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 STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (An Authorised Audit Company) Martin Michalik Director FINANCIAL REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021 Revenue from Con�nuing Opera�ons Expenditure Explora�on Expenses Salaries and Employee Beneﬁts Expenses Deprecia�on Expenses Corporate Expenses Occupancy Expenses Consul�ng Expenses Administra�on Expenses Share Based Payments Deprecia�on of Right of Use Assets Interest paid on leased liabili�es Stamp Duty Gain on sale of subsidiary (Loss) Before Income Tax Income Tax Total (Loss) for the Year Other Comprehensive Income Items That Will Not be Reclassiﬁed to Proﬁt or Loss Items That May be Reclassiﬁed Subsequently to Proﬁt or Loss Movement in Foreign Exchange Transla�on Reserve Total Comprehensive (Loss) (Loss) A�ributed to the Members Total Comprehensive (Loss) A�ributed to the Members Basic and Diluted Loss per Share for Loss A�ributable to the Ordinary Equity Holders of the Company (Cents per Share) Notes 5 6 6,12 29 6,13 13 7 20 2021 $ 515,628 (3,822,870) (638,661) (11,908) (181,548) (33,522) (269,364) (390,464) (186,114) (53,598) (2,850) - 36,289 (5,038,982) - (5,038,982) - - 2020 $ 291,906 (2,124,010) (530,323) (8,552) (147,147) (53,451) (6,879) (203,548) (129,426) (9,019) (681) (211,049) - (3,132,179) - (3,132,179) - - - - (280,852) (5,319,834) (5,038,982) (5,319,834) (4,268) (3,136,447) (3,132,179) (3,136,447) 28 (3.55) (2.81) The above Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income should be read in conjunction with the Notes to the Financial Statements. 36 ANNUAL REPORT 2021BOAB METALS LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 Current Assets Cash and Cash Equivalents Trade and Other Receivables Other Assets Total Current Assets Non-Current Assets Explora�on and Evalua�on Assets Investments Other Assets Plant and Equipment ROU Asset Total Non-Current Assets Total Assets Current Liabili�es Trade and Other Payables Provisions Lease liability Total Current Liabili�es Non-Current Liabili�es Lease liability Deferred tax liability Total Non-Current Liabili�es Total Liabili�es Net Assets Equity Contributed Equity Reserves Accumulated Losses Total Equity Notes 8 9 9 10 11 12 13 14 15 16 16 17 18 20 2021 $ 12,896,960 362,118 12,778 13,271,856 5,160,560 60,000 84,849 42,380 44,237 5,392,026 18,663,882 1,291,781 175,879 45,531 1,513,191 - 169,153 169,153 1,682,344 16,981,538 2020 $ 2,908,551 188,932 17,521 3,115,004 5,170,320 - 85,462 10,076 99,206 5,365,064 8,480,068 492,800 95,905 52,922 641,627 46,719 178,913 225,632 867,259 7,612,809 47,698,398 1,290,053 (32,006,913) 16,981,538 32,980,318 1,600,422 (26,967,931) 7,612,809 The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Financial Statements. 37 ANNUAL REPORT 2021BOAB METALS LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021 Issued Capital Share / Op�on Reserve Foreign Currency Transla�on Reserve $ 32,980,318 $ 1,653,328 - - - $ (52,906) Accumulated Losses Total $ (26,967,931) (5,038,982) $ 7,612,809 (5,038,982) - - (280,852) - (280,852) - (280,852) - (5,038,982) (5,319,834) 15,145,298 (642,849) - - 115,200 (115,200) 100,431 85,683 - - - - - - - - 15,145,298 (642,849) - 186,114 2021 Balance at 1 July 2020 (Loss) for the Year Other Comprehensive (Loss) for the Year Total Comprehensive (Loss) for the Year Issue of Shares/Op�ons Share/Op�on Issue Expense Performance Rights converted to Ordinary Shares Share Based Payments Balance at 30 June 2021 47,698,398 1,623,811 (333,758) (32,006,913) 16,981,538 2020 Balance at 1 July 2019 (Loss) for the Year Other Comprehensive (Loss) for the Year Total Comprehensive (Loss) for the Year Issue of Shares Share/Op�on Issue Expense 28,705,740 1,523,902 (48,638) (23,835,752) 6,345,252 - - - 4,600,000 (325,422) - - - - - - (3,132,179) (3,132,179) (4,268) - (4,268) (4,268) (3,132,179) (3,136,447) - - - - - - 4,600,000 (325,422) 129,426 Share Based Payments - 129,426 Balance at 30 June 2020 32,980,318 1,653,328 (52,906) (26,967,931) 7,612,809 The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Financial Statements. 38 ANNUAL REPORT 2021BOAB METALS LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 Cash Flows from Opera�ng Ac�vi�es Expenditure on Mining Interests Payments to Suppliers and Employees Receipts from Federal Government "Cash Flow Boost" Interest Received Management fees Net Cash (Ou�low) from Opera�ng Ac�vi�es Cash Flows from Inves�ng Ac�vi�es Proceeds from disposal of assets - Colombia Proceeds from sale of assets - Colombia Cash transferred into Security deposits Payments for Purchase of Tenements/Projects Payments for Purchase of Property, Plant and Equipment Net Cash Inﬂow/(Ou�low) from Inves�ng Ac�vi�es Cash Flows from Financing Ac�vi�es Proceeds from Issues of Shares Proceeds from conversion of op�ons Payment of Share Issue Costs Payments on lease liability Net Cash Inﬂow from Financing Ac�vi�es Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at the Beginning of the Financial Year Eﬀects of Foreign Exchange Cash and Cash Equivalents at the End of the Financial Year 8 Notes 2021 $ 2020 $ (3,104,780) (1,710,704) 67,648 21,598 172,721 (4,553,517) (2,551,427) (923,367) 50,000 33,811 123,732 (3,267,251) 27 164,985 27,190 436 - (44,212) 148,399 - - (60,948) (1,829) (5,825) (68,602) 10,240,007 4,851,958 (642,849) (55,589) 14,393,527 9,988,409 2,908,551 - 12,896,960 4,600,000 - (325,422) (9,265) 4,265,313 929,460 1,983,359 (4,268) 2,908,551 The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Financial Statements. 39 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accoun�ng policies adopted in the prepara�on of the ﬁnancial report are set out below. These policies have been consistently applied to all years presented unless otherwise stated. The ﬁnancial report includes the ﬁnancial statements for Boab Metals Limited (“Parent” or “Company”) and its subsidiaries (the “Group”) for the year ended 30 June 2021. The ﬁnancial report was authorised for issue in accordance with a resolu�on of the Board of Directors of Boab Metals Limited on 21 September 2021. Boab Metals Limited is a company incorporated in Australia whose shares are publicly traded on the Australian Securi�es Exchange. The nature of the opera�ons and principal ac�vi�es of the Group is explora�on of mineral tenements in Australia and La�n America. (a) BASIS OF PREPARATION This general-purpose ﬁnancial report has been prepared in accordance with Australian Accoun�ng Standards, other authorita�ve pronouncements of the Australian Accoun�ng Standards Board, Australian Interpreta�ons, and the Corpora�ons Act 2001. (i) Compliance with IFRS Australian Accoun�ng Standards include Australian equivalents to Interna�onal Financial Repor�ng Standards (“AIFRS”). Compliance with AIFRS ensures that the ﬁnancial statements and notes of Boab Metals Limited comply with Interna�onal Financial Repor�ng Standards (“IFRS”). (ii) Historical Cost Convention Financial statements have been prepared under the historical cost conven�on, as modiﬁed by the revalua�on of available-for-sale ﬁnancial assets, ﬁnancial assets and liabili�es at fair value through proﬁt or loss, certain classes of property, plant and equipment. (iii) Going Concern Basis The ﬁnancial report has been prepared on a going concern basis, which contemplates con�nuity of normal business ac�vi�es and realisa�on of assets and se�lement of liabili�es in the ordinary course of business. The going concern of the Group is dependent upon maintaining enough funds for its opera�ons and commitments. The Directors con�nue to monitor the funding requirements of the Group and are conﬁdent that funding can be secured as required to enable the Group to con�nue as a going concern and are of the opinion that the ﬁnancial report has been appropriately prepared on a going concern basis. (b) PRINCIPLES OF CONSOLIDATION (i) Subsidiaries Subsidiaries are all en��es over which the Group has the power to govern the ﬁnancial and opera�ng policies, generally accompanying a shareholding of more than half of the vo�ng rights. The existence and eﬀect of poten�al vo�ng rights that are currently exercisable or conver�ble are considered when assessing whether the Group controls another en�ty. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The acquisi�on method of accoun�ng is used to account for business combina�ons by the Group (refer to Note 1(d)). Intercompany transac�ons, balances and unrealised gains on transac�ons between Group companies are eliminated. Unrealised losses are also eliminated unless the transac�on provides evidence of the impairment of the asset transferred. Accoun�ng policies of subsidiaries have been changed where necessary to ensure consistency with policies adopted by the Group. 40 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (ii) Investment in Joint Ventures A joint venture is an arrangement under which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obliga�ons for its liabili�es. Joint control is deﬁned as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant ac�vi�es require the unanimous consent of the par�es sharing control. Interests in joint ventures are accounted for using the equity method. Under the equity method of accoun�ng, the investments are ini�ally recognised at cost and adjusted therea�er to recognise the Group’s share of the post-acquisi�on proﬁts or losses of the investee in proﬁt or loss, and the Group’s share of movements in other comprehensive income of the investee in other comprehensive income. Goodwill rela�ng to the joint venture is included in the carrying amount of the investment and is not amor�sed or tested individually for impairment. Dividends received or receivable from joint ventures are recognised as a reduc�on in the carrying amount of the investment. Financial statements of the joint venture are prepared for the same repor�ng period as the Group. When necessary, adjustments are made to bring accoun�ng policies in line with those of the Group. A�er applica�on of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in the joint venture. An impairment loss is measured by comparing the recoverable amount of the investment with the carrying amount. An impairment loss is recognised in the Consolidated Statement of Proﬁt or Loss and Other Comprehensive Income and is reversed if there has been a favourable change in the es�mates used to determine the recoverable amount. Upon loss of signiﬁcant inﬂuence over the joint venture, the Group measures and recognises any retained investment at its fair value. Any diﬀerence between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained investment and proceeds from disposal is recognised in proﬁt or loss. (iii) Investment in Joint Operations A joint arrangement occurs whereby the par�es that have joint control of the arrangement have rights to the assets, and obliga�ons for the liabili�es, rela�ng to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant ac�vi�es require unanimous consent of the par�es sharing control. 41 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) When a group en�ty undertakes its ac�vi�es under a joint arrangement, the Group as operator, recognises in rela�on to its interest in a joint arrangement its: assets, including its share of any assets held jointly; liabili�es, including its share of any liabili�es incurred jointly; revenue from the sale of its share of the output arising from the joint opera�on; share of the revenue from the sale of the output by the joint opera�on; and expenses, including its share of any expenses incurred jointly. The Group accounts for the assets, liabili�es, revenues, and expenses rela�ng to its interest in a joint opera�on in accordance with the Australian Accoun�ng Standards applicable to the certain assets, liabili�es, revenues, and expenses. When a group en�ty transacts with a joint opera�on in which a group en�ty is a joint operator (such as a sale or contribu�on of assets), the Group is considered to be conduc�ng the transac�on with the other par�es to the joint opera�on, and gains and losses resul�ng from the transac�ons are recognised in the Group’s consolidated ﬁnancial statements only to the extent of other par�es’ interests in the joint opera�on. When a group en�ty transacts with a joint opera�on in which a group en�ty is a joint operator (such as a purchase of assets), the Group does not recognise its share of the gains and losses un�l it resells those assets to a third party. (c) FOREIGN CURRENCY TRANSLATION (i) Functional and presentation currency Items included in the ﬁnancial statements of each of the Group’s en��es are measured using the currency of the primary economic environment in which the en�ty operates (func�onal currency). The consolidated ﬁnancial statements are presented in Australian dollars, Boab’s func�onal and presenta�on currency, unless otherwise stated. (ii) Transactions and balances Foreign currency transac�ons are translated into the func�onal currency using the exchange rate at the date of the transac�on. Foreign exchange gains and losses resul�ng from the se�lement of such transac�ons and from the transla�on at year end exchange rates of monetary assets and liabili�es denominated in foreign currencies are recognised in proﬁt or loss, except when they are deferred in equity as qualifying cash ﬂow hedges and qualifying net investment hedges or are a�ributable to part of the net investment in a foreign opera�on. Foreign exchange gains and losses rela�ng to borrowings are presented in the income statement within ﬁnance costs. All other foreign exchange gains and losses are presented in the income statement on a net basis within other income or other expenses. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined. Transla�on diﬀerences on assets and liabili�es carried at fair value are reported as part of the fair value gain or loss. 42 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (iii) Group companies The results and ﬁnancial posi�on of foreign opera�ons that have a func�onal currency other than the presenta�on currency are translated into the presenta�on currency as follows: assets and liabili�es for each balance sheet presented are translated at the closing rate at the date of that balance sheet; income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approxima�on of the cumula�ve eﬀect of the rates prevailing on the transac�on dates, in which case income and expenses are translated at the dates of the transac�ons); and all resul�ng exchange diﬀerences are recognised in other comprehensive income. On consolida�on, exchange diﬀerences arising from the transla�on of any net investment in foreign en��es, and of borrowings and other ﬁnancial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign opera�on is sold or any borrowings forming part of the net investment are repaid, the associated exchange diﬀerences are reclassiﬁed to proﬁt or loss, as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisi�on of a foreign opera�on are treated as assets and liabili�es of the foreign opera�on and translated at the closing exchange rate. (d) BUSINESS COMBINATIONS The acquisi�on method of accoun�ng is used to account for all business combina�ons, regardless of whether equity instruments or other assets are acquired. The considera�on transferred for the acquisi�on of a subsidiary comprises the fair values of the assets transferred, the liabili�es incurred and the equity interests issued by the Group. The considera�on transferred also includes the fair value of any asset or liability resul�ng from a con�ngent considera�on arrangement and the fair value of any pre-exis�ng equity interest in the subsidiary. Acquisi�on-related costs are expensed as incurred. Iden�ﬁable assets acquired and liabili�es and con�ngent liabili�es assumed in a business combina�on are, with limited excep�ons, measured ini�ally at their fair values at the acquisi�on date. On an acquisi�on-by-acquisi�on basis, the Group recognises any non- controlling interest in the acquiree either at fair value or at the non-controlling interest’s propor�onate share of the acquiree’s net iden�ﬁable assets. Excess considera�on transferred and the amount of any non-controlling interest in the acquiree over the fair value of the net iden�ﬁable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net iden�ﬁable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the diﬀerence is recognised directly in proﬁt or loss as a bargain purchase. Where se�lement of any part of cash considera�on is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the en�ty’s incremental borrowing rate (rate at which a similar borrowing could be obtained from an independent ﬁnancier under comparable terms and condi�ons). Con�ngent considera�on is classiﬁed either as equity or a ﬁnancial liability. Amounts classiﬁed as a ﬁnancial liability are subsequently remeasured to fair value with changes in fair value recognised in proﬁt or loss. 43 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) SEGMENT REPORTING (e) Opera�ng segments are iden�ﬁed, and segment informa�on disclosed based on internal reports received by the Board. REVENUE RECOGNITION (f) Interest revenue is recognised on a �me propor�onate basis that considers the eﬀec�ve yield on the ﬁnancial assets. Grant income received from Governments is recognised on a cash basis upon receipt. This includes grants received from the ATO from the Cashﬂow Boost during 2021. The Group recognised revenue from the Sorby Hills Joint Venture in accordance with its propor�onal holding. INCOME TAX (g) The income tax expense or revenue for the year is the tax payable on the current periods taxable income (based on the na�onal income tax rate for each jurisdic�on adjusted by changes in deferred tax assets and liabili�es a�ributable to temporary diﬀerences and to unused tax losses). Deferred income tax is provided in full, using the liability method, on temporary diﬀerences arising between the tax bases of assets and liabili�es and their carrying amounts in the ﬁnancial statements. Deferred income tax is not accounted for if it arises from ini�al recogni�on of an asset or liability in a transac�on other than a business combina�on that at the �me of the transac�on aﬀects neither accoun�ng nor taxable proﬁt or loss. Deferred income tax is determined using tax laws and rates that have been enacted or substan�ally enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is se�led. Deferred tax assets are recognised for deduc�ble temporary diﬀerences and unused tax losses only if it is probable that future taxable amounts will be available to u�lise those temporary diﬀerences and losses. Deferred tax assets and liabili�es are oﬀset where there is a legally enforceable right to oﬀset current tax assets and liabili�es and where the deferred tax balances relate to the same taxa�on authority. Current tax assets and liabili�es are oﬀset where the en�ty has a legally enforceable right to oﬀset and intends either to se�le on a net basis, or to realise the asset and se�le the liability simultaneously. Current and deferred tax balances a�ributable to amounts recognised directly in equity are also recognised directly in equity. IMPAIRMENT OF ASSETS (h) Goodwill and intangible assets that have an indeﬁnite useful life are not subject to amor�sa�on and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell, and value in use. To assess impairment, assets are grouped at the lowest levels for which there are separately iden�ﬁable cash inﬂows that are largely independent of the cash inﬂows from other assets or groups of assets (cash-genera�ng units). Non-ﬁnancial assets other than goodwill that suﬀered an impairment are reviewed for possible reversal of the impairment at each repor�ng date. 44 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) CASH AND CASH EQUIVALENTS (i) For presenta�on purposes on the cash ﬂow statement, cash and cash equivalents includes cash on hand and deposits held by ﬁnancial ins�tu�ons. TRADE AND OTHER RECEIVABLES (j) Trade and other receivables are non-deriva�ve ﬁnancial assets with ﬁxed or determinable payments that are not quoted in an ac�ve market. Trade receivables are ini�ally recognised at fair value and subsequently measured at amor�sed cost using the eﬀec�ve interest method, less any allowance for expected credit losses. Trade receivables for goods and services are generally due for se�lement within 30 days from date of invoice. The group has applied the simpliﬁed approach to measuring expected credit losses, which uses a life�me expected loss allowance. To measure the expected credit losses, trade receivables would be grouped based on days overdue. Other receivables are recognised at amor�sed cost, less any allowance for expected credit losses. (k) FINANCIAL INSTRUMENTS (i) Recognition, Initial Measurement and Derecognition Financial assets and ﬁnancial liabili�es are recognised when the Group becomes a party to the contractual provisions of the ﬁnancial instrument. Financial instruments (except for trade receivables) are measured ini�ally at fair value adjusted by transac�ons costs, except for those carried “at fair value through proﬁt or loss”, in which case transac�on costs are expensed to proﬁt or loss. Where available, quoted prices in an ac�ve market are used to determine the fair value. In other circumstances, valua�on techniques are adopted. Subsequent measurement of ﬁnancial assets and ﬁnancial liabili�es are described below. Trade receivables are ini�ally measured at the transac�on price if the receivables do not contain a signiﬁcant ﬁnancing component in accordance with AASB 15. Financial assets are derecognised when the contractual rights to the cash ﬂows from the ﬁnancial asset expire, or when the ﬁnancial asset and all substan�al risks and rewards are transferred. A ﬁnancial liability is derecognised when it is ex�nguished, discharged, cancelled or expires. (ii) Classiﬁcation and Subsequent Measurement Financial assets Except for those trade receivables that do not contain a signiﬁcant ﬁnancing component and are measured at the transaction price in accordance with AASB 15, all ﬁnancial assets are ini�ally measured at fair value adjusted for transac�on costs (where applicable). For the purpose of subsequent measurement, ﬁnancial assets other than those designated and eﬀec�ve as hedging instruments, are classiﬁed into the following categories upon ini�al recogni�on: amor�sed cost; fair value through other comprehensive income (FVOCI); and fair value through proﬁt or loss (FVPL). 45 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Classiﬁca�ons are determined by both: The contractual cash ﬂow characteris�cs of the ﬁnancial assets; and The en��es business model for managing the ﬁnancial asset. Financial assets at amortised cost Financial assets are measured at amor�sed cost if the assets meet the following condi�ons (and are not designated as FVPL): they are held within a business model whose objec�ve is to hold the ﬁnancial assets and collect its contractual cash ﬂows; and the contractual terms of the ﬁnancial assets give rise to cash ﬂows that are solely payments of principal and interest on the principal amount outstanding. A�er ini�al recogni�on, these are measured at amor�sed cost using the eﬀec�ve interest method. Discoun�ng is omi�ed where the eﬀect of discoun�ng is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of ﬁnancial instruments. Financial assets at fair value through other comprehensive income (Equity instruments) Upon ini�al recogni�on, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the deﬁni�on of equity under AASB 132 Financial Instruments: Presentation and are not held for trading. Financial assets at fair value through proﬁt or loss (FVPL) Financial assets at fair value through proﬁt or loss include ﬁnancial assets held for trading, ﬁnancial assets designated upon ini�al recogni�on at fair value through proﬁt or loss, or ﬁnancial assets mandatorily required to be measured at fair value. Financial assets are classiﬁed as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial liabilities Financial liabili�es are classiﬁed, at ini�al recogni�on, as ﬁnancial liabili�es at fair value through proﬁt or loss, loans and borrowings, payables, or as deriva�ves designated as hedging instruments in an eﬀec�ve hedge, as appropriate. Financial liabili�es are ini�ally measured at fair value, and, where applicable, adjusted for transac�on costs unless the Group designated a ﬁnancial liability at fair value through proﬁt or loss. Subsequently, ﬁnancial liabili�es are measured at amor�sed cost using the eﬀec�ve interest method except for deriva�ves and ﬁnancial liabili�es designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in proﬁt or loss. 46 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) All interest-related charges and, if applicable, gains and losses arising on changes in fair value are recognised in proﬁt or loss. (iii) Impairment The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amor�sed cost and FVOCI. The impairment methodology applied depends on whether there has been a signiﬁcant increase in credit risk. For trade receivables, the Group applies the simpliﬁed approach permi�ed by AASB, which requires expected life�me losses to be recognised from ini�al recogni�on of the receivables. (iv) Valuation Techniques In the absence of an ac�ve market for an iden�cal asset or liability, the Group selects and uses one or more valua�on techniques to measure the fair value of the asset or liability. The Group selects a valua�on technique that is appropriate in the circumstances and for which suﬃcient data is available to measure fair value. The availability of suﬃcient and relevant data primarily depends on the speciﬁc characteris�cs of the asset or liability being measured. The valua�on techniques selected by the Group are consistent with one or more of the following valua�on approaches: Market approach: valua�on techniques that use prices and other relevant informa�on generated by market transac�ons for iden�cal or similar assets or liabili�es. Income approach: valua�on techniques that convert es�mated future cash ﬂows or income and expenses into a single discounted present value. Cost approach: valua�on techniques that reﬂect the current replacement cost of an asset at its current service capacity. Each valua�on technique requires inputs that reﬂect the assump�ons that buyers and sellers would use when pricing the asset or liability, including assump�ons about risks. When selec�ng a valua�on technique, the Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available informa�on on actual transac�ons) and reﬂect the assump�ons that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best informa�on available about such assump�ons are considered unobservable. 47 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v) Fair Value Hierarchy AASB 13 requires the disclosure of fair value informa�on by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is signiﬁcant to the measurement can be categorised into as follows: Level 1 Measurements based on quoted prices (unadjusted) in ac�ve markets for iden�cal assets or liabili�es that the en�ty can access at the measurement date. Level 2 Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 Measurements based on unobservable inputs for the asset or liability. The fair values of assets and liabili�es that are not traded in an ac�ve market are determined using one or more valua�on techniques. These valua�on techniques maximise, to the extent possible, the use of observable market data. If all signiﬁcant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more signiﬁcant inputs are not based on observable market data, the asset or liability is included in Level 3. The Group would change the categorisa�on within the fair value hierarchy only in the following circumstances: if a market that was previously considered ac�ve (Level 1) became inac�ve (Level 2 or Level 3) or vice versa; or if signiﬁcant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa. When a change in the categorisa�on occurs, the Group recognises transfers between levels of the fair value hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred. (l) PLANT AND EQUIPMENT All plant and equipment are stated at historical cost less deprecia�on. Historical cost includes expenditure that is directly a�ributable to the acquisi�on of the items. Deprecia�on of plant and equipment is calculated using the straight-line method to allocate their cost (net of their residual values) over their es�mated useful lives. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is wri�en down immediately to its recoverable amount if the asset’s carrying amount is greater than its es�mated recoverable amount (Note 1(h)). Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the income statement. When revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in respect of those assets to retained earnings. 48 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) EXPLORATION AND EVALUATION COSTS Explora�on and evalua�on costs are wri�en oﬀ in the year they are incurred apart from acquisi�on costs which are carried forward where right of tenure of the area of interest is current, and they are expected to be recouped through sale or successful development and explora�on of the area of interest, or, where explora�on and evalua�on ac�vi�es in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Where an area of interest is abandoned, or the Directors decide that it is not commercial, any accumulated acquisi�on costs in respect of that area are wri�en oﬀ in the ﬁnancial period the decision is made. Each area of interest is reviewed at the end of each accoun�ng period and accumulated costs wri�en oﬀ to the extent that they will not be recoverable in the future. TRADE AND OTHER PAYABLES (n) Trade and other payables represent liabili�es for goods and services provided to the Group during the ﬁnancial year which remain unpaid at the end of the period. The amounts are unsecured and are paid on standard commercial terms. (o) EMPLOYEE BENEFITS (i) (ii) Wages and Salaries, Leave and Other Employee Beneﬁts Provisions are made for employee beneﬁts for services rendered during the period. These beneﬁts include salaries and leave beneﬁts. Liabili�es arising in respect of employee beneﬁts are measured at their nominal amounts based on remunera�on rates to be paid when the liability is se�led. Share-Based Payments The Group provides beneﬁts to employees (including Directors) and consultants of the Group in the form of share-based payments whereby employees and contractors render services in exchange for shares or rights over shares (“equity-se�led transac�ons”). The cost of these equity- se�led transac�ons is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an internal valua�on using a Black-Scholes op�on pricing model. The cost of equity-se�led transac�ons is recognised, together with a corresponding increase in equity, over the period in which the performance condi�ons are fulﬁlled, ending on the date on which the relevant employees become fully en�tled to the award (“ves�ng date”). The cumula�ve expense recognised for equity-se�led transac�ons at each repor�ng date un�l ves�ng date reﬂects the extent to which the ves�ng period has expired and the number of op�ons that the Directors think will vest ul�mately. This opinion is formed based on the informa�on available at balance date. No adjustment is made for the likelihood of market performance condi�ons being met as the eﬀect of these condi�ons is included in the determina�on of fair value at grant date. No expense is recognised for awards that do not ul�mately vest, except for awards where ves�ng is condi�onal upon a market condi�on. Where an equity-se�led award is cancelled, it is treated as if it had vested on the date of cancella�on, and any expense not yet recognised for the award is recognised immediately. However, if a new award is subs�tuted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modiﬁca�on of the original award. 49 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) CONTRIBUTED EQUITY Ordinary shares are classiﬁed as equity. Incremental costs directly a�ributable to the issue of new shares or op�ons are shown in equity as a deduc�on (net of tax) from the proceeds. Incremental costs directly a�ributable to the issue of new shares or op�ons, for the acquisi�on of a business, are not included in the cost of the acquisi�on as part of the purchase considera�on. (q) EARNINGS PER SHARE (i) Basic Earnings Per Share Basic earnings per share are calculated by dividing the proﬁt a�ributable to equity holders of the Parent en�ty, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the ﬁnancial year, adjusted for bonus elements in ordinary shares issued during the year. (ii) Diluted Earnings Per Share Diluted earnings per share adjusts the ﬁgures used in the determina�on of basic earnings per share to take into account the a�er income tax eﬀect of interest and other ﬁnancing costs associated with dilu�ve poten�al ordinary shares and the weighted average number of shares assumed to have been issued for no considera�on in rela�on to dilu�ve poten�al ordinary shares. (r) GOODS AND SERVICES TAX (‘GST’) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxa�on authority. In this case it is recognised as part of the cost of acquisi�on of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxa�on authority is included with other receivables or payables in the balance sheet. Cash ﬂows are presented on a gross basis. The GST components of cash ﬂows arising from inves�ng or ﬁnancing ac�vi�es which are recoverable from, or payable to the taxa�on authority, are presented as opera�ng cash ﬂow. (s) SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS The carrying amount of certain assets and liabili�es is o�en determined based on es�mates and assump�ons of future events. The key es�mates and assump�ons that have signiﬁcant risk of causing a material adjustment to the carrying amounts of certain assets and liabili�es within the next annual repor�ng period are: (i) Deferred Taxation The poten�al deferred tax asset arising from the tax losses and temporary diﬀerences has not been recognised as an asset because recovery of the tax losses is not yet considered probable. 50 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (ii) Capitalised Exploration Costs The applica�on of the Group’s accoun�ng policy for explora�on and evalua�on expenditure requires judgement in determining whether future economic beneﬁts are likely, either from explora�on or sale, or where ac�vi�es have not reached a stage which permits reasonable assessment. (iii) Share-Based Payments The Group measures the cost of equity-se�led and cash-se�led transac�ons by reference to the fair value of the goods and services received or, if this cannot be reliably measured, the fair value of the equity instruments at the date at which they are granted. The fair value of the equity instruments is determined by using the Black- Scholes model and the assump�ons and carrying amount at the repor�ng date is disclosed in Note 29. (t) LEASES The Group as lessee At incep�on of a contract the Group assesses if the contract contains or is a lease. If there is a lease present, a right-of-use asset and a corresponding liability are recognised by the Group where the Group is a lessee. However, all contracts that are classiﬁed as short-term leases (i.e. leases with a remaining lease term of 12 months or less) and leases of low-value assets are recognised as an opera�ng expense on a straight-line basis over the term of the lease. Ini�ally, the lease liability is measured at the present value of the lease payments s�ll to be paid at the commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily determined, the Group uses incremental borrowing rate. Lease payments included in the measurement of the lease liability are as follows; ﬁxed lease payments less any lease incen�ves; variable lease payments that depend on an index or rate, ini�ally measured using the index or rate at the commencement date; the amount expected to be payable by the lessee under residual value guarantees; the exercise price of purchase op�ons if the lessee is reasonably certain to exercise the op�ons; lease payments under extension op�ons, if the lessee is reasonably certain to exercise the op�ons; and payments of penal�es for termina�ng the lease, if the lease term reﬂects the exercise of op�ons to terminate the lease. The right-of-use asses comprise the ini�al measurement of the corresponding lease liability, any lease payments made at or before the commencement date and any ini�al direct costs. The subsequent measurement of the right-of-use assets is at cost less accumulated deprecia�on and impairment losses. Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest. Where a lease transfers ownership of the underlying asset or the costs of the right-of-use asset reﬂects that the Group an�cipates exercising a purchase op�on, the speciﬁc asset is depreciated over the useful life of the underlying asset. The Group as lessor The Group does not have any property which has been leased out, and therefore not applicable. 51 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 2. NEW STANDARDS AND INTERPRETATIONS ADOPTED AND NOT YET ADOPTED The Group has considered the implica�ons of new and amended Accoun�ng Standards which have become applicable for the current ﬁnancial repor�ng period. Ini�al adop�on of AASB 2020-04: COVID-19-Related Rent Concessions AASB 2020-4: Amendments to Australian Accounting Standards – COVID-19-Related Rent Concessions amends AASB 16 by providing a prac�cal expedient that permits lessees to assess whether rent concessions that occur as a direct consequence of the COVID-19 pandemic and, if certain condi�ons are met, account for those rent concessions as if they were not lease modiﬁca�ons. 2018-6 amends and narrows the deﬁni�on of Ini�al adop�on of AASB 2018-6: Amendments to Australian Accounting Standards – Deﬁnition of a Business a business speciﬁed in AASB 3: Business AASB Combinations, simplifying the determina�on of whether a transac�on should be accounted for as a business combina�on or an asset acquisi�on. En��es may also perform a calcula�on and elect to treat certain acquisi�ons as acquisi�ons of assets. Ini�al adop�on of AASB 2018-7: Amendments to Australian Accounting Standards – Deﬁnition of Material This amendment principally amends AASB 101 and AASB 108 by reﬁning the deﬁni�on of material by improving the wording and aligning the deﬁni�on across the standards issued by the AASB. Ini�al adop�on of AASB 2019-3: Amendments to Australian Accounting Standards – Interest Rate Benchmark This amendment amends speciﬁc hedge accoun�ng requirements to provide relief from the poten�al eﬀects of the uncertainty caused by interest rate benchmark reform. Ini�al adop�on of AASB 2019-1: Amendments to Australian Accounting Standards – References to the Conceptual Framework This amendment amends Australian Accoun�ng Standards, Interpreta�ons and other pronouncements to reﬂect the issuance of Conceptual Framework for Financial Repor�ng by the AASB. The standards listed above did not have any material impact on the amounts recognised in prior periods and are not expected to signiﬁcantly aﬀect the current or future periods. 3 FINANCIAL RISK MANAGEMENT FINANCIAL RISK MANAGEMENT OBJECTIVES The Group’s ac�vi�es expose it to a variety of ﬁnancial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of ﬁnancial markets and seeks to minimise poten�al adverse eﬀects on the ﬁnancial performance of the Group. Various methods are used to measure risks to which the Group is exposed, including sensi�vity analysis for interest rate, foreign exchange and other price risks, and ageing analysis for credit risk. 52 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 3. FINANCIAL RISK MANAGEMENT (CONTINUED) Risk management is carried out by the accoun�ng team under Board approved policies covering iden�ﬁca�on and analysis of risk exposure, risk limits, and appropriate procedures and controls. Repor�ng is provided to the Board on a monthly basis. MARKET RISK Foreign Currency Risk (i) The Group completes certain transac�ons denominated in foreign currency and is exposed to foreign currency risk through exchange rate ﬂuctua�ons. Foreign currency risk arises from future commercial transac�ons and recognised ﬁnancial assets and ﬁnancial liabili�es in a currency other than the Group’s func�onal currency. The risk is measured using sensi�vity analysis and cash ﬂow forecas�ng. Based on the net exposure to foreign currencies, a change in the foreign exchange rate as at the end of the year would not have a signiﬁcant eﬀect the Group’s ﬁnancial results. Price Risk (ii) Presently, the Group is not directly exposed to commodity price risk as it is in the explora�on phase. The Group is indirectly exposed to price movements for commodi�es such as gold, copper and silver as these may aﬀect the Group’s ability to access capital markets. Interest Rate Risk (iii) The Group's main interest rate risk arises from cash and term deposits held at variable interest rates as term deposits issued at ﬁxed rates expose the Group to fair value risk. The Group’s policy is to maximise interest rate returns, having regard to the cash requirements of the business. Credit Risk (iv) Credit risk refers to the risk that a counterparty will default on its contractual obliga�ons, resul�ng in ﬁnancial loss to the Group. The maximum exposure to credit risk at the repor�ng date to recognised ﬁnancial assets is the carrying amount (net of any provisions for impairment of those assets) as disclosed in the statement of ﬁnancial posi�on and notes to the ﬁnancial statements. Liquidity Risk (v) Liquidity risk management requires the Group to maintain enough liquid assets to pay debts as and when they fall due. The Group manages liquidity risk by maintaining adequate cash reserves through con�nuously monitoring actual and forecast cash ﬂows and matching the maturity proﬁles of ﬁnancial assets and liabili�es. 53 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 3. FINANCIAL RISK MANAGEMENT (CONTINUED) INTEREST RATE RISK The Group is exposed to market interest rate movements on short-term deposits. Group policy is to monitor the interest rate yield curve to 120 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. At 30 June 2021, if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables held constant, pre-tax loss would have been $114,575 lower/higher (2020 – change of 100 bps: $20,125 lower/higher) as a result of lower interest income. The Group's exposure to interest rate risks and the eﬀec�ve interest rates of ﬁnancial assets and ﬁnancial liabili�es, both recognised and unrecognised at the balance date, are as follows: Floa�ng Interest Rate $ Fixed Interest Rate Maturing in: 1 - 5 Years $ <5 Years $ >1 Year $ Non- Interest Bearing Total Carrying Amount $ $ - 11,451,486 - - - - 60,534 - 11,451,486 60,534 - - - - - - 1,445,474 362,118 - 60,000 - 24,315 - 1,891,907 - 12,896,960 362,118 60,000 84,849 13,403,927 - - - - - 1,230,961 1,230,961 - - - 60,820 60,820 - 45,531 - 45,531 - - - - - 1,291,781 45,531 1,337,312 Financial Instrument 2021 Financial Assets Cash and Cash Equivalents Trade & Other Receivables Investments Deposits Total Financial Assets Financial Liabilities Trade Creditors Other Creditors and Accruals Lease Liabili�es Total Financial Liabili�es Weighted average eﬀective interest rate is 0.31% 2020 Financial Assets Cash and Cash Equivalents Trade & Other Receivables Deposits Total Financial Assets Financial Liabilities Trade Creditors Other Creditors and Accruals Lease Liabili�es Total Financial Liabili�es 1,992,492 - - - - - - 20,000 20,000 1,992,492 - 916,059 - 188,932 - - 65,462 1,170,453 - - 2,908,551 188,932 85,462 3,182,945 - - - - 448,491 448,491 - - - - 44,309 44,309 - 52,922 52,922 - 46,719 46,719 - - - 492,800 99,641 592,441 54 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 3. FINANCIAL RISK MANAGEMENT (CONTINUED) NET FAIR VALUES All ﬁnancial assets and liabili�es have been recognised at the balance date at amounts approxima�ng their carrying value. CREDIT RISK EXPOSURES The Group has no signiﬁcant concentra�ons of credit risk. The maximum exposure to credit risk at balance date is the carrying amount (net of provision for doub�ul debts) of those assets as disclosed in the balance sheet and notes to the ﬁnancial statements. A formal credit risk management policy is not maintained. 4. SEGMENT INFORMATION AASB 8 requires opera�ng segments to be iden�ﬁed based on internal reports provided to the Board in order to allocate resources to the segments and assess performance. Informa�on reported to the Board is based on explora�on in the principal loca�ons of the Group’s projects, Australia and Colombia. The revenues and proﬁt generated by each of the Group’s opera�ng segments, assets and liabili�es are summarised as follows: Australia 2021 $ Colombia 2020 $ 2021 $ 2020 $ Elimina�on 2021 $ 2020 $ Total 2021 $ 2020 $ Segment Revenues Segment Opera�ng (Losses) Segment Assets Segment Liabili�es 1,033,786 667,138 6 154 (518,164) (375,386) 515,628 291,906 (5,055,395) (3,073,688) 16,413 (58,491) - - (5,038,982) (3,132,179) 38,009,998 14,974,840 10,860 9,802 (19,356,976) (6,504,576) 18,663,882 8,480,068 2,720,462 1,818,142 1,982 4,319 (1,040,100) (955,202) 1,682,344 867,259 5. REVENUE From Con�nuing Opera�ons Sorby Hills Project Revenue Interest Other Income 6. EXPENSES Loss Before Income Tax Includes the Following Expenses: Deprecia�on of Plant and Equipment Deprecia�on of ROU Asset Explora�on and Evalua�on Expenditure Gain of sale of subsidiary 55 Consolidated 2021 $ 122,435 21,598 371,595 515,628 2020 $ 123,732 33,811 134,363 291,906 Consolidated 2021 $ 11,908 53,598 3,822,870 (36,289) 2020 $ 8,552 9,019 2,124,010 - ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 7. INCOME TAX Income Tax Expense/(Beneﬁt) Current Tax Deferred Tax Adjustments for Current Tax of Prior Years Numerical Reconcilia�on of Income Tax Expense to Prima Facie Tax Payable Loss from Con�nuing Opera�ons Before Income Tax Expense Prima Facie Tax Beneﬁt at the Australian Tax Rate of 26% (2020: 27.5%) Tax Eﬀect of Amounts Which are not Deduc�ble (Taxable) in Calcula�ng Taxable Income: Other Items Unrecognised Temporary Diﬀerences Tax Eﬀect of Current Year Tax Losses for Which no Deferred Tax Asset Has Been Recognised Income Tax Expense/(Beneﬁt) Unrecognised Temporary Diﬀerences Deferred Tax Assets On Income Tax Account S. 40-880 Deduc�ons Write oﬀ Acquired Tenement Costs over 15 years Accruals and Provisions for Employee En�tlements Carry Forward Tax Losses Deferred Tax Liabili�es Prepayments Total Unrecognised Tempory Diﬀerences Deferred Tax Liabili�es Beginning Explora�on and Evalua�on on Acquisi�on Reduc�on of Deferred Tax Liability Due to Impairment Deferred Tax Liability - Explora�on and Evalua�on Assets Consolidated 2021 $ 2020 $ - - - - - - - - (5,038,982) (3,132,179) (1,310,135) (861,349) 30,809 (1,279,326) 53,294 (808,055) (140,932) 1,279,326 948,987 - - 267,894 130,108 1,395,275 1,686,596 58,016 27,008 6,319,796 8,040,981 4,927,701 6,771,413 - 8,040,981 (216 ) 6,771,197 178,913 221,008 (9,760) (42,095) 169,153 178,913 The deferred tax assets have not been brought to account, as it is not probable within the immediate future that tax proﬁts will be available against which deduc�ble temporary diﬀerences and tax losses can be u�lised. 56 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 8. CURRENT ASSETS - CASH AND CASH EQUIVALENTS Cash at Bank Cash and Cash Equivalents as Shown in the Consolidated Statement of Financial Posi�on and the Consolidated Statement of Cash Flows 9. CURRENT ASSETS - OTHER Other Receivables Prepayments Consolidated 2021 $ 12,896,960 2020 $ 2,908,551 12,896,960 2,908,551 Consolidated 2021 $ 362,118 12,778 374,896 2020 $ 188,932 17,521 206,453 The above receivables are within ini�al trade terms and therefore have not been impaired. 10. NON-CURRENT ASSETS – EXPLORATION AND EVALUATION ASSETS Balance at Beginning of the Year Addi�ons/(disposal) Reduc�on of Deferred Tax Liability Balance at the End of the Year 11. NON-CURRENT ASSETS – OTHER Bonds and Security Deposits VAT Receivable Consolidated 2021 $ 5,170,320 - (9,760) 2020 $ 5,210,586 1,829 (42,095) 5,160,560 5,170,320 Consolidated 2021 $ 84,849 - 84,849 2020 $ 85,285 177 85,462 Bonds and security deposits of $84,849 (2020: $85,285), are in rela�on to a credit card facility and oﬃce lease obliga�ons. 57 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 12. NON-CURRENT ASSETS - PLANT AND EQUIPMENT Plant and Equipment Cost Accumulated Deprecia�on Net Carrying Amount Plant and Equipment - Movement Opening Net Book Amount Addi�ons Deprecia�on Charge Foreign Exchange Transla�on Closing Net Carrying Amount 13. RIGHT OF USE ASSETS ROU Asset - Building Lease Building Lease at cost Accumulated Deprecia�on Net Carrying Amount ROU Asset - Movement Opening Net Book Amount Deprecia�on Charge Adjustments on leasing cost Closing Net Carrying Amount Amounts recognised in the Proﬁt and Loss Deprecia�on Expense on Right of Use Asset Interest Paid on lease liabili�es Consolidated 2021 $ 2020 $ 87,288 (44,908) 42,380 132,929 (122,853) 10,076 10,076 44,212 (11,908) - 42,380 19,238 15,090 (8,552) (15,700) 10,076 Consolidated 2021 $ 2020 $ 106,854 (62,617) 44,237 99,206 (53,598) (1,371) 44,237 108,225 (9,019) 99,206 108,225 (9,019) - 99,206 (53,598) (2,850) (9,019) (681) In the prior year, the Group entered into a lease of the premises at Level 1, 105 St George’s Terrace, Perth. The es�mated remaining life is 10 months. Discounted cashﬂows were calculated using the Group’s incremental borrowing rate of 3.5%. 14 LIABILITIES - TRADE AND OTHER PAYABLES Trade Payables Other Payables and Accruals Consolidated 2021 $ 1,230,961 60,820 1,291,781 2020 $ 448,491 44,309 492,800 The above payables are within ini�al trade terms and therefore are not past due. 58 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 15. PROVISIONS Current Provision for Annual Leave Provision for Long Service Leave 16. LEASE LIABILITIES Maturity Analysis Less than 1 year Greater than 1 year Consolidated 2021 $ 127,409 48,470 175,879 2020 $ 61,830 34,075 95,905 Consolidated 2021 $ 2020 $ 45,531 - 52,922 46,719 The Group has a lease for its main oﬃce premise at Level 1, 105 St. Georges Terrace Perth, which has been included in the Right-of-use asset (Note 13) . The remaining lease is payable within 12 months. 17. NON-CURRENT LIABILITIES – DEFERRED TAX LIABILITIES Deferred Tax Liabili�es Comprise Temporary Diﬀerences A�ributable to: Beginning Explora�on and Evalua�on on Acquisi�on Movement as a Result of Change in Tax Rate from 27.5% to 26% Deferred Tax Liability Consolidated 2021 $ 2020 $ 178,913 (9,760) 169,153 221,008 (42,095) 178,913 59 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 18. CONTRIBUTED EQUITY SHARE CAPITAL Ordinary Shares Fully Paid Total Contributed Equity MOVEMENTS IN ORDINARY SHARE CAPITAL Beginning of the Financial Year Issued during the year: 09 Sep 2019 Placement at $0.008 02 Sep 2020 Reclassiﬁca�on of converted Performance Rights 10 Sep 2020 Conversion of Op�ons @$.015 24 Sep 2020 Placement @ $0.018 09 Oct 2020 Placement @ $0.018 20 Oct 2020 Exercise of Op�ons @ $0.015 20 Oct 2020 Cashless issue 28 Oct 2020 Exercise of Op�ons @ $0.015 28 Oct 2020 Cashless issue 28 Oct 2020 Exercise of Op�ons @ $0.015 03 Nov 2020 Exercise of Op�ons @ $0.015 11 Nov 2020 Exercise of Op�ons @ $0.015 16 Nov 2020 Exercise of Op�ons @ $0.015 16 Nov 2020 Cashless issue 19 Nov 2020 Exercise of Op�ons @ $0.015 24 Nov 2020 Exercise of Op�ons @ $0.015 24 Dec 2020 Share consolida�on adjustments (25 for 1) 20 Jan 2021 Shares issued in lieu of director fees at $0.398 07 Apr 2021 Shares issued in lieu of director fees at $0.450 Less Transac�on costs 2021 2020 Shares 152,307,006 152,307,006 $ Shares $ 47,698,398 2,888,104,604 2,980,318 47,698,398 2,888,104,604 32,980,318 2021 2020 Shares 2,888,104,604 $ Shares 32,980,318 2,313,104,604 $ 28,705,740 - - 575,000,000 4,600,000 19,000,000 115,200 69,210 555,555,920 13,333,322 1,941,729 1,446,034 4,013,333 3,085,460 250,000 3,798,420 30,899,003 96,746,862 499,602 127,797,511 57,947,810 (3,652,308,717) 1,038 10,000,007 240,000 29,126 28,578 60,200 61,864 3,750 56,976 463,485 1,451,203 9,989 1,916,963 869,217 - 71,278 28,333 55,625 25,000 - 152,307,006 (642,849) - 47,698,398 2,888,104,604 (325,422) 32,980,318 ORDINARY SHARES Ordinary shares en�tle the holder to par�cipate in dividends and the proceeds on winding up of the Parent en�ty propor�onate to the number of and amounts paid for shares held. On a show of hands every holder of ordinary shares present at a mee�ng in person or by proxy is en�tled to one vote and upon a poll each share is en�tled to one vote. CAPITAL RISK MANAGEMENT Safeguarding its ability to con�nue as a going concern is the Group’s objec�ve when it comes to managing capital in order to provide beneﬁts to both shareholders and stakeholders and maintain an op�mal capital structure to reduce cost of capital. When an opportunity to invest in, or explore, a project is seen as value adding rela�ve to the share price at the �me of investment, the Group will seek to raise capital if required. 60 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 19. DIVIDENDS No recommenda�on for payment of dividends or dividend payments were made during the report period. 20. RESERVES Share/op�on reserve is used to recognise the fair value of shares and op�ons issued. Share/Op�on Reserve Foreign Currency Transla�on Reserve SHARE/OPTION RESERVE Balance at Beginning of Year Reclassiﬁca�on of Performance Rights upon conversion to ordinary shares Issue of Op�ons / Performance Rights Balance at End of Year Details of movement in share op�ons (Post-consolida�on) Consolidated 2021 $ 1,623,811 (333,758) 1,290,053 2020 $ 1,653,328 (52,906) 1,600,422 Consolidated 2021 $ 1,653,328 2020 $ 1,523,902 (115,200) 85,683 1,623,811 - 129,426 1,653,328 2021 2020 Outstanding at beginning of the year 15,510,879 No of share Op�ons Weighted Average Exercise Price 0.325 No of share Op�ons 18,090,879 Weighted Average Exercise Price 0.378 Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the end of the year - - (13,908,555) (1,202,324) 400,000 - - 0.375 0.375 0.500 - - - (2,580,000) 15,510,879 - - - 0.379 0.325 Details of movement in performance rights (Post-consolida�on) Balance at Beginning of Year Granted during the year Forfeited during the year Converted during the year Expired during the year Balance at End of Year 2021 Number of Performance Rights 2,500,000 280,000 - (760,000) - 2,020,000 2020 Number of Performance Rights - 2,500,000 - - - 2,500,000 61 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOREIGN CURRENCY TRANSLATION RESERVE Foreign currency transla�on reserve is used to recognise exchange diﬀerences arising from the transla�on of ﬁnancial statements of foreign opera�ons that do not use Australian dollars as their func�onal currency. Balance at Beginning of Year Exchange Diﬀerences Arising on Transla�on of Foreign Opera�ons Balance at End of Year 21. PARENT ENTITY INFORMATION Total Current Assets Total Non-Current Assets Total Assets Total Current Liabili�es Total Non-Current Liabili�es Total Liabili�es Equity Issued Capital Share Based Payments Reserve Accumulated Losses Total Equity Results of The Parent En�ty Loss for the Year Other Comprehensive Income Total Comprehensive Loss for the Year CAPITAL AND CONTINGENT LIABILITIES Consolidated 2021 $ (52,906) (280,852) 2020 $ (48,638) (4,268) (333,758) (52,906) Parent 2021 $ 11,981,411 10,798,170 22,779,581 2020 $ 2,200,965 6,197,729 8,398,694 2,008,773 - 2,008,773 1,613,757 - 1,613,757 47,698,398 1,623,811 (28,551,401) 20,770,808 32,980,318 1,653,328 (27,848,709 6,784,937 (702,692) - (702,692) (6,211,589) - (6,211,589) The parent en�ty had no capital or con�ngent liabili�es as at 30 June 2021 (2020: Nil). SIGNIFICANT ACCOUNTING POLICIES The accoun�ng policies of the parent en�ty are consistent with those of the Group, as disclosed in Note 1, except for investments in subsidiaries being accounted for at cost (less any impairment) in the parent en�ty. 62 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 22. INTERESTS IN SUBSIDIARIES The consolidated ﬁnancial statements incorporate the assets, liabili�es and results of the following wholly owned subsidiaries in accordance with the accoun�ng policy described in Note 1b(i): Subsidiary Incorporated West Rock Resources Pty Ltd Sorby Hills Pty Ltd Sorby Management Pty Ltd West Rock Resources Panama Corp. Paciﬁco Minerals Sucursal Colombia (Branch) Golden Paciﬁco Explora�on SAS* Paciﬁco Holdings SAS Australia Australia Australia Panama Colombia Colombia Colombia Ownership 2020 100% 100% 100% 100% 100% 100% 100% 2021 100% 100% 100% 100% 100% 0% 100% *The Company entered into a Share and Asset Sale Agreement with Quimbaya Gold Inc. on 10 November 2020 to dispose of a Colombian subsidiary being Golden Paciﬁco Explora�on SAS which held interests in various minor explora�on tenements in Colombia. The considera�on received was a total of $225,000, which consisted of $165,000 in cash and $60,000 in shares (1,120,000 Combia Gold Inc shares valued at Canadian $0.05 at exchange rate of CAN/AUD of 0.9333). 23. REMUNERATION OF AUDITORS During the period the following fees were paid, or payable, for services provided by the auditors of the Group. Audit Services Stantons Audit and Review of Financial Reports Total Remunera�on for Audit Services Non-Audit Services Technical Valua�on - Performance Rights Consolidated 2021 $ 2020 $ 53,141 53,141 40,378 40,378 - 750 63 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 24. COMMITMENTS AND CONTINGENCIES The Group plans to conduct explora�on work on its tenements to meet obliga�ons and retain rights of tenure. If required, the Group can reduce these expenditure obliga�ons by establishing joint venture agreements, applica�ons for expenditure exemp�ons, or selec�ve relinquishment of explora�on tenements. Due to the nature of the Group’s opera�ons in exploring and evalua�ng areas of interest, it is diﬃcult to accurately forecast future expenditure. The annual commitment across the Group for the next year is $2,222,694 (2020: $230,094). Explora�on Commitments Within One Year Later than One Year But Not Later Than Five Years Over Five Years Consolidated 2021 $ 2,222,694 2,124,654 1,271,286 5,618,634 2020 $ 230,094 920,375 - 1,150,469 There are no material con�ngent assets of the Group at balance date (2020: Nil). In 2019 the acquisi�on of the Sorby Hills Project included a provision for a 1% net smelter royalty payable to Quintana MH Holding Company LLC that has been classiﬁed as a material Con�ngent Liability, this is s�ll in existence in 2021. 25. INTERESTS IN JOINT OPERATIONS The Group recognises its share of jointly held assets, liabili�es, revenues and expenses of joint opera�ons. These have been incorporated into the ﬁnancial statements under the appropriate classiﬁca�ons. Informa�on rela�ng to joint opera�ons that are material to the Group are set out below: Borroloola West Project (Boab 51%). Net assets carried as at 30 June 2021 are $1,024,672 (2020: $982,532). Mt Jukes Project (Boab 14.8%). Net assets carried as at 30 June 2021 are nil (2020: Nil). Sorby Hills Project (Boab 75%). Net assets carried as at 30 June 2021 are $8,864,418 (2020: $4,187,787). 26. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE On 21 July 2021, Boab announced that it had signed a Binding Agreement with Todd River Metals Pty Ltd to acquire 100% of the Manbarrum Project including associated mining leases, mining lease applica�ons, explora�on licences, and mining informa�on (“Sale Assets”). Considera�on for the purchase of the Sales Assets comprises: a) The issue and allotment by Boab to Todd River (or its nominee) of A$500,000 of fully paid ordinary shares (“Considera�on Shares”) in the Company upon Comple�on of the transac�on at an issue price of A$0.4214 per share (being equal to the 30 day VWAP prior to the execu�on of the Binding Agreement); b) The Considera�on Shares will be issued out of the Company’s exis�ng capacity in accordance with ASX Lis�ng Rule 7.1 and will be subject to a voluntary escrow period of 12 months; and 64 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 26. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE (CONTINUED) c) Net Smelter Return (NSR) Royalty of 1.25% payable on future revenue generated from the sale of minerals extracted from the Manbarrum Project. The royalty will be secured by a mining mortgage over the Manbarrum Project tenements that may be subordinated to poten�al project ﬁnanciers provided certain condi�ons are met. Boab has retained the right to buy-back the royalty at market value subject to the comple�on of a Pre-Feasibility Study on the Manbarrum Project. On 31 August 2021, the Company announced that all condi�ons precedent had been met and that the Manbarrum aquisi�on was now complete. The Company has se�led the considera�on for the purchase being A$500,000 in the form of 1,186,521 fully paid ordinary shares (“Considera�on Shares”). The Considera�on Shares have been issued out of the Company’s exis�ng capacity in accordance with ASX Lis�ng Rule 7.1 and are subject to a voluntary escrow period of 12 months. 27. CASH FLOW RECONCILIATION RECONCILIATION OF NET LOSS AFTER INCOME TAX TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Net Loss for the Year Non-Cash Items Deprecia�on of Non-Current and ROU Assets Interest on lease liabili�es Share Based Payments - Director/Staﬀ Op�ons Sale of Investments (Non-Cash) Sale of Investment (considera�on received included in inves�ng ac�vi�es Foreign Exchange (Gain)/Loss Change in Opera�ng Assets and Liabili�es (Increase)/Decrease in Trade and Other Receivables Decrease/(Increase) in Prepayments Increase/(Decrease) in Opera�ng, Trade and Other Payables Increase/(Decrease) in Provisions Net Cash Ou�low from Opera�ng Ac�vi�es Consolidated 2021 $ (5,038,982) 2020 $ (3,132,179) 65,506 2,850 186,114 (96,289) (192,175) - 8,552 - 129,426 - - - (173,186) 4,743 607,928 79,974 (4,553,517) 197,472 (5,088) (477,827) 12,393 (3,267,251) 65 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 28. LOSS PER SHARE (POST CONSOLIDATION) RECONCILIATION OF EARNINGS USED IN CALCULATING LOSS PER SHARE Loss a�ributable to the ordinary equity holders of the Parent En�ty used in calcula�ng basic and diluted loss per share WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR Consolidated 2021 $ 2020 $ (5,038,982) (3,132,179) Number of Shares 2021 2020 Weighted average number of ordinary shares used as the denominator in calcula�ng basic and diluted loss per share 141,759,237 111,366,716 29. SHARE BASED PAYMENTS ORDINARY SHARES (Post-consolida�on) Share Based Payments Issued to Directors Issued to Key Management Personnel Consolidated 2021 $ 2020 $ 176,774 129,426 9,340 186,114 - 129,426 During the year 201,244 shares were issued to Directors or consultants as part of the cashless exercise of op�ons (2020: Nil). There were 126,903 ordinary shares issued to Directors in lieu of cash payments (2020: Nil). OPTIONS OVER ORDINARY SHARES (Post-consolida�on) No Op�ons were issued in 2021 (2020: Nil). Op�ons on issue at the end of the period had the following expiry dates and exercise prices: Expiry Date 16/10/2021 Status Unlisted Exercise Price $0.50 Op�ons 400,000 Op�ons on issue at the end of the period had a weighted average exercise price of $0.50 cents and a weighted average expiry period of 0.29 years. 66 ANNUAL REPORT 2021BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS 29. SHARE BASED PAYMENTS (CONTINUED) Performance Rights (Post-consolida�on) A total of 280,000 Performance Rights (2020: 2,740,000) were granted during the year to Directors and Key Management Personnel with variable ves�ng condi�ons based on the achievement of performance milestones. During the year, a total of 760,000 Class "A" Performance Rights were converted to ordinary shares as a result of perfomance hurdles being met. Performance Rights on issue at the end of the period had the following expiry dates and exercise prices: Details Class "B" Performance Shares Class "C" Performance Shares Class "D" Performance Shares Performance Rights 900,000 800,000 320,000 2,020,000 Exercise Price Grant Date Expiry Date Nil Nil Nil 29/11/2019 29/11/2019 Various 30/06/2022 30/06/2022 6/03/2025 30. RELATED PARTY TRANSACTIONS There were no related party transac�ons to report for the period. KEY MANAGEMENT PERSONNEL COMPENSATION Short Term Employee Beneﬁt Share Based Payments Post-Employment Beneﬁt Consolidated 2021 $ 699,415 166,600 54,436 920,451 2020 $ 360,222 129,424 33,264 522,910 67 ANNUAL REPORT 2021BOAB METALS LIMITED DIRECTORS’ DECLARATION 69 ANNUAL REPORT 2021BOAB METALS LIMITED The Directors of the Group declare that: 1. The ﬁnancial statements accompanying the notes are in accordance with the Corpora�ons Act 2001, and: a. Comply with Accoun�ng Standards, the Corpora�ons Act 2001 and other mandatory professional repor�ng requirements; b. Give a true and fair view of the ﬁnancial posi�on as at 30 June 2021 and of the performance for the report period for the consolidated en�ty. 2. In the Directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. 3. In the Directors’ opinion, the ﬁnancial statements and notes are prepared in compliance with IFRS and interpreta�ons issued by the Interna�onal Accoun�ng Standards Board. 4. The remunera�on disclosures as set out on pages 26 to 31 of the Directors’ Report comply with Accoun�ng Standards AASB 124 Related Party Disclosures and sec�on 300A of the Corpora�ons Act 2001. 5. The Directors have been given the declara�ons required under sec�on 295A of the Corpora�ons Act 2001. This declara�on is made in accordance with a resolu�on of the Board of Directors and is signed on behalf of the Directors. Gary Comb Chairman 21 September 2021 INDEPENDENT AUDITOR’S REPORT 71 ANNUAL REPORT 2021BOAB METALS LIMITED Liability limited by a scheme approved under Professional Standards Legislation PO Box 1908 West Perth WA 6872 Australia Level 2, 1 Walker Avenue West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au Stantons Is a member of the Russell Bedford International network of firms INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BOAB METALS LIMITED Report on the Audit of the Financial Report Opinion We have audited the consolidated financial report of Boab Metals Limited (“the Company”) and its subsidiaries (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021, 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 the directors' declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under 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 and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters We have determined the matters described below to be key audit matters to be communicated in our report. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. This matter was 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 this matter. INDEPENDENT AUDITOR’S REPORT 72 ANNUAL REPORT 2021BOAB METALS LIMITED Key Audit Matters How the matter was addressed in the audit Carrying Value of Exploration and Evaluation Assets As at 30 June 2021, the carrying value of the Group’s Exploration and Evaluation Assets totalled $5,160,560, as disclosed in Note 10. The carrying value of the Exploration and Evaluation Assets is a key audit matter due to: • The significance of the total balance (28% of total assets); • The necessity to assess management’s application of the requirements of the accounting standard Exploration for and Evaluation of Mineral Resources (“AASB 6”), in light of any indicators of impairment that may be present; and • The assessment of significant judgements made by management in relation to the Exploration and Evaluation Assets. Inter alia, our audit procedures included the following: i. Assessing the Group’s right to tenure over exploration assets by corroborating the ownership of the relevant licences for mineral resources to government registries and relevant third-party documentation; ii. Examined the directors’ assessment of the carrying value of the exploration and evaluation expenditure, ensuring the veracity of the data presented and that management has considered the effect of potential impairment indicators, commodity prices and the stage of the Group’s projects against AASB 6; iii. Evaluation of Group documents for consistency with the intentions for the continuation of exploration and evaluation activities in certain areas of interest and corroborated with enquiries of management. Inter alia, the documents we evaluated included: ▪ Minutes of meetings of the board and management; ▪ Announcements made by the Group to the Australian Securities Exchange; and ▪ Cash flow forecasts; and iv. Assessed the financial statements to ensure appropriate disclosures are made. Accounting for Joint Operations Refer to note 1(b)(iii) The Group has a joint arrangement with a 3rd party over the Sorby Hills Project. Under the arrangement, the Group owns 75% of the Project. Boab Metals Limited, through its wholly owned subsidiary, Sorby Hills Pty Ltd, manages the Project’s activities. Management have determined that the arrangement constitutes a joint operation and therefore, the Group has rights to the assets, and obligations for the liabilities of the joint arrangement. On consolidation, the Group accounts for its proportionate share of the assets and liabilities of the project. Inter alia, our audit procedures included the following: i. Assessing the management’s assessment and judgement of concluding that the arrangement is a joint operation and the accounting treatment relative to the relevant account standards and ensuring the correct treatment is adopted; ii. Reviewing the consolidation worksheets to ensure that Sorby Hills Project has been accounted for as a joint operation and therefore, the Group has accounted for their share of the assets and liabilities (proportionate basis) of the Sorby Hills Project; INDEPENDENT AUDITOR’S REPORT 73 ANNUAL REPORT 2021BOAB METALS LIMITED Accounting for the Sorby Hills Project is a key audit matter due to: • The significance of the total assets and liabilities of the joint venture; and • The nature and complexities involved in accounting as well as the judgement in the determination of whether the Group has an interest in the net assets or rights to the assets and obligations for liabilities and therefore, the accounting treatment in accordance with the relevant accounting standards. Under AASB 11 Joint Arrangements (“AASB 11”), if a party has the rights to the assets and the obligations for the liabilities of a joint arrangement, then the joint arrangement is considered to be a “joint operation” and those assets and liabilities should be recognised by the parties to the joint arrangement. iii. We have tested the controls over expenditure in the joint operation and appropriate substantive audit procedures in relation to assets, liabilities and expenses of the joint operation; and iv. Assessed the financial statements to ensure adequacy of the disclosures made. 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 2021 but does not include the financial report and our auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude 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 has 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 INDEPENDENT AUDITOR’S REPORT 74 ANNUAL REPORT 2021BOAB METALS LIMITED 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 Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view 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 entity's internal control. 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report. We 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 Company to cease to continue as a going concern. We 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. We 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 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. The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the consolidated financial report of the current period and are therefore 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. INDEPENDENT AUDITOR’S REPORT 75 ANNUAL REPORT 2021BOAB METALS LIMITED Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 21 to 26 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Boab Metals Limited for the year ended 30 June 2021 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. STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (An Authorised Audit Company) Martin Michalik Director West Perth, Western Australia 21 September 2021 SHAREHOLDER INFORMATION Addi�onal informa�on is set out below in accordance with the lis�ng rules of the Australian Stock Exchange Limited and is current as at 10 September 2021. 1. STATEMENT OF ISSUED CAPITAL Distribu�on of holdings for Ordinary Shares on Issue ‘BML’: Number of Holders by Holding Size Holders Total Units % of Issued Capital 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total 148 1,300 576 1,093 206 3,323 42,673 0.03% 3,532,596 2.30% 2.94% 23.28% 71.46% 100.00% 4,508,036 35,725,846 109,684,376 153,493,527 Ordinary shares carry one vote per share without restric�on. The number of fully paid ordinary shareholdings held in less than marketable parcels is 342 (based on a share price of $0.38). Distribu�on of holdings for Unlisted Op�on Holders Ex Price $0.050, Exp 16 October 2021 is as follows: Number of Holders by Holding Size Holders Total Units 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total 0 0 0 0 1 1 0 0 0 0 400,000 400,000 * % of Issued Capital 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% *Unlisted Op�ons do not carry any vo�ng rights un�l they are exercised and converted into Ordinary Fully Paid shares Distribu�on of holdings for Performance Rights on issue, Performance Rights have various expiry dates and ves�ng condi�ons. Each Performance Right vests into one Ordinary Fully Paid Share on conversion. Number of Holders by Holding Size Holders Total Units 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total 0 0 0 0 5 5 0 0 0 0 2,020,000 2,020,000* % of Issued Capital 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% *Performance Shares do not carry any vo�ng rights un�l they vest and are converted into Ordinary Fully Paid shares. 900,000 class “B” Performance Rights are on issue and they are held by 5 holders with Mr Simon Noon holding 53% of this class. 800,000 class “C” Performance Rights are on issue and they are held by 4 holders with Mr Simon Noon holding 60% of this class. 320,000 class “D” Performance Rights are on issue and they are held by 2 holders with Bluedale Pty Ltd and Mr David English holding these securi�es equally. 77 ANNUAL REPORT 2021BOAB METALS LIMITED SHAREHOLDER INFORMATION On-Market Buy back There is no current on-market buy back. Restricted Securi�es The Company has issued 1,186,521 ordinary shares to Todd River Metals Pty Ltd, these shares are under a voluntary escrow agreement and are in escrow un�l 30 August 2022. SUBSTANTIAL SHAREHOLDERS Holder** VILLIERS QUEENSLAND PL* ZERO NOMINEES PTY LTD * Denotes merged holders. ** The holders detailed above held more than 5% of the Issued Capital of the Company as at the date of this additional Shareholder Number 16,194,661 12,833,334 % 10.55 8.36 information. 2. QUOTATION Fully paid ordinary shares are quoted on the Australian Stock Exchange Limited. There is a total of 153,493,527 shares on issue. The top twenty shareholders, as listed below, hold 45.62% of these shares: Position 1 2 3 4 5 5 6 7 8 9 10 11 12 13 14 15 16 17 17 18 19 20 Holder Name VILLIERS QUEENSLAND PL* ZERO NOMINEES PTY LTD CITICORP NOMINEES PTY LIMITED BRENT CONNOLLY* AIGLE ROYAL SUPER FUND PL* CRAIG CHAPMAN* EQUITY TRUSTEES LIMITED MR GRAHAM CHARLES POWELL MATORICZ SUPER PTY LTD SIMON NOON* LADAKH PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED MIEI RAGAZZI PTY LTD SURPION PTY LTD RICHARD MONTI* TODD RIVER METALS PTY LTD BNP PARIBAS NOMINEES PTY LTD JACANA GLEN PTY LTD MR WARWICK DYSON BOLTON & LING SUPER PTY LTD TRAVIS CLARK* BOXWOOD PTY LTD* Total Total Issued Capital - Ordinary Shares Holding 16,194,661 12,833,334 5,394,747 4,481,740 3,400,000 3,400,000 3,261,659 2,500,000 2,000,000 1,817,119 1,773,182 1,714,556 1,520,000 1,500,000 1,324,982 1,186,521 1,122,798 1,000,000 1,000,000 937,888 % 10.55% 8.36% 3.51% 2.92% 2.22% 2.22% 2.12% 1.63% 1.30% 1.18% 1.16% 1.12% 0.99% 0.98% 0.86% 0.77% 0.73% 0.65% 0.65% 0.61% 860,000 799,563 70,022,750 153,493,527 0.56% 0.52% 45.62% 100.00% *Denotes merged holders. 78 ANNUAL REPORT 2021BOAB METALS LIMITED SHAREHOLDER INFORMATION 3. UNQUOTED SECURITIES Holders with more than 20% of any unlisted class of security, other than those acquired under an employee incen�ve scheme, are listed below: Holder Quintana Resources Holdings LP Total Total holders 50c Op�ons Expiring 16-Oct-21 400,000 400,000 1 4. SCHEDULE OF INTERESTS IN MINING TENEMENTS HELD AT BALANCE SHEET DATE Farm-In Agreements/ Projects/Tenements Sorby Hills Project M80/196 M80/197 M80/285 M80/286 M80/287 E80/5317 Borroloola West Project EL31354 EL26938 EL26939 EL28508 EL28658 EL30305 MLN624 Mount Jukes Project EL51/2008 EL12/2009 Urrao Project 2791 Loca�on Held at Start of Quarter Held at End of Quarter 75% 75% 75% 75% 75% 100% 100% 51% 51% 51% 51% 51% 51% 13.74% 13.74% 100% 75% 75% 75% 75% 75% 100% 100% 51% 51% 51% 51% 51% 51% 13.74% 13.74% 100% WA, Australia NT, Australia TAS, Australia Colombia 79 ANNUAL REPORT 2021BOAB METALS LIMITED BOAB METALS LIMITED LEVEL 1, 105 ST GEORGES TCE, PERTH WA 6000 TELEPHONE: +61 (0)8 6268 0449, WWW.BOABMETALS.COM

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