Boab Metals Limited
Annual Report 2022

Plain-text annual report

T R O P E R L A U N N A 2 2 0 2 BOAB METALS LIMITED 4 Clive St, West Perth WA 6005 TEL: (08) 6268 0449 www.boabmetals.com ABN 43 107 159 713 CORPORATE DIRECTORY DIRECTORS Gary Comb (Executive Director and Chairman) Simon Noon (Managing Director & CEO) Richard Monti (Non-Executive Director) Andrew Parker (Non-Executive Director) COMPANY SECRETARY Jerry Monzu REGISTERED OFFICE 4 Clive Street WEST PERTH WA 6005 SHARE REGISTRY Automic Group Pty Ltd Level 5 191 St Georges Terrace PERTH WA 6000 BANKERS Australian and New Zealand Banking Group Limited Level 1 1275 Hay Street WEST PERTH WA 6005 AUDITORS Stantons International Audit and Consulting Pty Ltd 40 Kings Park Road WEST PERTH WA 6005 SECURITIES EXCHANGE LISTING Boab Metals Limited shares are listed on the Australian Securities Exchange (Home Branch - Perth) ASX Code: BML WEBSITE ADDRESS www.boabmetals.com TABLE OF CONTENTS Chairman’s Report Managing Director’s Report Review of Operations Directors’ Report Auditor’s Independence Declaration Consolidated Statement Of Profit Or Loss & Other Comprehensive Income 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 2 3 5 16 29 30 31 32 33 34 70 71 76 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 regarded 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 circumstances 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. 1 Annual Report for the Year Ended 30 June 20222 CHAIRMAN’S REPORT ________________________________________________________ 2 BOAB METALS LIMITED Dear Shareholders, On behalf of your Board of Directors, I am pleased to present the 2022 Annual Report and recap on the progress that Boab Metals Limited has made over the past financial year at our flagship Sorby Hills Lead-Silver Project and delivering on our objective to become a profitable low-cost producer and responsible economic contributor to the east Kimberley community. Over the year, the Company delivered on a range of key project execution milestones including an expanded Mineral Resource estimate, execution of a Port Access and Services Agreement with Cambridge Gulf Limited for Wyndham Port, execution of a Power Purchase Heads of Agreement with Horizon Power, updated Environmental Approvals to facilitate an Early Works program, and commencement of EPC Contract tenders. Our agreement with Horizon Power is particularly exciting as it lays the foundation for a power solution that will see Boab source the majority of Sorby Hills forecast electricity requirements from renewable energy generated by the Ord River Hydroelectric Plant. From a project funding perspective, Boab has continued to advance discussions with engaged financing parties including Australian Government debt funding organisations NAIF and EFA and a suite of leading commercial banks. During the year, the Company was pleased to welcome a select group of financiers on a site visit of the Project to demonstrate the progress that has been made to date and the potential value of Sorby Hills to the local stakeholders. In addition to progressing Sorby Hills, the Company has executed several strategic growth initiatives throughout the year. The acquisition of the Manbarrum Zinc-Silver-Lead Project, located 25m east of Sorby Hills, and the commencement of drilling at our highly prospective Eight Mile Creek Project, located immediately south of Sorby Hills, are two such initiatives that demonstrate high potential to generate long-term value for shareholders. Looking forward, our strategy over the coming 12 months is built around delivering a robust Definitive Feasibility Study underpinned by tendered capital and operating costs that will allow us to move efficiently and confidently towards securing project finance and commencing construction works at Sorby Hills. The Board is grateful for the support of all shareholders and would like to commend all staff on their hard work and dedication during the year. We look forward to an exciting year ahead. Gary Comb ChairmanBOAB METALS LIMITEDMANAGING DIRECTOR’S REPORT ________________________________________________________ Throughout the 2022 financial year, the Boab team has focused on workstreams required to bring about a Final Investment Decision on our 75% owned Sorby Hills Lead-Silver Project. Our team has achieved key project execution milestones to ensure we remain on track to be in position, subject to a Final Investment Decision, to commence major Project construction work in Q2 calendar year 2023 following the lifting of the wet season in the Kimberley region. Highlights have included: • A 78% increase in Measured Resources to 12.6Mt, further enhancing the geological confidence in our Sorby Hills deposit. • Completion of a comprehensive Metallurgical program that built up extensive previous testwork and confirmed high metal recoveries and provide robust input for the final process plant design criteria. • Execution of a Port Access and Services Agreement with Cambridge Gulf Limited for Wyndham Port securing a critical element of the path to market for the concentrates that will be produced at Sorby Hills. • Execution of a Power Purchase Heads of Agreement with Horizon Power that incorporates renewable energy from the Ord River Hydroelectric Power Plant into a one-stop solution that simultaneously provides secure power, positive environmental outcomes and economic benefit to the Sorby Hills Project. • Execution of a multi-stream approval strategy that has successfully derisked the Project construction schedule by decoupling Early Works approvals from those required for the commencement of Major Works. • Completion of a tender for the process plant EPC with submissions received from a suite of high-quality engineering firms providing real-time competitive pricing data and toward final contract award. • Receipt of strong offtake proposals from a host of international and domestic lead concentrate smelters and traders, demonstrating the depth of market demand for our Sorby Hills Lead-Silver concentrate. With respect to project funding, we were delighted to host NAIF together with a number of commercial mining banks on a site visit of the Sorby Hills Project giving them a unique first-hand experience that we believe will provide potential lenders confidence in Boab’s ability to execute the Project and demonstrate the positive impact the Project will have on the local community. We look forward ramping up our engagement with financiers over the first half of the coming financial year. Outside of Sorby Hills, Boab completed the strategic acquisition of the Manbarrum Zinc-Silver- Lead asset located 25km east of the Sorby Hills. The acquisition was both a logical step and an exciting strategic opportunity for the Company to grow its Resource base and further establish itself as a long-term mineral producer and economic contributor to the east Kimberley region. Annual Report for the Year Ended 30 June 2022 3 3 Annual Report for the Year Ended 30 June 2022 MANAGING DIRECTOR’S REPORT ________________________________________________________ I’d like to take this opportunity to acknowledge all of our staff and their families for their continued hard work. Against the backdrop of a volatile economic environment and unpredictable working conditions, I am proud of the milestones the Company has achieved and the progress that has been made. I would like to also extend my appreciation to my fellow Board members for their invaluable guidance over the 2022 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 4 BOAB METALS LIMITED 4 BOAB METALS LIMITED REVIEW OF OPERATIONS ________________________________________________________ OVERVIEW During the Financial Year to 30 June 2022, Boab has continued to focus on 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. Sorby Hills is the largest undeveloped, near-surface Lead- Silver-Zinc deposit in Australia. Key activities undertaken during the period included: Progressing the Sorby Hills Definitive Feasibility Study (“DFS”) • Completion of the Phase V diamond and RC drilling campaign at Sorby Hills. • Finalised Sorby Hills DFS metallurgical test work. • Updated Mineral Resource Estimate for Sorby Hills. Progressing Sorby Hills Project Execution Workstreams • Execution of a Head of Agreement with Horizon Power with respect to a Power Purchase Agreement. • Execution of an Access and Service Agreement with Cambridge Gulf with respect to Wyndham Port. • Securing amendments to the Project’s existing environmental approvals to allow for an increase in the permitted Development Area. • Completion of the Tender of the Process Plant EPC Contract. Progressing Sorby Hills Project Finance and Offtake • Site visit undertaken by Northern Australia Infrastructure Facility (“NAIF”) and commercial banks. • Competitive tender for the Boab’s share of Lead-Silver Concentrate from Sorby Hills commenced with strong offers being received from a suite of domestic and international traders and smelters. Progressing Growth opportunities • Acquisition of the Manbarrum Zinc-Silver-Lead Project strategically located 25km east of Sorby Hills. • Maiden drilling of the highly prospective Eight-Mile Creek Project located immediately south and along strike of the Sorby Hills Project. Annual Report for the Year Ended 30 June 2022 5 5 Annual Report for the Year Ended 30 June 2022 REVIEW OF OPERATIONS ________________________________________________________ Completion of Phase V Diamond and RC Drilling Campaign Boab’s Phase V drilling program was designed to expand the proposed production capacity at Sorby Hills for the purposes of the DFS. At the conclusion of the program, 59 diamond drill holes (5,284m) and 15 RC drill holes (888m) were completed across the deposit. The Phase V drilling program proved successful, and the assay results confirmed extended and shallow mineralisation on the margins of the current Sorby Hills open pit designs and at high Lead Silver grades within the Beta Deposit. It is anticipated these results will have a positive impact on both the confidence and size of the DFS mining inventory. Selected results from the Phase V Program (ASX releases 25 August 2021, 28 September 2021 and 1 February 2022) include: Omega Deposit SHMD_066: 5m @ 6.77% Pb & 26g/t Ag from 100m; SHMD_074: 5m @ 7.08% Pb & 91g/t Ag from 108m; and SHMD_099: 5m @ 5.37% Pb & 16g/t Ag from 90m. Beta Deposit SHMD_088: 6m @ 5.37% Pb & 21g/t Ag from 50m; SHMD_091: 12m @ 5.82% Pb & 24g/t Ag from 35m; and SHMD_104: 6m @ 3.89% Pb & 13g/t Ag from 65m. Alpha Deposit SHDD_059: 4.5 m @ 2.39% Pb & 101g/t Ag from 31m. Beta Deposit SHMD_111: 26m @ 2.58% Pb & 25g/t Ag from 53m; Incl. 2m @ 7.50%Pb & 58g/t Ag from 71m; SHRC_123: 27m @ 3.47% Pb & 37g/t Ag from 34m; Incl. 3m @ 7.04% Pb & 95g/t Ag from 35m; 5m @ 5.60% Pb & 44g/t Ag from 45m; 6m @ 4.50% Pb & 49g/t Ag from 55m; SHRC_124: 17m @ 3.51% Pb & 46g/t Ag from 49m; and Incl. 8m @ 6.93% Pb & 90g/t Ag from 57m. Wildcat Prospect SHMD116: 26m @ 1.39% Pb & 17g/t Ag from 14m; Incl. 5m @ 2.12% Pb & 27g/t Ag from 15m; and SHRC_129: 6m @ 5.37% Pb & 21g/t Ag from 12m. 6 BOAB METALS LIMITED 6 BOAB METALS LIMITED REVIEW OF OPERATIONS ___________________________________________________ Figure 1 - Plan view of the Sorby Hill deposits showing drill hole locations, PFS proposed pit outlines and Resource classification. Sorby Hills DFS Metallurgical Test Work Results The DFS Metallurgical Test Work Program was launched on the back of the successful Phase IV drilling program with the primary objective of delivering robust results to underpin the Sorby Hills DFS Process Plant design criteria. Approximately 1,420kg from 399m of half core was recovered from 35 HQ diamond holes drilled during the Phase IV and V programs and then combined and composited into Variability Samples, Schedule Composites and Master Composites. Annual Report for the Year Ended 30 June 2022 7 7 Annual Report for the Year Ended 30 June 2022 REVIEW OF OPERATIONS ________________________________________________________ Samples and Composites were utilised for a range of test work including Flotation, Comminution, Mineralogy, Heavy Liquid Separation, Tailings Thickening, Concentrate Filtration and Concentrate Analysis. Flotation results (ASX release 19 November 2021) confirmed recoveries of: • up to 95%Pb (Fresh Ore) and 90%Pb (Oxidised Ore); and • up to 87%Ag (Fresh Ore) and 92%Ag (Oxidised Ore). The DFS Metallurgical Test work Program builds upon a significant body of previous metallurgical test work undertaken by Boab since acquiring the Sorby Hills Project in 2018 and test work by others dating back to 1979. Updated Mineral Resource Estimate for Sorby Hills Boab’s Pre-Feasibility Study (“PFS”) confirmed Sorby Hills as a low-risk, high value project underpinned by a large near-surface lead-silver-zinc deposit comprising a Mineral Resource of 44.1Mt at 3.3% Pb, 38 g/t Ag and 0.5% Zn (ASX release 2 June 2020), and Proved and Probable Reserves of 13.6Mt at 3.6% Pb, and 40 g/t Ag (ASX release 25 August 2020). On the back of the positive PFS results, Phase IV and Phase V drilling programs were designed to primarily advance the Project towards DFS status. An interim Mineral Resource update incorporating the results of the Phase IV drilling was released in April 2021 (ASX release 6 April 2021) and delivered 44.9Mt at 3.2% Pb, 0.5% Zn and 37g/t Ag. The updated Mineral Resource Estimate (ASX release 17 December 2021) was undertaken by CSA Global and upgraded the PFS Mineral Resource Estimate via the inclusion of results from both Phase IV and Phase V drilling programs. Highlights of the estimate included: • A 5.6Mt increase (+78%) in Measured Resources versus the Mineral Resource Estimate that underpinned the PFS. • Inaugural 1.0Mt Indicated Resource reported for the Beta Deposit. It is anticipated that the Beta Deposit will now form part of the Sorby Hills DFS Mining Inventory where previously it had been excluded. • Total Resources to 47.3Mt at 4.1% Pb Eq (3.1% Pb, 35g/t Ag) and 0.4% Zn containing 1.47Mt Pb, 53 Moz Ag and 0.21kt Zn representing a 14% increase in Measured and Indicated Resources to the PFS Resource. A comprehensive breakdown of the Mineral Resource by Resource classification and deposit is detailed in Table 1 and Table 2. 8 BOAB METALS LIMITED 8 BOAB METALS LIMITED REVIEW OF OPERATIONS ________________________________________________________ Table 1: Updated Sorby Hills Mineral Resource Estimate - Pb Domains only. Grade Contained Metal Classification by Deposit Mt Pb % Zn % Ag Pb Eq. g/t % 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 Indicated Inferred Sub Total Total Resource Measured Indicated Inferred Total 0.6 5.3% 1.0% 23 6.0% 0.6 5.3% 0.1% 23 6.0% 1.4 1.3 3.8% 0.3% 19 4.3% 3.4% 0.3% 21 4.0% 2.7 3.6% 0.3% 20 4.2% Pb kt 31 31 52 44 97 Zn kt Ag Pb Eq. koz kt 6 6 4 4 8 427 427 859 862 35 35 60 52 1,720 112 8.5 5.8 2.9 3.3% 0.4% 37 4.3% 3.5% 0.4% 34 4.4% 2.7% 0.4% 26 3.4% 279 205 76 32 25 13 9,995 6,331 2,414 366 259 97 17.2 3.3% 0.4% 34 4.2% 566 71 18,948 730 2.8 2.1 4.1% 0.3% 75 6.2% 112 3.2% 0.5% 38 4.3% 68 16.2 2.5% 0.5% 27 3.2% 402 9 11 75 6,668 2,617 170 91 14,039 523 21.1 2.8% 0.4% 34 3.8% 590 96 24,090 799 0.7 0.8 2.6% 0.5% 41 3.8% 3.6% 1.2% 86 6.0% 1.5 3.1% 0.9% 64 4.9% 18 27 45 4 9 923 2,052 13 2,975 26 44 71 1.0 3.2 4.1% 0.2% 42 5.3% 42 3.4% 0.4% 43 4.6% 109 4.2 3.6% 0.4% 43 4.8% 151 2 14 17 1,382 54 4,474 148 5,856 202 12.6 3.5% 0.4% 43 4.7% 11.0 3.4% 0.4% 34 4.4% 23.6 2.7% 0.5% 31 3.6% 444 377 645 45 46 17,521 12,114 117 23,406 596 482 848 47.3 3.1% 0.4% 35 4.1% 1,465 207 53,042 1,925 Note: Tonnes and Grade are rounded. Reported at a 1.0% Pb Cut-Off. Discrepancy in calculated Contained Metal is due to rounding. See ASX release 17 December 2021 for Lead Equivalent calculation method. Lead Equivalent calculation excludes Zinc. Annual Report for the Year Ended 30 June 2022 9 9 Annual Report for the Year Ended 30 June 2022 REVIEW OF OPERATIONS ___________________________________________________ Table 2: Sorby Hills Mineral Resource Estimate - Alpha Deposit Zn Domains only. Classification by Deposit Alpha Indicated Inferred Sub Total Mt 2.1 2.1 4.2 Pb % 0.3 0.4 0.5 Zn % 2.8 2.3 2.5 Ag g/t 22 21 22 Pb kt 6 8 Zn kt 59 48 Ag koz 1,485 1,418 15 107 2,971 Note: Tonnes and Grade are rounded. Reported at a 1.0% Pb Cut-Off Discrepancy in calculated Contained Metal is due to rounding. Note that high grade results from the RC portion of the Phase V drill program at Beta deposit were not received in time to be incorporated into the updated Mineral resource Estimate. The results will be included in future updates. Heads of Agreement executed with Horizon Power to Supply Cleaner and Cheaper Power to the Sorby Hills Project. During the year, Boab entered into a Heads of Agreement with Horizon Power with respect to a Power Purchase Agreement to supply electricity to Sorby Hills (ASX release 22 April 2022). The proposed one-stop solution would simultaneously provide secure power, positive environmental outcomes and economic benefit to the Sorby Hills Project. Key Indicative Terms of the Heads of Agreement include: • Delivery of firm power over a 10-year term with an option for Boab to extend; • Cleaner, cheaper electricity sourced from Ord River hydroelectric plant to provide majority of the energy demand of the Project; and • On-site diesel plant to provide 100% back-up power. Preliminary supply modelling indicates that the integrated hydro-diesel power solution will provide material economic benefit to the Project versus the Build Own Operate “BOO” diesel power solution contemplated in the Sorby Hills Pre-Feasibility Study. Boab and Horizon Power continue to advance technical and commercial discussions with a view to executing a formal Power Purchase Agreement prior to a Decision to Mine. Port Access Agreement During the period Boab announced that it had executed an agreement with Cambridge Gulf Limited (“Cambridge Gulf”) with respect to access and stevedoring services at Wyndham Port, the port through which concentrates produced at the Sorby Hills will be stored, loaded and shipped to customers (ASX release 31 March 2022). The Agreement extends to April 2034, with an automatic rollover each 12-month period thereafter. 10 BOAB METALS LIMITED 10 BOAB METALS LIMITED 11 REVIEW OF OPERATIONS ________________________________________________________ Annual Report for the Year Ended 30 June 2022 11 Obligations of either party under the agreement are subject to customary conditions precedent including the obtainment of any outstanding environmental approvals, consents, permits or other authorisations required by any government body, department or authority. The Company and Cambridge Gulf are working closely with each other and the relevant stakeholders to finalise these workstreams. Wyndham Port is located 150 km by existing sealed road from Sorby Hills and is the only deep-water port between Broome and Darwin. The facility is a vital link within Northern Australia’s primary and secondary industries’ supply chains. The Port is designed for the export of metal concentrates. Figure 2 - Location of the Sorby Hills Project relative to Wyndham Port and the Ord River Hydroelectric Plant Annual Report for the Year Ended 30 June 2022REVIEW OF OPERATIONS ________________________________________________________ EPC Contract Tender The Sorby Hills DFS is investigating an expanded process plant capacity at Sorby Hills versus the 1.5Mpta incorporated in the PFS. Tenders for the EPC Contract covering the upsized process plant and non-process infrastructure were received from a range of experienced engineering firms (ASX release 31 May 2022). The quality of the tenders received, and the pricing of the EPC Contract has been competitive and in line with expectations. The Company is currently working with a short-list of tenderers to refine their submissions ahead of commencing contract formation with the preferred party. The tendered pricing will underpin capital costs included in the DFS, thus providing a higher level of accuracy. Permitting Throughout the Sorby Hills DFS, Boab has adopted a multi-stream approvals strategy to de-risk the Project execution schedule. Specifically, Site Establishment and Early Works approvals streams have been decoupled from the Main Works approval stream to afford Boab flexibility to commence and complete on-site pre-construction work. During the period (ASX release 1 July 2022), Boab received confirmation that the Western Australian Environment Protection Authority (“EPA”) had approved amendments to Boab’s existing EPA approval, a key regulatory prerequisite for the commencement of Site Establishment and Early Works. The amendments to the approval related primarily to an increase in the permitted “development area”. The increase will allow for: • early establishment of an all-weather access to the Project; • development of a materials laydown and hardstand area to facilitate construction of the expanded processing plant and associated infrastructure; and • construction of an accommodation village at the Project site. Sorby Hills Site Visit undertaken by NAIF and Commercial Banks Representatives from the Federal Government’s Northern Australia Infrastructure Facility (“NAIF”), together with representatives from a number of Australian and international commercial mining banks, joined Boab management on a two-day site visit of the Sorby Hills Project and surrounding infrastructure including Kununurra township and Wyndham Port, as part of their ongoing due diligence of the Project (ASX release 7 October 2021). NAIF is an Australian Federal Government organisation with an aggregate of A$5 billion of debt finance which may be lent on concessional terms to support development that generates public benefit for Northern Australia. The site visit followed positive discussions held with potential project lenders earlier in the year and provided attendees with a unique first-hand experience that will provide confidence in Boab’s ability to execute the Project. 12 BOAB METALS LIMITED 12 BOAB METALS LIMITED 13 REVIEW OF OPERATIONS ________________________________________________________ Annual Report for the Year Ended 30 June 2022 13 Acquisition of the Strategically Located Manbarrum Zinc-Silver-Lead Project On 21 July 2021, Boab entered into an agreement with Todd River Metals Pty Ltd to acquire 100% of the Manbarrum Zinc-Silver-Lead Project (ASX release 21 July 2021). The acquisition was completed on 31 August 2021. The total consideration for the acquisition included: • 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 completion of a Pre-Feasibility Study on the Manbarrum Project. The Manbarrum Project is located 25 kilometres east of Sorby Hills and covers geology that is genetically related to the geology at Sorby Hills, therefore allowing for an effective transfer of knowledge to maximise both exploration and Resource development potential. While the Company remains focussed on the development of the Sorby Hills Project, the strategic acquisition of the Manbarrum Project provides an opportunity to investigate a broader regional production strategy that leverages the clear synergies between the two projects. Figure 3 - Location of the Manbarrum Project relative to the Sorby Hills Project and the recently completed road upgrades connecting the two projects. Annual Report for the Year Ended 30 June 2022REVIEW OF OPERATIONS ___________________________________________________ Figure 4 - New intersection to access Sorby Hills Project 14 BOAB METALS LIMITED 14 BOAB METALS LIMITED FINANCIAL STATEMENTS Directors’ Report Auditor’s Independence Declaration Consolidated Statement of Profit or Loss and other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Shareholder Information 15 Annual Report for the Year Ended 30 June 2022DIRECTORS’ REPORT ________________________________________________________ FINANCIAL AND OPERATING REVIEW FINANCIAL REVIEW The Group began the financial year with a cash reserve of $12,896,960. During the year, total exploration expenditure incurred by the Group amounted to $4,436,892 (2021: $3,822,870). In line with the Group’s accounting policies, all exploration expenditure incurred in the ordinary course of operations was expensed. The result for the year was an operating loss after income tax of $6,804,523 (2021: $5,038,982). As at 30 June 2022, available cash funds totalled $6,317,527 (2021: $12,896,960). OPERATING RESULTS Summarised operating results for the year are as follows: Geographic Segments Australia Revenues and (loss) from ordinary activities before income tax expense Colombia Revenues and profit from ordinary activities before income tax expense Revenue/(Loss before income tax) Shareholder Returns Basic Loss per share (cents per share) SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS 2022 Revenues $ Results $ 251,491 (6,787,157) 1 (17,366) 251,492 (6,804,523) 2022 (4.44) 2021 (3.55) During the year there were no significant changes in the state of affairs of the Group other than as disclosed in this report. Annual Report for the Year Ended 30 June 2022 16 16 BOAB METALS LIMITED DIRECTORS’ REPORT ________________________________________________________ MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR There were no matters subsequent to the end of the financial year. LIKELY DEVELOPMENTS AND EXPECTED RESULTS The Group will continue exploration and development activities and to assess commercial opportunities for corporate growth, including the acquisition of interests in projects, as they arise. Due to the unpredictable nature of these opportunities, developments may occur at short notice. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group is subject to substantial environmental regulation regarding its exploration activities. The Group endeavours to maintain an appropriate standard of environmental care through awareness of, and compliance with, new and existing environmental legislation. The Directors are not aware of any breach of environmental legislation for the year under review. RISK MANAGEMENT The Board is responsible for ensuring that risks and opportunities are identified on a timely basis and that activities are aligned with these. At this stage of the Company’s development the Board has not established a separate risk management committee 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’ objectives are aligned with Board identified risks. Mechanisms include board approval of a strategic plan (designed to meet stakeholders’ needs and reduce business risk), and Board approved operating 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 responsibilities individually, and as a Board, for the benefit of all Company stakeholders. That involves recognition 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 activities, the stage of its development and the cost of strict and detailed compliance with all of the recommendations, it has adopted a range of modified systems, procedures and practices which enable it to meet the principles of good corporate governance. The Groups’ practices are consistent with the guidelines and where these do not directly relate to the recommendations in the guidelines the Group considers that its adopted practices are appropriate. Corporate Governance policies can be found on the Company website. 17 BOAB METALS LIMITED 17 Annual Report for the Year Ended 30 June 2022 DIRECTORS’ REPORT ________________________________________________________ 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 liabilities that may arise from an officer’s position, except for conduct involving a wilful breach of duty or improper use of information or position to gain personal advantage. The contract of insurance prohibits the disclosure of the nature of the liabilities and the amount of premium. DIRECTORS MEETINGS The following table sets out the number of directors’ meetings held during the financial year and the number of meetings attended by each director while they held the position. During the financial year, 5 board meetings were held (2021: 5). Directors Gary Comb Simon Noon Richard Monti Andrew Parker Board of Directors Eligible Attended 5 5 5 5 5 5 5 5 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 operating base metal mines. Interests in Shares, Options and Performance Rights 560,237 Ordinary Shares. 160,000 Class “D” Unlisted Performance Rights Other Directorships in Listed Entities in the past three years Ironbark Zinc Limited and Cyprium Metals Limited. 18 Annual Report for the Year Ended 30 June 2022 18 BOAB METALS LIMITED DIRECTORS’ REPORT ________________________________________________________ INFORMATION ON DIRECTORS (CONTINUED) SIMON NOON MAICD, AFAIM Managing Director & CEO Simon was appointed 19 October 2013. Simon is an experienced executive having spent the past 13 years managing Public Resources Companies. Simon has a strong background in strategic management, business planning, finance and capital raising across a variety of commodities. Simon’s experience includes managing Groote Resources Ltd from a Market Cap under $10M to market highs in excess of $200M. After leaving Groote, Simon co-founded West Rock Resources Ltd where he held the position of Managing Director until the company was acquired by Boab Metals Ltd in 2013. As Managing Director of West Rock, Simon secured and operated joint ventures and strategic alliances with mid and top tier miners. Since his appointment in 2013, Simon has managed the Company’s exploration and evaluation of a range of projects across Australia and South America. Most notably, Simon led the Company’s transformative acquisition of Sorby Hills in Western Australia in 2018. Over the past 4 years, Simon has overseen the rapid development of Sorby Hills including a 50% increase in the size of the Mineral Resource and the delivery of a high-quality Pre-Feasibility Study detailing the Project’s low risk and robust economics. Simon is a passionate member of the WA resources industry, a member of the Australian Institute of Company Directors and an Associate Fellow of the Australian Institute of Management. Interests in Shares, Options and Performance Rights 1,882,000 Ordinary Shares Other Directorships in Listed Entities in the past three Years Nil. 19 BOAB METALS LIMITED 19 Annual Report for the Year Ended 30 June 2022 DIRECTORS’ REPORT ________________________________________________________ RICHARD MONTI BSc (Hons), Grad Dip AppFin., MAusIMM Non-Executive Director Richard was appointed 12 October 2009 and resigned as Non-Executive Chairman on 6 March 2020, from this date Richard assumed the role of Non-Executive Director. Richard is a geologist with a successful career of over thirty years in the international mineral resource industry resulting in broad industry knowledge and strong strategic planning capabilities. Richard has over forty-six director-years’ experience on thirteen ASX and TSX listed mining and exploration 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, Options and Performance Rights 1,324,982 Ordinary Shares. Other Directorships in Listed Entities in the past three years Zinc of Ireland NL, Black Dragon Gold, Alto Metals Limited and Caravel Minerals Limited. ANDREW PARKER LLB Non-Executive Director Andrew was appointed 12 October 2009, and holds a law degree from the University of Western Australia and has significant experience in the exploration and mining industry and a wealth of expertise 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 position of Managing Director until 2008. Interests in Shares, Options and Performance Rights 369,005 Ordinary Shares. Other Directorships in Listed Entities in the past three years Widgie Nickel Limited. JERRY MONZU FGIA, CPA, Bbus Company Secretary Jerry is a corporate executive with over 25 years’ experience in corporate governance, finance and accounting across various industry sectors with Australia and globally, acting as Company Secretary, Chief Financial Officer and Director of several private and listed ASX, JSE and AIM companies throughout his career. Annual Report for the Year Ended 30 June 2022 20 20 BOAB METALS LIMITED DIRECTORS’ REPORT ________________________________________________________ REMUNERATION REPORT - AUDITED Our remuneration report is set out under the following main headings: PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION; DETAILS OF REMUNERATION; SERVICE AGREEMENTS; SHARE-BASED COMPENSATION; and ADDITIONAL INFORMATION. The information provided under headings A-E includes disclosures that are required under Accounting 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 remuneration policy of the Group aligns Directors and Executives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Group’s financial results. The Board believes the policy is appropriate and effective in its ability to attract and retain high calibre Executives and Directors. The Board’s policy for determining the nature and amount of remuneration for Directors and Executives of the Group is as follows:  All Executives receive a base salary (based on factors such as experience) plus statutory superannuation.  The Board reviews Executive packages with reference to the Group’s performance, Executive performance and information from relevant industry sectors and comparable listed companies. Independent external advice is sought where required.  The Board may exercise discretion in relation to approving incentives, bonuses, and the issue of options.  All remuneration paid to Directors and Executives is valued at the cost to the Group and expensed. The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at the Annual General Meeting (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 Executive remuneration packages. These performance rights have various vesting conditions based on market and operational hurdles being met. 21 BOAB METALS LIMITED 21 Annual Report for the Year Ended 30 June 2022 DIRECTORS’ REPORT ________________________________________________________ REMUNERATION REPORT - AUDITED (CONTINUED) Group Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration The Group’s remuneration policy encourages the alignment of personal and shareholder interests through the issue of options to Directors and Executives. The Board believes this policy is effective in increasing shareholder wealth. The Group currently benchmarks remuneration paid against other peer group companies and the Board acts in its capacity as the Remuneration Committee in assessing Executive remuneration. The Company did not use any external remuneration consultants in the financial year. Voting and comments on the Remuneration Report at the 2021 Annual General Meeting At the Company’s 2021 Annual General Meeting (“AGM”), a resolution to adopt the 2021 remuneration report was put to a vote and passed unanimously on a show of hands with proxies received also indicating majority. 95.04% of validly appointed proxies were in favour of adopting the remuneration report. No comments were made on the remuneration report at the AGM. B. DETAILS OF REMUNERATION Details of the remuneration 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 operations of the Group, no other employees are required to have their remuneration disclosed in accordance with the Corporations Act 2001. Annual Report for the Year Ended 30 June 2022 22 22 BOAB METALS LIMITED DIRECTORS’ REPORT ________________________________________________________ REMUNERATION REPORT - AUDITED (CONTINUED) Salary & Fees $ Non- Monetary(1) $ Superannuation $ Options/ Performance Rights/Reversal of Performance Rights Expense(3) $ Total $ Proportion of remuneration performance related 100,000 50,000 - 50,000 11,187 4,750 (11,778) 8,040 99,409 112,790 - 7% 320,000 283,539 24,963 56,280 27,500 25,935 (55,340) 91,339 317,123 457,093 48,000 40,200 - - 4,800 3,819 (11,529) 29,401 41,271 73,420 Director G. Comb 2022 2021 S. Noon 2022 2021 R. Monti 2022 2021 A. Parker 2022 48,000 - 4,800 (9,223) 43,577 2021 D. English(2) 2022 2021 Totals 2022 2021 40,200 - 3,819 28,480 72,499 199,480 169,615 9,581 (9,581) 19,304 16,113 199,863 9,340 204,649 (9,340) 715,480 583,554 15,382 115,861 67,591 54,436 (97,210) 166,600 701,243 920,451 (1) Relates to the movement in leave provisions for the period. (2) D. English resigned. His last day with the company was on 6 January 2022, salary payments are reflected up to this period. (3) During the year Share based Payments expense previously recognised has been reversed due to the Performance rights not vesting. (See Note 29). No retirement benefits are payable post-employment under the Group’s executive services agreements. 23 BOAB METALS LIMITED - 20% - 40% - 39% - 5% 23 Annual Report for the Year Ended 30 June 2022 DIRECTORS’ REPORT ________________________________________________________ REMUNERATION REPORT - AUDITED (CONTINUED) C. SERVICE AGREEMENTS Material terms of the Executives service agreements are as follows: Gary Comb - Executive Chairman • Remuneration payable of $100,000 per annum plus statutory superannuation; • The right to participate in the Company’s Employee Share Incentive Plan as approved by the Board; and • The right to resign with no formal resignation period. Simon Noon - Managing Director • Remuneration payable of $320,000 per annum plus statutory superannuation; • Either party may terminate the agreement without cause on three months’ written notice; • The right to participate in the Company’s Employee Share Incentive 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 Monti - Non-Executive Director • Remuneration payable of $48,000 per annum plus statutory superannuation; • The right to participate in the Company’s Employee Share Incentive Plan as approved by the Board; and • The right to resign with no formal resignation period. Andrew Parker - Non-Executive Director • Remuneration payable of $48,000 per annum plus statutory superannuation; • The right to participate in the Company’s Employee Share Incentive Plan as approved by the Board; and • The right to resign with no formal resignation period. David English - Chief Operating Officer - (Resigned 6 January 2022) • Remuneration payable of $350,000 per annum plus statutory superannuation; • Either party may terminate the agreement without cause on three month’s written notice • The right to participate in the Company’s Employee Share Incentive Plan as approved by the Board. D. SHARE-BASED COMPENSATION During the year no additional compensation was issued to Directors and Key Management Personnel (2021: 280,000 Performance Rights). No shares were issued to Directors upon exercise of remuneration options (2021: 142,699 ordinary shares). Annual Report for the Year Ended 30 June 2022 24 24 BOAB METALS LIMITED DIRECTORS’ REPORT ________________________________________________________ REMUNERATION REPORT - AUDITED (CONTINUED) Performance Income as a Proportion of Total Compensation No performance-based bonuses were paid during the year (2021: Nil). E. ADDITIONAL INFORMATION Movements in Shares Movement in the number of ordinary shares in the Company held (directly, indirectly or beneficially) by each Director, including their related parties, is shown below. There were no shares issued as part of Director remuneration during the year (2021: 126,903). KMP G Comb R. Monti S. Noon A. Parker D.English (2) KMP G Comb R. Monti S. Noon A. Parker D. English Held at 1 July 2021 560,237 1,324,982 1,817,119 369,005 - 4,071,343 Movement Held at 30 June 2022 560,237 - 1,324,982 - 64,881(1) 1,882,000 369,005 - - - 4,136,224 64,881 Movement Held at 1 July 2020 360,237 200,000 216,231 1,108,751 657,119 1,160,000 153,635 215,370 - - 2,684,121 1,387,222 Held at 30 June 2021 560,237 1,324,982 1,817,119 369,005 - 4,071,343 (1) Movement relates to shares purchased on market. (2) David English resigned on 6 January 2022, no shares were held by Mr English either directly or beneficially as at his resignation date. 25 BOAB METALS LIMITED 25 Annual Report for the Year Ended 30 June 2022 DIRECTORS’ REPORT ________________________________________________________ REMUNERATION REPORT - AUDITED (CONTINUED) Movement in Options There were no KMP options on issue during the financial year ended 30 June 2022. The options on issue and converted in the 2021 financial year are as per below: Fair Value of options exercised in the 2021 financial year. KMP G Comb R. Monti S. Noon A. Parker D. English No of options Exercised - 237,669 424,000 193,333 - 855,002 No of shares Issued - 116,231 177,118 73,633 - 366,982 Amount Paid $ - 29,126 35,250 12,500 - 76,876 Fair Value on Exercise $ - 23,178 44,453 20,635 - 88,266 The value of options exercised was calculated at the market price on the date of exercise after deducting the price paid on the exercise the options. The number of shares issued differs from options exercised due to the cashless issue of shares. KMP G. Comb R. Monti S. Noon A. Parker D. English Held at 1 July 2020 Other Changes 1 Held at 30 June 2021 Vested at 30 June 2021 - 237,669 424,000 193,333 - 855,002 - - (237,669) (424,000) (193,333) - (855,002) - - - - - - - - - - - (1) Shows options converted to ordinary shares in the year. Annual Report for the Year Ended 30 June 2022 26 26 BOAB METALS LIMITED DIRECTORS’ REPORT ________________________________________________________ REMUNERATION REPORT - AUDITED (CONTINUED) Movements in Performance Rights Movement in the number of Performance Rights in the Company held (directly, indirectly or beneficially) by Directors and Key Management Personnel, including their related parties, during the reporting period is as follows: KMP G. Comb R. Monti S. Noon A. Parker D. English(2) Held at 1 July 2021 420,000 200,000 960,000 160,000 280,000 2,020,000 Other Changes (260,000)1 (200,000)1 (960,000)1 (160,000)1 (280,000)2 (1,860,000) Held at 30 June 2022 160,000 - - - - 160,000 Vested at 30 June 2022 - - - - - - (1) These Performance Rights were cancelled on 30 June 2022 as the milestones attaching to them could not be met. (2) Mr English resigned on 6 January 2022 and held 280,000 Performance Rights up to the date of his resignation, these Performance Rights were cancelled on his resignation date. KMP G. Comb R. Monti S. Noon A. Parker D. English(2) Held at 1 July 2020 520,000 300,000 1,440,000 240,000 - 2,500,000 Other Changes (100,000)(1) (100,000)(1) (480,000)(1) (80,000)(1) 280,000(2) (480,000) Held at 30 June 2021 420,000 200,000 960,000 160,000 280,000 2,020,000 Vested at 30 June 2021 - - - - - - (1) These Performance Rights were converted into Ordinary Shares in the 2021 financial year as the attaching Performance Milestones were met. (2) Mr English was issued these Performance Rights (with various vesting conditions) during the 2021 financial year. END OF THE REMUNERATION REPORT 27 BOAB METALS LIMITED 27 Annual Report for the Year Ended 30 June 2022 28 DIRECTORS’ REPORT ________________________________________________________ Annual Report for the Year Ended 30 June 2022 28 OPTIONS OVER ORDINARY SHARES There were no options on issue as at the date of the Directors Report. 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 International Audit and Consulting Pty Ltd during the financial year. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on the following page. Signed in accordance with a resolution of the Directors. Gary Comb Chairman 2 September 2022 Details Performance Rights Exercise Price Grant Date Expiry Date Class "D" Performance Rights 160,000 Nil 06/03/2020 6/03/2025 160,000 BOAB METALS LIMITEDAUDITOR’S INDEPENDENCE DECLARATION ________________________________________________________ PO Box 1908 West Perth WA 6872 Australia Level 2, 40 Kings Park Road West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au 2 September 2022 Board of Directors Boab Metals Limited 4 Clive Street, WEST PERTH, WA 6005 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 statements of Boab Metals Limited for the year ended 30 June 2022, 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 faithfully STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (An Authorised Audit Company) Martin Michalik Director Liability limited by a scheme approved under Professional Standards Legislation 29 BOAB METALS LIMITED 29 Annual Report for the Year Ended 30 June 2022 FINANCIAL REPORT CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2022 ________________________________________________________ Revenue from Continuing Operations Expenditure Exploration Expenses Salaries and Employee Benefits Expenses Depreciation Expenses Corporate Expenses Occupancy Expenses Consulting Expenses Administration Expenses Share Based Payments Depreciation of Right of Use Assets Interest Paid on Leased Liabilities Write Down of Investment 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 Translation Reserve Total Comprehensive (Loss) (Loss) Attributed to the Members Total Comprehensive (Loss) Attributed to the Members Basic and Diluted Loss per Share for Loss Attributable to the Ordinary Equity Holders of the Company (Cents per Share) Notes 5 6 2022 $ 2021 $ 251,492 515,628 (4,436,892) (3,822,870) (858,676) (638,661) 6,12 (17,087) (11,908) 29 6,13 13 6,10 6 7 (231,044) (181,548) (63,676) (33,522) (180,115) (269,364) (274,433) (390,464) 97,210 (186,114) (64,559) (53,598) (2,071) (2,850) (1,024,672) - - 36,289 (6,804,523) (5,038,982) - - (6,804,523) (5,038,982) - - - - - - 20 316 (280,852) (6,804,207) (5,319,834) (6,804,523) (5,038,982) (6,804,207) (5,319,834) 28 (4.44) (3.55) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the Notes to the Financial Statements. Annual Report for the Year Ended 30 June 2022 30 30 BOAB METALS LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022 ________________________________________________________ Current Assets Cash and Cash Equivalents Trade and Other Receivables Prepayments Total Current Assets Non-Current Assets Exploration and Evaluation Assets Investments Other Assets Plant and Equipment ROU Asset Total Non-Current Assets Total Assets Current Liabilities Trade and Other Payables Provisions Lease Liabilities Total Current Liabilities Non-Current Liabilities Lease Liabilities Deferred Tax Liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed Equity Reserves Accumulated Losses Total Equity Notes 2022 $ 2021 $ 8 9 9 10 11 12 13 14 15 16 16 17 18 20 6,317,527 12,896,960 350,051 36,458 362,118 12,778 6,704,036 13,271,856 4,668,040 5,160,560 60,000 74,889 61,800 98,631 60,000 84,849 42,380 44,237 4,963,360 5,392,026 11,667,396 18,663,882 616,271 208,163 69,974 1,291,781 175,879 45,531 894,408 1,513,191 30,220 162,647 192,867 - 169,153 169,153 1,087,275 1,682,344 10,580,121 16,981,538 48,198,398 47,698,398 1,193,159 1,290,053 (38,811,436) (32,006,913) 10,580,121 16,981,538 The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Financial Statements. 31 BOAB METALS LIMITED 31 Annual Report for the Year Ended 30 June 2022 FINANCIAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2022 ________________________________________________________ Issued Capital Share / Option Reserve $ $ 47,698,398 - 1,623,811 - Foreign Currency Translation Reserve $ (333,758) - Accumulated Losses Total $ $ (32,006,913) (6,804,523) 16,981,538 (6,804,523) - - 316 - 316 - - 316 (6,804,523) (6,804,207) 500,000 - - (97,210) - - - - 500,000 (97,210) 2022 Balance at 1 July 2021 (Loss) for the Year Other Comprehensive (Loss) for the Year Total Comprehensive (Loss) for the Year Issue of Shares/Options Share Based Payments Balance at 30 June 2022 48,198,398 1,526,601 (333,442) (38,811,436) 10,580,121 32,980,318 1,653,328 (52,906) (26,967,931) 7,612,809 - - - 2021 Balance at 1 July 2020 (Loss) for the Year Other Comprehensive (Loss) for the Year Total Comprehensive (Loss) for the Year Share/Option Issue Expense Performance Rights converted to Ordinary Shares Issue of Shares 15,145,298 (642,849) 115,200 (115,200) Share Based Payments 100,431 85,683 - - - - - - (5,038,982) (5,038,982) (280,852) - (280,852) (280,852) (5,038,982) (5,319,834) - - - - - - - - 15,145,298 (642,849) - 186,114 Balance at 30 June 2021 47,698,398 1,623,811 (333,758) (32,006,913) 16,981,538 The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Financial Statements. Annual Report for the Year Ended 30 June 2022 32 32 BOAB METALS LIMITED FINANCIAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS AS AT 30 JUNE 2022 ________________________________________________________ Cash Flows from Operating Activities Expenditure on Mining Interests Payments to Suppliers and Employees Receipts from Federal Government "Cash Flow Boost" Interest Received Management Fees Other Income Notes 2022 $ 2021 $ (4,846,003) (3,104,780) (1,984,288) (1,710,704) - 67,648 35,915 21,598 304,033 172,721 1,100 - Net Cash (Outflow) from Operating Activities 27 (6,489,243) (4,553,517) Cash Flows from Investing Activities Proceeds From Disposal of Assets - Colombia Proceeds From sale of Assets - Colombia Payments of Security Deposit – Bank Guarantee Cash Transferred From Security Deposits Payments for Purchase of Property, Plant and Equipment - - 164,985 27,190 (28,300) 40,541 - 436 (36,507) (44,212) Net Cash (Outflow)/Inflow from Investing Activities (24,266) 148,399 Cash Flows from Financing Activities Proceeds From Issues of Shares Proceeds From conversion of options Payment of Share Issue Costs Payments on Lease Liability Net Cash (Outflow)/Inflow from Financing Activities Net (Decrease)/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 - - - 10,240,007 4,851,958 (642,849) (65,924) (55,589) (65,924) 14,393,527 (6,579,433) 9,988,409 12,896,960 2,908,551 - - 8 6,317,527 12,896,960 The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Financial Statements. 33 BOAB METALS LIMITED 33 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation 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 2022. The financial report was authorised for issue in accordance with a resolution of the Board of Directors of Boab Metals Limited 2 September 2022. Boab Metals Limited is a company incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Group is exploration of mineral tenements in Australia and Latin America. (a) BASIS OF PREPARATION This general-purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian Interpretations, and the Corporations Act 2001. (i) Compliance with IFRS Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the financial statements and notes of Boab Metals Limited comply with International Financial Reporting Standards (“IFRS”). (ii) Historical Cost Convention Financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, financial assets and liabilities 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 continuity of normal business activities and realisation of assets and settlement of liabilities in the ordinary course of business. The going concern of the Group is dependent upon maintaining enough funds for its operations and commitments. The Directors continue to monitor the funding requirements of the Group and are confident that funding can be secured as required to enable the Group to continue 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 entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than half of the voting rights. Annual Report for the Year Ended 30 June 2022 34 34 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) (ii) Subsidiaries (continued) The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. 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 acquisition method of accounting is used to account for business combinations by the Group (refer to Note 1(d)). Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with policies adopted by the Group. 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 obligations for its liabilities. Joint control is defined as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Interests in joint ventures are accounted for using the equity method. Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition 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 relating to the joint venture is included in the carrying amount of the investment and is not amortised or tested individually for impairment. Dividends received or receivable from joint ventures are recognised as a reduction in the carrying amount of the investment. Financial statements of the joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring accounting policies in line with those of the Group. After application 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 estimates 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. 35 BOAB METALS LIMITED 35 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (iii) Investment in Joint Operations A joint arrangement occurs whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. When a group entity undertakes its activities under a joint arrangement, the Group as operator, recognises in relation to its interest in a joint arrangement its: liabilities, including its share of any liabilities incurred jointly;  assets, including its share of any assets held jointly;   revenue from the sale of its share of the output arising from the joint operation;  share of the revenue from the sale of the output by the joint operation; and  expenses, including its share of any expenses incurred jointly. The Group accounts for the assets, liabilities, revenues, and expenses relating to its interest in a joint operation in accordance with the Australian Accounting Standards applicable to the certain assets, liabilities, revenues, and expenses. When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a sale or contribution of assets), the Group is considered to be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from the transactions are recognised in the Group’s consolidated financial statements only to the extent of other parties’ interests in the joint operation. When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a purchase of assets), the Group does not recognise its share of the gains and losses until 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 entities are measured using the currency of the primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in Australian dollars, Boab’s functional and presentation currency, unless otherwise stated. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rate at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities 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 attributable to part of the net investment in a foreign operation. Annual Report for the Year Ended 30 June 2022 36 36 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (ii) Transactions and balances (continued) Foreign exchange gains and losses relating 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. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. (iii) Group companies The results and financial position of foreign operations that have a functional currency other than the presentation currency are translated into the presentation currency as follows:  assets and liabilities for each balance sheet presented are translated at the  for each closing rate at the date of that balance sheet; income and expenses income statement and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and  all resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation 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 acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing exchange rate. (d) BUSINESS COMBINATIONS The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. 37 BOAB METALS LIMITED 37 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. (d) (e) (f) (g) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) BUSINESS COMBINATIONS (continued) The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non- controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. Excess consideration transferred and the amount of any non-controlling interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable 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 settlement of any part of cash consideration 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 entity’s incremental borrowing rate (rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions). Contingent consideration 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. SEGMENT REPORTING Operating segments are identified, and segment information disclosed based on internal reports received by the Board. REVENUE RECOGNITION Interest revenue is recognised on a time proportionate basis that considers the effective 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 proportional holding. INCOME TAX The income tax expense or revenue for the year is the tax payable on the current periods taxable income (based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable 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 liabilities and their carrying amounts in the financial statements. Annual Report for the Year Ended 30 June 2022 38 38 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. (g) (h) (i) (j) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) INCOME TAX (continued) Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax laws and rates that have been enacted or substantially 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 settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. IMPAIRMENT OF ASSETS Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation 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 identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. CASH AND CASH EQUIVALENTS For presentation purposes on the cash flow statement, cash and cash equivalents includes cash on hand and deposits held by financial institutions. TRADE AND OTHER RECEIVABLES Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. 39 BOAB METALS LIMITED 39 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. (j) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) TRADE AND OTHER RECEIVABLES (continued) Trade receivables for goods and services are generally due for settlement within 30 days from date of invoice. The group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables would be grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. (k) FINANCIAL INSTRUMENTS (i) Recognition, Initial Measurement and Derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial instruments (except for trade receivables) are measured initially at fair value adjusted by transactions costs, except for those carried “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss. Where available, quoted prices in an active market are used to determine the fair value. In other circumstances, valuation techniques are adopted. Subsequent measurement of financial assets and financial liabilities are described below. Trade receivables are initially measured at the transaction 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 substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, 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 initially measured at fair value adjusted for transaction costs (where applicable). Annual Report for the Year Ended 30 June 2022 40 40 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (ii) Classification and Subsequent Measurement (Continued) Financial assets (continued) For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments, are classified into the following categories upon initial recognition:  amortised cost;   fair value through other comprehensive income (FVOCI); and fair value through profit or loss (FVPL). Classifications are determined by both:  The contractual cash flow characteristics of the financial assets; and  The entities business model for managing the financial asset. Financial assets at amortised cost Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL):   they are held within a business model whose objective 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. After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting 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 initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under AASB 132 Financial Instruments: Presentation and are not held for trading. 41 BOAB METALS LIMITED 41 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 initial recognition 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 liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss. (iii) (iv) All interest-related charges and, if applicable, gains and losses arising on changes in fair value are recognised in profit or loss. Impairment The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised 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 permitted by AASB, which requires expected lifetime losses to be recognised from initial recognition of the receivables. Valuation Techniques In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation techniques to measure the fair value of the asset or liability. The Group selects a valuation 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 characteristics of the asset or liability being measured. Annual Report for the Year Ended 30 June 2022 42 42 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (iv) Valuation Techniques (continued) The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches:  Market approach: valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities. Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.   Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity. Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation 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 information on actual transactions) and reflect the assumptions 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 information available about such assumptions are considered unobservable. (v) Fair Value Hierarchy AASB 13 requires the disclosure of fair value information 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 active markets for identical assets or liabilities that the entity 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. 43 BOAB METALS LIMITED 43 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v) Fair Value Hierarchy (continued) Level 3 Measurements based on unobservable inputs for the asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation 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 categorisation within the fair value hierarchy only in the following circumstances:   if a market that was previously considered active (Level 1) became inactive (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 categorisation 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 depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation of plant and equipment is calculated using the straight-line method to allocate their cost (net of their residual values) over their estimated 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 written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated 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. Annual Report for the Year Ended 30 June 2022 44 44 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. (m) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) EXPLORATION AND EVALUATION COSTS Exploration and evaluation costs are written off in the year they are incurred apart from acquisition 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 exploration of the area of interest, or, where exploration and evaluation activities 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 acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest is reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. (n) TRADE AND OTHER PAYABLES Trade and other payables represent liabilities 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) 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. Liabilities arising in respect of employee benefits are measured at their nominal amounts based on remuneration rates to be paid when the liability is settled. (ii) 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-settled transactions”). The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an internal valuation using a Black-Scholes option pricing model. The cost of equity- settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“vesting date”). 45 BOAB METALS LIMITED 45 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (ii) Share-Based Payments (continued) The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent to which the vesting period has expired and the number of options that the Directors think will vest ultimately. This opinion is formed based on the information available at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted 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 modification of the original award. (p) CONTRIBUTED EQUITY Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction (net of tax) from the proceeds. Incremental costs directly attributable to the issue of new shares or options, for the acquisition of a business, are not included in the cost of the acquisition as part of the purchase consideration. (q) EARNINGS PER SHARE (i) Basic Earnings Per Share Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Parent entity, 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. Annual Report for the Year Ended 30 June 2022 46 46 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. (q) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) EARNINGS PER SHARE (Continued) (ii) Diluted Earnings Per Share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential 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 taxation authority. In this case it is recognised as part of the cost of acquisition 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 taxation 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 investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. (s) SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS The carrying amount of certain assets and liabilities is often determined based on estimates and assumptions of future events. The key estimates and assumptions that have significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: (i) (ii) Deferred Taxation The potential 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. Capitalised Exploration Costs The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement in determining whether future economic benefits are likely, either from exploration or sale, or where activities have not reached a stage which permits reasonable assessment. 47 BOAB METALS LIMITED 47 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (iii) Share-Based Payments The Group measures the cost of equity-settled and cash-settled transactions 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 assumptions and carrying amount at the reporting date is disclosed in Note 29. (t) LEASES The Group as lessee At inception 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 operating expense on a straight-line basis over the term of the lease. Initially, the lease liability is measured at the present value of the lease payments still 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 incentives; variable lease payments that depend on an index or rate, initially 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 options if the lessee is reasonably certain to exercise the options; lease payments under extension options, if the lessee is reasonably certain to exercise the options; and payments of penalties for terminating the lease, if the lease term reflects the exercise of options to terminate the lease. Annual Report for the Year Ended 30 June 2022 48 48 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t) LEASES The Group as lessee (continued) The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease payments made at or before the commencement date and any initial direct costs. The subsequent measurement of the right-of-use assets is at cost less accumulated depreciation 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 anticipates exercising a purchase option, the specific asset is depreciated over the useful life of the underlying asset.  AASB 2021-3: Amendments to Australian Accounting Standards – COVID-19 Related Rent Concessions beyond 30 June 2021. The Group has applied AASB 2021-3: Amendments to Australian Accounting Standards – COVID-19 Related Rent Concessions beyond 30 June 2021 this reporting period. The amendment amends AASB 16 to extend by one year, the application of the practical expedient added to AASB 16 by AASB 2020-4: Amendments to Australian Accounting Standards – COVID-19-Related Rent Concessions. The practical expedient permits lessees not to assess whether rent concessions that occur as a direct consequence of the COVID- 19 pandemic and meet specified conditions are lease modifications and instead, to account for those rent concessions as if they were not lease modifications. The amendment has not had a material impact on the Group’s financial statements. The Group as lessor The Group does not have any property which has been leased out, and therefore not applicable. 2. NEW AND AMENDED ACCOUNTING POLICIES ADOPTED BY THE GROUP The Group has considered the implications of new and amended Accounting Standards which have become applicable for the current financial reporting period. 49 BOAB METALS LIMITED 49 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 2.  NEW AND AMENDED ACCOUNTING POLICIES ADOPTED BY THE GROUP (CONTINUED) AASB 2021-3: Amendments to Australian Accounting Standards – COVID-19 Related Rent Concessions beyond 30 June 2021 The Group has applied AASB 2021-3: Amendments to Australian Accounting Standards – COVID-19-Related Rent Concessions beyond 30 June 2021 this reporting period. The amendment amends AASB 16 to extend by one year, the application of the practical expedient added to AASB 16 by AASB 2020-4: Amendments to Australian Accounting Standards – COVID-19-Related Rent Concessions. The practical expedient permits lessees not to assess whether rent concessions that occur as a direct consequence of the COVID- 19 pandemic and meet specified conditions are lease modifications and instead, to account for those rent concessions as if they were not lease modifications. The amendment has not had a material impact on the Group’s financial statements.  AASB 2020-8: Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2 The Group has applied AASB 2020-8 which amends various standards to help listed entities to provide financial statement users with useful information about the effects of the interest rate benchmark reform on those entities’ financial statements. As a result of these amendments, an entity: • • • will not have to derecognise or adjust the carrying amount of financial statements for changes required by the reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark rate; will not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the hedge meets other hedge accounting criteria; and will be required to disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates. The amendment has not had a material impact on the Group’s financials.  AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current The amendment amends AASB 101 to clarify whether a liability should be presented as current or non-current. The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The amendment is not expected to have a material impact on the financial statements once adopted. Annual Report for the Year Ended 30 June 2022 50 50 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 2. NEW AND AMENDED ACCOUNTING POLICIES ADOPTED BY THE GROUP (CONTINUED)  AASB 2020-3: Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other Amendments AASB 2020-3: Amendments to Australian Accounting Standards – Annual Improvements 2018-2020 and Other Amendments is an omnibus standard that amends AASB 1, AASB 3, AASB 9, AASB 116, AASB 137 and AASB 141. The Group plans on adopting the amendment for the reporting period ending 30 June 2023. The impact of the initial application is not yet known.  AASB 2021-2: Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates The amendment amends AASB 7, AASB 101, AASB 108, AASB 134 and AASB Practice Statement 2. These amendments arise from the issuance by the IASB of the following International Financial Reporting Standards: Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) and Definition of Accounting Estimates (Amendments to IAS 8). The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact of the initial application is not yet known.  AASB 2021-5: Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction The amendment amends the initial recognition exemption in AASB 112: Income Taxes such that it is not applicable to leases and decommissioning obligations – transactions for which companies recognise both an asset and liability and that give rise to equal taxable and deductible temporary differences. The Group plans on adopting the amendment for the reporting period ending 30 June 2024. The impact of the initial application is not yet known. The standards listed above did not have any material impact on the amounts recognised in prior period and are not expected to significantly affect the current or future periods. 51 BOAB METALS LIMITED 51 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 3. FINANCIAL RISK MANAGEMENT FINANCIAL RISK MANAGEMENT OBJECTIVES The Group’s activities 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 potential adverse effects on the financial performance of the Group. Various methods are used to measure risks to which the Group is exposed, including sensitivity analysis for interest rate, foreign exchange and other price risks, and ageing analysis for credit risk. Risk management is carried out by the accounting team under Board approved policies covering identification and analysis of risk exposure, risk limits, and appropriate procedures and controls. Reporting is provided to the Board on a monthly basis. MARKET RISK (i) Foreign Currency Risk The Group completes certain transactions denominated in foreign currency and is exposed to foreign currency risk through exchange rate fluctuations. Foreign currency risk arises from future commercial transactions and recognised financial assets and financial liabilities in a currency other than the Group’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. 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 on the Group’s financial results. (ii) (iii) Price Risk Presently, the Group is not directly exposed to commodity price risk as it is in the exploration phase. The Group is indirectly exposed to price movements for commodities such as gold, copper and silver as these may affect the Group’s ability to access capital markets. Interest Rate Risk 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. Annual Report for the Year Ended 30 June 2022 52 52 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 3. FINANCIAL RISK MANAGEMENT (CONTINUED) MARKET RISK (Continued) (iv) Credit Risk Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Group. The maximum exposure to credit risk at the reporting 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 position and notes to the financial statements. (v) Liquidity Risk 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 continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. 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 2022, 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 $63,659 lower/higher (2021 – change of 100 bps: $114,575 lower/higher) as a result of lower interest income. 53 BOAB METALS LIMITED 53 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 3. FINANCIAL RISK MANAGEMENT (CONTINUED) INTEREST RATE RISK (Continued) The Group's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at the balance date, are as follows: Floating Interest Rate $ Fixed Interest Rate Maturing in: >1 Year $ 1 - 5 Years $ <5 Years $ Non- Interest Bearing Total Carrying Amount $ $ Financial Instrument 2022 Financial Assets Cash and Cash Equivalents Investments Trade & Other Receivables Deposits Total Financial Assets Financial Liabilities Trade Creditors Other Creditors and Accruals Lease Liabilities Total Financial Liabilities 6,317,527 - - 48.399 6,365,926 - - - - - - - - - - - - 60,000 - 350,051 - 26,490 - - 436,541 - - - - - 69,974 - 69,974 - - 30,220 30,220 - - - 589,433 26,838 - - 616,271 Weighted average effective interest rate is 0.102% 2021 Financial Assets Cash and Cash Equivalents Trade & Other Receivables Investments Deposits Total Financial Assets Financial Liabilities Trade Creditors Other Creditors and Accruals Lease Liabilities Total Financial Liabilities 11,451,486 - - - 11,451,486 - - - - - - - - - 60,534 60,534 - - - - - 1,445,474 362,118 60,000 - 24,315 - 1,891,907 - - - - - 45,531 45,531 - - - 1,230,961 60,820 - - - - 1,291,781 1,230,961 60,820 45,531 1,337,312 6,317,527 60,000 350,051 74,889 6,802,467 589,433 26,838 100,194 716,465 12,896,960 362,118 60,000 84,849 13,403,927 NET FAIR VALUES All financial assets and liabilities have been recognised at the balance date at amounts approximating their carrying value. 54 BOAB METALS LIMITED 54 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ CREDIT RISK EXPOSURES The Group has no significant concentrations of credit risk. The maximum exposure to credit risk at balance date is the carrying amount (net of provision for doubtful 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 operating segments to be identified based on internal reports provided to the Board in order to allocate resources to the segments and assess performance. Information reported to the Board is based on exploration in the principal locations of the Group’s projects, Australia and Colombia. The revenues and profit generated by each of the Group’s operating segments, assets and liabilities are summarised as follows: Australia Colombia Consolidation Adjustments Total 2022 $ 2021 $ 2022 $ 2021 $ 2022 $ 2021 $ 2022 $ 2021 $ 894,926 1,033,786 1 6 (643,435) (518,164) 251,492 515,628 (6,787,157) (5,055,395) (17,366) 16,413 - - (6,804,523) (5,038,982) 42,095,451 38,009,998 6,102 10,860 (30,434,157) (19,356,976) 11,667,396 18,663,882 728,098 2,720,462 4,381 1,982 354,796 (1,040,100) 1,087,275 1,682,344 Segment Revenues Segment Operating (Losses) Segment Assets Segment Liabilities 5. REVENUE From Continuing Operations Sorby Hills Project Revenue Interest Other Income 6. EXPENSES Loss Before Income Tax Includes the Following Expenses: Depreciation of Plant and Equipment Depreciation of ROU Asset Exploration and Evaluation Expenditure Write-down of Borroloola Exploration Asset Gain on Sale of Subsidiary BOAB METALS LIMITED 55 Consolidated 2022 $ 160,662 35,915 54,915 251,492 2021 $ 122,435 21,598 371,595 515,628 Consolidated 2022 $ 17,087 64,559 4,436,882 1,024,672 - 2021 $ 11,908 53,598 3,822,870 - (36,289) 55 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 7. INCOME TAX Income Tax Expense/Benefit Current Tax Deferred Tax Adjustments for Current Tax of Prior Years Numerical Reconciliation of Income Tax Expense to Prima Facie Tax Payable Loss from Continuing Operations Before Income Tax Expense Prima Facie Tax Benefit at the Australian Tax Rate of 25% (2021: 26%) Tax Effect of Amounts which are not Deductible (Taxable) in Calculating 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 Deductions Write off Acquired Tenement Costs over 15 years Accruals and Provisions for Employee Entitlements Carry Forward Tax Losses Deferred Tax Liabilities Prepayments Total Unrecognised Temporary Differences Consolidated 2022 $ 2021 $ - - - - - - - - (6,804,523) (5,038,982) (1,701,131) (1,310,135) 278,460 (1,422,671) 30,809 (1,279,326) 1,422,671 1,279,326 - - 172,810 267,894 1,397,142 1,395,275 51,771 58,016 7,835,423 9,457,146 - 9,457,146 6,319,796 8,040,981 - 8,040,981 56 Annual Report for the Year Ended 30 June 2022 56 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 7. INCOME TAX (CONTINUED) Deferred Tax Liabilities Beginning Exploration and Evaluation on Acquisition Reduction of Deferred Tax Liability Due to Impairment Deferred Tax Liability - Exploration and Evaluation Assets Consolidated 2022 $ 2021 $ 169,153 178,913 (6,506) (9,760) 162,647 169,153 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 deductible temporary differences and tax losses can be utilised. 8. CURRENT ASSETS - CASH AND CASH EQUIVALENTS Cash at Bank Cash and Cash Equivalents as Shown in the Consolidated Statement of Financial Position and the Consolidated Statement of Cash Flows 9. CURRENT ASSETS - OTHER Trade and Other Receivables Prepayments Consolidated 2022 $ 6,317,527 2021 $ 12,896,960 6,317,527 12,896,960 Consolidated 2022 $ 350,051 36,458 386,509 2021 $ 362,118 12,778 374,896 The above receivables are within initial trade terms and therefore have not been impaired. 57 BOAB METALS LIMITED 57 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 10. NON-CURRENT ASSETS - EXPLORATION AND EVALUATION ASSETS Balance at Beginning of the Year Additions Disposal/Write down of Assets(1) Reduction of Deferred Tax Liability Balance at the End of the Year Consolidated 2022 $ 5,160,560 538,658 (1,024,672) (6,506) 4,668,040 2021 $ 5,170,320 - - (9,760) 5,160,560 (1) During the current financial year the Group has written off its investment in the Borroloola Project amounting to $1,024,672. 11. NON-CURRENT ASSETS - OTHER Bonds and Security Deposits VAT Receivable Consolidated 2022 $ 74,889 - 74,889 2021 $ 84,849 - 84,849 Bonds and security deposits of 74,889 (2021: $84,849), are in relation to a credit card facility and office lease obligations. 12. NON-CURRENT ASSETS - PLANT AND EQUIPMENT Plant and Equipment Cost Accumulated Depreciation Net Carrying Amount Plant and Equipment - Movement Opening Net Book Amount Additions Depreciation Charge Foreign Exchange Translation Closing Net Carrying Amount Consolidated 2022 $ 2021 $ 110,304 (48,504) 61,800 87,288 (44,908) 42,380 42,380 36,507 (17,087) - 61,800 10,076 44,212 (11,908) - 42,380 Annual Report for the Year Ended 30 June 2022 58 58 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 13. NON-CURRENT ASSETS - RIGHT OF USE ASSETS ROU Asset - Building Lease Building Lease at Cost Accumulated Depreciation Net Carrying Amount ROU Asset - Movement Opening Net Book Amount Recognition of New ROU Asset Depreciation Charge Adjustments on Leasing Cost Closing Net Carrying Amount Amounts recognised in the Profit and Loss Depreciation Expense on Right of Use Asset Interest Paid on Lease Liabilities Consolidated 2022 $ 2021 $ 139,244 (40,613) 98,631 106,854 (62,617) 44,237 44,237 139,459 (64,559) (20,506) 98,631 99,206 - (53,598) (1,371) 44,237 (64,559) (2,071) (53,598) (2,850) On 1 December 2021, the Group entered into a lease of the premises on 4 Clive St. West Perth for two years. Discounted cash flows were calculated using the Group’s incremental borrowing rate of 3.36% per annum. 14. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES Trade Payables Other Payables and Accruals Consolidated 2022 $ 589,433 26,838 616,271 2021 $ 1,230,961 60,820 1,291,781 The above payables are within initial trade terms and therefore are not past due. 15. CURRENT LIABILITIES - PROVISIONS Current Provision for Annual Leave Provision for Long Service Leave 16. CURRENT AND NON-CURRENT - LEASE LIABILITIES Maturity Analysis Less than 1 year Greater than 1 year Consolidated 2022 $ 143,093 65,070 208,163 2021 $ 127,409 48,470 175,879 Consolidated 2022 $ 2021 $ 69,974 30,220 45,531 - The Group has a lease for its main office premise at 4 Clive St. West Perth, which has been included in the Right-of-use asset (Note 13) . The remaining lease is payable within 1 and a half years. 59 BOAB METALS LIMITED 59 Annual Report for the Year Ended 30 June 2022 60 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ Annual Report for the Year Ended 30 June 2022 60 17. NON-CURRENT LIABILITIES – DEFERRED TAX LIABILITIES Consolidated 2022 2021 $ $ Deferred Tax Liabilities Comprise Temporary Differences Attributable to: Beginning Exploration and Evaluation on Acquisition 169,153 178,913 Movement as a Result of Change in Tax Rate (6,506) (9,760) Deferred Tax Liability 162,647 169,153 18. CONTRIBUTED EQUITY SHARE CAPITAL 2022 2021 Shares $ Shares $ Ordinary Shares Fully Paid 153,493,527 48,198,398 152,307,006 47,698,398 Total Contributed Equity 153,493,527 48,198,398 152,307,006 47,698,398 MOVEMENTS IN ORDINARY SHARE CAPITAL 2022 2021 Shares $ Shares $ Beginning of the Financial Year 152,307,006 47,698,398 2,888,104,604 32,980,318 Issued during the year: Share Placement/Share Purchase Plan - - 568,889,242 10,240,007 Conversion/Exercise of Options + Performance Rights - - 342,463,878 4,967,158 Cashless Issues - - 5,031,096 100,431 Shares Issued in Lieu of Director Fees - - 126,903 53,333 Share Consolidation Adjustments (25 to 1) - - (3,652,308,717) - Shares Issued for Manbarrum Acquisition 1,186,521 500,000 - - Less Transaction costs - - - (642,849) 153,493,527 48,198,398 152,307,006 47,698,398 BOAB METALS LIMITEDNOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 18. CONTRIBUTED EQUITY (CONTINUED) ORDINARY SHARES Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Parent entity proportionate to the number of and amounts paid for shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote and upon a poll each share is entitled to one vote. CAPITAL RISK MANAGEMENT Safeguarding its ability to continue as a going concern is the Group’s objective when it comes to managing capital in order to provide benefits to both shareholders and stakeholders and maintain an optimal capital structure to reduce cost of capital. When an opportunity to invest in, or explore, a project is seen as value adding relative to the share price at the time of investment, the Group will seek to raise capital if required. 19. DIVIDENDS No recommendation for payment of dividends or dividend payments were made during the report period. 20. RESERVES Share/option reserve is used to recognise the fair value of shares and options issued. Share/Option Reserve Foreign Currency Translation Reserve SHARE/OPTION RESERVE Balance at Beginning of Year Reclassification of Performance Rights upon conversion to ordinary shares Issue of Options / Performance Rights Reversal of Lapsed Performance Rights Balance at End of Year 61 BOAB METALS LIMITED Consolidated 2022 $ 1,526,601 (333,442) 2021 $ 1,623,811 (333,758) 1,193,159 1,290,053 Consolidated 2022 $ 1,623,811 2021 $ 1,653,328 - (115,200) - 85,683 - 1,623,811 (97,210) 1,526,601 61 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 20. RESERVES (CONTINUED) Details of movement in share options Outstanding at Beginning of Year Granted during the year Forfeited during the year Exercised during the year Expired during the year Outstanding at the End of the Year 2022 2021 No of share Options Weighted Average Exercise Price No of share Options Weighted Average Exercise Price 400,000 - - - (400,000) - 0.50 - - - 0.50 - 15,510,879 - - (13,908,555) (1,202,324) 400,000 0.325 - - 0.375 0.375 0.500 Details of movement in performance rights 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 2022 Number of Performance Rights 2021 Number of Performance Rights 2,020,000 - (280,000) - (1,580,000) 160,000 2,500,000 280,000 - (760,000) - 2,020,000 FOREIGN CURRENCY TRANSLATION RESERVE Foreign currency translation reserve is used to recognise exchange differences arising from the translation of financial statements of foreign operations that do not use Australian dollars as their functional currency. Annual Report for the Year Ended 30 June 2022 62 62 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 20. RESERVES (CONTINUED) Balance at Beginning of Year Exchange Differences Arising on Translation of Foreign Operations Balance at End of Year 21. PARENT ENTITY INFORMATION Total Current Assets Total Non-Current Assets Total Assets Total Current Liabilities Total Non-Current Liabilities Total Liabilities Equity Issued Capital Share Based Payments Reserve Accumulated Losses Total Equity Results of The Parent Entity Loss for the Year Other Comprehensive Income Total Comprehensive Loss for the Year Consolidated 2022 $ (333,758) 2021 $ (52,906) 316 (280,852) (333,442) (333,758) Parent 2022 $ 3,904,995 17,048,315 20,953,310 2021 $ 11,981,411 10,798,170 22,779,581 410,373 30,220 440,593 2,008,773 - 2,008,773 48,198,398 1,526,601 (29,212,282) 20,512,717 47,698,398 1,623,811 (28,551,401) 20,770,808 (660,881) - (660,881) (702,692) - (702,692) 63 BOAB METALS LIMITED 63 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 21. PARENT ENTITY INFORMATION (CONTINUED) CAPITAL AND CONTINGENT LIABILITIES The parent entity had no capital or contingent liabilities as at 30 June 2022 (2021: Nil). The accounting policies of the parent entity 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 entity. 22. INTERESTS IN SUBSIDIARIES The consolidated financial statements incorporate the assets, liabilities and results of the following wholly owned subsidiaries in accordance with the accounting policy described in Note 1b(i): Subsidiary Incorporated Ownership West Rock Resources Pty Ltd Sorby Hills Pty Ltd Sorby Management Pty Ltd West Rock Resources Panama Corp. Manbarrum Pty Ltd Pacifico Minerals Sucursal Colombia (Branch) Pacifico Holdings SAS 23. REMUNERATION OF AUDITORS Australia Australia Australia Panama Australia Colombia Colombia 2022 100% 100% 100% 100% 100% 100% 100% 2021 100% 100% 100% 100% - 100% 100% 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 Remuneration for Audit Services No non-audit services were provided by Stantons. Consolidated 2022 $ 2021 $ 52,408 52,408 53,141 53,141 Annual Report for the Year Ended 30 June 2022 64 64 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 24. COMMITMENTS AND CONTINGENCIES The Group plans to conduct exploration work on its tenements to meet obligations and retain rights of tenure. If required, the Group can reduce these expenditure obligations by establishing joint venture agreements, applications for expenditure exemptions, or selective relinquishment of exploration tenements. Due to the nature of the Group’s operations in exploring and evaluating areas of interest, it is difficult to accurately forecast future expenditure. The annual commitment across the Group for the next year is $1,978,574 (2021: $2,222,694). Exploration Commitments Within One Year Later than One Year But Not Later Than Five Years Over Five Years Consolidated 2021 2022 $ $ 1,978,574 2,222,694 2,190,371 2,124,654 1,271,286 5,618,634 976,896 5,145,841 There are no material contingent assets of the Group at balance date (2021: Nil). In 2019 the acquisition 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 Contingent Liability, this is still in existence as at balance date 30 June 2022. The terms of the acquisition of the Manbarrum Project included a 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 potential project financiers provided certain conditions are met. Boab has retained the right to buy-back the royalty at market value subject to the completion of a Pre-Feasibility Study on the Manbarrum Project. 25. INTERESTS IN JOINT OPERATIONS The Group recognises its share of jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated into the financial statements under the appropriate classifications. 65 BOAB METALS LIMITED 65 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 25. INTERESTS IN JOINT OPERATIONS (CONTINUED) Information relating to joint operations that are material to the Group are set out below: • • • Borroloola West Project (Boab 51%). Net assets carried as at 30 June 2022 are Nil (2021: $1,024,672). Mt Jukes Project (Boab 14.8%). Net assets carried as at 30 June 2022 are nil (2021: Nil). Sorby Hills Project (Boab 75%). Net assets carried as at 30 June 2022 are $7,404,482 after write off of exploration costs of $8,868,342 (2021: $5,302,903 after write off of exploration costs of $3,561,515). 26. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE There have been no other matters that would require disclosure subsequent to the end of the financial year. Annual Report for the Year Ended 30 June 2022 66 66 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 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 Depreciation of Non-Current and ROU Assets Interest on Lease Liabilities Share Based Payments - Director/Staff Options Sale of Investments (Non-Cash) Write Down of Borroloola investment Sale of Investment (consideration received included in investing activities Foreign Exchange (Gain)/Loss Consolidated 2022 $ (6,804,523) 2021 $ (5,038,982) 81,646 2,071 (97,210) - 1,024,672 65,506 2,850 186,114 (96,289) - - (192,175) - - Change in Operating Assets and Liabilities (Increase)/Decrease in Trade and Other Receivables Decrease/(Increase) in Prepayments Increase/(Decrease) in Operating, Trade and Other Payables Increase/(Decrease) in Provisions Net Cash Outflow from Operating Activities 9,786 (23,680) (714,289) 32,284 (6,489,243) (173,186) 4,743 607,928 79,974 (4,553,517) 28. LOSS PER SHARE (POST CONSOLIDATION) RECONCILIATION OF EARNINGS USED IN CALCULATING LOSS PER SHARE Loss attributable to the ordinary equity holders of the Parent Entity used in calculating basic and diluted loss per share Consolidated 2022 $ 2021 $ (6,804,523) (5,038,982) 67 BOAB METALS LIMITED 67 Annual Report for the Year Ended 30 June 2022 NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 28. LOSS PER SHARE (POST CONSOLIDATION) - CONTINUED WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share 153,226,966 141,759,237 Number of Shares 2022 2021 29. SHARE BASED PAYMENTS ORDINARY SHARES Share Based Payments Issued to Directors Issued to Key Management Personnel Reversal of previously recognised expense due to Performance Right being forfeited or expiring prior to vesting Consolidated 2022 $ - - 2021 $ - - (97,210) (97,210) - 186,114 During the year no shares were issued to Directors or consultants (2021: 201,244). There were no ordinary shares issued to Directors in lieu of cash payments (2021: 126,903). OPTIONS OVER ORDINARY SHARES No Options were issued in 2022 (2021: Nil) and there were no options on issue as at 30 June 2022. Annual Report for the Year Ended 30 June 2022 68 68 BOAB METALS LIMITED NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________ 29. SHARE BASED PAYMENTS (CONTINUED) Performance Rights No Performance Rights were granted during the year to Directors and Key Management Personnel (2021: 280,000). During the year, a total of 780,000 Class "B" and 800,000 Class “C” Performance Rights were cancelled as the milestones attaching to them could not be met. Furthermore 120,000 Class “B” and 160,0000 Class “D” Performance Rights were forfeited and cancelled due to Key Management Personnel ceasing employment. Details Class "D" Performance Rights Performance Rights 160,000 160,000 Exercise Price Grant Date Expiry Date Nil 20/03/2020 6/03/2025 30. RELATED PARTY TRANSACTIONS Other than the transactions with Directors and Key Management Personnel as disclosed in the Remuneration Report, there were no related party transactions to report for the period. KEY MANAGEMENT PERSONNEL COMPENSATION Short Term Employee Benefit Share Based Payments Post-Employment Benefit Consolidated 2022 $ 730,862 (97,210) 67,591 701,243 2021 $ 699,415 166,600 54,436 920,451 69 BOAB METALS LIMITED 69 Annual Report for the Year Ended 30 June 2022 70 DIRECTORS’ DECLARATION ________________________________________________________ Annual Report for the Year Ended 30 June 2022 70 The Directors of the Company declare that: 1. The financial statements accompanying the notes are in accordance with the Corporations Act 2001, and: a. Comply with Accounting Standards, the Corporations Act 2001 and other mandatory professional reporting requirements; b. Give a true and fair view of the financial position as at 30 June 2022 and of the performance for the report period for the consolidated entity. 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 interpretations issued by the International Accounting Standards Board. 4. The remuneration disclosures as set out on pages 21-27 of the Directors’ Report comply with Accounting Standards AASB 124 Related Party Disclosures and section 300A of the Corporations Act 2001. 5. The Directors have been given the declarations required under section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors and is signed on behalf of the Directors. Gary Comb Chairman 2 September 2022 . BOAB METALS LIMITEDINDEPENDENT AUDITOR’S REPORT ________________________________________________________ PO Box 1908 West Perth WA 6872 Australia Level 2, 40 Kings Park Road West Perth WA 6005 Australia Tel: +61 8 9481 3188 Fax: +61 8 9321 1204 ABN: 84 144 581 519 www.stantons.com.au 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 2022, 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 2022 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 following matters described 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. Liability limited by a scheme approved under Professional Standards Legislation Stantons Is a member of the Russell Bedford International network of firms 71 BOAB METALS LIMITED 71 DIRECTORS’ DECLARATION ________________________________________________________ Annual Report for the Year Ended 30 June 2022 70 The Directors of the Company declare that: 1. The financial statements accompanying the notes are in accordance with the Corporations Act 2001, and: a. Comply with Accounting Standards, the Corporations Act 2001 and other mandatory professional reporting requirements; b. Give a true and fair view of the financial position as at 30 June 2022 and of the performance for the report period for the consolidated entity. 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 interpretations issued by the International Accounting Standards Board. 4. The remuneration disclosures as set out on pages 21-27 of the Directors’ Report comply with Accounting Standards AASB 124 Related Party Disclosures and section 300A of the Corporations Act 2001. 5. The Directors have been given the declarations required under section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors and is signed on behalf of the Directors. Gary Comb Chairman 2 September 2022 . Annual Report for the Year Ended 30 June 202272 INDEPENDENT AUDITOR’S REPORT ________________________________________________________Key Audit Matters How the matter was addressed in the audit Carrying Value of Exploration and Evaluation Assets As at 30 June 2022, the carrying value of the Group’s Exploration and Evaluation Assets totalled $4,668,040, 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 (40% 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 overexploration assets by corroborating theownership of the relevant licences formineral resources to government registriesand relevant third-party documentation;ii.Examined the directors’ assessment of thecarrying value of the exploration andevaluation expenditure, ensuring theveracity of the data presented and thatmanagement has considered the effect ofpotential impairment indicators, commodityprices and the stage of the Group’sprojects against AASB 6;iii.Evaluation of Group documents forconsistency with the intentions for thecontinuation of exploration and evaluationactivities in certain areas of interest andcorroborated with enquiries ofmanagement. Inter alia, the documents weevaluated included:Minutes of meetings of the board andmanagement;Announcements made by the Group tothe Australian Securities Exchange;andCash flow forecasts; andiv.Assessed the financial statements toensure 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 Inter alia, our audit procedures included the following: i.Evaluating management’s assessmentand judgement of concluding that thearrangement is a joint operation in relationto the relevant accounting standards(including AASB 11) and ensuring thecorrect treatment is adopted;ii.Reviewing the consolidation worksheets toensure that the Sorby Hills Project hasbeen accounted for as a joint operation and Annual Report for the Year Ended 30 June 2022 72 BOAB METALS LIMITED73 INDEPENDENT AUDITOR’S REPORT ________________________________________________________accounts for its proportionate share of the assets and liabilities of the project. Accounting for the Sorby Hills Project is a key audit matter due to: •The significance of the total assets andliabilities of the joint venture; and•The nature and complexities involved inaccounting as well as the judgement in thedetermination of whether the Group has aninterest in the net assets or rights to theassets and obligations for liabilities andtherefore, the accounting treatment inaccordance with the relevant accountingstandards. Under AASB 11 JointArrangements (“AASB 11”), if a party hasthe rights to the assets and the obligationsfor the liabilities of a joint arrangement,then the joint arrangement is considered tobe a “joint operation” and those assets andliabilities should be recognised by theparties to the joint arrangement.therefore, the Group has accounted for their share of the assets and liabilities (proportionate basis) of the Sorby Hills Project; iii.Testing controls over expenditure in thejoint operation and appropriate substantiveaudit procedures in relation to assets,liabilities and expenses of the jointoperation; andiv.Assessing the financial statements toensure adequacy of the disclosures made.OTHER INFORMATION The directors are responsible for the other information. The other information comprises the information in the Group's annual report for the year ended 30 June 2022 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. 73 BOAB METALS LIMITEDAnnual Report for the Year Ended 30 June 202274 INDEPENDENT AUDITOR’S REPORT ________________________________________________________AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL REPORT Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with 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. Annual Report for the Year Ended 30 June 2022 74 INDEPENDENT AUDITOR’S REPORT ________________________________________________________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. REPORT ON THE REMUNERATION REPORT Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 21 to 27 of the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Boab Metals Limited for the year ended 30 June 2022 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 2 September 2022 75 BOAB METALS LIMITEDBOAB METALS LIMITED75 INDEPENDENT AUDITOR’S REPORT ________________________________________________________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. REPORT ON THE REMUNERATION REPORT Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 21 to 27 of the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Boab Metals Limited for the year ended 30 June 2022 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 2 September 2022 75 BOAB METALS LIMITEDAnnual Report for the Year Ended 30 June 2022SHAREHOLDER INFORMATION AS AT 30 AUGUST 2022 ________________________________________________________ Additional information is set out below in accordance with the listing rules of the Australian Stock Exchange Limited and is current as at 30 August 2022. 1. STATEMENT OF ISSUED CAPITAL Distribution 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 159 1,177 522 1,056 227 3,141 38,638 0.03% 3,238,012 2.11% 2.62% 23.00% 72.24% 100.00% 4,020,902 35,306,993 110,888,982 153,493,527 Ordinary shares carry one vote per share without restriction. The number of fully paid ordinary shareholdings held in less than marketable parcels is 611 (based on a share price of $0.24). Distribution of holdings for Performance Rights on issue: Performance Rights on issue expire on 6 March 2025 and have vesting conditions attached. Each Performance Right vests into one Ordinary Fully Paid Share on conversion. Number of Holders by Holding Size 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total Holders Total Units 0 0 0 0 1 1 0 0 0 0 160,000 160,000* % of Issued Capital 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% *Performance Shares do not carry any voting rights until they vest and are converted into Ordinary Fully Paid shares. • 160,000 class “D” Performance Rights are on issue and they are held by 1 holder being Bluedale Pty Ltd. Annual Report for the Year Ended 30 June 2022 76 76 BOAB METALS LIMITED SHAREHOLDER INFORMATION AS AT 30 AUGUST 2022 ______________________________________________________ 1. STATEMENT OF ISSUED CAPITAL (CONTINUED) On-Market Buy back There is no current on-market buy back. Restricted Securities The Company has no restricted securities currently on issue. SUBSTANTIAL SHAREHOLDERS Holder** VILLIERS QUEENSLAND PL* Number 15,528,133 % 10.20 * 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 information. 77 BOAB METALS LIMITED 77 Annual Report for the Year Ended 30 June 2022 SHAREHOLDER INFORMATION AS AT 30 AUGUST 2022 ______________________________________________________ 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 39.29% of these shares: Position 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Holder Name VILLIERS QUEENSLAND PL* ZERO NOMINEES PTY LTD CITICORP NOMINEES PTY LIMITED MR BRENT DAVID CONNOLLY SURPION PTY LTD MR GRAHAM CHARLES POWELL HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED MATORICZ SUPER PTY LTD SIMON NOON* BNP PARIBAS NOMS PTY LTD LADAKH PTY LTD MR GABOR MATORICZ JACANA GLEN PTY LTD MIEI RAGAZZI PTY LTD BNP PARIBAS NOMINEES PTY LTD RICHARD MONTI* EQUITY TRUSTEES LIMITED TODD RIVER METALS PTY LTD CRAIG CHAPMAN TRAVIS CLARK Total Total Issued Capital - Ordinary Shares Holding 16,110,933 6,833,334 5,785,686 4,445,000 2,600,000 2,500,000 2,107,464 2,100,000 1,882,000 1,872,265 1,773,182 1,753,991 1,700,000 % 10.50% 4.45% 3.77% 2.90% 1.69% 1.63% 1.37% 1.37% 1.23% 1.22% 1.16% 1.14% 1.11% 1,523,000 1,380,807 0.99% 0.90% 1,324,982 1,261,659 0.86% 0.82% 1,186,521 1,100,000 1,060,000 60,300,824 0.77% 0.72% 0.69% 39.29% 153,493,527 100.00% *Denotes merged holders. Annual Report for the Year Ended 30 June 2022 78 78 BOAB METALS LIMITED SHAREHOLDER INFORMATION AS AT 30 AUGUST 2022 ______________________________________________________ 3. UNQUOTED SECURITIES There were no holders with more than 20% of any unlisted class of security (other than those acquired under an employee incentive scheme). 4. SCHEDULE OF INTERESTS IN MINING TENEMENTS HELD Farm-In Agreements/ Project 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 Manbarrum Project EL24395 MA24518 MA26581 Urrao Project 2791 Location % Held Western Australia Northern Territory Australia Northern Territory Australia Colombia 75% 75% 75% 75% 75% 100% 100% 51% 51% 51% 51% 51% 51% 100% 100% 100% 100% 79 BOAB METALS LIMITED 79 Annual Report for the Year Ended 30 June 2022 The Company has executed several strategic growth initiatives throughout the year. The acquisition of the Manbarrum Zinc-Silver-Lead Project, located 25m east of Sorby Hills, and the commencement of drilling at our highly prospective Eight Mile Creek Project, located immediately south of Sorby Hills, are two such initiatives that demonstrate high potential to generate long-term value for shareholders. 80 BOAB METALS LIMITEDCORPORATE DIRECTORY DIRECTORS Gary Comb (Executive Director and Chairman) Simon Noon (Managing Director & CEO) Richard Monti (Non-Executive Director) Andrew Parker (Non-Executive Director) COMPANY SECRETARY Jerry Monzu REGISTERED OFFICE 4 Clive Street WEST PERTH WA 6005 SHARE REGISTRY Automic Group Pty Ltd Level 5 191 St Georges Terrace PERTH WA 6000 BANKERS Level 1 1275 Hay Street WEST PERTH WA 6005 Australian and New Zealand Banking Group Limited AUDITORS Stantons International Audit and Consulting Pty Ltd 40 Kings Park Road WEST PERTH WA 6005 SECURITIES EXCHANGE LISTING Boab Metals Limited shares are listed on the Australian Securities Exchange (Home Branch - Perth) ASX Code: BML WEBSITE ADDRESS www.boabmetals.com T R O P E R L A U N N A 2 2 0 2 BOAB METALS LIMITED 4 Clive St, West Perth WA 6005 TEL: (08) 6268 0449 www.boabmetals.com ABN 43 107 159 713 

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