20 22 Annual Report Calidus Resources Limited | ABN: 98 006 640 553 | ASX: CAI | and Controlled Entities Annual Report for the Financial Year ending 30 June 2022 Annual Report for the Financial Year ending 30 June 2022 1 Contents Corporate Directory Chairman’s Letter FY2022 Company Highlights Review of Operations Sustainability Report 2 5 7 9 18 Annual Mineral Resource & Ore Reserve Report 23 Tenement Schedule Directors’ Report Remuneration Report (Audited) Auditor’s Independence Declaration Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income 26 28 36 47 49 49 Consolidated Statement of Financial Position 50 Consolidated Statement of Changes in Equity 51 Consolidated Statement of Cash Flows 52 Notes to the Consolidated Financial Statements 53 Directors’ Declaration Independent Auditor’s Report Additional ASX Information 79 81 85 Annual Report for the Financial Year ending 30 June 2022 2 Corporate Directory Corporate Directory Directors David Reeves Managing Director Mark Connelly Non-Executive Chairman John Ciganek Non-Executive Director Kate George Non-Executive Director Company Secretary Julia Beckett Management Richard Hill Chief Financial Officer Paul Brennan Project Development Don Russell General Manager Warrawoona Operations Registered Office & Principal Place of Business Suite 12, 11 Ventnor Avenue West Perth WA 6005 Email: info@calidus.com.au Website: www.calidus.com.au Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Corporate Directory 3 Auditor Moore Australia Audit (WA) Level 15, Exchange Tower, 2 The Esplanade, Perth WA 6000 Share Registry Automic GPO Box 5193 Sydney NSW 2001 Securities Exchange The Company’s shares are listed on the Australian Securities Exchange (ASX). Website: moore-australia.com.au Telephone: 1300 288 664 ASX Code: CAI – Ordinary Shares (Within Australia) +61 2 9698 5414 (Overseas) Email: hello@automicgroup.com.au Annual Report for the Financial Year ending 30 June 2022 4 Corporate Directory Taking a company and project from junior exploration status to production, as has happened at Calidus, is a major feat by any measure Calidus Resources Limited ABN: 98 006 640 553 ASX:CAI Annual Report for the Financial Year ending 30 June 2022 Chairman’s Letter 5 Chairman’s Letter Dear Shareholder I am delighted to report that Calidus has joined the ranks of ASX gold producers – the culmination of five years of determined exploration, meticulous engineering and hard work. And it’s a milestone to which all gold start-ups aspire, but relatively few achieve. At the time of writing, we are ramping up production at our Warrawoona project and we are on track to achieve nameplate capacity in the September quarter. On behalf of the Calidus Board, I would like to publicly thank all our staff, especially our executive team led by Dave Reeves, Richard Hill, Paul Brennan and Don Russell. In addition, I would like to thank all contractors for their enormous commitment to our project. The challenges we faced, including COVID 19, severe weather, inflation and shortages of labour and equipment, made the completion of the project on time and on budget even more impressive. This is a huge credit to everyone involved. Calidus has a wealth of growth opportunities at its fingertips, including advancing the Blue Spec gold deposit. This sits within trucking distance of Warrawoona and has the potential to increase production to around 130,000oz per year. We intend to push ahead with early works including permitting, securing available accommodation units and installing water and communications infrastructure. In addition to Blue Spec, Calidus has a host of highly prospective exploration prospects within trucking distance of Warrawoona. Testing and advancing these forms a key part of our growth agenda. Exploration continues to offer substantial upside for Calidus, not just because of the value which can be created through discovery but because of the potential to leverage the infrastructure we now have at Warrawoona. This gives your Company a distinct competitive advantage in a region which hosts extensive mineralisation but so little processing capacity. We will continue exploration and demerger plans for Pirra Lithium in the Pilbara. Our initial exploration work has returned highly promising results which, combined with the market’s strong appetite for lithium assets, highlight the potential to create significant value for Calidus shareholders. The past year has been intense and productive, and we look forward to building on our achievements to date. Calidus is committed to remaining a high-growth company which creates value for its shareholders. The start of production is just one of the many milestones we intend to achieve as we deliver on this commitment. I look forward to reporting to you as we implement the next key plans of our growth strategy. Yours faithfully Mark Connelly Non-Executive Chairman Annual Report for the Financial Year ending 30 June 2022 6 Chairman’s Letter Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 FY2022 Company Highlights 7 FY2022 Company Highlights Operations ā First gold pour completed in May 2022 with a total of 8,916 ounces poured in the June quarter with an additional 1,192 ounces of gold in circuit ā Warrawoona Gold Plant successfully commissioned and ramping up to nameplate production of 2.4Mtpa, with up to 2.8Mtpa tested and no major bottlenecks identified ā Grade reconciling 100% between Grade Control Model and Resource model ā One lost time injury recorded to date ā Positive operating cashflow for the month of June Blue Spec Expansion ā Strong drill results including 52m @ 1.4g/t Au from 22m and 10m @ 1.95g/t Au from 81m highlight open-pit potential at Blue Spec East, outside of the resource being used in the Blue Spec Feasibility Study ā Blue Spec Feasibility Study ongoing and expected to be released in the September quarter Pirra Lithium ā Formation of Pirra Lithium Pty Ltd, new Pilbara lithium exploration company owned 50% by Calidus and 50% by Haoma Mining NL (Haoma) ā Pirra Lithium’s maiden drill program commenced at the Spear Hill lithium project, where pegmatites are defined over 4.3km and rock-chip samples yielded grades up to 2.35% Li₂O and 808ppm Ta Annual Report for the Financial Year ending 30 June 2022 8 FY2022 Company Highlights Calidus has a wealth of growth opportunities at its fingertips, including advancing the Blue Spec gold deposit. This sits within trucking distance. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAI Annual Report for the Financial Year ending 30 June 2022 Review of Operations 9 Review of Operations Calidus Resources (ASX:CAI) (“Calidus” or “the Company”) completed development and achieved the first gold pour at the 1.7Moz (100% owned) Warrawoona Gold Project (“Warrawoona” or “the Project”). Warrawoona is situated in the East Pilbara district of the Pilbara Goldfield of Western Australian. The Warrawoona Gold Project has total Mineral Resources of 1.7Mozs and 720km2 of prospective tenements. Calidus’ landholding also consists of the Blue Spec Project (100% owned) within 75km radius from Warrawoona. Blue Spec consists of an existing Resource of 415kt at 16.3g/t Au (219koz Au) and remains open down dip, together with the farm-in agreements on promising tenements both along strike from Blue Spec. Warrawoona is forecast to produce on average 90,000ozs per annum. However, this has the potential to increase to 130,000ozs per annum when the nearby Blue Spec deposit is developed. Blue Spec is now the subject of a Definitive Feasibility Study (“DFS”) which is due in the September quarter of 2022.1 In addition, Calidus is a 50% owner of Pirra Lithium Pty Ltd (“Pirra”) a Pilbara focused lithium explorer. Pirra has extensive tenements in the Pilbara, covering 1063km2 with potential for Lithium discoveries. The focus is on the same granites of the Split Rock Supersuite and related pegmatites which host the large Wodgina (MIN) and Pilgangoora (PLS) mines 75km to the NW.2 DE GREY MINING MALLINA PROJECT 9.0 Moz KAIROS MT YORK DEPOSIT 873 koz BAMBOO CREEK PROJECT WARRAWOONA PROJECT 1.7 Moz NOVO RESOURCES NULLAGINE PROJECT 903 koz Port Hedland WARRAWOONA PROJECT WESTERN AUSTRALIA Kalgoorlie Perth Warrawoona Project Other Gold Project Town Road NORTHERN STAR PAULSEN’S MINE 1.1 Moz Figure 1: Location of the Warrawoona Gold Project KALAMAZOO ASHBURTON PROJECT 1.65 Moz CAPRICORN METALS KARLAWINDA MINE 2.15 Moz Warrawoona Gold Project During the year, construction of Warrawoona was completed in line with budget and schedule with one lost time injury. First gold was poured from Warrawoona during the June 2022 quarter, making Calidus Australia’s newest gold producer. Warrawoona is forecast to produce on average 90,000ozs per annum. However, this has the potential to increase to 130,000ozs per annum when the nearby Blue Spec deposit is developed. Blue Spec has a JORC Resource of 415,000t at 16.3gpt for 219,000oz and is now the subject of a DFS which is due in the September quarter of 2022.1 1. Refer to ASX announcements dated 29 September 2020, 23 March 2021, 9 September 2021, 8 November 2021 and 2 June 2022. The Company confirms that it is not aware of any information or data that materially affects the information included in the market announcements, and that all material assumptions and technical parameters underpinning the estimates continue to apply. 2. Refer to ASX announcements dated 18 January 2022, 21 February 2022, 8 March 2022, 11 May 2022, 27 May 2022 and 6 June 2022. The Company confirms that it is not aware of any information or data that materially affects the information included in the market announcements, and that all material assumptions and technical parameters underpinning the estimates continue to apply. Annual Report for the Financial Year ending 30 June 2022 10 Review of Operations W��������� ������� Granite Black Range Dolerite Fortescue Group Nullagine Group Gorge Ck Group Dalton Suite Soanesville Group Pilbara Supergroup Kelly Group Strelley Pool Fm Warrawoona Group Calidus Project Tenure Au Resource ����������� ���� ��������� ������� Figure 2: Tenement Holdings of Calidus Figure 3: Gold Bars from Warrawoona Gold Project Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Review of Operations 11 Project highlights included: ā Processing plant commissioning completed ā LNG storage vessels delivered to site with ā First gold pour in May 2022 ā Milling rates progressed during the June quarter and will reach nameplate of 2.4Mtpa in the September quarter ā Process plant tested at up to 2.8Mtpa, with no major bottlenecks identified ā Mining rates have been improving and are now meeting long term averages transition to gas fired electricity expected in the September quarter ā Total of 323,267t of low-grade ore, commissioning ore and ROM ore milled ā Total of 8,916ozs of gold poured with an additional 1,192ozs of gold in circuit ā Total of A$22.0 million received from gold sales from the sale of 8,201oz with an average realised gold price of A$2,687 per ounce Figure 4: Warrawoona Gold Project Warrawoona Operational Performance Warrawoona Production Units Apr-22 May-22 Jun-22 June-22 Qtr Ore mined Waste Mined Strip ratio Ore mined Ore milled Grade Recovery Ounces Poured Gold Sales Total Gold Sold Average Realised Sales Price Total Gold Revenue bcm bcm ratio t t g/t % oz oz A$/oz A$ M 37,680 222,608 5.9 82,897 30,723 0.77 97.4 0 0 0 0 45,670 293,219 6.4 107,642 131,637 0.9 98.2 3,451 2,232 2,686 6.0 62,141 380,346 6.1 161,727 160,907 1.1 98.6 5,465 5,969 2,687 16.0 145,491 896,173 6.2 352,266 323,267 0.99 98.36 8,916 8,201 2,687 22.0 Annual Report for the Financial Year ending 30 June 2022 12 Review of Operations Exploration Blue Spec Deposit During the year, Calidus advanced its strategy to grow the production rate at its Warrawoona Gold Project with completion of a successful feasibility study drilling program at the Blue Spec deposit. This comprised diamond drilling to provide sufficient core to replicate the extensive metallurgical testwork completed by previous owners and advance the metallurgical studies to a DFS level. The drilling program confirmed results of up to 101 g/t High Grade.3 Highlights included: ā Geology logging of core identified numerous instances of visible gold in all holes (see figure 5) ā Assay Results included: ā 4.1m @ 33.6g/t Au from 194.9m (21BSDD005) incl. 2.2m @ 60.4g/t Au and incl. 1.1m @ 100.7g/t Au from 196m ā 2.55m @ 44.1g/t Au from 413.25m (21BSDD002) incl. 1.9m @ 58.5g/t Au ā 3.1m @20.4g/t Au from 449.9m (BSDD001) incl. 2.1m @ 28.4 g/t Au The results from the four diamond holes will be used to update the Mineral Resource Estimate (“MRE”) for Blue Spec. Geotechnical logging of the holes was also completed with preliminary advice received from the Geotechnical Consultant which was also in line with expectations. Environmental base line studies are underway for a Mining Proposal which will be submitted in September quarter 2022. Figure 5: Visible Gold Intersected in Ore Zone 3. Refer to ASX announcements dated 9 September 2021 and 8 November 2021. The Company confirms that it is not aware of any information or data that materially affects the information included in the market announcements, and that all material assumptions and technical parameters underpinning the estimates continue to apply. Our initial exploration work has returned highly promising results Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Review of Operations 13 Blue Spec East E Regional Drilling Results Calidus announced highly promising exploration results along strike from the Blue Spec Resource and from the Marble Bar Goldfield.4 BSP0264 18m @ 4.21g/t Highlights included: ā Gold intercepts at Blue Spec East highlight potential for an open-pit operation ā Results include 52m @ 1.4g/t Au from 22m in 22BSRC010, 20m @ 1.41g/t Au from 44m in 22BSRC009, and 10m @ 1.95g/t Au from 81m in 22BSRC018 ā These results are outside of the Blue Spec Resource being used in the current DFS ā At the Marble Bar Goldfield, 25km from Warrawoona, drilling has confirmed the down-dip extension of the Marble Bar quartz reef with high-grade intercepts including 2m @ 8.03g/t Au from 22m in 21MBRC005, 2m @ 6.75g/t Au from 48m in 21MBRC002 and 2m @ 4.53g/t Au from 85m in 21MBRC007 ā These results demonstrate the presence of shallow high-grade gold down dip from the old workings, showing potential for Marble Bar to provide ore to Warrawoona w 400m MP0008 7.0m @ 22.2g/t BSS_177 3.0m @ 5.18g/t 200m Blue Spec Remnants DDH_101 3.51m @ 98.3g/t BSD0018 0.5m @ 245g/t 7m @ 24.6g/t 0m BSD0018_W1 8.45m @ 5.20g/t 3m @ 5.75g/t BSD0033_W1 1.5m @ 14.2g/t -200m BSD0018_W2 1.76m @ 12.6g/t -400m BSD0039 0.83m @ 22.4g/t 2021 Drill Intercept DDH_101-D 7.87m @ 11.1g/t DDH_518 1.25m @ 225g/t BSP0177 11.0m @ 7.53g/t 21BSDD002 2.55m @ 44.1g/t Au incl. 1.9m @ 58.5g/t Au 21BSDD001 3.1m @ 20.4g/t Au incl. 2.1m @ 28.4g/t Au 16BSDH004 2.55m @ 59.1g/t BSD0035_W1 11.5m @ 12.7g/t BSD0036_W1 2.5m @ 156g/t Blue Spec Resource 200 metres Figure 6: 21072_BlueSpec_Diamond Drilling GS_20 2m @ 35.2g/t BSP0095 1m @ 10.6g/t BSP0047 9m @ 4.57g/t GSI_009 0.8m @ 17.3g/t w 400m 200m 0m 2021 Drill Intercept 100 metres BSS_035 1m @ 18.4g/t BSS_048 4m @ 17.1g/t E 21BSDD006 GS_15 1m @ 10.5g/t BSS_050 1m @ 18.4g/t 21BSDD005 4.1m @ 33.6g/t Au incl. 2.2m @ 60.4g/t Au BSD0011 2.8m @ 77.6g/t BSS_158 2m @ 7.3g/t BSD0014 0.95m @ 32.1g/t BSD0012 2.3m @ 75.5g/t BSD0013 0.7m @ 42.9g/t BSD0009 1m @ 51.0g/t BSD0002 0.7m @ 214g/t 16BSDH034 4m @ 35.0g/t GSI_007 2.1m @ 20.1g/t 16BSDH012 2m @ 15.2g/t GSI_003 2.4m @ 15.1g/t BSD0001 0.9m @ 100g/t 16BSDH033 4m @ 35.9g/t 16BSDH038 12m @ 5.21g/t Figure 7: Gold Spec Long Section and Significant Drill Intercepts 4. Refer to ASX announcements dated 2 June 2022. The Company confirms that it is not aware of any information or data that materially affects the information included in the market announcements, and that all material assumptions and technical parameters underpinning the estimates continue to apply. Annual Report for the Financial Year ending 30 June 2022 14 Review of Operations Calidus drillhole Au intercept >0.5 g/t Quartz reef Carbonate-sericite alteration Britannia Gold drill holes Consolidated Expl drill holes Historical workings 21MBRC006 21MBRC007 2m @ 4.53 g/t Au from 85m incl. 1m @ 8.34 g/t Au from 85m 21MBRC008 21MBRC005 21MBRC007 Nabob 21MBRC004 21MBRC003 21MBRC002 21MBRC001 21MBRC005 2m @ 8.03 g/t Au from 22m incl. 1m @ 11.9 g/t Au from 23m 21MBRC002 2m @ 6.75 g/t Au from 48m incl. 1m @ 12.9 g/t Au from 48m Excised: M45/607 P45/3040 P45/2954 Figure 8: Map of E45/5172 showing the location of recently drilled RC holes and significant intercepts Regional Stream Sediment Sampling An initial stream sediment sampling program, immediately along strike of the Blue Spec Gold project, has highlighted that Blue Spec West is highly prospective and represents the first modern exploration work done in this area.5 Highlights included: ā Greenfields exploration at the Blue Spec project defines three areas with elevated gold of up to 326 ppb ā The stream sediment sampling at Blue Spec West was the first modern exploration done in this area ā The results highlight the prospectivity of the western part of the Blue Spec Fault Zone, which has received very limited historical exploration and no drilling ā Follow-up soil sampling program is planned to be followed with drilling 5. Refer to ASX announcement dated 21 March 2022. The Company confirms that it is not aware of any information or data that materially affects the information included in the market announcements, and that all material assumptions and technical parameters underpinning the estimates continue to apply. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 200000E 210000E 220000E Review of Operations 15 E 46/1026 Stream Sediment Sample Area P 46/1972 M 46/115 Blue Spec Gold Spec 7 5 8 0 0 0 0 N ddnnee rr TT rraa eehhSS cc ee pp SS ee uullBB N 0 0 0 0 8 5 7 Nullagine 200000E 0 2.5 5 km 210000E 220000E Figure 9: Map showing the location of E46/1026 and the area covered by the stream sediment samples A maiden drill program at the Spear Hill prospect commenced to test the thickness and down-dip extent of the pegmatite. The initial scout drilling program comprised of 20 holes for approximately 1,673m, on a 1km portion of the 4.3km of strike length of outcropping lithium bearing pegmatites already mapped. The shareholders of Pirra Lithium plan to commence a demerger process and IPO. Pirra Lithium Calidus announced the formation of Pirra Lithium Pty Ltd (“Pirra Lithium”) a new Pilbara lithium exploration company. Pirra Lithium is owned equally by Calidus and Haoma Mining NL (“Haoma”). Pirra Lithium has been assigned tenements and lithium rights across the most prospective lithium ground in the Calidus and Haoma portfolios. These tenements and lithium rights cover 1,063km2. Calidus will contribute the first $1 million of funding for exploration and manage the exploration using existing infrastructure in the area. Following this, both parties will contribute equally to the funding of Pirra Lithium. Calidus issued 1,461,262 fully paid ordinary shares to Haoma at an issue price of $0.68 per Share as compensation for previous exploration. The parties executed formal mineral rights sharing agreements which govern the grant of the lithium rights to Pirra Lithium.6 Following the completion of the Pirra Lithium transaction, Pirra Lithium discovered a lithium-bearing pegmatite with a mapped strike length of more than 4.3km at the Spear Hill prospect. Rock-chip samples of the pegmatite and the adjacent granitic country rocks were collected. Assays of the pegmatite yielded 0.66%-2.34% Li₂O, with two samples of metasomatized country rock adjacent to the pegmatite yielding 2.78% and 2.91% Li₂O. The Spear Hill area, about 50km SW of Marble Bar, is part of the historic Shaw River tin field. The area has been mined for alluvial tin since about 1893 with a little more than 6,500t of tin concentrate won from the field up until 1975. Pilgangoora Archer W odgina Spear Hill Prospect Port Hedland Pirra Lithium WESTERN AUSTRALIA Kalgoorlie Perth Lithium Mine Lithium Resource Town Road 100 kilometres Figure 10: Pirra Lithium Location Map 6. Refer to ASX announcements dated 18 January 2022, 21 February 2022, 8 March 2022, 11 May 2022, 27 May 2022 and 6 June 2022. The Company confirms that it is not aware of any information or data that materially affects the information included in the market announcements, and that all material assumptions and technical parameters underpinning the estimates continue to apply. Annual Report for the Financial Year ending 30 June 2022 16 Review of Operations 119°30′E 120°0′E P45/2975 P45/2974 Archer (Li) Marble Bar SPEAR HILL PROSPECT 2 1 ° 0 S ′ 2 1 ° 3 0 S ′ ′ S 0 ° 1 2 ′ S 0 3 ° 1 2 119°30′E 120°0′E Figure 11: Location of the Spear Hill area and tenement holdings and lithium rights of Pirra Lithium on a background of GSWA’s 1:500,000 state bedrock geology and linear structures layers Pirra Project Tenure Split Rock Supersuite 0 10 20 km Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 7 6 2 2 0 0 0 N 7 6 2 0 0 0 0 N Review of Operations 17 752000E 754000E E 45/4587 E 45/5834 P 45/2975 P 45/2974 Sample Location New Previously Assay Reported <1% Li O2 >1% Li O2 Lithium Pegmatite Dolerite Alluvium Colluvium 0 500 1,000 m N 0 0 0 2 2 6 7 N 0 0 0 0 2 6 7 Figure 12: Mapped distribution of the lithium pegmatites 752000E 754000E Corporate Cash Position At 30 June 2022, Calidus and its subsidiaries held $18.1 million of cash, $1.9 million of gold on hand and $163k in listed investments. Project Loan Facilities The Project Loan Facilities with Macquarie Bank totalling $110 million were fully drawn during the financial year. The first debt repayment of $3 million was made in June 2022 reducing the facilities to $107 million at 30 June 2022. Outstanding hedge facilities totalled 156,799 ounces with an average forward price of A$2,392/ oz for delivery from September 2022 to September 2025. Personnel Changes Appointment of Kate George as a Non- Executive Director The Company announced the appointment of Ms Kate George as a Non-Executive Director on 1 February 2022. Ms George has over 20 years’ experience in environmental management within government and industry, working with small midcap miners to major resource companies. Resignation of Keith Coughlan as Non- Executive Director The Company advised on 13 May 2022 that Mr Keith Coughlan had resigned as Non-Executive Director of the Company. Investor Relations The Company presented either via live stream video or in person at numerous investor conferences including: ā Diggers and Dealers Forum in Kalgoorlie, Western Australia ā RRS 2022 Gold Coast Conference, Queensland ā The virtual Australian Gold Conference ā Noosa Mining Investor Conference, Queensland ā RIU Explorers Conference, Fremantle, Western Australia ā Euroz Hartleys Rottnest Institutional Conference, Western Australia ā Euroz Gold Day, Perth, Western Australia ā Rising Stars-Miningnews.net ‘Boom in a Room’ Investor Conference, Perth, Western Australia ā RRS Brisbane Investor Briefing, Queensland ā Conducted various roadshows through Perth, Melbourne and Sydney. Annual Report for the Financial Year ending 30 June 2022 18 Sustainability Report Sustainability Report At 30 June 2022 Sustainable Development and Production. Sustainable Development and Production is at the heart of our values at Calidus. At Calidus, we work with transparency and trust, supporting long-term economic growth and creating shared value with our stakeholders. We respect the human rights of all people, including our employees, the communities where we are active, and those working within our supply chains. We acknowledge the environmental and cultural value of the land in which we operate and mitigate potential harm as a result of our project and operational activities. Health and Wellbeing At Calidus we genuinely care about the health and wellbeing of our people, including our employees and contractors and all stakeholders. We believe that a healthy and engaged workforce is a conduit to becoming a safe, productive and ultimately successful and sustainable business. Calidus is committed to promote the physical and mental health of our people through initiatives and support systems, such as employee assistance programs and the provision of onsite facilities to support a healthy lifestyle and facilitate positive social interactions. The Board and management team at Calidus have built an environment and culture to support the health and wellbeing of all our employees and contractors through visible and effective leadership. Promotion of Health and Wellbeing On site initiatives completed to date at Warrawoona to promote Health and Wellbeing of staff and contractors include: ā The construction of a fully equipped medical center and ambulance, to ensure an effective emergency response resource is available to mitigate possible harm to our employees and contractors and also provide assistance to local communities ā The construction of wet mess facilities and recreation room designed to provide an inclusive communal atmosphere and promote social activities ā The construction of a well-equipped indoor gym and out-door walking track to promote physical activities and exercise ā The construction of dry-mess facilities and the provision of a selection of fresh and healthy food options to promote healthy nutrition. Employee Assistance Programs Calidus and its contractors provide access to Employee Assistance Programs for all employees and their families through work-based intervention programs. These are designed to enhance the emotional, mental and general psychological wellbeing of employees and immediate family members. The aim of the Employee Assistance Programs are to provide preventive and proactive interventions for the early detection, identification and resolution of both work and personal challenges that may adversely affect performance and wellbeing. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Sustainability Report 19 Covid 19 Response Calidus continues to manage and mitigate the potential impact of the COVID-19 global pandemic on the Company’s operations. The management response plan remains focused on ensuring the health and safety of personnel and limiting the disruption risk to our operations. This plan has been progressively developed in line with the formal guidance of State and Federal health authorities and under the Company’s existing Emergency Management Policies. The Company continues to closely monitor the advice and requirements from State and Federal Governments and health authorities and maintain its focus on minimising the effects of COVID-19 on the health and well-being of staff and the communities in which we operate. Safety The safety and health of our people is the most important of our core values at Calidus. Safety is embedded in everything we do at Calidus, and we expect our employees and contractors to always ensure their own safety and that of their colleagues. We acknowledge that a risk-based approach to managing hazards, incorporating regular reviews and audits of our principal risks and controls is essential to providing a safe and productive workplace for our employees and contractors. We will ensure that all employees and contractors have the competency and skills required to work safely, and are provided with appropriate tools and information to enable work to be conducted safely and productively. Safety Statistics Since the development of Warrawoona has commenced, there have been two recordable injuries with 610,674 hours worked by employees and contractors to date. Environment Environmental stewardship is embedded in our operational thinking and Calidus is committed to continually improve its environmental and sustainability performance. At Calidus we recognise the significant fauna and flora of the Pilbara region. We protect and support the natural environment in which we operate by creating effective systems, practices and documented plans to manage and mitigate environmental impacts of activities. Environmental Permits Calidus applied for, and received, Environmental Approval for development of Warrawoona from both the WA State Government Environmental Protection Agency (EPA) and Federal Government Department of Agriculture, Water and Environment (DAWE). Various other approvals have been applied for and received from WA State Government Department of Mining Industry Regulation and Safety (DMIRS) and Department of Water and Environmental Regulation (DWER). Comprehensive Environmental Base Line Studies Calidus has undertaken 3 years of comprehensive environmental base line studies which underpinned the identification of the environmental aspects of the region in which we operate, and the development of environmental management plans for our operations and a mine closure. These base line studies incorporate the following scientific fields: ā Flora and Vegetation ā Terrestrial Fauna ā Subterranean Fauna ā Short Range Endemic Fauna ā Groundwater dependent Ecosystems ā Ground water ā Surface water ā Waste Rock Characterisation ā Tailings Characterisation including consideration of Cyanide Destruction ā Climate and Meteorology ā Green House Gas ā Noise As we have now moved into production, Calidus has implemented detailed monitoring procedures to ensure compliance with all statutory requirements. Annual Report for the Financial Year ending 30 June 2022 20 Sustainability Report Carbon Reduction Strategies Calidus continues to carefully plan its operations to incorporate carbon reduction strategies. Strategies identified to date include: ā Construction of a 4MW solar farm and 3MW battery to reduce carbon emissions by 17,000t per annum ā Locally sourced LNG to substitute diesel usage in power generation to reduce carbon emissions by 10,500t per annum ā The installation of Hydrogen-ready power generation to further reduce emissions as hydrogen fuel becomes available in the future ā All flights from personnel to and from site are carbon offset through contributions to airline carbon offset schemes Cyanide Destruction Infrastructure installed to enable destruction of cyanide in tailings prior to discharge from the process plant to minimise the potential exposures to native wildlife. Contribution to Pilbara Environmental Offset Fund (PEOF) Calidus has contributed $600,000 to PEOF to broker access for offsets on land. Native Wildlife Protection Calidus took the lead to establish a 32ha conservation zone initiative for the protection of native wildlife in our mining area and has implemented extensive management plans for the monitoring of federal protected species present within the boundaries of our tenements. Water Recycling The Warrawoona tailings dam is designed to recycle water used in operations and collect water in cyclonic events to reduce pressure on local aquifers. Waste Dumps Waste dumps are carefully designed to blend in with the local relief to limit their visual impact at mine closure. Community At Calidus, we acknowledge the traditional custodians of the land in which we operate, and recognise the strength, resilience and capacity of the First Peoples of this land. We recognise that our long-term success depends on our ability to build relationships with business partners, host communities and other stakeholders and maintain a social licence to operate. We engage regularly, openly and honestly with our host communities and stakeholders, and take their views and concerns into account in our decision-making. We commit to maintaining community engagement, seeking to provide local employment opportunities and engaging local businesses, seeking opportunities to invest in local infrastructure and to support the sustainable development of our host communities and recognise the value they add to our operations. Upgrading Local Infrastructure A number of initiatives have been undertaken to upgrade local infrastructure including: ā Contribution to the upgrade of the Marble Bar airstrip in collaboration with the Shire of East Pilbara ā Upgrade and ongoing maintenance of the Corunna Downs Rd, our key travel route Support Local Business and Community Events A number of initiatives have been undertaken to support local business and community events including: ā Prioritisation of local contractors and employment ā Active participation and sponsorship of key community events Sponsorships & Opportunities for Local Employment A number of initiatives have been undertaken to provide sponsorships and opportunities for local employment including: ā Indigenous Arts Program at Marble Bar and Warralong schools ā Establish apprenticeships and other opportunities for local indigenous people Heritage Surveys Extensive heritage surveys have been completed in collaboration with the local traditional custodians. Sites of importance were identified, mapped and demarcated. As a direct result of these surveys, the project development has been modified to ensure all identified heritage sites are protected from any current and future impact during the construction and operation of the project. A key achievement of Calidus is that no heritage site has been disturbed in the construction or operation of Warrawoona. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Diversity and Inclusion Calidus is dedicated to growing an inclusive and diverse workforce, aligned with the Company’s core values, where every employee is treated fairly, feels respected and where they can contribute to our success and realise their full potential. A diverse and inclusive workforce provides new perspectives, thinking and constructive challenges, fostering innovation and creativity. Diversity refers to all characteristics that make individuals different from each other. It includes age, religious beliefs, cultural diversity, nationality, ethnicity, gender or gender identity, sexual orientation, marital or family status, disabilities, socio-economic background, perspectives and experience, or any other area of potential difference. Inclusion refers to our diverse range of people feeling welcomed, respected and valued to fully participate, having access to opportunities and resources, and be able to contribute their perspectives and talents to drive the long-term sustainable business of Calidus. Building a Diverse and Inclusive Workplace The Board has established a Diversity Policy which provides a framework for the Company to achieve diversity objectives. Sustainability Report 21 Corporate Governance Effective corporate governance is critical to the long-term success of Calidus. The Board and all levels of management are committed to upholding a strong corporate governance framework, policies and procedures of the highest standard, to support a culture that values ethical behaviour and the conduct of business with integrity and respect. The Board oversees Calidus’ sustainability objectives and are accountable for a positive corporate culture, the achievement of high governance standards and ensuring compliance with the legislative and regulatory framework in which we operate. Corporate Governance Framework The Board is responsible for establishing the Company’s Corporate Governance Framework and has referred to the 4th Edition of the ASX Corporate Governance Councils’ Corporate Governance Principles and Recommendations. The Corporate Governance Statement discloses the extent to which the Company follows the recommendations. The Boards’ Audit and Risk Committee oversees the internal financial control systems and risk management systems and assessments and makes recommendations to the Board. In addition, the Boards’ Remuneration and Nomination Committee has oversight over the Company’s remuneration framework to motivate the achievement of key performance criteria and appropriate behaviours that align with the Calidus values. Transparent Communication Being transparent in relation to governance and risk is fundamental to building and maintaining stakeholder trust and investor confidence and underpins the substance of our disclosures. The Board is responsible for establishing and ensuring compliance with the Company’s Continuous Disclosure Policy, Securities Trading Policy and Whistle-blower Policy. Ethical Business Practice Calidus is committed to upholding lawful and ethical practices in our dealings with suppliers, stakeholders and local communities. The Board establishes and monitors compliance with the Calidus values, Code of Conduct, and other associated policies including an Anti-Bribery and Anti-Corruption Policy. The Boards’ objective is to ensure that all Directors, management and employees are accountable, act ethically and with integrity, in the best interests of our shareholders, in compliance with all laws and Company policies, and in alignment with community expectations. A copy of the Corporate Governance Statement, Corporate Governance Policies and charters are available on the Company website: https://www. calidus.com.au/about/corporate-governance/ Annual Report for the Financial Year ending 30 June 2022 22 Sustainability Report The past year has been intense and productive, and we look forward to building on our achievements to date Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Annual Mineral Resource & Ore Reserve Report 23 Annual Mineral Resource & Ore Reserve Report At 30 June 2022 In accordance with ASX Listing Rule 5.21, Calidus reviews and reports its Mineral Resources and Ore Reserves at least annually. The date of reporting is 30 June each year, to coincide with the Company’s end of financial year balance date. If there are any material changes to its Mineral Resources or Ore Reserves over the course of the year, the Company promptly reports these changes. Mineral Resources The Mineral Resources for Calidus has decreased from 1.723Moz as reported on 30 June 2021, to 1.691Moz at 30 June 2022, a decrease of 32koz. The key change involves resource depletion due to mining. The Mineral Resource has been classified in the Measured, Indicated and Inferred categories, in accordance with the 2012 Australasian Code for Reporting of Mineral Resources and Ore Reserves (JORC Code). A range of criteria has been considered in determining this classification including geological continuity, data quality, drill hole spacing, modelling technique, estimation properties including search strategy, number of informing data and average distance of data from blocks. The total Mineral Resource Estimate is shown in Table 1. Table 1: Mineral Resources as at 30 June 2022 (inclusive of Reserves; rounded to nearest 100,000t; 0.01g/t; 1,000oz) Deposit Cut-Off Measured Indicated Inferred Total (g/t) Mt Au (g/t) KOz Mt Au (g/t) KOz Mt Au (g/t) KOz Mt Au (g/t) KOz Klondyke Open Pit including Klondyke UG including Copenhagen Coronation Fieldings Gully Blue Spec Project Blue Spec Gold Spec 0.3 0.5 1.5 2.0 0.5 0.5 0.5 3.0 3.0 1.6 1.1 0.93 1.17 49 42 28.8 20.1 1.0 0.7 0.2 0.6 0.3 0.2 0.1 0.1 0.90 1.12 2.87 3.36 5.58 1.88 1.80 835 725 89 72 34 34 16 21.70 106 29.10 12.40 79 27 8.3 5.0 1.8 1.2 0.1 0.2 0.3 0.3 0.2 0.0 0.81 1.09 3.31 4.08 2.65 1.24 1.87 217 176 162 130 9 9 20 38.7 26.3 2.7 1.9 0.3 0.8 0.6 0.88 1,101 1.12 2.83 3.33 4.54 1.69 1.84 943 250 202 43 43 36 13.30 113 0.4 16.30 219 12.20 21.60 92 21 0.3 0.1 16.70 15.20 171 48 Total 1.6 0.93 49 31.0 1.12 1,114 11.0 1.57 530 43.5 1.20 1,691 Ore Reserves The Ore Reserve for the Klondyke open pit, St George and Copenhagen open pits has decreased by 31kozs due to mining depletion. Ore Reserves are shown in Table 2. Table 2: Ore Reserves as at 30 June 2021 (rounded to nearest 1,000t; 0.1g/t; 1,000oz) Deposit Cut-Off (g/t) Klondyke Open Pit 0.33-0.36 Klondyke Underground 1.2 St George Open Pit 0.36-0.39 Copenhagen Open Pit 1.88 Proven Au (g/t) 1.0 koz 45 Mt 1.4 Probable Mt Au (g/t) Total Mt Au (g/t) 9.8 1.9 0.2 0.1 1.0 2.1 1.2 5.5 1.2 koz 326 120 9 17 11.3 1.9 0.2 0.1 1.0 2.1 1.2 5.5 1.2 koz 371 120 9 17 517 Total 1.4 1.0 45 12.1 472 13.5 Annual Report for the Financial Year ending 30 June 2022 24 Annual Mineral Resource & Ore Reserve Report Governance Arrangements and Internal Controls Calidus has ensured that the Mineral Resources and Ore Reserves quoted are subject to good governance arrangements and internal controls. The Mineral Resources and Ore Reserves reported have been generated by internal and external Company geologists, who are experienced in best practice modelling and estimation methods. The competent person has also undertaken reviews of the quality and suitability of the underlying information used to generate the resource estimation. In addition, Calidus’ management carry out regular reviews and audits of internal processes and external contractors that have been engaged by the Company. Competent Persons Statement The information in this report that relates to exploration targets and exploration results is based on and fairly represents information compiled by Mr. Steve Sheppard, a competent person who is a member of the AusIMM. Mr. Steve Sheppard is employed by Calidus Resources Limited. Steve has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Steve Sheppard consents to the inclusion in this announcement of the matters based on his work in the form and context in which it appears. The information in this report that relates to Klondyke Underground Mineral Resources is based on and fairly represents information compiled or reviewed by Mr. Lynn Widenbar, Principal Consultant of Widenbar and Associates Pty Ltd., who is a Member of the AusIMM and the AIG. Mr. Lynn Widenbar is a full-time employee of Widenbar and Associates Pty Ltd. and has sufficient experience, which is relevant to the style of mineralisation and types of deposit under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Lynn Widenbar consents to the inclusion of the report of the matters based on the information in the form and context in which it appears. The information in this report that relates to Blue Spec and Gold Spec, Copenhagen, Coronation, and Fieldings Gully Mineral Resources is based on and fairly represents information compiled or reviewed by Mr. Ben Playford, who is a Member of the AIG. Mr. Ben Playford is a full-time employee of Calidus Resources Limited. and has sufficient experience, which is relevant to the style of mineralisation and types of deposit under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Ben Playford consents to the inclusion of the report of the matters based on the information in the form and context in which it appears. The information in this report that relates to Klondyke Open Pit Mineral Resources is based on and fairly represents information compiled or reviewed by Ms. Christine Standing, Principal Consultant of Optiro Ltd., who is a Member of the AusIMM and the AIG. Ms. Christine Standing is a full-time employee of Optiro Ltd. and has sufficient experience, which is relevant to the style of mineralisation and types of deposit under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Jani Kalla consents to the inclusion of the report of the matters based on the information in the form and context in which it appears. The information in this report that relates to the Open Pit Ore Reserves is based on and fairly represents information compiled or reviewed by Mr. Steve O’Grady. Mr. O’Grady has confirmed that he has read and understood the requirements of the 2012 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. He is a Competent Person as defined by the JORC Code 2012 Edition, having more than five years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity for which he is accepting responsibility. Mr. O’Grady is a Member of the AusIMM and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to the Underground Ore Reserves is based on and fairly represents information compiled or reviewed by Mr. Matthew Keenan. Mr. Keenan is a full time employee of Entech Pty Ltd. Mr. Keenan has confirmed that he has read and understood the requirements of the 2012 Edition of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Keenan is a Competent Person as defined by the JORC Code 2012 Edition, having more than five years’ experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity for which he is accepting responsibility. Mr. Keenan is a Member of the AusIMM and has provided his prior written consent to the inclusion in the report of the matters based on his information in the form and context in which it appears. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Annual Mineral Resource & Ore Reserve Report 25 Forward looking Statements and Disclaimers This report does not constitute investment advice. Neither this report nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This report does not take into account any person’s particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this report are not intended to represent recommendations of particular investments to particular persons. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments. To the fullest extent permitted by law, Calidus Resources Limited does not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this report. No responsibility for any errors or omissions from this report arising out of negligence or otherwise is accepted. This report may include forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Calidus. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in this report. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements. Any forward looking statements in this report speak only at the date of issue of this report. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Calidus does not undertake any obligation to update or revise any information or any of the forward looking statements in this report or any changes in events, conditions or circumstances on which any such forward looking statement is based. Compliance Statement The information in this report that relates to Exploration Results and Mineral Resources released previously on the ASX. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that, in the case of mineral resources estimates, all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements. Annual Report for the Financial Year ending 30 June 2022 26 Tenement Schedule Tenement Schedule as at 30 June 2022 Calidus Resources & Subsidairies Tenement Schedule Tenement ID Holder Size (ha) Renewal Ownership /Interest E45/3381 Keras (Pilbara) Gold Pty Ltd E45/4666 Keras (Pilbara) Gold Pty Ltd E45/4622 Keras (Pilbara) Gold Pty Ltd E45/4934 Keras (Pilbara) Gold Pty Ltd E45/4856 Keras (Pilbara) Gold Pty Ltd E45/4857 Keras (Pilbara) Gold Pty Ltd E45/3615 Keras (Pilbara) Gold Pty Ltd E45/4236 Keras (Pilbara) Gold Pty Ltd E45/4905 Keras (Pilbara) Gold Pty Ltd E45/4906 Keras (Pilbara) Gold Pty Ltd M45/0521 Keras (Pilbara) Gold Pty Ltd M45/0547 Keras (Pilbara) Gold Pty Ltd M45/0552 Keras (Pilbara) Gold Pty Ltd M45/0668 Keras (Pilbara) Gold Pty Ltd M45/0669 Keras (Pilbara) Gold Pty Ltd M45/0670 Keras (Pilbara) Gold Pty Ltd M45/0671 Keras (Pilbara) Gold Pty Ltd M45/0672 Keras (Pilbara) Gold Pty Ltd M45/0679 Keras (Pilbara) Gold Pty Ltd M45/0682 Keras (Pilbara) Gold Pty Ltd M45/0240 Keras (Pilbara) Gold Pty Ltd E45/1290 Keras (Pilbara) Gold Pty Ltd E46/0115 Keras (Pilbara) Gold Pty Ltd E46/0244 Keras (Pilbara) Gold Pty Ltd E45/4555 Keras (Pilbara) Gold Pty Ltd E45/5172 Keras (Pilbara) Gold Pty Ltd E45/4843 Keras (Pilbara) Gold Pty Ltd P45/3065 Keras (Pilbara) Gold Pty Ltd P46/1972 Keras (Pilbara) Gold Pty Ltd L45/523 L45/564 L45/565 Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd 7,802 3,162 4,217 1,595 1,594 1,275 1,595 957 638 319 18 18 10 242 102 113 119 116 121 236 6 150 931 18 1,915 4,291 941 29 195 173 60 7 16/03/2021 23/11/2021 04/05/2022 22/01/2023 20/05/2023 20/05/2023 22/11/2022 19/10/2024 29/11/2022 29/11/2022 10/03/2034 02/05/2035 18/01/2035 28/12/2037 28/12/2037 29/12/2037 29/11/2037 01/08/2037 08/04/2038 17/04/2038 17/11/2028 11/02/2042 03/02/2033 28/11/2042 01/03/2022 30/05/2024 02/07/2022 29/03/2024 15/12/2025 18/09/2040 25/11/2020 26/11/2020 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Tenement Schedule 27 Calidus Resources & Subsidairies Tenement Schedule continued… Tenement ID Holder Size (ha) Renewal Ownership /Interest L45/566 Keras (Pilbara) Gold Pty Ltd E45/5747 Keras (Pilbara) Gold Pty Ltd E45/5748 Keras (Pilbara) Gold Pty Ltd G45/345 G45/347 G45/349 G45/348 L45/527 L45/567 L45/573 L45/584 L45/585 L45/586 L45/587 L45/588 L45/590 L45/591 L45/592 L45/593 L45/613 Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd 9 3,826 5,112 439 2 26 36 252 2 11 66 115 56 73 102 105 58 86 21 7 25/11/2020 15/12/2026 15/12/2026 11/05/2041 03/01/2042 03/01/2042 21/02/2042 23/02/2042 17/12/2041 04/01/2042 20/04/2042 06/04/2042 22/02/2042 06/04/2042 03/03/2042 22/02/2042 28/03/2042 22/02/2042 04/01/2042 10/06/2042 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Applications E45/6104 E45/6105 E46/1421 L45/639 Joint Venture E45/4704 E45/4706 E45/5706 E46/1026 E46/1035 Keras (Pilbara) Gold Pty Ltd Keras (Pilbara) Gold Pty Ltd 1,913 956 APPLICATION APPLICATION Keras (Pilbara) Gold Pty Ltd 16,552 APPLICATION Keras (Pilbara) Gold Pty Ltd 140 APPLICATION 100% 100% 100% 100% Beckton Gledhill Pty Ltd Beckton Gledhill Pty Ltd 7,962 5,414 07/04/2022 Earning 70% 08/01/2022 Earning 70% Keras (Pilbara) Gold Pty Ltd/Beatons Creek Gold Pty Ltd 1,277 09/01/2027 70% Gondwana Resources Limited Nimble Resources Pty Ltd 3,797 8,701 09/05/2026 Earning 51% 01/12/2025 Earning 70% Annual Report for the Financial Year ending 30 June 2022 28 Directors’ Report Directors’ Report The Directors of Calidus Resources Limited (Calidus or the Company) submit their report on the results and state of affairs of Calidus and its subsidiaries (collectively the Group), for the financial year ended 30 June 2022. Directors The names and information of Directors of Calidus in office during the financial year and at the date of this report are: Mr. David Reeves Managing Director Qualifications: Mining Engineer Bachelor of Engineering (1st Class honours), Grad Dip Applied Finance, WA Mine Managers Certificate Experience: Mr Reeves is a Perth-based, qualified mining engineer with 31 years of experience in the mining industry and was the Non-Executive Chairman of European Metals Holdings Limited (ASX and AIM). Mr Reeves has extensive experience in international capital markets through his involvement with various listed London and Australia companies. Mr Reeves was the Project Manager of Zimplats and Afplats prior to their sale for a combined US$1 billion and prior to this, worked with Delta Gold in Zimbabwe and various gold companies in Western Australia in which he assumed various roles, including the position of Mine Manager. Special Responsibilities: None Interest in Shares and Options: ā 20,212,258 Fully Paid Ordinary Shares ā 1,500,000 Unlisted Option, nil exercise price, exp 27 December 2024 ā 341,979 Executive Options (Tranche 1) nil exercise price exp 31 December 2023 ā 341,979 Executive Options (Tranche 2) nil exercise price exp 31 December 2024 ā 341,979 Executive Options (Tranche 3) nil exercise price exp 31 December 2025 Directorships Held in Other Listed Entities: None Past directorships in the last 3 years: ā Non-Executive Chairman of European Metals Holdings Limited (ASX & AIM) – resigned 30 June 2020 ā Non-Executive Director of Keras Resources Plc (AIM)- resigned 1 September 2022 Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Directors’ Report 29 Mr. Mark Connelly Independent Non-executive Chairman Qualifications: Bachelor of Business, ECU, MAICD, AIMM, Member of SME Experience: Mr Connelly was previously Managing Director of Papillon Resources and was instrumental in the US$570m takeover of Papillon by B2Gold Corp in October 2014. Prior to Papillon, Mr Connelly was Chief Operating Officer of Endeavour Mining Corporation, following its merger with Adamus Resources Limited where he was Managing Director and CEO. Mark was instrumental in not only the merger, but procurement of project finance and the development of the Nzema Mine in Ghana into a +100Koz pa mining operation. Special Responsibilities: Member of the Audit and Risk Committee and Chairman of the Remuneration and Nomination Committee following resignation of K Coughlan on 13 May 2022 Interest in Shares and Options: ā 776,786 Fully Paid Ordinary Shares ā 100,000 NED Options, nil exercise price, exp 27 December 2023 ā 56,334 NED Options (Tranche 1) nil exercise price exp 31 December 2023 ā 156,333 NED Options (Tranche 2) nil exercise price exp 31 December 2024 ā 156,333 NED Options (Tranche 3) nil exercise price exp 31 December 2025 Directorships Held in Other Listed Entities: ā Non-Executive Chairman of Chesser Resources Limited (ASX) ā Non-Executive Chairman of Oklo Resources Limited (ASX) ā Non-Executive Chairman of Omnia Metals Group Limited (ASX) ā Non-Executive Non-Executive Director of Renegade Exploration Limited (ASX) Past directorships in the last 3 years: ā Non-Executive Chairman of Hyperion Metals Limited (ASX) (previously named Tao Commodities Ltd) from 5 May 2017 to 18 February 2021 ā Non-Executive Chairman of Primero Group Limited (ASX) from 25 May 2018 to 25 February 2021 ā Non-Executive Chairman of West African Resources Ltd (ASX) from 23 June 2015 to 29 May 2020 ā Non-Executive Chairman of Baxton Gold Holdings Limited (ASX) from 12 February 2021 to 30 June 2022 Annual Report for the Financial Year ending 30 June 2022 30 Directors’ Report Directors continued… Mr. Keith Coughlan Non-Executive Director (resigned 13 May 2022) Qualifications: BA Experience: Mr Coughlan has almost 31 years’ experience in stockbroking and funds management. He has been largely involved in the funding and promoting of resource companies listed on ASX, AIM and TSX, has advised various companies on the identification and acquisition of resource projects and was previously employed by one of Australia’s then largest funds. Special Responsibilities: Chairman of the Remuneration and Nomination Committee and member of the Audit and Risk Committee Mr. John Ciganek Non-Executive Director Qualifications: Bachelor of Mining Engineering, Wollongong University, NSW. MBA Macquarie Graduate School of Management, NSW Experience: John has more than 31 years in the mining sector across a range of roles including mining engineering, stockbroking, executive management and corporate finance. Most recently, John gained substantial experience in debt financings including project financings, project bonds issuances, convertible note offerings, working capital facilities, hedging facilities, off-taker funding, and equity raisings through his role as Executive Director for Burnvoir Corporate Finance. Special Responsibilities: Chairman of the Audit and Risk Committee and member of the Remuneration and Nomination Committee. Ms Kate George Non-Executive Director (appointed 1 February 2022) Qualifications: Bachelor of Science (Environmental) with First Class Honours from Murdoch University and is a qualified Auditor of Integrated Management Systems (RABQSA, QM, EM, OH). Experience: Kate has more than 20 years’ experience in environmental management within government and industry, working with small midcap miners to major resource companies. Kate’s key experience includes development of environmental permitting strategy and the coordination of ecological survey via Western Australian consulting firm Rapallo. Interest in Shares and Options: ā 500,000 Fully Paid Ordinary Shares ā 200,000 NED Options, nil exercise price, exp 27 December 2023 Directorships Held in Other Listed Entities: ā Executive Chairman of European Metals Holdings Limited (ASX & AIM) ā Non-Executive Chairman of Doriemus plc (ASX) Past directorships in the last 3 years: Non-Executive Director of Southern Hemisphere Mining Limited (ASX) from 7 July 2016 to 5 February 2021 Interest in Shares and Options: ā 66,667 Fully Paid Ordinary Shares ā 133,333 NED Options, nil exercise price, exp 4 January 2025 ā 2,407 NED Options (Tranche 1) nil exercise price exp 31 December 2023 ā 2,407 NED Options (Tranche 2) nil exercise price exp 31 December 2024 ā 69,074 NED Options (Tranche 3) nil exercise price exp 31 December 2025 Directorships Held in Other Listed Entities: ā Non-Executive Chairman of Ookami Limited (ASX) ā Non-Executive Director of Vanadium Resources Limited (ASX) Past directorships in the last 3 years: None Special Responsibilities: Member of the Remuneration and Nomination Committee and the Audit and Risk Committee Interest in Shares and Options: ā 250,000 Fully Paid Ordinary Shares ā 56,527 NED Options (Tranche 1) nil exercise price exp 31 December 2023 ā 61,667 NED Options (Tranche 2) nil exercise price exp 31 December 2024 ā 61,667 NED Options (Tranche 3) nil exercise price exp 31 December 2025 Directorships held in other listed entities: None Past directorships in the last 3 years: None Company Secretary Ms Julia Beckett Julia was appointed Company Secretary of the Company on 24 September 2018. Ms Beckett holds a Certificate in Governance Practice and Administration and is a Member of the Governance Institute of Australia. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Directors’ Report 31 Meetings of Directors and Committees The number of Directors’ Meetings (including meetings of Committees of Directors) held during the year ended 30 June 2022, and the number of meetings attended by each Director whilst in office are as follows: Directors’ Meetings Audit Committee Remuneration Committee Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended 12 12 11 12 4 12 12 11 12 4 - 2 2 2 - - 2 2 2 - - 1 1 1 - - 1 1 1 - Dave Reeves Mark Connelly Keith Coughlan John Ciganek Kate George Securities Options At the date of this report, the unissued ordinary shares of Calidus Resources Limited under option are as follows: Grant Date 25-Nov-19 25-Nov-19 25-Nov-19 4-Jun-20 5-Aug-20 16-Dec-20 16-Dec-20 4-Jan-21 19-Jan-21 15-Feb-21 23-Feb-22 28-May-21 14-Mar-22 14-Mar-22 26-May-22 26-May-22 26-May-22 Date of Expiry Exercise Price Number under Option 27-Dec-23 27-Dec-24 30-Jan-25 4-Jun-25 5-Aug-25 11-Dec-25 16-Dec-25 4-Jan-25 19-Jan-23 16-Feb-24 18-Jan-23 28-May-24 31-Dec-22 31-Dec-23 31-Dec-22 31-Dec-23 31-Dec-24 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 100,000 3,450,000 1,350,000 250,000 300,000 167,500 128,800 133,333 220,000 50,000 750,000 150,000 1,806,559 2,760,884 457,247 562,386 629,053 13,265,762 Shares Issued on Exercise of Options During the financial year, the Company issued ordinary shares as a result of the exercise of options as follows: Exercise Date Issued Price of the Shares Number of Shares Issued 12-Nov-21 10-Jan-22 14-Mar-22 14-Mar-22 26-May-22 02-Jun-22 10-Jun-22 28-Jun-22 Nil Nil Nil Nil Nil Nil Nil Nil 170,000 166,667 570,732 1,461,262 506,650 220,000 200,000 141,000 Annual Report for the Financial Year ending 30 June 2022 32 Directors’ Report Dividends No amounts were paid by way of dividends since the end of the previous financial year (2021: Nil). At this time of this report, the Directors do not recommend the payment of a dividend. Operating and Financial Review Financial Position The net assets of the Group have decreased from 30 June 2021 by $6,077,787 to $100,815,334 at 30 June 2022 (2021: $106,893,121). As at 30 June 2022, the Group’s cash and cash equivalents decreased by $9,181,089 to $18,136,337 at 30 June 2022 (2021: $27,317,426) and had working capital position of ($1,295,419) (2021: $15,980,229 working capital), as noted in “Note 18D” on page 68. Principal Activities The principal activities of the Company during the financial year were gold exploration and development. Refer to the “Review of Operations” on page 9 for further details. Significant Changes in the State of Affairs Refer to “Review of Operations” on page 9 for the significant changes in the state of affairs of the Group that occurred during the financial year. Financial Review Operating Results For the 2022 financial year the Group delivered a loss before tax of $8,720,509 (2021: $4,778,565 loss). The financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business. Events Subsequent to Reporting Date On 19 August 2022 Calidus raised $20 million (before costs) via a share placement to professional and sophisticated investors through the issue of 29,850,747 shares at a price of $0.67 per share. Annual Report for the Financial Year ending 30 June 2022Calidus Resources Limited ABN: 98 006 640 553 ASX:CAI Directors’ Report 33 Business Strategy, Prospects and Future Developments Business Strategy The focus of the Company during the year was the development and construction of the 100% owned Warrawoona Gold Project (“Warrawoona” or “the Project”) in the East Pilbara district of the Pilbara Goldfields in Western Australia, culminating in the first gold pour in the June Quarter, 2022. The Company’s objectives are to: ā Ramp up to steady state commercial operations at the Warrawoona Gold Project in the first half of FY23 ā Further optimise operations to maximise operating cash flow whilst maintaining a high standard of safety ā Organically grow the production rate at Warrawoona by: ā increasing the Reserves and Resources through exploration activity across the tenement package ā delivery of the Blue Spec project feasibility study ā Actively pursuing inorganic growth opportunities ā Increase the value of Pirra Lithium through exploration and commencement of a demerger process Material Business Risks The Company is exposed to business risks that have the potential to impact the achievement of business strategies. The following risks are not intended as an exhaustive list of all business risks and uncertainties. ā External Economic Factors: The Company is exposed to fluctuations in the Australian dollar gold price which can impact on revenue streams from operations. To mitigate downside in the gold price, the Board has implemented a hedging program to assist in offsetting variations in the Australian dollar gold price over a portion of future production. In addition, the Company is exposed to global inflationary pressures across a range of input costs such as oil, parts and consumables and labour. The Company monitors costs and mitigates impacts by collaborating with suppliers and managing its usage of inputs. ā Reserves and Resources: The Mineral Resource Estimates and Ore Reserve Estimates are estimates only and no assurance can be given that they will be realised. The estimates are determined in accordance with JORC and compiled or reviewed by a qualified competent person. ā COVID-19: Calidus continues to actively manage the ongoing response to the COVID-19 virus. Calidus continues to operate under protocols developed internally and as prescribed by State and Federal health authorities to minimise risks to our people and communities and ensure we continue to safely operate during this challenging period. Calidus continues to monitor and manage the potential impacts COVID-19 has on labour availability. ā Government regulation: The Company’s mining, processing, development and exploration activities are subject to various laws and statutory regulations governing prospecting, development, production, taxes, royalty payments, labour standards and occupational health, mine safety, toxic substances, land use, water use, communications, land claims of local peoples and other matters. No assurance can be given that new laws, rules and regulations will not be enacted or that existing laws, rules and regulations will not be applied in a manner which could have an adverse effect on the group’s financial position and results of operations. Any such amendments to current laws, regulations and permits governing operations and activities of mining and exploration, or more stringent implementation thereof, could have a material adverse impact on the Company. ā Exploration and Development Risk: An ability to sustain or increase the current level of production in the longer term is in part dependent on the success of the group’s exploration activities and development projects, and the expansion of existing mining operations. The exploration for, and development of, mineral deposits involves significant risks that a combination of evaluation, experience and knowledge may not eliminate. Major costs may be required to locate and establish mineral reserves, to establish rights to mine the ground, to receive all necessary operating permits, to develop metallurgical processes and to construct mining and processing facilities at a particular site. ā Operating Risk: The Company’s gold mining operations are subject to operating risks that could result in decreased production, increased costs & reduced revenues. To manage this risk the Company seeks to attract and retain high calibre employees and implement suitable systems and processes to ensure production targets are achieved. ā Climate Change Risk: Changes to climate-related regulations and government policy, reduced water availability, extreme weather events and associated technological and market changes may have the potential to impact the Company’s future financial results. Calidus is committed to proactively managing the impact of climate related risks to our business. ā Environmental Risk: The Company has environmental liabilities which arise as a consequence of mining operations, waste management, tailings management, chemical management, water management and energy efficiency. The Company monitors its ongoing environmental obligations and risks and implements rehabilitation and corrective actions as appropriate. ā Health and Safety Risk: The Company seeks to ensure that it provides a safe workplace to minimise risk of harm to its employees and contractors. Calidus has implemented management systems to promote a strong safety culture and deliver appropriate training and emergency preparedness. Annual Report for the Financial Year ending 30 June 2022 34 Directors’ Report Environmental Regulations and Performance The consolidated entity will comply with its obligations in relation to environmental regulation on its projects when it undertakes exploration and mining operations. So far as the Directors are aware, all activities have been undertaken in compliance with all environmental regulations Indemnification and Insurance of Directors and Officers The Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows: ā The Company has entered into agreements to indemnify all Directors and officers and to provide access to Company documents. The agreement provides for the Company to indemnify all losses or liabilities incurred by each Director or officer in their capacity as Director or officers of the Company to the extent permitted by the Corporations Act 2001 ā The Company has paid premiums to insure each Director or officer against liabilities or costs incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director or officer of the Company, other than conduct involving a willful breach of duty in relation to the Company. Under the terms and conditions of the insurance contract, the nature of the liabilities insured against and the premium paid cannot be disclosed Non-audit Services No non-audit services were provided to the Company during or since the end of the financial year. Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Directors’ Report 35 Annual Report for the Financial Year ending 30 June 2022 36 Remuneration Report (Audited) Remuneration Report (Audited) This report details key aspects of the remuneration policy and framework the nature and amount of remuneration of each Key Management Personnel of Calidus Resources Limited (Calidus or the Company). The information in this remuneration report has been audited as required by s308(3C) of the Corporations Act 2001. 2. Remuneration and Nomination Committee The Board has adopted a formal Remuneration & Nomination Committee Charter which provides a framework for the consideration of remuneration matters. The Remuneration & Nomination Committee is responsible for reviewing and making recommendations to the Board which has ultimate responsibility for the following remuneration matters: 1. Setting remuneration packages for Executive Directors, Non-Executive Directors and Senior Executives; and 2. Implementing employee incentive and equity based plans and making awards pursuant to those plans. 1. Key Management Personnel Key Management Personnel (KMP) have authority and responsibility for planning, directing and controlling the activities of the Group. KMP comprise the Directors of the Company and key Senior Executive personnel. KMP during the year ended 30 June 2022 are set out below: Mr David Reeves Managing Director Mr Mark Connelly Non-Executive Chairman Mr John Ciganek Non-Executive Director Ms Kate George Non-Executive Director (appointed 1 February 2022) Mr Keith Coughlan Non-Executive Director (resigned 13 May 2022) Mr Richard Hill Chief Financial Officer Mr Paul Brennan Project Development Mr Don Russell General Manager Warrawoona Operations Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Remuneration Report (Audited) 37 3. Remuneration Policy and Framework The remuneration policy is approved by the Board of the Company and has been designed to ensure reward for performance is competitive and appropriate to the result delivered. The framework aligns rewards with the creation of value for shareholders and conforms to market best practice. The Board ensures that Director and Executive reward satisfies the following key criteria for good reward government practices: ā Competitiveness and reasonableness ā Acceptability to the shareholder ā Aligned to the Company’s strategic and business objectives and the creation of shareholder value ā Link between performance and remuneration ā Transparency ā Capital management. The Board engaged an independent remuneration expert, BDO Reward (WA) Pty Ltd (BDO) to review the Company’s remuneration approach to determine the appropriateness of the remuneration policy and structures in comparison to the market. The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment objectives and Director and Executive performance. Recommendations from the independent remuneration expert review have been implemented as detailed in this report. The Board’s policy for determining the nature and amount of remuneration for Board members and Senior Executives of the Company is as follows: A. Executive Directors and Other Senior Executives The Company’s remuneration policy for Executive Directors and Senior Executives is designed to promote superior performance and long-term commitment to the Company. The Board reviews executive packages regularly by reference to the Company’s performance, executive performance, and comparable information from industry sectors and other listed companies in similar industries. Executives receive a base remuneration which is benchmarked from time to time against other similar organisations. Executives receive superannuation and may receive performance-based remuneration including participation in the Employee Share Incentive Plan (ESIP) that is approved by shareholders and a Short Term Incentive Plan (STIP). Annual Report for the Financial Year ending 30 June 2022 38 Remuneration Report (Audited) 3. Remuneration Policy and Framework continued… B. Non-Executive Directors The Company’s Constitution provides that Directors are entitled to be remunerated for their services as follows: ā The total aggregate fixed sum per annum to be paid to the directors (excluding salaries of executive directors) from time to time will not exceed the sum determined by the shareholders in general meeting and the total aggregate fixed sum will be divided between the Directors as the Directors shall determine and, in default of agreement between them, then in equal shares. The maximum Non-Executive Directors’ fees, payable in aggregate, are currently set at $250,000 per annum. ā The Directors’ remuneration accrues from day to day. The Directors are entitled to be paid reasonable travelling, accommodation and other expenses incurred by them respectively in or about the performance of their duties as Directors. Notwithstanding the aforementioned, and based on advice from the independent remuneration expert, the remuneration structure for Non-Executive Directors represents the following structure: ā Annual board fees; ā Committee fees; and ā Equity based fees in lieu of fixed fees (refer to 3D). The equity-based fees to be considered for Non-Executive Directors will not be subject to performance conditions which conforms with best practice governance standards, including the ASX Corporate Governance Council’s Principles. Other than statutory superannuation contribution, no retirement benefits are provided for Non-Executive Directors of the Company. C. Short Term Incentives The Company did not utilise a defined STIP in the year ended 30 June 2022. As the Company was a non-producer, the Boards aim was to conserve and utilise its cash holdings in the most effective manner possible. Given that the Company has commenced commissioning the Warrawoona Gold Project it is to be expected that the Company will implement a STIP in future years. D. Long Term Incentives Employee Share Incentive Plan Shareholders approved the Employee Share Incentive plan (ESIP) at the Annual General Meeting held on 3 December 2020. Project Incentive Options for Executive Directors and Senior Executives To ensure cash holdings are conserved as the Company progresses its activities from the development of the Warrawoona Gold Project and to align Executive Directors and Senior Executives remuneration and key performance criteria with value creation for shareholders, an allocation of zero exercise price options (i.e. options with a nil exercise price) were issued under the terms of the ESIP (Project Incentive Options). All remaining Project Incentive Options either vested or expired during the financial year following the successful first gold pour in the June 2022 quarter at the Warrawoona Gold Project. Incentive Options for Executive Directors and Senior Executives The Company is in an important stage of development with significant opportunities and challenges in both the near and long-term, and the use of options seeks to align the efforts of the Executive Directors and Senior Executives in seeking to achieve growth of the share price and in the creation of shareholder value. In addition, the Board also believes that incentivising with options is a prudent means of conserving the Company’s available cash reserves. The Board believes it is important to offer these options to continue to attract and maintain highly experienced and qualified executives in a competitive market. An allocation of zero exercise price options (i.e. options with a nil exercise price) were issued under the terms of the ESIP (Incentive Options) in the year ended 30 June 2022. The Incentive Options expire within 3 years from the date of grant and vest subject to the relevant Executive Director or Senior Executive remaining employed by the Company at the date of vesting, and achievement of the following performance conditions: (i) Performance Condition 1: one third of the Incentive Options will vest subject to a positive Share price according to the performance of the Company relative to the performance of a Peer Group based on total shareholder return (TSR) over the 12 month period from 1 January 2022 to 31 December 2022. (ii) Performance Condition 2: one third of the Incentive Options will vest subject to a positive Share price according to the performance of the Company relative to the performance of a Peer Group based on total shareholder return (TSR) over the 24 month period from 1 January 2022 to 31 December 2023. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Remuneration Report (Audited) 39 3. Remuneration Policy and Framework continued… (iii) Performance Condition 3: - one third of the Incentive Options will vest subject to the executive providing continuous service to the Company and remaining employed or engaged by the Group at all times until the end of 31 December 2023. The Incentive Options issued to Executive Directors in the year ended 30 June 2022 were approved at a meeting of shareholders on 13 May 2022. Options for Fixed Remuneration Correction Plan The Company engaged BDO, independent remuneration consultants, to conduct a market review of the Total Fixed Remuneration (TFR) packages of the Directors. The market review identified the Company TFR packages to be at a discount to the market median. In order for the Company to conserve cash, the Company utilises an equity allocation in the form of zero exercise price options issued under the ESIP to ensure that the TFR packages are market appropriate. The equity allocation represents equity in lieu of additional fees. The fixed remuneration correction plan has a retentive benefit given recipients must complete a period of service with the Company to satisfy the vesting condition and serves to ensure Directors are remunerated at market related rates whilst conserving the Company’s cash. The vesting condition for options issued to Non- Executive Directors is that the Director must remain with the Company, with a third of the options vesting each year (NED Options). The NED Options issued in the year ended 30 June 2022 were approved at a meeting of shareholders on 13 May 2022. Share Rights and Performance Rights No share rights or performance rights were granted to KMP in the year ended 30 June 2022. E. Service Contracts Remuneration and other terms of employment for the Directors and KMP are formalised in contracts of service. F. Engagement of Remuneration Consultants During the financial year ended 30 June 2022, the Company engaged BDO Reward (WA) Pty Ltd (BDO), independent remuneration consultants, to review it’s the Company’s remuneration approach so as to determine the appropriateness of pay structures in comparison to the market and provide recommendations on how to improve both the fixed remuneration and performance-based remuneration programs, as well as valuation of resulting issued options. BDO was paid $28,250 for these services. G. Relationship Between Remuneration of KMP and Earnings The Board did not consider earnings during the financial year ended 30 June 2022 and previous financial years when determining the nature and amount of remuneration of KMP, as the Company has only recently commenced commissioning of the Warrawoona Gold Project. Annual Report for the Financial Year ending 30 June 2022 40 Remuneration Report (Audited) 4. KMP Remuneration Disclosure continued… 4. KMP Remuneration Disclosure Details of the remuneration of the directors and KMP of the Company for the years ending 30 June 2022 and 30 June 2021 are as follows: Short-term benefits Post-employment benefits Share-based payments Name Year Salary, fees and leave D Reeves M Connelly K Coughlan (i) K George (ii) J Ciganek (iii) A Miethke(iv) P Brennan R Hill D Russell Total ($) 329,833 287,500 72,000 66,000 36,000 30,000 20,000 - 36,000 18,000 - 2,000 256,000 240,000 273,500 245,000 359,750 320,833 1,383,083 1,209,333 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 Other ($) - - - - - - - - - - - - - - - - - - - - Super- annuation ($) 32,983 14,250 7,200 6,270 - - 2,000 - - - - - 25,600 22,800 27,350 23,275 35,975 30,479 131,108 97,074 (i) Mr. K Coughlan left the Company on 13 May 2022. (ii) Ms. K George joined the Company on 1 February 2022. (iii) Mr. J Ciganek joined the Company on 4 January 2021. (iv) Mr. A Miethke left the Company on 27 July 2020. Other Share rights ($) - ($) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Options and performance rights ($) 213,793 106,222 79,928 21,000 13,987 14,000 34,916 - 41,522 16,209 - Total ($) 576,609 407,972 159,128 93,270 49,987 44,000 56,916 - 77,522 34,209 - 33,646 35,646 126,759 408,359 96,873 142,241 154,456 310,046 203,612 359,673 443,091 422,731 705,771 554,924 963,192 2,477,383 646,018 1,952,425 The relative proportion of actual remuneration split between fixed and variable remuneration is as follows: Name Fixed Remuneration At Risk – STI At Risk – LTI D Reeves M Connelly K Coughlan A Miethke J Ciganek K George P Brennan R Hill D Russell 2022 63% 50% 72% - 46% 39% 69% 68% 56% 2021 74% 77% 68% 6% 53% - 73% 63% 63% 2022 - 2021 - - - - - - - - - - - - - - - - - 2022 37% 50% 28% - 54% 61% 31% 32% 44% 2021 26% 23% 32% 94% 47% - 27% 37% 37% Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Remuneration Report (Audited) 41 5. Service Agreement Disclosure A. Executive Service Agreements The terms of KMP service agreements are summarised in the following table: Name Base salary(i) D Reeves Managing Director R Hill Chief Financial Officer P Brennan Project Development D Russell General Manager Warrawoona Operations $420,000 per annum plus superannuation $344,000 per annum plus superannuation $304,000 per annum plus superannuation $389,000 per annum plus superannuation Term of agreement Termination benefit(ii) Until terminated 6 months’ base salary Until terminated 6 months’ base salary Until terminated 3 months’ base salary Until terminated 6 months’ base salary (i) Termination benefits are payable on early termination by the Company other than for gross misconduct. During the period, amendments were made to the following executive service agreements in the form of an Executive Service Agreement Deed of Variation. Key terms detailed below: ā The Company has agreed to pay Mr. D Reeves a base salary of $479,000 (increased from $300,000 effective 1 May 2022) plus superannuation per year for services provided to the Company as Managing Director. Mr D Reeves personally elected to decrease the base salary component of his remuneration package to $420,000 effective 1 August 2022. ā The Company has agreed to pay Mr. R Hill a base salary of $344,000 (increased from $250,000 effective 1 April 2022) per year for services provided to the Company as Chief Financial Officer. ā The Company has agreed to pay Mr. P Brennan a base salary of $304,000 (increased from $240,000 effective 1 April 2022) per year for services provided to the Company as Project Development Manager. ā The Company has agreed to pay Mr. D Russell a base salary of $389,000 (increased from $350,000 effective 1 April 2022) per year for services provided to the Company as General Manager Warrawoona Operations. B. Non-Executive Director Arrangements All Non-Executive Directors enter into a service agreement with the Company in the form of a letter of appointment. Key terms are detailed below: ā The Company has agreed to pay Mr. M Connelly a director fee of $72,000 plus superannuation per year for services provided to the Company as Non-Executive Chairman. ā The Company has agreed to pay Mr. K Coughlan director fees of $48,000 (increased from $36,000 effective 1 April 2022) per year for services provided to the Company as Non-Executive Director. Mr. K Coughlan resigned and left the Company on 13 May 2022. ā The Company has agreed to pay Mr. J Ciganek director fees of $48,000 (increased from $36,000 effective 1 April 2022) per year for services provided to the Company as Non-Executive Director. ā The Company has agreed to pay Ms. K George director fees of $48,000 plus superannuation per year for services provided to the Company as Non-Executive Director. ā A Non-Executive Director may resign from his/ her position and thus terminate their contract on written notice to the Company. ā A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the expiration of their period of office (if applicable). Annual Report for the Financial Year ending 30 June 2022 42 Remuneration Report (Audited) 6. Share-Based Compensation Disclosure A. Issue of Shares No shares were issued to Directors and other KMP as part of compensation during the year ended 30 June 2022. B. Share Rights No share rights were issued to Directors and other KMP as part of compensation during the year ended 30 June 2022. C. Options The following table details the terms and conditions of each grant of options to Directors and other KMP in the year ended 30 June 2022 (Refer to “3D on page 38) and the assumptions used in estimating fair value: Name Director Options D Reeves D Reeves D Reeves NED Options J Ciganek J Ciganek J Ciganek M Connelly M Connelly M Connelly K George K George K George Incentive Options D Russell D Russell D Russell R Hill R Hill R Hill P Brennan P Brennan P Brennan Number of options granted Grant date Vesting date and exercisable date Expiry date Exercise price Fair value per option at grant date 341,979 341,979 341,979 2,407 2,407 69,074 56,334 156,333 156,333 56,527 61,667 61,667 13-May-22 31-Dec-22 31-Dec-23 13-May-22 31-Dec-23 31-Dec-24 13-May-22 31-Dec-24 31-Dec-25 13-May-22 31-Dec-22 31-Dec-23 13-May-22 31-Dec-23 31-Dec-24 13-May-22 31-Dec-24 31-Dec-25 13-May-22 31-Dec-22 31-Dec-23 13-May-22 31-Dec-23 31-Dec-24 13-May-22 31-Dec-24 31-Dec-25 13-May-22 31-Dec-22 31-Dec-23 13-May-22 31-Dec-23 31-Dec-24 13-May-22 31-Dec-24 31-Dec-25 280,729 13-May-22 31-Dec-22 31-Dec-23 280,729 280,729 250,104 250,104 250,104 222,882 222,882 222,882 13-May-22 31-Dec-23 31-Dec-24 13-May-22 31-Dec-24 31-Dec-25 13-May-22 31-Dec-22 31-Dec-23 13-May-22 31-Dec-23 31-Dec-24 13-May-22 31-Dec-24 31-Dec-25 13-May-22 31-Dec-22 31-Dec-23 13-May-22 31-Dec-23 31-Dec-24 13-May-22 31-Dec-24 31-Dec-25 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil $0.82 $0.79 $0.85 $0.85 $0.85 $0.85 $0.85 $0.85 $0.85 $0.85 $0.85 $0.85 $0.71 $0.85 $0.73 $0.71 $0.85 $0.73 $0.71 $0.85 $0.73 Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Remuneration Report (Audited) 43 7. Additional Disclosures A. Fully Paid Ordinary Shares of Calidus Resources Limited Held by each KMP The number of Shares in the Company held during the financial year by KMP of the Company, including their related parties, are set out below. 2022 Ordinary Shares Name D Reeves M Connelly K Coughlan K George (i) J Ciganek P Brennan (ii) R Hill D Russell Balance at start of year (number) 20,151,190 676,786 500,000 250,000 - 1,757,143 1,625,143 113,600 24,823,862 Received during the year as compensation (number) - - - - - - - - - Received during the year on the exercise of options (number) - 100,000 200,000 - 66,667 - - 300,000 666,767 Received during the year on vesting of performance rights (number) - Other changes during the year (number) 61,068 Balance at end of year (number) 20,212,258 - - - - - 776,786 (700,000) - 250,000 250,000 - 66,667 570,732 (2,327,875) - - - (1,196,391) 428,752 (23,600) 390,000 570,732 (3,936,798) 22,124,463 2021 Ordinary Shares Name D Reeves M Connelly K Coughlan A Miethke J Ciganek P Brennan R Hill D Russell Received during the year as compensation (number) - - - - - - - - - Received during the year on the exercise of options (number) 1,650,000 100,000 - - - 1,500,000 1,500,000 - Other changes during the year Balance at end of year (number) 1,506,990 76,786 (444,000) - - 107,143 125,143 103,600 (number) 20,151,190 676,786 500,000 - - 1,757,143 1,625,143 113,600 4,750,000 1,475,662 24,823,862 Balance at start of year (number) 16,994,200 500,000 944,000 - - 150,000 - 10,000 18,598,200 B. Share Rights in Calidus Resources Limited Held by each KMP There were no Share Rights held in the Company during the financial year by any KMP of the Company, including their related parties. Annual Report for the Financial Year ending 30 June 2022 44 Remuneration Report (Audited) 7. Additional Disclosures continued… C. Options in Calidus Resources Limited Held by each KMP The number of Options in the Company held during the financial year by KMP of the Company, including their related parties, are set out below. Balance at start of year (number) 1,500,000 Granted as remuneration during the year Exercised during the year Other changes during the year (number) 1,025,937 (number) - (number) - 2022 Options Name D Reeves M Connelly 200,000 369,000 (100,000) - K Coughlan 200,000 - K George J Ciganek - 200,000 P Brennan 1,350,000 R Hill 1,350,000 D Russell 600,000 179,861 73,888 668,646 750,312 842,187 - - (66,667) - - (300,000) Balance at end of year Vested and exercisable Not vested (number) 2,525,937 469,000 179,861 207,221 (number) 1,500,000 - - - - 2,018,646 1,350,000 2,100,312 1,350,000 1,142,187 300,000 (number) 1,025,937 469,000 - 179,861 207,221 668,646 750,312 842,187 (200,000) - 5,400,000 5,036,949 (466,667) (200,000) 9,770,282 3,150,000 3,474,518 2021 Options Name D Reeves Balance at start of year (number) 3,150,000 M Connelly 300,000 K Coughlan 200,000 A Miethke 200,000 Granted as remuneration during the year (number) - - - - Exercised during the year (number) (1,650,000) (100,000) - (200,000) J Ciganek - 200,000 - P Brennan 2,850,000 R Hill 2,850,000 - - (1,500,000) (1,500,000) D Russell - 600,000 - 9,550,000 800,000 (4,950,000) Other changes during the year Balance at end of year Vested and exercisable Not vested (number) - (number) 1,500,000 (number) - (number) 1,500,000 200,000 - 66,667 133,333 - - - - - - 200,000 1,350,000 1,350,000 600,000 200,000 200,000 - 200,000 1,350,000 1,350,000 600,000 5,400,000 66,667 5,333,333 - - - - - - - - - - - - - D. Performance Rights in Calidus Resources Limited Held by each KMP The number of Performance Rights in the Company held during the financial year by KMP of the Company, including their related parties, are set out below. 2022 Performance Rights Balance at start of year Name P Brennan (number) 900,000 900,000 2021 Performance Rights Balance at start of year Name P Brennan (number) 900,000 900,000 Granted as remuneration during the year (number) - - Granted as remuneration during the year (number) - Exercised during the year (number) (900,000) (900,000) Other changes during the year (number) - Balance at end of year (number) - Vested and exercisable Not vested (number) - (number) - - - - - Exercised during the year (number) - Other changes during the year (number) - Balance at end of year (number) 900,000 Vested and exercisable Not vested (number) 900,000 (number) - - - - 900,000 900,000 - Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Remuneration Report (Audited) 45 8. Other Transactions with KMP (or their related parties) During the financial year ended 30 June 2022, the Group incurred the following amounts to related parties: Office Rent - Wild West Enterprises Pty Ltd The Company paid office rent to Wild West Enterprises Pty Ltd of $81,500 in the year ended 30 June 2022, (prior year to 30 June 2021: $74,300). Mr Reeves (Managing Director of the Company) is a director of Wild West Enterprises Pty Ltd. During the year Calidus and Wild West Enterprises Pty Ltd renewed the sub-lease agreement in respect of the office space at 12/11 Ventnor Avenue, West Perth for an initial period of two years with a one-time option to extend for a further one year. The rent payable by Calidus under the Office Lease Agreement is $6,300 per month payable in advance. The Board considers that the agreement to be on arms’ length and commercial terms. Also, refer to “Note 23” on page 73. 9. Loans Made to KMP No loans were made to KMP, including personally related entities during the reporting period. 10. Voting and Comments at the Company’s 2021 Annual General Meeting Of the total valid available votes lodged, the Company received 99.33% of ‘FOR” votes on its remuneration report for the 2021 financial year. The Company did not receive specific feedback on its remuneration practices. 11. Share Trading Policy The trading of shares is subject to, and conditional upon, compliance with the company’s employee Share Trading Policy. The ability for an executive to deal with an option or a right is restricted by the terms of issue and the plan rules which do not allow dealings in any unvested security. The Share Trading Policy specifically prohibits an executive from entering into transactions that limit the economic risk of participating in unvested entitlements such as equity- based remuneration schemes. The Share Trading Policy can be viewed on the Company’s website. END OF REMUNERATION REPORT Annual Report for the Financial Year ending 30 June 2022 46 Remuneration Report (Audited) Calidus Resources Limited ABN: 98 006 640 553 ASX:CAI Annual Report for the Financial Year ending 30 June 2022 Auditor’s Independence Declaration 47 Auditor’s Independence Declaration Moore Australia Audit (WA) Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 8 9225 5355 F +61 8 9225 6181 www.moore-australia.com.au AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF CALIDUS RESOURCES LIMITED As lead auditor of Calidus Resources Limited, I declare, that to the best of my knowledge and belief, during the financial year ended 30 June 2022, there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and (ii) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Calidus Resources Limited and the entities it controlled during the financial year. NEIL PACE PARTNER MOORE AUSTRALIA AUDIT (WA) CHARTERED ACCOUNTANTS Signed at Perth this 21st day of September 2022. Moore Australia Audit (WA) – ABN 16 874 357 907. An independent member of Moore Global Network Limited - members in principal cities throughout the world. Liability limited by a scheme approved under Professional Standards Legislation. Annual Report for the Financial Year ending 30 June 2022 48 Auditor’s Independence Declaration Calidus Resources Limited ABN: 98 006 640 553 ASX:CAI Annual Report for the Financial Year ending 30 June 2022 Consolidated Financial Statements 49 Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2022 Revenue Other income Total revenue Personnel costs Borrowing and finance costs Depreciation and amortisation Exploration expenditure written off Share-based payment expense Administration expenses (Loss) / profit on financial assets Profit / (loss) before tax Income tax benefit / (expense) Net loss for the year Note 30 June 2022 30 June 2021 $ - 16,228 16,228 $ - 185,952 185,952 (1,944,108) (1,398,340) (1,239,462) (157,594) 2 2 3 4 11, 14 (730,817) (444,184) 12 20 (772,053) (103,638) (2,380,222) (1,052,660) (1,476,294) (1,340,917) (193,781) (467,184) (8,720,509) (4,778,565) 5 - - (8,720,509) (4,778,565) Other comprehensive income, net of income tax - - Other comprehensive loss for the year, net of tax (8,720,509) (4,778,565) Total comprehensive loss attributable to members of the parent entity (8,720,509) (4,778,565) Earnings per share: Basic loss per share (dollars per share) 6 (0.02) (0.02) The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes Annual Report for the Financial Year ending 30 June 2022 50 Consolidated Financial Statements Consolidated Statement of Financial Position as at 30 June 2022 Current Assets Cash and cash equivalents Other receivables Financial assets Other current assets Total Current Assets Non-Current Assets Property, plant and equipment Exploration and evaluation assets Mine properties under development Right-of-use assets Other non-current assets Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Lease liabilities Provisions Interest bearing liabilities Total Current Liabilities Non-Current Liabilities Interest bearing liabilities Lease liabilities Provisions Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued capital Reserves Accumulated losses Total Equity Note 30 June 2022 $ 30 June 2021 $ 7 8 9 10 11 12 13 14 15 14 17 16 16 14 17 18 19 18,136,337 27,317,426 1,271,717 163,056 1,362,545 1,410,745 356,836 976,358 20,933,655 30,061,365 1,945,582 2,024,322 25,904,406 23,486,369 187,539,009 91,764,206 938,210 559,323 1,575,524 24,993 216,886,531 118,875,414 237,820,186 148,936,779 20,703,473 12,747,942 680,302 1,218,753 624,465 558,776 36,000,000 - 58,602,527 13,931,183 71,000,000 25,000,000 310,837 7,091,478 982,257 2,130,218 78,402,324 28,112,475 137,004,852 42,043,658 100,815,334 106,893,121 119,572,944 119,310,444 5,343,119 2,962,897 (24,100,729) (15,380,220) 100,815,334 106,893,121 The consolidated statement of financial position is to be read in conjunction with the accompanying notes. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Consolidated Financial Statements 51 Consolidated Statement of Changes in Equity for the year ended 30 June 2022 Balance at 1 July 2020 Loss for the year attributable to owners of the parent Other comprehensive income for the year attributable to owners of the parent Total comprehensive income for the year attributable to owners of the parent Transaction with owners, directly in equity Note Issued Capital Reserve Accumulated Losses Total $ 39,714,679 $ 1,910,237 $ (10,601,655) $ 31,023,260 - - - - - - (4,778,565) (4,778,565) - - (4,778,565) (4,778,565) Shares issued during the year 82,736,234 - Share based payments Transaction costs Balance at 30 June 2021 20 18 - 1,052,660 (3,140,469) - - - - 82,736,234 1,052,660 (3,140,469) 119,310,444 2,962,897 (15,380,220) 106,893,121 Balance at 1 July 2021 119,310,444 2,962,897 (15,380,220) 106,893,121 Loss for the year attributable to owners of the parent Other comprehensive income for the year attributable to owners of the parent Total comprehensive income for the year attributable to owners of the parent Transaction with owners, directly in equity - - - - - - (8,750,509) (8,750,509) - - (8,750,509) (8,750,509) Shares issued during the year Share based payments Transaction costs Balance at 30 June 2022 262,500 - - - 2,380,222 - - - - 20 18 262,500 2,380,222 - 119,572,944 5,343,119 (24,100,729) 100,815,334 The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes Annual Report for the Financial Year ending 30 June 2022 52 Consolidated Financial Statements Consolidated Statement of Cash Flows for the year ended 30 June 2022 Cash flows from operating activities Receipts from customers Payments for suppliers and employees Other/grant income Interest received Note 30 June 2022 $ - 30 June 2021 $ 67,225 (3,221,257) (2,364,230) - 16,228 110,454 41,520 Net cash used in operating activities 7 (3,205,029) (2,145,031) Cash flows from investing activities Payments for exploration and evaluation Payments for mine properties under development Payments for acquisition of Blue Spec Project Proceeds from sale of financial assets Purchase of plant and equipment Investment in Pirra Lithium Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Transaction costs related to issue of shares Proceeds from exercise of options Proceeds from borrowings Repayment of borrowings Transaction costs related to borrowings Repayment of lease liabilities Net cash provided by financing activities Net increase in cash held Cash and cash equivalents at the beginning of the year (3,138,202) (4,987,437) (83,629,606) (49,940,857) - - - (12,700,000) 533,547 (414,234) (534,331) - (87,302,139) (67,508,981) 262,500 72,072,280 - - (3,139,749) 952,500 85,000,000 25,000,000 (3,000,000) - (208,096) (3,228,225) (728,325) (376,029) 81,326,079 91,280,777 (9,181,089) 21,626,765 27,317,426 5,690,661 Cash and cash equivalents at the end of the year 7 18,136,337 27,317,426 The consolidated statement of cash flows is to be read in conjunction with the accompanying notes. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 53 Notes to the Consolidated Financial Statements for the Year Ended 30 June 2022 Note 1. Statement of Significant Accounting Policies The consolidated financial statements for the year ended 30 June 2022, comprises Calidus Resources Limited (Calidus or the Company) and controlled entities (collectively the Group). Calidus is a listed public company limited by shares, incorporated and domiciled in Australia. liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future period affected. The separate financial statements of Calidus, as the parent entity, have not been presented with this financial report as permitted by the Corporations Act 2001 (Cth). These financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board (AASB) and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and the Corporations Act 2001 (Cth). Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with IFRS as issued by the IASB. The financial statements were authorised for issue on 21 September 2022 by the directors of the Company. A. Basis of Preparation The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. i. Historical Cost Convention The financial statements have been prepared under the historical cost convention modified by the revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied. ii. Use of Estimates and Judgments The preparation of consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These estimates and associated assumptions are based on historical experience and various factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and iii. Comparative Figures Where required by AASBs comparative figures have been adjusted to conform with changes in presentation for the current financial year. Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements is presented. B. Accounting Policies Except where stated below, the Group has consistently applied accounting policies to all periods presented in the financial statements. The Group has considered the implications of new and amended Accounting Standards applicable for annual reporting periods beginning after 1 July 2021 as per “Note 1D” on page 54. C. Principles of Consolidation As at the reporting date, the assets and liabilities of the Parent and all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended. i. Business Combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. The Group measures goodwill at the acquisition date as: ā the fair value of the consideration transferred; plus ā the recognised amount of any non- controlling interests in the acquired entity; plus ā if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less ā the net recognised amount of the identifiable assets acquired and liabilities assumed. Annual Report for the Financial Year ending 30 June 2022 54 Notes to the Consolidated Financial Statements Note 1: Statement of Significant Accounting Policies continued… When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. D. Application of New and Revised Accounting Standards The consideration transferred does not include amounts related to settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. ii. Subsidiaries Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non- controlling interests to have a deficit balance. A list of controlled entities is contained in Note 21 Controlled Entities of the financial statements. iii. Loss of Control Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date control is lost. Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial asset depending on the level of influence retained. iv. Transactions Eliminated on Consolidation All intra-group balances and transactions, and any income and expenses arising from intra- group transactions, are eliminated in full in preparing the consolidated financial statements. For the year ended 30 June 2022, the Group has reviewed and adopted all the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for annual reporting periods beginning on or before 1 July 2021. These standards did not materially affect the Group’s financial statements for the year ended 30 June 2022. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting period and on foreseeable future transactions. E. Critical Accounting Estimates and Judgments Management discusses with the Board the development, selection and disclosure of the Group’s critical accounting policies and estimates and the application of these policies and estimates. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. i. Exploration and evaluation expenditure Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current. Tenement acquisition costs are initially capitalised. Refer to the accounting policy stated in Note 12 “Exploration and Evaluation Assets” on page 63. The carrying value of capitalised expenditure at reporting date is $25,904,406 (30 June 2021: $23,486,369). The ultimate recoupment of the value of the exploration and evaluation assets and mine properties is dependent on successful development and commercial exploitation or alternatively, sale, of the underlying mineral exploration properties or where activities in the area have not yet reached a stage, which permits reasonable assessment of the existence of economically recoverable reserves. The Group undertakes at least on an annual basis a comprehensive review for indicators of impairment of these assets. There is significant estimation and judgement in determining the inputs and assumptions used in determining the recoverable amounts. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Note 1: Statement of Significant Accounting Policies continued… The key areas of estimation and judgement that are considered in this review include: Project was assessed to have not yet attained commercial production. Notes to the Consolidated Financial Statements 55 ā Recent drilling results and reserves and resource estimates; ā Environmental issues that may impact the underlying tenements; ā The estimated market value of assets at the review date; ā Independent valuations of underlying assets that may be available; ā Fundamental economic factors such as gold prices, exchange rates and current and anticipated operating costs in the industry; and ā The Group’s market capitalisation compared to its net assets. Information used in the review process is rigorously tested to externally available information as appropriate. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. ii. Mine properties under development Mine properties under development relates to costs incurred to access and exploit a mineral resource and includes: ā Reclassified exploration and evaluation assets ā The costs incurred in preparing mines for production including plant and equipment under construction ā Pre-commercial production operating costs (net of pre-commercial production income); ā Mine closure and rehabilitation assets. The Group assesses the stage of each mine under development to determine when a mine moves into the production phase, this being when the mine is substantially completed and ready for its intended use. This point is commonly referred to as the attainment of commercial production. On attainment of commercial production, capitalised mine properties under development are transferred to property, plant and equipment and mine properties and revenues and expenditures of an operating nature cease to be capitalised and commence being recognised in profit and loss or the cost of inventory. It is also the point at which the depreciation and amortisation of the development assets commences. The criteria used to assess the start date of commercial production are determined based on the unique nature of the mine development project, such as the complexity of the project and its location. The Group considers various relevant criteria to assess when the production phase is considered to have commenced. As at 30 June 2022, the Warrawoona Gold The group uses the unit-of-production basis when depreciating / amortising life of-mine specific assets which results in a depreciation / amortisation charge proportionate to the depletion of the anticipated remaining life-of- mine production. Each item’s economic life, which is assessed annually, has due regard for both its physical life limitations and to present assessments of the available resource of the mine property at which it is located. iii. Impairment of Assets The carrying amounts of assets in the development or production phase are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash- generating unit is the greater of its value in use and its fair value less costs of disposal. In assessing this, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the statement of profit or loss and other comprehensive income. Impairment losses recognised in respect of cash- generating units are allocated first to reduce the carrying amount of any goodwill and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. An impairment loss in respect of goodwill is not reversed. Annual Report for the Financial Year ending 30 June 2022 56 Notes to the Consolidated Financial Statements Note 1: Statement of Significant Accounting Policies continued… iv. Taxation vii. Rehabilitation provision The Group assesses site rehabilitation liabilities on an annual basis. The provision recognised is based on an assessment of the estimated cost of closure and reclamation of the areas discounted to present value. Significant estimation is required in determining the provision for site rehabilitation. Factors such as future development/exploration activity, changes in the costs of goods and services required to complete restoration activity and changes to the legal and regulatory framework can all affect the timing and ultimate cost to rehabilitate sites where mining and/or exploration activities have previously taken place. viii. Hedging In conjunction with the financing facility negotiated with Macquarie Bank Limited, the Company has entered into forward gold contracts totaling 156,799 oz at an average delivery price of A$2,392 per ounce spread over the term of the facility from September 2022 to September 2025 and representing approximately 53% of planned production of the Warrawoona Gold Project. These forward sales contracts are not treated as derivatives and fair valued in the financial statements as they fall within the own use exemption of AASB 9 Financial Instruments. Should the Company fail to settle these contracts by physical delivery, then it may be required to account for the fair value of a portion, or potentially all of, the existing contracts in the financial statements. Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the best estimates of directors. These estimates take into account both the financial performance and position of the company as they pertain to current income taxation legislation, and the directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents that directors’ best estimate, pending an assessment by tax authorities in relevant jurisdictions. The Directors have considered it prudent not to bring to account the deferred tax asset of income tax losses until it is probable of deriving assessable income of a nature and amount to enable such benefit to be realised. Refer to Note 5 “Income Tax” on page 58. v. Coronavirus (COVID-19) pandemic Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the Group based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic. vi. Share based payment transactions The group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an internal valuation using a Black-Sholes model and a hybrid employee share option pricing model, applying the assumptions detailed in Note 20. The fair value of performance rights is determined by the share price at the date of valuation and consideration of the probability of the vesting condition being met. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 57 Note 2. Revenue and Other Income Other Income Other Interest income 2022 $ - 16,228 16,228 2021 $ 144,432 41,520 185,952 Included in Other are Cash Flow Boosts from the ATO of nil (2021: $92,954). A. Revenue Revenues represent revenue generated from external customers. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances. Revenue is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due or there is a risk of return of goods or there is continuing management involvement with the goods. All revenue is stated net of the amount of value added taxes. Pre-commercial production revenues are capitalised to the extent they are expected to be realised through successful exploitation of the related mining leases and are recognised against mine properties under development until such time as commercial production is declared. On the commencement of commercial production, the revenue is recognised in the income statement. B. Interest Income Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be reliably measured. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition. Note 3. Personnel Costs Director fees Superannuation Wages and salaries Other employment related costs Note 4. Borrowing and Finance Costs Interest expense Amortisation of capitalised borrowing costs Interest expense on lease liabilities 2022 $ 489,064 127,829 811,826 515,389 2021 $ 403,500 64,842 459,504 470,494 1,944,108 1,398,340 Note 2022 $ 11,160 13 1,130,322 97,980 2021 $ 2,425 81,301 73,868 1,239,462 157,594 Annual Report for the Financial Year ending 30 June 2022 58 Notes to the Consolidated Financial Statements Note 5. Income Tax A. Income Tax Expense / (Benefit) Current tax Deferred tax 2022 $ 2021 $ (15,931,078) (2,894,432) 15,931,078 2,894,432 Relating to origination and reversal of temporary differences (724,132) (1,423,386) Deferred tax expense / (benefit) not recognised Income tax expense / (benefit) reported in income statement 724,132 1,423,386 - - B. Reconciliation of Income Tax Expense / (Benefit) to Prima Facie Tax Payable The prima facie tax payable / (benefit) on loss from ordinary activities before income tax is reconciled to the income tax expense as follows: Accounting profit / (loss) before tax from continuing operations (8,720,509) (4,778,565) Prima facie tax on operating loss at 25% (2021: 26%) (2,180,127) (1,242,427) Add / (subtract) the tax effect of: Non-deductible expenses Deferred tax assets / (liabilities) not brought to account 623,780 1,556,347 262,919 979,508 Income tax expense / (benefit) attributable to operating loss - - C. Deferred Tax Assets Tax losses Other temporary differences Set-off deferred tax liabilities Net deferred tax assets Less deferred tax assets not recognised Net tax assets D. Tax losses and Deductible Temporary Differences Unused tax losses and deductible temporary differences for which no deferred tax asset has been recognised: 28,211,487 12,834,933 2,986,624 3,103,615 31,198,111 15,938,548 (22,315,770) (7,780,338) 8,882,341 8,158,210 (8,882,341) (8,158,210) - - 111,400,378 47,924,109 111,400,378 47,924,109 Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Note 5: Income Tax continued… Notes to the Consolidated Financial Statements 59 Potential deferred tax assets attributable to tax losses have not been brought to account at 30 June 2022 because the directors do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time. These benefits will only be obtained if: (a) the company derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised; (b) the company continues to comply with the conditions for deductibility imposed by law; and (c) no changes in income tax legislation adversely affect the company in utilising the benefits. The corporate tax rate for eligible companies was reduced from 26% to 25% for the financial year ended 30 June 2022 providing certain turnover thresholds and other criteria are met. Deferred tax assets and liabilities are required to be measured at the tax rate that is expected to apply in the future income year when the asset is realised or the liability is settled. The directors have determined that the deferred tax balances be measured at the tax rates stated. Current tax assets and liabilities for the current and prior period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date. Deferred income tax is provided on all temporary differences at the statement of financial position date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: ā when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or ā when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Annual Report for the Financial Year ending 30 June 2022 60 Notes to the Consolidated Financial Statements Note 6. Earnings Per Share (EPS) A. Reconciliation of Earnings to Profit or Loss (Loss) / profit for the year 2022 $ 2021 $ (8,720,509) (4,778,565) (Loss) / profit used in the calculation of basic and diluted EPS (8,720,509) (4,778,565) 2022 $ 2021 $ 400,899,115 289,827,437 2022 $ (0.02) 2021 $ (0.02) B. Weighted average number of ordinary shares outstanding during the year used in calculation of basic EPS C. Earnings Per Share At the end of the 2022 financial year, the Group has 13,265,762 unissued shares under options (2021: 7,770,950), nil performance rights on issue (2021: 900,000). The Group does not report diluted earnings per share on annual losses generated by the Group. During the 2022 financial year the Group’s unissued shares under option and partly-paid shares were anti-dilutive. Basic profit/(loss) per share is calculated as net profit or loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted profit/(loss) per share is calculated as net profit or loss attributable to members of the parent, adjusted for: ā costs of servicing equity (other than dividends) and preference share dividends; ā the after tax effect of dividends and interest associated with the dilutive potential ordinary shares that have been recognised as expenses; and ā other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. Note 7. Cash and Cash Equivalents A. Current Cash at bank 2022 2021 $ 18,136,337 $ 27,317,426 18,136,337 27,317,426 Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Cash at bank earns interest at floating rates based on daily bank deposit rates. The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in “Note 26” on page 75. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 61 Note 7: Cash and Cash Equivalents continued… B. Reconciliation of Cash Note 2022 $ 2021 $ Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: ā Cash and cash equivalents C. Cash Flow Information 18,136,337 27,317,426 18,136,337 27,317,426 i. Reconciliation of cash flow from operations to (loss)/profit after income tax Loss after income tax Non-cash flows in result: ā Depreciation and amortisation ā Share-based payments ā Exploration write-off/Impairment expense ā Environmental rehabilitation expense ā (loss)/profit on financial assets Changes in operating assets and liabilities: ā (Increase)/decrease in receivables ā (Increase)/decrease in other assets ā Increase/(decrease) in trade and other payables ā Increase/(decrease) in provisions 20 (8,720,509) (4,778,565) 730,817 2,380,222 772,053 80,178 193,781 (114,578) (4,716) 1,451,273 26,450 444,010 1,052,660 103,638 - 467,184 (81,948) 43,669 82,648 521,673 Cash flow from operations (3,205,029) (2,145,031) Note 8. Trade and Other Note 9. Financial Assets Receivables A. Current GST receivable Other receivables 2022 $ 1,244,332 27,385 2021 $ 1,410,745 - Shares held in listed investments(i) 2022 $ 2021 $ 163,056 356,836 163,056 356,836 Total 1,271,717 1,410,745 (i) Shares held in Pacton Gold Inc. At initial recognition, the Group measures a financial asset at its fair value. Transaction costs are expensed in profit or loss. Changes in the fair value of financial assets are recognised in other gains / (losses) in the consolidated statement of profit or loss as applicable. Note 10. Other Current Assets Prepayments 2022 $ 1,362,545 1,362,545 2021 $ 976,358 976,358 Expected Credit Losses The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. Where applicable, in measuring the expected credit losses, the trade receivables are assessed on a collective basis as they possess shared credit risk characteristics. They are grouped based on the days past due and also according to the geographical location of customers. The expected loss rates are based on the payment profile for past sales (where applicable) as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and forwarding looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding. Trade receivables are written off when there is no reasonable expectation of recovery. Failure to make payments within 180 days from the invoice date and failure to engage with the Group on alternative payment arrangement amongst others is considered indicators of no reasonable expectation of recovery. Annual Report for the Financial Year ending 30 June 2022 62 Notes to the Consolidated Financial Statements Note 11. Property, Plant, and Equipment A. Non-current Motor vehicles Accumulated depreciation Computer and software Accumulated depreciation Plant and equipment Accumulated depreciation Buildings 2022 $ 132,786 (110,658) 22,128 171,852 (112,965) 58,887 1,089,128 (91,182) 997,946 866,621 866,621 2021 $ 132,786 (91,608) 41,178 171,852 (68,265) 103,587 1,089,128 (76,192) 1,012,936 866,621 866,621 Total property, plant and equipment 1,945,582 2,024,322 B. Movements in Carrying Amounts Year Ended 30 June 2022 Carrying amount at the beginning of year Additions Assets acquired via project acquisition Depreciation expense Carrying amount at 30 June 2022 Year Ended 30 June 2021 Carrying amount at the beginning of year Additions Assets acquired via project acquisition(i) Depreciation expense Carrying amount at 30 June 2021 Motor Vehicles $ 41,178 - - (19,051) 22,127 Motor Vehicles $ 10,270 56,682 - (25,774) 41,178 Computer and software $ 103,587 - - (44,699) 58,888 Plant and equipment $ 1,012,936 - - (14,990) Buildings (ii) Total $ 866,621 - - - $ 2,024,322 - - (78,740) 997,946 866,621 1,945,582 Computer and software Plant and equipment Buildings (ii) Total $ 12,056 123,796 - (32,265) $ 35,316 6,430 994,747 (23,557) $ 639,121 227,500 - - $ 696,763 414,408 994,747 (81,596) 103,587 1,012,936 866,621 2,024,322 (i) Value of Blue Spec Project plant and equipment acquired. (ii) Depreciation on buildings will commence once commercial production is declared at the Warrawoona Gold Project. Property, plant and equipment is stated at cost less accumulated depreciation and any impairment losses. The cost of the asset includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located, and appropriate proportion of production overheads. Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. An item of plant and equipment is de-recognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is de-recognised. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows are discounted to their present values in determining recoverable amounts. For an asset that does not generate largely Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 63 Note 11: Property, Plant and Equipment continued… independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value. An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount with the impairment loss recognised in the statement of profit or loss and other comprehensive income. Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates used for the current and comparative year are: Plant and equipment Computer and software Motor vehicles 2022 % 25–50 33 33 2021 % 25–50 33 33 The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. Note 12. Exploration and Evaluation Assets A. Non-current Exploration expenditure capitalised: Exploration and evaluation Net carrying value B. Movements in Carrying Amounts Balance at the beginning of year Expenditure capitalised during the year Assets acquired via project acquisition (i) Transfer to mine properties under development Exploration expenditure write off Carrying amount at the end of year 2022 S 2021 S 25,904,406 25,904,406 23,486,369 23,486,369 23,486,369 24,329,686 3,450,553 - 7,338,408 18,900,195 (260,463) (26,978,282) (772,053) (103,638) 25,904,406 23,486,369 (i) Value of Blue Spec Project exploration and evaluation assets acquired The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases are dependent on the successful development and commercial exploitation or sale of the respective areas. Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied: ā the rights to tenure of the area of interest are current; and ā at least one of the following conditions is also met: (i) the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or (ii) exploration and evaluation activities in the area of interest have not at the balance date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development assets. The Group’s exploration properties may be subjected to claim(s) under Native Title (or jurisdictional equivalent), or contain sacred sites, or sites of significance to the indigenous people of Australia. As a result, exploration properties or areas within the tenement may be subject to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum to such claims. Annual Report for the Financial Year ending 30 June 2022 64 Notes to the Consolidated Financial Statements Note 13. Mine Properties Under Development Movements in carrying amounts Balance at the beginning of year Expenditure capitalised during the year Gold sales revenue capitalised during the year Transfer from exploration and evaluation Capitalised borrowing costs Change in rehabilitation provision Amortisation Carrying amount at the end of year 2022 S 91,764,206 2021 S - 108,451,108 57,986,277 (22,067,268) - 260,463 26,978,282 5,402,190 4,858,632 (1,130,322) 5,337,256 1,543,692 (81,301) 187,539,009 91,764,206 Mine properties under development represents the costs incurred in preparing mines for production and includes prior exploration and evaluation costs, plant and equipment under construction, capitalised borrowing costs, operating costs incurred and operating revenues before commercial production commences, and mine closure and rehabilitation assets recognised. These costs and revenues are capitalised to the extent they are expected to be recouped through successful exploitation of the related mining leases. Once commercial production commences, these costs are transferred to property, plant and equipment and mine properties, as relevant, and are depreciated and amortised using the units-of-production method based on the estimated economically recoverable reserves to which they relate or are written off if the mine property is abandoned. Capitalised borrowing costs represent interest and commitment fees on drawn and undrawn amounts of debt facilities, as well as all transaction costs directly attributable to establishing a debt facility. Interest and commitment fees are capitalised to qualifying assets, in this case Mine properties under development, until the point in time that commercial production is declared, following commercial production commencing, interest and commitment fees will be expensed as incurred. Capitalised interest and commitment fees are amortised using the units-of- production method. Capitalised transaction costs directly attributable to establishing a debt facility are amortised on a straight-line basis over the expected life of the debt facility. Note 14. Leases A. Right-of-use Assets Balance at the beginning of the year Additions(i) Depreciation charge Net carrying value B. Lease Liabilities Current Lease liabilities(i) Total current lease liabilities Non-current Lease liabilities(i) Total non-current lease liabilities Total lease liabilities 2022 S 1,575,524 14,762 (652,076) 938,210 680,302 680,302 310,837 310,837 991,139 2021 S - 1,938,112 (362,588) 1,575,524 624,465 624,465 982,257 982,257 1,606,722 (i) The Group has renewed the sub-lease agreement for office premises in West Perth, Western Australia during the financial year for a period of two years with a one-time option to extend for a further year. In addition, various agreements have been entered for Warrawoona Project infrastructure with 36-month durations. Right-of-use assets and corresponding lease liabilities have been recognised for these agreements. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 65 Note 14: Leases continued… A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and an estimate of costs expected to be incurred for dismantling and removing the underlying asset. Right-of-use assets are depreciated on a straight- line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement of lease liabilities. The Group has elected not to recognise a right-of- use asset and corresponding lease liability for short- term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred. A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred. Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down. Note 15. Trade and Other Payables Current Unsecured Trade payables Accruals Accrued finance costs Other payables Employment related payables 2022 S 2021 S 15,830,082 1,292,840 1,596,294 1,083,426 900,830 2,803,207 9,072,490 692,065 - 180,180 20,703,472 12,747,942 Trade payables, accruals and employment related payables are non-interest bearing and are usually settled within 30 days. Accrued finance costs and other payables are settled over the next 12 months with varying due dates. Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables and provisions are presented as current liabilities unless payment is not due within 12 months. Annual Report for the Financial Year ending 30 June 2022 66 Notes to the Consolidated Financial Statements Note 16. Interest Bearing Liabilities Current Secured Bank loans Non-Current Secured Bank loans Interest bearing liabilities relate to a $110 million project loan facility denominated in AUD with Macquarie Bank Limited for the development of the Warrawoona Gold Project, which is secured against the assets of Keras Pilbara (Gold) Pty Ltd and Calidus Resources Limited. The facilities comprise a Senior Secured Loan of $85 million and a Mezzanine Facility of $25 million. Interest is charged at commercial rates and scheduled monthly repayments commence on 30 June 2022 and cease June 2025. Note 17. Provisions Current Payroll tax Annual leave Non-current Long service leave Rehabilitation Provision for rehabilitation Balance at the beginning of the period Provisions made during the year Provision assumed via project acquisition (i) (i) Value of Blue Spec Project rehabilitation liability acquired Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. The expense relating to any provision is presented in the statement of profit or loss and other comprehensive income net of any reimbursement. Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting year. If the effect of the time value of money is material, provisions are 2022 S 36,000,000 36,000,000 2021 S - - 71,000,000 25,000,000 71,000,000 25,000,000 At 30 June 2022, the balance was $107 million, the full $110 million was drawn during the financial year prior to the first $3 million repayment being made in June 2022 (2021: balance drawn was $25 million). Estimates of future cash flows used for classification of the debt facility between current and non-current may differ from the actual outcomes in the next 12 months. 2022 S 544,135 674,618 1,218,753 33,576 7,057,911 7,091,487 2,119,102 4,938,809 - 2021 S 359,648 199,128 558,776 11,116 2,119,102 2,130,218 - 1,543,692 575,410 7,057,911 2,119,102 discounted using a current pre-tax rate that reflects the risks specific to the liability. The Group assesses site rehabilitation liabilities on an annual basis. The provision recognised is based on an assessment of the estimated cost of closure and reclamation of the areas discounted to present value. Significant estimation is required in determining the provision for site rehabilitation. Factors such as future development/exploration activity, changes in the costs of good and services required to complete restoration activity and changes to the legal and regulatory framework can all affect the timing and ultimate cost to rehabilitate sites where mining and/ or exploration activities have previously taken place. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 67 Note 18. Issued Capital Fully paid ordinary shares at no par value 403,364,658 399,928,347 119,572,944 119,310,444 2022 No. 2021 No. 2022 $ 2021 $ A. Ordinary Shares At the beginning of the year Shares issued during the year: 399,928,347 219,464,064 119,310,444 39,713,959 Exercise of Options 170,000 Receipt for employee shares previously issued under holding lock Share payment for prior issue Shares in lieu of salary Shares in lieu of director fees Shares in lieu of fees Placement Exercise of options Shares issued to purchase royalty Placement Exercise of options Share purchase plan Shares issued to purchase royalty Exercise of options Placement Shares issued for Blue Spec Acquisition Exercise of options Exercise of options Exercise of options Shares issued for Macquarie financing Issue of debt advisor shares Performance rights vested Exercise of options Exercise of options Exercise of options Exercise of options Exercise of options Exercise of options Exercise of options - - - - - - - - - - - - - - - - - - - - - 166,667 570,732 1,461,262 506,650 220,000 200,000 141,000 Transaction costs relating to share issues - - - - 238,259 155,983 103,661 49,019,608 200,000 4,000,000 62,500,000 488,500 5,290,279 750,000 150,000 31,250,000 13,333,333 200,000 4,000,000 5,200,000 3,100,000 240,000 244,660 - - - - - - - - - - 112,500 112,500 150,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - 25,000,000 - 2,240,000 31,875,000 - 2,698,000 375,000 - 12,500,000 5,733,333 40,000 800,000 - 1,240,000 122,400 - - - - - - - - (3,139,749) At reporting date 403,364,658 399,928,347 119,572,944 119,310,444 Terms of Ordinary Shares Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held and in proportion to the amount paid up on the shares held. At shareholders meetings, each ordinary share is entitled to one vote in proportion to the paid-up amount of the share when a poll is called, otherwise each shareholder has one vote on a show of hands. Annual Report for the Financial Year ending 30 June 2022 68 Notes to the Consolidated Financial Statements Note 18: Issued Capital continued… B. Options At the beginning of the year Options exercised Options expired/cancelled Options issued/expensed At reporting date 2022 No. 2021 No. 2022 $ 2021 $ 7,770,950 15,788,500 2,657,256 1,604,596 (1,404,317) (10,238,500) - (67,000) - 6,966,129 13,265,762 2,220,950 7,770,950 (23,181) 2,403,403 5,037,478 - - 1,052,660 2,657,256 C. Share Rights and Performance Rights At the beginning of the year 900,000 2,597,903 305,641 305,641 Issue of performance rights Issue of share rights - - - - Exercise of performance rights (900,000) (1,200,000) Exercise of share rights At reporting date - - (497,903) 900,000 - - - - - - - - 305,641 305,641 D. Capital Management The directors’ objectives when managing capital are to ensure that the Group can maintain a capital base to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the availability of liquid funds in order to meet its short-term commitments. The focus of the Group’s capital risk management is the current working capital position against the requirements of the Group in respect to its exploration, development, operations, and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings and/or debt facilities as required. The working capital position of the Group was as follows: Cash and cash equivalents Trade and other receivables Trade and other payables Working capital position 7 8 15 Note 2022 $ 18,136,337 1,271,717 2021 $ 27,317,426 1,410,745 (20,703,473) (12,747,942) (1,295,419) 15,980,229 Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 69 Note 19. Reserves Options reserve Share rights and performance rights reserve A. Options Reserve Balance at the beginning of the financial year Share based payments expense Balance at the end of the financial year Note 2022 18a 18b $ 5,037,478 305,641 2021 $ 2,657,256 305,641 5,343,119 2,962,897 2,657,256 20 2,380,222 5,037,478 1,604,596 1,052,660 2,657,256 The option reserve records items recognised as expenses on the value of directors and employee equity issues. At 30 June 2022, the following options are outstanding: ā 100,000 unlisted options issued to non-executive directors exercisable at nil price expiring on or before 27 December 2023; ā 3,450,000 unlisted options issued to senior executives exercisable at nil price expiring on or before 27 December 2024; ā 1,350,000 unlisted options issued to senior executives exercisable at nil price expiring 30 January 2025; ā 250,000 unlisted options issued to senior employees exercisable at nil price expiring 4 June 2025; ā 300,000 unlisted options issued to a senior executive exercisable at nil price expiring 5 August 2025; ā 167,500 unlisted options issued to a senior employee exercisable at nil price expiring 11 December 2025; ā 128,800 unlisted options issued to a senior employee exercisable at nil price expiring 16 December 2025; ā 133,000 unlisted options issued to a non-executive director exercisable at nil price expiring 4 January 2025; ā 220,000 unlisted options issued to senior employees exercisable at nil price expiring 19 January 2023; ā 50,000 unlisted options issued to employees exercisable at nil price expiring 16 February 2024; ā 750,000 unlisted options issued to employees exercisable at nil price expiring 18 January 2023; ā 150,000 unlisted options issued to employees exercisable at nil price expiring 28 May 2024. ā 2,263,806 unlisted options issued to directors, executives and employees exercisable at nil price expiring 31 December 2022; ā 3,665,249 unlisted options issued to employees exercisable at nil price expiring 31 December 2023; ā 287,074 unlisted options issued to employees exercisable at nil price expiring 31 December 2024; B. Share Rights and Performance Rights Reserve Balance at the beginning of the financial year Balance at the end of the financial year 2022 S 305,641 305,641 2021 S 305,641 305,641 Annual Report for the Financial Year ending 30 June 2022 70 Notes to the Consolidated Financial Statements Note 20. Share-based Payments Note 2022 $ 2021 $ Options: Share based payments – Key Management Personnel Share based payments – other employees 963,192 1,417,030 646,018 406,642 Subtotal – share based payments (options) 20b 2,380,222 1,052,660 Equity-settled Compensation The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using the Black-Scholes pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised is adjusted to reflect the actual number of share options that vest except where forfeiture is only due to market conditions not being met. A. Share-based Payment Arrangements in Effect During the Year Employee Securities Incentive Plan During the year, the Company issued the following options with the terms and summaries below: Number of Options 1,622,116 1,722,421 341,979 641,690 1,600,849 287,074 750,000 Date of Expiry Exercise Price Vesting Terms 31-Dec-23 31-Dec-24 31-Dec-25 31-Dec-23 31-Dec-24 31-Dec-25 18-Jan-23 Nil Nil Nil Nil Nil Nil Nil Share price performance to 31 December 2022 Share price performance to 31 December 2023 Share price performance to 31 December 2024 Service to 31 December 2022 Service to 31 December 2023 Service to 31 December 2024 Completion of agreement with Haoma Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Note 20: Share-based Payments continued… Notes to the Consolidated Financial Statements 71 B. Summary of Number of Options and its Vale A summary of the number of company options issued in both the current and prior years to Key Management Personnel and other employees that have an impact on the share-based payments expense in the current year as follows: Key Management Personnel Number of shares David Reeves Mark Connelly Keith Coughlan Kate George Adam Miethke John Ciganek Paul Brennan Richard Hill Don Russell Other Employees Various NED options 700,000 622,749 200,000 - - - Incentive options 600,000 170,000 167,500 228,800 417,650 167,000 270,000 - - - - - - - 3,287,082 1,025,937 3,056,298 750,000 - - 300,000 200,000 - 200,000 - 369,000 - - - - - - - - - - - - - - - - - - - - - - - 179,861 - - - - - - - - - - - - - - - - - - - - - - - 73,888 200,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 600,000 - - - - - - - - - - 170,000 167,500 228,800 417,650 167,000 270,000 668,646 750,312 842,187 - - - - - - - 3,056,298 750,000 A summary of share-based payments expense for the Key Management Personnel and other employees are as follows: Key Management Personnel Other Employees A$ David Reeves Mark Connelly Keith Coughlan Kate George Adam Miethke John Ciganek Paul Brennan Richard Hill Don Russell Various NED options 700,000 622,749 200,000 - - - Incentive options 600,000 170,000 167,500 228,800 417,650 167,000 270,000 - - - - - - - 3,287,082 213,793 3,056,298 750,000 - - 20,980 13,987 - 58,947 - - - - - - - - - - - - - - - - - - - - - - - 34,916 - - - - - - - - - - - Total – Key Management Personnel (A$) Total – Employees (A$) - - - - - - - - - - - - - - 8,098 33,424 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 150,388 - - - - - - - - - - 43,137 51,336 64,589 119,584 20,156 104,866 126,759 142,241 159,658 - - - - - - - 477,111 536,250 963,192 1,417,030 Annual Report for the Financial Year ending 30 June 2022 72 Notes to the Consolidated Financial Statements Note 20: Share-based Payments continued… A summary of the movements of all company options issued to Key Management Personnel as share-based payments is as follows: 2022 2021 Number of options Weighted average exercise price Outstanding at the beginning of the year 5,400,000 Expired/cancelled Issued Exercised Outstanding at year-end Exercisable at year-end - 3,909,831 (666,667) 8,643,164 4,500,000 $0.00 - $0.00 $0.00 $0.00 $0.00 Number of options 9,550,000 - 800,000 (4,950,000) 5,400,000 - Weighted average exercise price $0.00 - $0.00 $0.00 $0.00 $0.00 i. The weighted average exercise price of outstanding options at the end of the reporting year was nil (2021: nil). ii. The fair value of the options granted is deemed to represent the value of the employee services received over the vesting period. C. Summary of the Movements of All Company Options A summary of the movements of all company options (excluding performance rights) on issue is as follows: 2022 2021 Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at the beginning of the year 7,770,950 Issued Expired/cancelled Exercised Outstanding at year-end Exercisable at year-end 6,966,129 (67,000) (1,404,317) 13,265,762 6,816,300 $0.00 $0.00 - $0.00 $0.00 - 15,788,500 2,220,950 - (10,238,500) 7,770,950 - $0.05 $0.00 - $0.08 $0.00 - Note 21. Controlled Entities A. Ultimate Parent Entity Calidus Resources Limited is the ultimate parent of the Group (refer to “Note 1C” on page 53). B. Subsidiaries The consolidated financial statements include the financial statements of the Parent and the subsidiaries set out in the following table: Country of incorporation Class of Shares Percentage owned (%) ā Keras (Gold) Australia Pty Limited ā Keras (Pilbara) Gold Pty Limited ā Calidus Otways Pty Limited ā Calidus Blue Spec Pty Limited Australia Australia Australia Australia Ordinary Ordinary Ordinary Ordinary 2022 100 100 100 100 2021 100 100 100 100 Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 73 Note 22. Key Management Personnel (KMP) A. Directors and Key Management B. Key Management Personnel Personnel Compensation The names are positions of KMP during the current and prior financial year are as follows: ā Mr David Reeves Managing Director ā Mr Mark Connelly Non-Executive Chairman ā Mr Keith Coughlan Non-Executive Director (resigned 5 May 2022) ā Mr John Ciganek Non-Executive Director ā Ms Kate George Non-Executive Director (appointed 1 February 2022) ā Mr Richard Hill Chief Financial Officer ā Mr Paul Brennan Project Development ā Mr Don Russell Details of Key Management Personnel remuneration are contained in the audited Remuneration Report in the Directors’ Report. A summary of total compensation paid to Key Management Personnel during the year is as follows: Short-term employee benefits Post-employment benefits 2022 S 2021 S 1,383,083 1,209,333 131,108 97,074 Share-based payments 963,192 646,018 Total 2,477,383 1,952,425 General Manager Warrawoona Operations Note 23. Related Party Transactions 2022 S 2021 S Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Wild West Enterprises Pty Ltd - Office Rent Discovery Capital – Corporate Advisory and Capital Raising Fees 81,500 - 74,300 10,000 Refer to “Other Transactions with KMP (or their related parties)” on page 45 of the Remuneration Report for further information regarding the terms of the related party transactions. Note 24. Commitments A. Exploration expenditure commitments Exploration expenditure commitments represent tenement rentals and expenditure that may be required to be met under relevant legislation should the Group wish to retain tenure on all current tenements in which the Group has an interest. Exploration expenditure commitments payable: Not later than 12 months Between 12 months and five years Later than five years Total Exploration tenement minimum expenditure requirements 2022 S 2021 S 778,702 2,091,481 3,082,884 5,953,067 824,798 1,632,316 3,322,661 5,779,775 Annual Report for the Financial Year ending 30 June 2022 74 Notes to the Consolidated Financial Statements Note 24: Commitments continued… B. Operating Lease Commitments The Company leases assets for operations and its office premises. As at 1 July 2019, with the adoption of AASB 16, operating leases as previously defined under AASB 117, have for the most part, been recognised and included as lease liabilities with future commitments disclosed in note 14. Any leases that did not meet the definition of finance leases, were either short-term in nature or did not meet the recognition requirements. The office lease expired during the year and was subsequently renewed (refer to “Note 23” on page 73). C. Physical gold delivery commitments As part of the risk management policy of the Group and in compliance with the conditions required by the Group’s financier Macquarie Bank Limited (MBL), the group has entered into gold forward contracts to manage the gold price of a proportion of anticipated gold sales. The contracts are accounted for as sales contracts with revenue recognised once the gold has been delivered to MBL. The physical gold delivery contracts are considered a contract to sell a non-financial item and therefore do not fall within the scope of AASB 9 Financial Instruments. Hence no derivatives are recognised. Gold delivery commitments: No later than 12 months Between 12 months and 5 years Total gold delivery commitments Gold for physical delivery ounces 50,549 106,250 156,799 Contracted gold sale price Value of committed sales $ $ Mark-to- market $ 2,444 2,367 2,392 123,533,686 (10,603,083) 251,521,075 (46,642,193) 375,054,761 (57,245,276) Mark-to-market has been calculated using the spot price of A$2,618 per ounce as at 30 June 2022. Mark-to-market represents the value of the open contracts at balance date, calculated with reference to the gold spot price at that date. A negative amount represents a valuation in the counterparty’s favour. Note 25. Operating Segments For management purposes, the Group’s operations are organised into one operating segment domiciled in the same country, which involves the exploration and exploitation of gold minerals in Australia. All the Group’s activities are inter-related, and discrete financial information is reported to the Managing Director as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the statement of comprehensive income. The accounting policies applied for internal reporting purposes are consistent with those applied in preparation of these financial statements. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 75 Note 26. Financial Risk Management A summary of the Group’s financial assets and liabilities as at 30 June 2022 and 30 June 2021 is shown below: 2022 2021 Floating interest rate Fixed interest rate Non- interest bearing 2022 total Floating interest rate Fixed interest rate Non- interest bearing $ $ $ $ $ Financial assets Cash and cash equivalents Trade and other receivables Financial assets 18,136,367 - - Total financial assets 18,136,367 Financial liabilities Financial liabilities at amortised cost Trade and other payables - Short-term financial liabilities Long-term financial liabilities 36,000,000 71,000,000 Total financial liabilities 107,000,000 Net financial assets/(liabilities) (88,863,633) - - - - - - - - - $ - - - 18,136,367 27,317,426 1,271,717 1,271,717 163,056 163,056 - - 1,434,773 19,571,140 27,317,426 20,703,473 20,703,473 36,000,000 - - 71,000,000 25,000,000 20,703,473 127,703,473 25,000,000 (19,268,700) (108,132,333) 2,317,426 2021 Total $ 27,317,426 $ - 1,410,745 1,410,745 356,836 356,836 1,767,581 29,085,007 12,747,942 12,747,942 - - - 25,000,000 12,747,942 37,747,942 (10,980,361) (8,662,935) - - - - - - - - - Financial Risk Management Objectives, Exposures and Management The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk, interest rate risk and equity price 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. The Board of directors has overall responsibility for the establishment and oversight of the risk management framework. The Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in accordance with the Group’s risk profile. This includes assessing, monitoring and managing risks for the Group and setting appropriate risk limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the establishment of a formal system for risk management and associated controls. Instead, the Board approves all expenditure, is intimately acquainted with all operations and discusses all relevant issues at the Board meetings. The operational and other compliance risk management have also been assessed and found to be operating efficiently and effectively. The Group uses derivative financial instruments such as forward foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, i.e., not as trading or other speculative instruments. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk. A. 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 Group has a strict code of credit, including obtaining agency credit information, confirming references, and setting appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. 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. The Group has no significant concentration of credit risk with any single party with the exception of GST receivable from the Australian Tax Office. At 30 June 2022, GST receivable for the Group totalled $1,244,332 (2021: $1,410,745). Annual Report for the Financial Year ending 30 June 2022 76 Notes to the Consolidated Financial Statements Note 25: Financial Risk Management continued… B. Liquidity Risk Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable. The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. The following table details the Group’s contractual maturities for its financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The table includes both interest and principal cash flows. Within 1 Year Greater than 1 Year Total 2022 $ 2021 $ Financial liabilities due for payment Trade and other payables 20,703,473 12,747,942 2022 2021 $ - $ - 2022 $ 2021 $ 20,703,473 12,747,942 36,000,000 - 71,000,000 25,000,000 107,000,000 25,000,000 56,703,473 12,747,942 71,000,000 25,000,000 127,703,473 37,747,942 18,136,337 27,317,426 1,271,717 1,410,745 163,056 356,836 - - - - - - - - 18,136,337 27,317,426 1,271,717 1,410,745 163,056 356,836 19,571,110 29,085,007 (37,132,363) 16,337,065 (71,000,000) (25,000,000) (108,132,363) (8,662,935) Total anticipated inflows 19,571,110 29,085,007 Borrowings Total contractual outflows Financial assets Cash and cash equivalents Trade and other receivables Financial assets Net (outflow)/inflow on financial instruments C. Market Risk i. Interest Rate Risk The Group’s main interest rate risk arises from long-term borrowings. The long-term borrowings have been obtained at variable rates which expose the Group to interest rate risk. The Group has short-term and long-term borrowings outstanding as at 30 June 2022 of $36,000,000 and $71,000,000 respectively (2021: nil and $25,000,000 respectively). An increase/decrease in interest rates of 100 basis points would have an adverse/favourable effect on profit before tax of $1,070,000, assuming interest is not capitalised. The Group’s interest rate risk exposure will increase/decrease as debt is drawn/repaid. ii. Foreign Exchange Risk Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the Group’s functional currency. The group does not have any material exposure to foreign exchange risk. iii. Price Risk The Group holds shares in Pacton Gold Inc. which are exposed to changes in market prices. The market value of shares held by the Group at 30 June 2022 totalled $163,056 (2021: $356,836). An increase/decrease of 10% would have a favourable/adverse effect on profit before tax of $16,306 (2021: $35,684). iv. Commodity Price Risk The Group’s exposure to commodity price risk arises largely from Australian dollar gold price fluctuations for its anticipated future gold production and sales. The Group’s exposure to movements in the gold price is managed through the use of Australian dollar gold forward contracts. The gold forward sale contracts do not meet the criteria of financial instruments for accounting purposes on the basis that they meet the normal purchase/ sale exemption because physical gold will be delivered into the contract. Further information relating to these forward sale contracts is included in note 24c. No sensitivity analysis is provided for these contracts as they are outside the scope of AASB 9 Financial Instruments. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Notes to the Consolidated Financial Statements 77 Note 27. Events Subsequent to Reporting Date On 12 August 2022, Calidus announced it had received firm commitments to raise $20 million (before costs) via a share placement to professional and sophisticated investors through the issue of 29,850,747 shares at a price of $0.67 per share. No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the Group’s operations, the results of those operations, or the consolidated entity’s state of affairs in future financial years. Note 28. Contingent Liabilities A. Royalties The Group has an obligation to pay royalties to third parties on minerals produced from various tenements. The royalties are based on a profit-based calculation, as profit has not yet been established there are no royalty payments due or payable at this time. C. Project Contracts Calidus has entered into various operational contracts related to the Warrawoona Gold Project. Should these contracts be cancelled at the election of Calidus prior to the expiry of the term Calidus has a maximum liability of $32.3 million. B. Tenement Earn-in Rights Calidus may earn up to a 75% interest in the Gondwana tenements by spending $1.0 million on the tenements over 60 months. At the completion of the expenditure commitment, each party will be subject to a fund or dilute obligation in the respective proportions on the Gondwana tenements with any interest diluting below 10% converting to a 1% net smelter royalty. D. Other Contingent Liabilities There were no other material contingent liabilities at the end of the year. Annual Report for the Financial Year ending 30 June 2022 78 Notes to the Consolidated Financial Statements Note 29. Auditor’s Remuneration Remuneration of the auditor of the company for: Auditing or reviewing the financial reports Other services provided by a related practice of the auditor 2022 S 58,343 - 58,343 2021 S 50,350 - 50,350 Note 30. Parent Entity Disclosures Financial statements and notes for Calidus Resources Limited, the legal parent entity are provided below: A. Financial Position of Calidus Resources Limited (legal parent) Current assets 106,981,441 111,903,392 2022 S 2021 S Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Equity Issued capital Options and Share Rights reserve Accumulated losses Total equity B. Financial Performance of Calidus Resources Limited Profit / (loss) for the year Other comprehensive (loss) / income Total comprehensive loss 631,001 162,171 107,612,442 112,065,563 1,594,966 13,623 1,608,589 466,477 72,649 539,126 106,003,853 111,526,437 116,721,982 119,310,444 5,343,119 2,962,897 (16,061,248) (10,746,904) 106,003,853 111,526,437 (5,314,344) (3,549,241) - - (5,314,344) (3,549,241) C. Guarantees entered into by Calidus Resources Limited for the debts of its subsidiaries There are various parent guarantees entered into by Calidus Resources Limited for the debts of its subsidiaries as at 30 June 2022 (2021: various). Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Directors’ Declaration 79 Directors’ Declaration 1. In the opinion of the Directors of Calidus Resources Limited (the ‘Company’): a. the financial statements, notes and the additional disclosures are 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 performance for the year then ended; and ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. 2. This declaration has been made after reviewing the declarations required to be made to the Directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2022. MARK CONNELLY Non-executive Chairman Dated: 21 September 2022 Annual Report for the Financial Year ending 30 June 2022 80 Directors’ Declaration …I would like to thank all contractors for their enormous commitment to our project. The challenges we faced… made the completion of the project on time and on budget even more impressive Mark Connelly Non-Executive Chairman Calidus Resources Limited ABN: 98 006 640 553 ASX:CAI Annual Report for the Financial Year ending 30 June 2022 Independent Auditor’s Report 81 Independent Auditor’s Report Moore Australia Audit (WA) Level 15, Exchange Tower, 2 The Esplanade, Perth, WA 6000 PO Box 5785, St Georges Terrace, WA 6831 T +61 8 9225 5355 F +61 8 9225 6181 www.moore-australia.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CALIDUS RESOURCES LIMITED REPORT ON THE AUDIT OF THE FINANCIAL REPORT Opinion We have audited the financial report of Calidus Resources 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 ended 30 June 2022, 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 (including Independence Standards) (the “Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Moore Australia Audit (WA) – ABN 16 874 357 907. An independent member of Moore Global Network Limited - members in principal cities throughout the world. Liability limited by a scheme approved under Professional Standards Legislation. Annual Report for the Financial Year ending 30 June 2022 82 Independent Auditor’s Report Key Audit Matters (continued) Carrying amount of Mine Properties Under Development Refer to Note 13 Mine Properties Under Development During the years ended 30 June 2021 and 2022, the Group transferred approximately $27 million from exploration and evaluation assets to mine properties under development following the decision to commence development at the Warrawoona Gold Project (the Project). Subsequent to the transfer, substantial costs were incurred and capitalised in relation to the ongoing development works, which were substantially complete by 30 June 2022. The carrying amount of mine properties under development at balance date was approximately $187.5 million. The impairment assessment conducted under AASB 136 Impairment of Assets as at the date of transfer involved a comparison of the recoverable amount of the Project assets with their carrying amounts in the financial statements. The evaluation of the recoverable amount of these assets at transfer and at year-end is considered a key audit matter as it was based upon a model which required significant judgement in verifying the key assumptions supporting the expected discounted future cash flows of the Project. Our audit focused on the Group’s assessment of the carrying amount of the capitalised mine property under development as this is the single largest asset of the Group. Our procedures included: ā We reviewed the Group’s updated Feasibility Study (FS) released on 29 September 2020 and obtained an understanding of the process associated with the NPV (value in use) model, as subsequently updated, to assess the recoverable amount of the Project. ā Critically evaluated management’s methodology in the NPV model and the basis for key assumptions utilised in the model such as discount rate, estimated project development capital, gold price per oz, and average AISC/oz. ā We reviewed the sensitivity analysis disclosed in the FS around the key inputs in the NPV model for reasonableness ā We compared actual costs incurred in developing the Warrawoona Gold project with budgeted costs, noting that actual costs were largely in line with budgets. ā We reviewed the types of costs capitalised in Mine Properties Under Development ensuring they were appropriate and accurate. This included consideration of the increased provision for Rehabilitation costs. ā We substantiated a sample of capitalised expenditure incurred during the year by agreeing to supporting documentation/invoices ā We reviewed external and internal sources of information for observable impairment indicators. This included reviewing minutes of Board meetings, internal management reports, discussion with management/directors and giving due consideration to recent trends such as movement in gold prices, recent increases in costs and labour and the Company’s market capitalisation, which was considerably higher than its year-end net asset position as at 30 June 2022. ā We reviewed the Company’s most recent Life of Mine Plan and cashflow budgets for the next 12 months. ā We discussed with management the operating performance of the Warrawoona gold mine between the date of its commissioning and the date of our report, including assessment criteria for attainment of “Commercial Production” and when that is likely to occur ā Assessed the appropriateness of the disclosures contained in the financial report Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Independent Auditor’s Report 83 Key Audit Matters (continued) Capitalised Exploration & Evaluation Assets Refer to Note 12 Exploration and evaluation assets At balance date, the Group’s statement of financial position includes capitalised exploration and evaluation assets of approximately $25.9 million. The ability to recognise and to continue to defer exploration and evaluation assets under AASB 6: Exploration for and Evaluation of Mineral Resource is impacted by the Group’s ability, and intention, to continue to explore the tenements or its ability to realise this value through development or sale. Due to the significance of these assets and the subjectivity involved in assessing the ability to continue to defer these assets, this is considered a key audit matter. Our procedures included: ā Ensuring the Group has the ongoing right to explore in the relevant exploration areas of interests which included performing ownership searches of the tenements to Department of Mines WA & other agreements. ā Tested a sample of exploration & evaluation expenditures capitalised during the year to supporting documentation including contracts. ā Ensuring the Group is committed to continue exploration and evaluation activity in the relevant exploration areas of interest by assessing their exploration and future development expenditures that have been budgeted for and reviewing minutes of Board meetings and other internal reports. ā Assessing the carrying value of these assets for any indicators of impairment including comparing against the Company’s market capitalisation. ā We also assessed the appropriateness of the disclosures contained in the financial report. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 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. Annual Report for the Financial Year ending 30 June 2022 84 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. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our audit report.. REPORT ON THE REMUNERATION REPORT Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Calidus Resources Limited, for the financial 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. NEIL PACE PARTNER MOORE AUSTRALIA AUDIT (WA) CHARTERED ACCOUNTANTS Signed at Perth this 21st day of September 2022. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAIAnnual Report for the Financial Year ending 30 June 2022 Additional ASX Information 85 Additional ASX Information as at 21 September 2022 The following additional information is required by the Australian Securities Exchange in respect of listed public companies. As at 21 September 2022 there were 6,325 holders of Ordinary Fully Paid Shares. Voting Rights The voting rights attached to each class of equity security are as follows: ā Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands. ā Listed Options, Unlisted Options and Performance Shares: Options and performance shares do not entitle the holders to vote in respect of that equity instrument, nor participate in dividends, when declared, until such time as the options are exercised or performance shares convert and subsequently registered as ordinary shares. 20 Largest Shareholders Ordinary Shares as at as at 21 September 2022 Rank Holder Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Alkane Resources Ltd HSBC Custody Nominees (Australia) Limited Citicorp Nominees Pty Limited “Mrs Eleanor Jean Reeves” “Bnp Paribas Noms Pty Ltd ” “Macquarie Bank Limited ” National Nominees Limited “BNP Paribas Noms Pty Ltd ” “Hedgehog Management Pty Ltd ” “Bnp Paribas Nominees Pty Ltd ” UBS Nominees Pty Ltd Mr Simon Patrick Bowman Mr Stacey Radford Garrett Smythe Ltd BNP Paribas Nominees Pty Ltd ACF Clearstream “NG Investment Group Pty Ltd ” “79 Pty Ltd ” J P Morgan Nominees Australia Pty Limited “Corrine Rachel Panzich ” 20 Mr Stacey Radford Total Total Issued Capital - Selected Security Class(es) Holding 42,780,356 31,590,985 27,769,629 20,557,152 19,082,934 12,903,921 11,883,783 11,305,882 8,761,381 7,898,108 5,314,165 5,000,000 4,852,968 4,041,532 4,021,794 3,950,440 3,448,452 3,397,141 3,248,452 3,218,485 % of Issued Capital 9.77% 7.22% 6.34% 4.70% 4.36% 2.95% 2.71% 2.58% 2.00% 1.80% 1.21% 1.14% 1.11% 0.92% 0.92% 0.90% 0.79% 0.78% 0.74% 0.74% 235,027,560 53.69% 437,781,705 100.00% Annual Report for the Financial Year ending 30 June 2022 86 Additional ASX Information Substantial Ordinary Shareholders as at 21 September 2022 Name Alkane Resources Ltd HSBC Custody Nominees (Australia) Limited Citicorp Nominees Pty Limited Holding 42,780,356 31,590,985 27,769,629 % of Issued Capital 9.77% 7.22% 6.34% Distribution of Ordinary Shareholders as at 21 September 2022 Holding Range 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Holders Total Units % Issued Ordinary Capital 827 2,210 1,073 1,830 385 6,325 537,731 6,188,835 8,643,681 61,662,414 360,749,044 437,781,705 0.12% 1.41% 1.97% 14.09% 82.40% 100.00% Unmarketable Parcels As at 21 September 2022 there were 511 holders with less than a marketable parcel of shares. On-Market Buy-Back There is no current on-market buy-back. Unquoted Securities As at 21 September 2022 the following unquoted securities are on issue: Security Name NED Options @ $0 Expiring 27/12/2023 UNL Inc Options Exp 30/01/2025 @ $0.00 UNL Inc Options Exp 04/06/2025 @ $0.00 UNL Options Exp 04/01/2025 @ $0.00 UNL Inc Options Exp 18/01/2023 @ $0.00 UNL Opt Exp 31/12/23 @ $0.00 – Tranche 1 UNL Opt Exp 31/12/23 @ $0.00 – Tranche 2 UNL Opt Exp 31/12/24 @ $0.00 – Tranche 3 UNL Opt Exp 31/12/24 @ $0.00 – Tranche 4 UNL Opt Exp 31/12/23 @ $0.00 – Tranche 5 UNL Opt Exp 31/12/24 @ $0.00 – Tranche 6 UNL Opt Exp 31/12/24 @ $0.00 – Tranche 7 UNL Exec Opt Exp 31/12/23 @ $0.00 – Tr 1 UNL Exec Opt Exp 31/12/24 @ $0.00 – Tr 2 UNL Exec Opt Exp 31/12/24 @ $0.00 – Tr 3 UNL Ned Opt Exp 31/12/23 @ $0.00 – Tr 1 UNL Ned Opt Exp 31/12/24 @ $0.00 – Tr 2 UNL Ned Opt Exp 31/12/25 @ $0.00 – Tr 3 Units 100,000 1,350,000 150,000 133,333 750,000 575,006 628,059 916,893 852,228 753,715 753,715 753,715 341,979 341,979 341,979 115,268 220,407 287,074 ASX Listing Rule 4.10.19 The Company has used its cash and net assets in a form readily convertible to cash in hand at the time of reinstatement of the Company’s securities to quotation in a way consistent with its business objectives. Calidus Resources Limited ABN: 98 006 640 553 ASX:CAI Suite 12, 11 Ventnor Ave, West Perth Western Australia 6005 PO Box 1240, West Perth WA 6872 Western Australia 6005 E-mail: info@calidus.com.au calidus.com.au