A S X A n n o u n c e m e n t | 2 2 O c t o b e r 2 0 21 2021 Annual Report Eagle Mountain Mining Limited (ASX:EM2) (“Eagle Mountain”, the “Company”) is pleased to attach the Annual Report for the year ending 30 June 2021. For further information please contact: Tim Mason BEng, MBA, GAICD Chief Executive Officer tim@eaglemountain.com.au Mark Pitts B.Bus, FCA, GAICD Company Secretary mark@eaglemountain.com.au This Announcement has been approved for release by Mark Pitts, Company Secretary on behalf of the Board of Eagle Mountain Mining Limited EAGLE MOUNTAIN MINING LIMITED Eagle Mountain is a copper-gold explorer focused on the strategic exploration and development of highly prospective greenfields and brownfields projects in Arizona, USA. Arizona is at the heart of America’s mining industry and home to some of the world’s largest copper discoveries such as Bagdad, Miami and Resolution, one of the largest undeveloped copper deposits in the world. Follow the Company developments through our website and social media channels Website https://eaglemountain.com.au/ Twitter https://twitter.com/eagle_mining LinkedIn https://www.linkedin.com/company/eagle-mountain-mining-ltd/ 2 0 2 1 Annual Report CORPORATE DIRECTORY DIRECTORS Rick Crabb (Non-Executive Chairman) AUDITORS William Buck Audit (WA) Pty Ltd Charles Bass (Managing Director) Level 3 Roger Port (Non-Executive Director) 15 Labouchere Road South Perth WA 6151 ALTERNATE DIRECTOR Brett Rowe (Alternate Director for Charles Bass) EXECUTIVE Tim Mason (Chief Executive Officer) COMPANY SECRETARY Mark Pitts REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS Ground Floor, 22 Stirling Highway Nedlands, Western Australia 6009 Email: info@eaglemountain.com.au Website: eaglemountain.com.au REGISTERED OFFICE Ground Floor 22 Stirling Highway Nedlands WA 6009 SHARE REGISTRY Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth WA 6000 CORPORATE GOVERNANCE A summary statement reporting against the 4th Edition of the ASX Corporate Governance Recommendations which has been approved by the Board together with current policies and charters is available on the Company website. http://eaglemountain.com.au/about/#corporate ASX CODE EM2 ABN 34 621 541 204 Copper for a Low Emission Future CONTENTS Chairman’s Letter Managing Director’s Letter CEO Letter Vision FY2021 Highlights Review of Operations ASX Additional information Financial Report Directors’ Report Auditor’s Independence Declaration Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration Independent Auditor’s Report 4 6 8 10 11 12 36 40 41 57 58 59 60 61 62 95 96 EAGLE MOUNTAIN MINING | 2021 Annual Report 3 3 EAGLE MOUNTAIN MINING | 2021 Annual Report Chairman’s Letter Dear Shareholders, It is with pleasure that I present Eagle Mountain Mining Limited’s fourth Annual Report. Following the purchase in late 2019 of the Oracle Ridge copper project in Arizona, the Company has taken a number of important steps to enhance the value of this asset. Our belief that the Oracle Ridge Project was a quality acquisition due to its location, existing high-grade copper resource and multiple exploration targets, has in my view, been proven correct as a result of the excellent work undertaken by the Eagle Mountain Mining team based in Perth and Tucson. In August 2020, major US based international drill company, Boart Longyear was appointed to undertake the extensive drilling programme planned for Oracle Ridge, beginning with one rig. As new prospective targets were identified, two additional rigs were brought into operation. 4 4 EAGLE MOUNTAIN MINING | 2021 Annual Report EAGLE MOUNTAIN MINING | 2021 Annual Report In December 2020, the Company announced a JORC (2012) Mineral Resource Estimate at Oracle Ridge of 12.2Mt at 1.51% Cu, 16.3g/t Ag and 0.19g/t Au for 184kt Cu, 6.4Moz Ag and 73koz of Au (Indicated and Inferred at 1.0% Cu cut-off). It was noted that scope existed for a larger resource dependant on cut-off grade and commodity prices. Moreover, drill results from areas outside the JORC Resource area indicated significant potential to expand the resource footprint. In February 2021, the Company acquired the remaining 20% interest in the Oracle Ridge Project held by Vincere Resource Holdings Inc. This added some 81 million pounds of copper to Eagle Mountain’s attributable copper in the JORC Resources. As explained in last year’s Annual Report, our goal is to further build on the existing high-grade mineral resource to support an attractive mine life while maximising the production rates necessary to minimise mining unit costs. To this end, an extensive amount of drilling has been undertaken over the past year, to build on the understanding of the complex geological structures not only at Oracle Ridge proper but also the surrounding ground. So encouraging has been the results of this work, that the Company staked new claims to more than double the landholding. Needless to say, it has been a very busy period for the Eagle Mountain team, led by our Managing Director Charles Bass and CEO Tim Mason in Perth and supported by Manuel Ramos in Tucson as CEO of US Operations. The team have safely executed this work to a high standard during challenging times, not only due to COVID 19 restrictions but also some adverse weather conditions. On behalf of the Directors, I would like to thank the Eagle Mountain team in Perth and Arizona for their work on both the Oracle Ridge and Silver Mountain Projects. My thanks also to my fellow Director, Roger Port, for his diligence and expertise on financial and strategic issues and to Company Secretary, Mark Pitts, for his corporate and governance support during an active period of acquisition and fundraising. Next year again promises to be very active and exciting for the Company and I thank shareholders for their ongoing support. Yours faithfully Rick Crabb Chairman 5 EAGLE MOUNTAIN MINING | 2021 Annual Report Managing Director’s Letter Dear Fellow Shareholders, I am extremely proud of our extraordinarily professional staff, consultants and contractors, both in Perth and Arizona. In the face of fires, floods, snowstorms and lighting storms, they continue to unlock the true value at the Oracle Ridge copper mine and its surrounds. I am extremely excited by the potential that I see being unlocked in the larger Oracle Ridge area. This potential was a key motivation for me to strike an extremely beneficial agreement with Vincere Holdings in 2019 for an 80% interest in the project. Even though we have not yet unlocked the true secrets of what lies below, we were encouraged to strike a deal this year with Vincere for their remaining 20% interest for the issue of 10 million shares of EM2. Not only was it a relatively low cost acquisition for their share of the contained copper, silver and gold, but all future discoveries are 100% to the benefit of Eagle Mountain shareholders. 6 6 EAGLE MOUNTAIN MINING | 2021 Annual Report EAGLE MOUNTAIN MINING | 2021 Annual Report You might ask why I feel so optimistic by what I see. In the early 1980s, I spent about a year in Tucson working on the geology and resource definition at the Twin Buttes porphyry copper mine. As with almost all copper mines in the southwest US and Mexico that are considered “porphyry”. Twin Buttes started mining skarn mineralisation before further mineralisation was discovered. There were zones of quite good grade and large zones of lesser grade material that were all cut up by faulting and intrusions. The same host limestone rocks that become skarnified occur throughout the southwest. Many of the mines include various styles of mineralisation including polymetallic veining, skarn, breccia hosted and peripheral gold in both sedimentary and porphyry rocks. The peripheral gold zones were sometimes mined by original pioneers and we have such gold occurrences in our local area. Most, if not all, of the hallmarks of the various “porphyry” copper mines across the southwest US are being recognised at and near Oracle Ridge copper mine. will need to establish a potential “centre of gravity” that accounts for a much larger operation that could encompass Golden Eagle, OREX and even Red Hawk. This means that we need to know where to put an initial milling operation and allow for future expansion, but also for tailings disposal. These are nice problems to have, but we need to be patient to make sure that everything is done to maximise the fullest value out of our potential and minimise our risk. To demonstrate my belief in the potential of the Oracle Ridge project, I was very happy to convert my $US1 million of debt to the Company into shares at a premium to the share price at the time. More recently, I was pleased to subscribe for another $1million worth of shares during our September 2021 fund raise. Yours faithfully We have several fronts that we are and will be working on to unlock this potential. Even though we will be working on areas such as metallurgical and mining studies at the existing Oracle Ridge mine, we Charles Bass Managing Director 7 EAGLE MOUNTAIN MINING | 2021 Annual Report CEO Letter Dear Fellow Shareholders, I am pleased to report on what has been an outstanding year of growth and achievement for Eagle Mountain. I am incredibly proud of what our team has delivered, despite navigating the various challenges of COVID-19, the wettest monsoon in Tucson since 1964, and extensive wildfires around our Oracle Ridge project over the last year. Our vision is to become a low-emission producer of copper which is vital for decarbonisation of the global economy. Most analysts are anticipating shortfalls in global copper supply due to increasing demand and limited supply response; both of which support forecasts for higher copper prices, especially beyond 2025. This is a great time to be growing our copper inventory ahead of these strong predictions. We see strong potential for significantly more mineralisation to be discovered at and around the Oracle Ridge mine, due to its striking geological similarities with other major deposits in Arizona. Our exploration activities over the last year have focused on developing models to vector towards prospective areas, and we now have multiple quality targets including Golden Eagle, OREX and Red Hawk. 8 8 EAGLE MOUNTAIN MINING | 2021 Annual Report EAGLE MOUNTAIN MINING | 2021 Annual Report The year has seen a rapid expansion of the team and activities in Arizona. We undertook extensive geophysics over the larger Oracle Ridge area and more than doubled our land holdings over the last year as we discovered more prospective areas around the mine. We defined a maiden JORC Resource, and we now have three diamond drills turning on a full-time basis with the aim of expanding these Resources. We have undertaken full suites of geochemistry on the core which provide us with a far greater insight to the geology of the project and vectoring towards prospective areas. The acquisition of the remaining 20% of Oracle Ridge was affectively an additional 81 million pounds of copper at an acquisition price of US$0.10/ lb. This was an advantageous move that simplifies operations and administration ahead of further growth of the Project. We now have a team of 22 employees in Arizona, including Manuel Ramos who was the former President of ASARCO, one of the largest copper producers in Arizona. Recently, the team moved into a larger office and core logging facility in Tucson to support the expanded activities and planned growth of the Company. Earlier in the year, a large wildfire on the Santa Catalina Mountains threatened many homes and caused multiple evacuations. Our Oracle Ridge project was very close to these fires and the local fire department used our facilities as a base for helicopter water bombers. Our team worked tirelessly setting up pumps and waterlines to assist the fire department in one of the worst wildfires in the history of the Catalina Mountains. We were lucky that none of our infrastructure was damaged and I am proud we could assist the local community at a time when it was needed most. Our exploration activities and potential mining operation will have a strong focus on minimising our environmental footprint. We will evaluate the use of electric mining equipment, as opposed to diesel equipment, to reduce emissions which will further reduce power requirements for ventilation. Future mining studies will consider the extensive energy- saving benefits of gravity as our Resources are located at an elevated position. Our exploration activities will continue with a two-pronged approach. Firstly, we will continue to hunt for a larger mineralised system, potentially far larger than what has been defined thus far. Secondly, we will continue to grow and upgrade our existing JORC resources to a critical size that supports a reasonable minelife with strong annual production rates. Prior to potentially recommencing mining operations at Oracle Ridge, we believe that it’s vital to build our mineral resources to de-risk this decision and ensure the mine and plant are designed appropriately. To support future mining studies, we will undertake metallurgical test work and other studies in parallel with the resource expansion to enable a faster transition to mining. Our Silver Mountain Copper Project remains a highly prospective greenfields project however, following the exploration success in the last year, we will continue to focus on further building our resource base at Oracle Ridge in the coming year. We will look to recognise further value in Silver Mountain, either from ongoing geological investigations or bringing in other groups to assist with exploration activities. Over the last year, we have built an enthusiastic team, driven by shared values to find the copper the world desperately needs to reduce carbon emissions. I believe we are well positioned for significant growth with a high-quality team and an attractive asset base. I would like to thank all our dedicated board, employees, contractors, business partners and shareholders for their contributions to our Company over the last year. Yours faithfully Tim Mason Chief Executive Officer 9 EAGLE MOUNTAIN MINING | 2021 Annual Report Vision To become a low-emission producer of copper which is vital for decarbonisation of the global economy 10 10 EAGLE MOUNTAIN MINING | 2021 Annual Report EAGLE MOUNTAIN MINING | 2021 Annual Report FY2021 Highlights • Maiden JORC Resource estimate calculated at 12.2 Mt at 1.51% Cu,16.3G/t Ag and 0.19g/t Au based on historical holes only. • Strong exploration results with a focus on resource expansion. • Multiple new exploration targets were defined including OREX, the Talon and Golden Eagle. • Accelerated drilling program successfully commenced, now with three diamond drills rigs operating on a full-time basis. • Moved to 100% ownership of Oracle Ridge. This included a further 81 million pounds of copper at an effective acquisition price of US$0.10/lb Cu. • • • Landholding at Oracle Ridge more than doubled. Supported the local community and fire departments during wildfires on the Santa Catalina Mountains. Appointed Manuel Ramos as CEO in the US. Mr Ramos was the former President of ASARCO, a major copper producer in Arizona. • Well supported capital raisings which generated $20m in new capital. • Eagle Mountain Mining awarded the Deloitte High Growth Award for 2021. EAGLE MOUNTAIN MINING | 2021 Annual Report 11 11 EAGLE MOUNTAIN MINING | 2021 Annual Report Review of Operations Portal and core shed at Oracle Ridge RReevviieeww ooff OOppeerraattiioonnss Eagle Mountain Mining Limited (“Eagle Mountain”, “Company”) owns 100% of the Oracle Ridge and Silver Mountain projects in Arizona, a Tier 1 mining jurisdiction1 which hosts many large copper mines and projects operated by major mining companies including BHP, Rio Tinto, Freeport- McMoran, Asarco, Hudbay and South 32. The Company’s projects are prospective for both high- grade copper-silver-gold mineralization and large-scale copper systems. Activities during the year focused primarily on the Oracle Ridge Project. Eagle Mountain’s vision is to become a low-emission producer of copper which is vital for decarbonisation of the global economy. It is planned that future mining operations will have a strong focus on reducing emissions by using battery or electric powered mining equipment and sourcing or producing renewable energy where possible. At Oracle Ridge, the project benefits from its resource being located on a hill so the use of gravity as part of the mine design could further reduce energy consumption which also reduces emissions. Many countries have renewed targets for decarbonisation of their economies and copper is a key metal for reducing the use of fossil fuels. We are driven by our vision to supply the copper for a greener global future, but also to supply that copper via a low-emission process. 1Arizona is ranked 3th in the world by the Fraser Institute for mining investment attractiveness https://www.fraserinstitute.org/sites/default/files/annual-survey-of-mining-companies-2019.pdf 12 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 10 EAGLE MOUNTAIN MINING | 2021 Annual Report OOrraaccllee RRiiddggee CCooppppeerr PPrroojjeecctt ((110000%%)) Summary The Oracle Ridge Copper Mine is located northeast of Tucson and 26 kilometres from BHP’s San Manuel mine, once the largest underground mine in the USA. The site is easily accessible by road and is supported by a nearby railway and copper smelters in the state. Figure 1 shows the location of the Oracle Ridge copper project. Figure 1 - Location of Oracle Ridge Copper Project The Oracle Ridge Copper Mine is an advanced stage exploration project with a high-grade copper resource with significant gold and silver. Mineralization at Oracle Ridge is skarn hosted which is common at many other porphyry deposits in Arizona. The source of the mineralisation at Oracle Ridge has not been found and it remains a key exploration opportunity. The project benefits from 18 kilometres of existing underground development in very good condition along with other supporting infrastructure. During the year, the Company completed a maiden JORC Mineral Resource Estimate (“MRE”) of 12.2Mt at 1.51% Cu, 16.3g/t Ag and 0.19g/t Au for 184kt Cu, 6.4Moz Ag and 73koz of Au (Indicated and Inferred at 1.0% Cu cut-off) (refer ASX announcement 14 December 2020). This resource estimate was based solely on existing historical drillholes and does not incorporate any of the holes drilled by the Company. E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 11 13 EAGLE MOUNTAIN MINING | 2021 Annual Report During the year, the Company moved to 100% ownership of the Oracle Ridge Copper Mine (“Oracle Ridge”) after buying out joint venture partner, Vincere Resource Holdings LLC. The Company acquired the remaining 20% ownership from Vincere Holdings LLC in mid-2021 for the issue of 10 million shares, which was effectively an additional 81 million pounds of copper at an acquisition price of US$0.10/lb Cu in JORC Resources. More significantly, it provided 100% exposure to exploration success and it dissolved the joint venture simplifying project operations and administration (refer announcement 30 April 2021). Eagle Mountain identified a range of exploration targets including extensions to the existing mineralisation and other near-mine prospects before commencing its diamond drill program in September 2020. Following strong exploration results combined with ongoing delineation of further exploration targets, the Company brought on an additional drill in May 2021. The Company now has three diamond drill rigs operating on a full-time basis at the project targeting extensions to existing resources and other prospective areas. During the year, the Company identified two separate prospective alteration systems at Golden Eagle, located two kilometres to the east of the mine area. The geology at Golden Eagle is vastly different from the copper skarn mineralisation at the Oracle Ridge Mine and includes multiple prospective signatures of a large hydrothermal system including quartz veining, extensive pyrite and polymetallic mineralisation. Drilling at Golden Eagle commenced in July 2021. A further prospective target area was identified as a possible extension to the skarn mineralisation which supports the MRE. This area is known as Oracle Ridge Extension or “OREX”. OREX is at the lower contact of the Leatherwood intrusive which can be traced at the surface for over four kilometres and displays discontinuous skarn alteration and mineralisation over its entire length. Based on Eagle Mountain’s recent mapping and review of historical drilling information (refer ASX announcement 12 October 2020), the Company believes that the prospective contact exists at depth below the Leatherwood for approximately three kilometres in an east-west direction. The Company is seeking permits from the United States Forest Service for drilling on parts of the OREX prospect. An MRE upgrade drilling program commenced during the year, which aims to enable resources in the “measured” category to be defined. The initial results not only support the existing MRE but also discovered broad zones of mineralisation in areas that had not been previously assayed. Further resource upgrade drilling is planned for FY22. To support the planned growth of the Company, Mr Manuel Ramos was appointed as Chief Executive Officer of US Operations during the year. Mr Ramos is a veteran of the Arizona copper industry. He was President and Chief Operating Officer for ASARCO LLC between 2009 and 2018. Prior to that position, Mr Ramos was VP Metallurgical Operations for over 10 years at ASARCO. ASARCO, now a subsidiary of Grupo México, is a large integrated copper company that operates the Mission, Silver Bell and Ray copper mine complexes in Arizona along with the Hayden Copper Smelter, all within a few hours drive of Eagle Mountain’s Oracle Ridge Project. Prior to ASARCO, Mr. Ramos held various managerial positions with Grupo México over a 25 year period. Mr Ramos is a highly regarded Arizona businessman who brings a wealth of experience and resource industry knowledge, along with broad US networks to this new role. A key objective for Mr Ramos 14 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 12 EAGLE MOUNTAIN MINING | 2021 Annual Report is to take the Oracle Ridge Project from exploration through to feasibility and potentially operations. To support the accelerated exploration program, additional employees were engaged to support drilling, core logging and general exploration activities. The Company now has 22 employees in the US along with supporting contractors and consultants. Late in the financial year, the Company moved into a new office in the northern end of Tucson which is closer to the site. Core processing will occur in the new office and will allow for future growth of the Company. The Company has also purchased a core saw to enable more efficient cutting of core at a reduced cost. During the year, the Company continued to take a disciplined approach to the management of COVID-19. Pleasingly there was little disruption to exploration activities. Vaccination rates in the US are relatively high and restrictions gradually eased over the year allowing business to progress. With the ongoing COVID-19 pandemic globally, sourcing certain supplies can be slower than usual impacting some activities. This year saw extreme weather with both monsoons, flooding and snow. During January, large snowstorms across the southern USA impacted operations for a few days with over 1 foot of snow. Drilling activities were ceased when access became too hazardous. Recently, Tucson experienced the third wettest monsoon in its history. These rains caused damage to roads and the extensive lightning storms prohibited drilling. Drilling rates picked up after the monsoon season abated in September 2021. Early in the financial year, a large wildfire in the Santa Catalina Mountains threatened many homes and burnt extensive bushland. The fires came close to the Oracle Ridge project though fortunately no infrastructure was damaged. The operational team in the US helped emergency crews by setting up water lines for inflatable tanks to allow the helicopter water bombers faster access to fight the fires. The local fire department was very appreciative of the assistance we provided, and we were proud to contribute to the community during this time. Project History Since mining ceased in 1996, there has been little modern exploration and very minimal drilling beyond the defined MRE, until Eagle Mountain acquired the project. Table 1 below shows a brief history of Oracle Ridge. PPrrooppeerrttyy OOwwnneerr Phelps Dodge Copper Co. TTiimmee PPeerriioodd 1873-1937 Daily Arizona Copper Co, Control Mines Continental Union Mines Inc Copper Inc, 1937 - 1968 1968 - 1988 Santa Catalina Mining Corp 1988 - 2004 EEvveennttss • Mining in district begins • 20 t/day copper smelter constructed • Exploration and development • 90 t/day flotation plant constructed • Operations occur sporadically • • Reported US$19 million expenditure on Large scale analysis of mineralisation exploration and development • 750 short ton (“st”)/day mill constructed 1991 • 1000 st/day mill expansion completed 1993 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 13 15 EAGLE MOUNTAIN MINING | 2021 Annual Report Marble Mountain Ventures LLC Oracle Mining Corp 2004 - 2010 2010 - 2014 Receiver of Oracle Ridge Mining LLC (ORM) - Vincere Resource Holdings LLC 2014 – 2019 Wedgetail Operations LLC (80% controlled by Eagle Mountain Mining) 2019-2020 • Roughly 1 million st of ore processed 1991-1995 • Operation closed 1996 and mill removed • Real estate developers – no mining or exploration • Gold Hawk, renamed Oracle Mining Corp, purchased 100% in the Oracle Ridge property from Marble Mountain Ventures • 21,700 m validation and expansion drill program 2010-2013 • Air Quality Permit received 2012 • MOU with Pima County on land exchange • Updated Mineral Resource Estimate NI43-101 2014 • Secured note granted to Vincere • Vincere’s secured note puts ORM in receivership • Oracle Ridge mine assets held on care and maintenance at cost of approx. US$400,000 per annum • Wedgetail Operations LLC (“Wedgetail”) undertook due diligence and negotiations on Oracle Ridge, which resulted in Wedgetail acquiring an 80% interest the project November 2019 (commercial details of the acquisition are outlined later in the report) in Wedgetail Operations LLC (100% controlled by Eagle Mountain Mining) 2021 • Wedgetail purchased Vincere’s 20% interest, thus moving to 100% ownership. Table 1 - History of the Oracle Ridge Copper Project 16 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 14 EAGLE MOUNTAIN MINING | 2021 Annual Report Figure 2 - Plan Map of the Oracle Ridge Claims Existing Infrastructure The project has substantial infrastructure at the mine including approximately 18 kilometres of underground development, access roads, tailings storage facility (closed), underground ventilation, electrical and water services and surface infrastructure including offices and maintenance buildings. The existing infrastructure will reduce capital costs and the time required to re-start potential production, which will be assessed in any future mining study. E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 15 17 EAGLE MOUNTAIN MINING | 2021 Annual Report Underground development at Oracle Ridge Underground diamond drill at Oracle Ridge Mineralisation The MRE at Oracle Ridge occurs within five main skarn zones, hosted by three limestone formations; Abrigo, Martin and Escabrosa. These same formations also host significant skarn deposits at other major porphyry mines in Arizona, including the Bisbee district, Mission Complex, Twin Buttes, the Ray Mine, Superior district and further south into major mines located in Mexico. Skarn alteration and copper mineralisation is believed to have formed during the Laramide orogeny, a geologic period when many major world-class copper deposits such as Globe-Miami, Magma, Resolution, Ray and San Manuel-Kalamazoo were formed throughout the southwestern United States. 18 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 16 EAGLE MOUNTAIN MINING | 2021 Annual Report Skarns are formed by an influx of hot solutions and heat from a nearby intrusive was likely responsible for altering the mineral composition of the pre-existing limestone prior to depositing copper, gold and silver minerals. The location of the intrusive at Oracle Ridge is not known and locating this system remains a key exploration objective for the Company. A conceptual section of Oracle Ridge is shown in Figure 3 below. Figure 3 - Cross-Section of Conceptual Skarn Mineralisation at Oracle Ridge E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 17 19 EAGLE MOUNTAIN MINING | 2021 Annual Report Core from drilling at the Talon. Mineralisation includes copper mineralisation with disseminated bornite (blue) and chalcopyrite (yellow) in skarnified sediments in drill hole WT-21-32 (272.1 to 272.5m) (refer ASX announcement 23 September 2021) JORC Resource During the year, a maiden JORC Mineral Resource Estimate (MRE) was completed. The MRE is the culmination of a substantial amount of work by Eagle Mountain and follows the appointment of SRK Consulting (Australasia) (SRK), a highly reputable mining consultancy. SRK was engaged to complete the MRE using a methodology best suited for the mineralisation style at Oracle Ridge. None of the drill holes completed since the commencement of the resource expansion drilling program, which commenced in September 2020, have been included in the MRE, providing significant opportunity for a resource upgrade in the future. Using a 1.0% Cu cut-off grade, Oracle Ridge contains 12.2Mt at 1.51% Cu, 16.3/t Ag and 0.19g/t Au for a contained 184kt Cu, 6.4Moz Ag and 73koz of Au as shown in Table 2 and Table 3 below. Table 2 – Oracle Ridge Copper Project JORC 2012 Mineral Resource Estimate (1.0% Cu cut-off)1 CCllaassss IInnddiiccaatteedd IInnffeerrrreedd TToottaall TToonnnnaaggee ((MMtt)) CCuu ((%%)) 1.52 1.50 11..5511 6.6 5.6 1122..22 Note - Totals may not add due to rounding differences AAgg ((gg//tt)) 15.8 17.0 1166..33 AAuu ((gg//tt)) 0.19 0.18 00..1199 CCuu ((tt)) 100,000 84,000 118844,,000000 AAgg ((OOzz)) 3,348,000 3,033,000 66,,338822,,000000 AAuu ((OOzz)) 40,000 33,000 7733,,000000 20 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 18 EAGLE MOUNTAIN MINING | 2021 Annual Report Table 3 – Oracle Ridge Copper Project cut-off grade comparison (Indicated and Inferred)1 CCooppppeerr CCuutt--ooffff ((%% CCuu)) TToonnnnaaggee ((MMtt)) CCuu ((%%)) AAgg ((gg//tt)) AAuu ((gg//tt)) CCuu ((tt)) AAgg ((OOzz)) AAuu ((OOzz 00..44 00..66 00..88 11..00 11..22 11..44 11..66 44.5 28.4 18.6 1122..22 8.1 5.6 3.7 0.87 1.08 1.30 11..5511 1.72 1.91 2.12 9.7 12.0 14.1 1166..33 18.5 20.6 22.9 0.11 0.13 0.17 00..1199 0.21 0.23 0.25 389,000 13,791,000 158,000 309,000 10,923,000 125,000 242,000 8,453,000 97,000 118844,,000000 66,,338822,,000000 7733,,000000 140,000 4,845,000 55,000 108,000 3,718,000 42,000 79,000 2,729,000 29,000 Note - Totals may not add due to rounding differences The defined mineralisation at Oracle Ridge includes both higher and lower grade zones with a steep grade versus tonnage relationship. By reducing the cut-off from 1% to 0.8% Cu, there is a 32% increase in contained copper. Conversely, by increasing the cut-off to 1.4% Cu, the overall copper grade increases significantly from 1.51% to 1.91% Cu. These variations provide optionality for future mining studies in terms of the potential production rate and grade. Skarn Expert During the year, the Company engaged Dr Larry Meinert, a world-renowned expert on skarns and associated mineralisation. Dr Meinert’s review included examination of drill core, mapping of underground formations and assay analysis. Key conclusions from Dr Meinert’s technical report include: • The southern extension to the Oracle Ridge mine area is prospective for additional copper-rich mineralisation • Potential for additional skarn-hosted mineralisation exists in the central and southern part of the Oracle Ridge mine area beneath the Leatherwood intrusive and forms a prime target for deeper drilling • Aeromagnetics is an effective tool in targeting copper mineralisation at Oracle Ridge • Detailed logging of minerals across the deposit will allow vectoring towards copper-rich zones Dr Meinert will continue collaborating with Eagle Mountain’s technical team to improve the knowledge of the mineralisation system, evaluate exploration results at near-mine targets such as OREX and define new prospective areas in the Oracle Ridge region. Exploration Since acquiring the project in November 2019, the Company has continued to build its geological knowledge of the mine and region. This work has included reinterpretation of existing data, structural reviews, multispectral studies, and geophysical surveys. E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 19 21 EAGLE MOUNTAIN MINING | 2021 Annual Report The exploration strategy at Oracle Ridge is to initially prove the exploration target through drilling. Concurrently, as skarn mineralisation is sourced from porphyry systems, locating the structural controls leading to the porphyry system remains a key exploration focus for the Company. In September 2020, the Company commenced a surface diamond drilling program at Oracle Ridge. The drilling program was set to target extensions to high-grade portions of the existing MRE. During the year, the Company discovered a new zone of mineralisation along the upper Leatherwood contact. This area known as the Talon coincides with a strong magnetic anomaly. Assay results in this area included the outstanding high-grade intercept of 12.7m at 3.96% Cu, 49.11g/t Ag and 1.3g/t Au. Included in this zone was 34.4% Cu, 367g/t Ag and 26.2g/t Au over 0.4m in a massive chalcopyrite zone, the highest assay grades received at Oracle Ridge (refer ASX announcement 31 March 2021). Massive sulphides had not been previously encountered by Eagle Mountain at Oracle Ridge. This is an exciting discovery and the technical team and its consultants are assessing the relevance of this interval and its implications for the prospectivity of this area. Large portions of the Leatherwood contact remain untested across the Project. In April 2021, it was decided to accelerate diamond drilling with a second rig mobilised in late May 2021 and a third drill commencing in early July 2021. The decision to accelerate drilling was supported by the following factors: • Multiple strong assay and drilling results outside the existing MRE; • Prospectivity for further mineralisation supported by the report from, Dr Larry Meinert • (refer ASX announcement 19 May 2021); and Increasing pipeline of high-priority targets within a few kilometres of the underground mine portals. The aim of the accelerated drilling program is to: • Expand the existing JORC Resources; • Establish a Measured Resource category in the next MRE; • Drill test high-priority targets within a few kilometres of the existing mine; and • Assist vectoring towards potential deeper sources of mineralisation. Drilling on the western side of the Talon indicated the potential for stacked lodes with multiple mineralised zones in hole WT-21-15. Subsequent to the end of the financial year, assay results for nearby holes WT-21-16 and WT-21-17 (refer ASX announcement 29 July 2021) confirmed the presence of stacked mineralised lodes in the area. This is extremely encouraging as the stacked lodes have the potential to add significant tonnes to the existing MRE. Follow-up drilling is planned to the south of this area. A total of 40 holes equalling 13,011 metres were drilled during the year. 22 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 20 EAGLE MOUNTAIN MINING | 2021 Annual Report Principal Geologist Brian Paull holding core from WT-21-06 (from 371.6m) which assayed 34.4% Cu, 367g/t Ag and 26.2g/t Au (refer ASX announcement 31 March 2021). E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 21 23 EAGLE MOUNTAIN MINING | 2021 Annual Report 2 2 t r o p e R l a u n n A 1 2 0 2 | G N I N I M N I A T N U O M E L G A E . ) 1 2 0 2 r e b m e t p e S 8 2 t n e m e c n u o n n a X S A r e f e r ( n e k a t r e d n u g n i l l i r d m o r f s t l u s e r y a s s a d e t c e l e s f o p a m y r a m m u S –– 4 e r u g F i 24 EAGLE MOUNTAIN MINING | 2021 Annual Report To support the accelerated drilling program, extensive roadworks continued during the year to establish new drilling pads. Some of the zones with very high copper assay grades could not be followed up previously due to the location of access roads at the time. The roads installed during the year enabled targeting of these prospective areas. Resource extension drilling at Oracle Ridge Mineral Resource Estimate Upgrade Drilling During the year, two Resource upgrade holes were drilled with a further two holes completed in early July 2021. The aim of the MRE upgrade program was to verify the quality and reliability of a small portion of the historical drilling information in the Company’s database. In addition, should the remaining infill MRE upgrade holes support the grades and thicknesses of previous drilling, a portion of the existing Indicated MRE is likely to be upgraded to the JORC Measured category (following an updated MRE). Only ‘Measured’ Mineral Resources may be converted to ‘Proved’ Ore Reserves if they are economically mineable as defined by a Pre-Feasibility or Feasibility Study. These studies would include the application of various modifying factors and dilution and have not yet been completed. E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 23 25 EAGLE MOUNTAIN MINING | 2021 Annual Report The results of the initial MRE upgrade drilling were very pleasing as the results not only supported the surrounding holes and MRE, but also intercepted thick zones of mineralisation which had not previously been assayed. Results include: • 110.1m at 1.06% Cu, 9.64g/t Ag and 0.16g/t Au (WT-21-24), ending in mineralisation, and included o 18.4m at 3.12% Cu, 27.83g/t Ag and 0.51g/t Au, within o 50.5m at 1.73% Cu, 14.31g/t Ag and 0.26g/t Au2 • 106.0m at 1.15% Cu, 11.73g/t Ag and 0.16g/t Au (WT-21-20)3 • 96.1m at 0.98% Cu, 7.84g/t Ag and 0.15g/t Au (WT-21-18)4 The intercept of 18.4m at 3.12% copper and 0.51g/t gold, within a much larger mineralised zone, is one of the best intercepts recorded at Oracle Ridge. In addition, the overall average gold grades in the reported infill holes are, better than those in surrounding historical holes. The results from the resource upgrade drilling are significant because if the presence of these thick zones is extensive it could materially improve the contained copper in the resource and provide optionality for future mining methods and production rates. Core logging at Oracle Ridge 2 Refer ASX announcement 15 September 2021 3 Refer ASX announcement 31 August 2021 4 Refer ASX announcement 29 July 2021 26 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 24 EAGLE MOUNTAIN MINING | 2021 Annual Report GGoollddeenn EEaaggllee Golden Eagle is an area centred approximately two kilometres to the east of the Oracle Ridge mine portals which abuts the OREX project area to the north. Literature and preliminary exploration work by Eagle Mountain showed potential for Golden Eagle to contain a gold-rich mineralised system (refer ASX announcement 3 March 2021). The Company initiated an exploration program over the area including a geological mapping and sampling program and a geophysical magnetic survey. The objective of the program was to confirm the extent and endowment of the area and identify favourable targets for drilling. Two separate prospective alteration systems have been discovered at Golden Eagle, both vastly different to the copper skarn mineralisation at the Oracle Ridge mine two kilometres to the west. One of the alteration systems includes silica flooding, quartz stockwork veining and pyritization along a major fault system; measuring 1 kilometre by 0.3 kilometres and remaining open in three directions. The other system includes gold samples at surface up to 10.45 g/t Au that sit along a 1.5-kilometre-long magnetic high anomaly. There are several faults that occur in the area, including the regionally significant Geesaman Fault which represents a favourable plumbing system for mineralising fluids. Drilling at Golden Eagle commenced in July 2021 testing both the pyrite silica zone and the magnetic feature crossing the alteration area in a NW-SE direction. See Figure 5 below. Outcropping Vuggy quartz vein with pods of massive hematite, jarosite and goethite rock at Golden Eagle which assayed 1.62 g/t Au and 10.30 g/t Ag. (Refer ASX announcement 23 August 2021) E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 25 27 EAGLE MOUNTAIN MINING | 2021 Annual Report Figure 5 – Plan view of Golden Eagle showing prospective systems (Refer ASX announcement 23 August 2021). The Golden Eagle Project contains several features which rank it as a high priority exploration opportunity: • A favourable structural setting including major features such as the Geesaman Fault act to hide the magnitude of the alteration system; • Significant pyritic and silica alteration has been uncovered along the Pidgeon Tank Fault; • High-grade gold samples over a 1.5-kilometre-long magnetic trend together with anomalous bismuth and tungsten; and • Historical gold mining, including the well documented Sanderson Mine. 28 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 26 EAGLE MOUNTAIN MINING | 2021 Annual Report OOrraaccllee RRiiddggee EExxtteennssiioonn ““OORREEXX”” Based on encouraging results from an initial field mapping program at OREX in 2020 (refer ASX announcement 12 October 2020), a detailed mapping project was undertaken. Assays confirmed extensive occurrences of outcropping skarn-hosted copper-silver-gold mineralisation along the lower contact of the Leatherwood intrusive and the skarn horizon. Over 100 grab samples were collected with many returning high-grade mineralisation. The limestone formations and resulting skarn are very similar to those encountered at the Oracle Ridge mine. The results of this latest fieldwork indicate that OREX is an outstanding target to define additional skarn-hosted copper mineralisation at Oracle Ridge. Alteration and mineralisation at OREX and at the Oracle Ridge mine display many similarities. The lower contact of the Leatherwood intrusive at OREX can be traced at the surface for over four kilometres and displays discontinuous skarn alteration and mineralisation over its entire length. Based on Eagle Mountain’s recent mapping and review of historical drilling information (refer ASX announcement 12 October 2020), the Company believes that the prospective contact exists at depth below the Leatherwood for approximately three kilometres in an east-west direction (see Figure 6). The Company is seeking permits from the United States Forest Service for drilling on parts of the OREX prospect. Figure 6 - Location of OREX prospect with high-grade samples (refer ASX announcement 16 April 2021) E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 27 29 EAGLE MOUNTAIN MINING | 2021 Annual Report High-grade waste from dump material at OREX target assaying 9.15% Cu, 192 g/t Ag and 0.15 g/t Au. The sample was collected next to a small adit mined along a copper-bearing shear within the Leatherwood intrusive (refer ASX announcement 12 October 2020). SSiillvveerr MMoouunnttaaiinn PPrroojjeecctt –– 110000%% oowwnneedd Overview The Silver Mountain copper/gold project (“Silver Mountain”) is located in Arizona to the northwest of Phoenix. The project area sits on the northwest-southeast Laramide Arc, a geological feature containing world-class porphyry copper mines such as Bagdad, Miami and Resolution. It also lies on the southern extension of a northeast-southwest prospective metallogenic belt that hosts United Verde and Iron King, two historical mines of volcanogenic massive sulphide affinity. The intersection of these two trends results in a favourable geologic setting with high complexity and potential for multiple mineralisation styles. The northern portion of the project area has a history of prospecting and mining of high- grade copper from the 1890s into the 1920s. Except for very limited campaigns in the 1960s, 1970s and early 1990’s, there had been no modern exploration of the Silver Mountain area. Eagle Mountain and its subsidiaries have 30 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 28 EAGLE MOUNTAIN MINING | 2021 Annual Report been the first companies to undertake modern exploration over the Silver Mountain project area commencing in 2013. Eagle Mountain was the first group to combine the fragmented land ownership along the main copper mining trend. A portion of the tenements are held in patented claims, which grant royalty-free surface and mineral rights with very low carrying costs. Silver Mountain encompasses three main prospects known as “Pacific Horizon”, “Scarlett” and “Red Mule”, each having a unique mineralisation style. The Company views Silver Mountain as a very prospective project supported by multiple favourable geological signatures. Further field mapping and geophysical surveys are planned with the aim of defining the potential source of mineralisation outcropping at the surface. Figure 7 - Map showing the land tenure and local geology of the Pacific Horizon, Scarlett and Red Mule prospects E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 29 31 EAGLE MOUNTAIN MINING | 2021 Annual Report Figure 8 below shows a hypothetical cross section across the Silver Mountain project illustrating the different types of mineralisation targets and a postulated porphyry source at depth which could explain the different mineralisation styles observed on the property. CCOOMMPPEETTEENNTT PPEERRSSOONN SSTTAATTEEMMEENNTTSS The information in this document that relates to new Exploration Activities is based on information compiled by Mr Fabio Vergara and Mr Brian Paull who are both Members of The Australasian Institute of Mining and Metallurgy (MAusIMM) and have sufficient experience relevant to the activity which they are undertaking to qualify as a Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). Mr Vergara is the Chief Geologist and Mr Paull Principal Geologist of Eagle Mountain Mining Limited and consent to the inclusion in this document of the information in the form and context in which it appears. Mr Vergara and Mr Paull hold shares and options in Eagle Mountain Mining Limited. Where the Company references previous exploration results including technical information from previous ASX announcements and including historic results outlined in the ASX announcement dated 25 May 2020, JORC Table 1 disclosures are included within them. The Company confirms that it is not aware of any new information or data that materially affects the information included in those announcements, and all material assumptions and technical parameters underpinning the results within those announcements continue to apply and have not materially changed. In addition, the form and context in which the Competent Persons findings are presented have not been materially modified from the original reports. Where the Company references the JORC Mineral Resource Estimate announced on 14 December 2020, it confirms that it is not aware of any new information or data that materially affects the information included in that announcement, and all material assumptions and technical parameters underpinning the Mineral Resource Estimate within that announcement continue to apply and have not materially changed. In addition, the form and context in which the Competent Persons findings are presented have not been materially modified from the original reports. Figure 8 - Conceptual mineralisation system at Silver Mountain Project 32 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 30 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 31 EAGLE MOUNTAIN MINING | 2021 Annual Report CCOOMMPPEETTEENNTT PPEERRSSOONN SSTTAATTEEMMEENNTTSS The information in this document that relates to new Exploration Activities is based on information compiled by Mr Fabio Vergara and Mr Brian Paull who are both Members of The Australasian Institute of Mining and Metallurgy (MAusIMM) and have sufficient experience relevant to the activity which they are undertaking to qualify as a Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). Mr Vergara is the Chief Geologist and Mr Paull Principal Geologist of Eagle Mountain Mining Limited and consent to the inclusion in this document of the information in the form and context in which it appears. Mr Vergara and Mr Paull hold shares and options in Eagle Mountain Mining Limited. Where the Company references previous exploration results including technical information from previous ASX announcements and including historic results outlined in the ASX announcement dated 25 May 2020, JORC Table 1 disclosures are included within them. The Company confirms that it is not aware of any new information or data that materially affects the information included in those announcements, and all material assumptions and technical parameters underpinning the results within those announcements continue to apply and have not materially changed. In addition, the form and context in which the Competent Persons findings are presented have not been materially modified from the original reports. Where the Company references the JORC Mineral Resource Estimate announced on 14 December 2020, it confirms that it is not aware of any new information or data that materially affects the information included in that announcement, and all material assumptions and that technical parameters underpinning announcement continue to apply and have not materially changed. In addition, the form and context in which the Competent Persons findings are presented have not been materially modified from the original reports. the Mineral Resource Estimate within E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 31 33 EAGLE MOUNTAIN MINING | 2021 Annual Report AANNNNUUAALL MMIINNEERRAALL RREESSOOUURRCCEE SSTTAATTEEMMEENNTT AASS AATT 3300 JJUUNNEE 22002211 GGoovveerrnnaannccee aanndd IInntteerrnnaall CCoonnttrroollss The Company’s Mineral Resource Statement has been compiled in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code 2012”) and Chapter 5 of the ASX Listing Rules and ASX Guidance Note 31. The Company has no Ore Reserve estimates. The Company governs its activities in accordance with industry best-practice. The resource reports and supporting data were subjected to internal analysis and peer-review before release. MMiinneerraall RReessoouurrcceess During the financial year, the Company undertook a review of its Canadian NI 43-101 compliant mineral resource at its Oracle Ridge Copper Project (“Oracle Ridge”) in Arizona, USA, with the view to re-defining the mineral resource as JORC Code 2012 compliant. In late 2020, SRK Consulting (Australasia) was engaged to complete a review of the existing Mineral Resource Estimate (“MRE”). A substantial amount of work was completed using a methodology best suited for the mineralisation style at Oracle Ridge, which included: • Review, verification and interpretation of historical datasets; • Integration of historical datasets with information uncovered during the review which had never been previously digitised (e.g. structures, alteration, mineralogy, missing surveys); • Development of a maiden structural model as previous geological models did not include any structural data or interpretation; and • Development of a new geological model. RReevviieeww ooff MMaatteerriiaall CChhaannggeess On 14 December 2020, the Company announced its maiden JORC Code 2012 compliant MRE. The MRE for the Oracle Ridge Project comprises 1122..22MMtt aatt 11..5511%% CCuu,, 1166..33gg//tt AAgg aanndd 00..1199gg//tt AAuu ffoorr 118844kktt CCuu,, 66..44MMoozz AAgg aanndd 7733kkoozz ooff AAuu (Indicated and Inferred at 1.0% Cu cut-off). TTaabbllee 11 –– OOrraaccllee RRiiddggee CCooppppeerr PPrroojjeecctt JJOORRCC 22001122 MMiinneerraall RReessoouurrccee EEssttiimmaattee ((11..00%% CCuu ccuutt-- ooffff)) CCllaassss IInnddiiccaatteedd IInnffeerrrreedd TToottaall TToonnnnaaggee ((MMtt)) CCuu ((%%)) 1.52 1.50 11..5511 6.6 5.6 1122..22 AAgg ((gg//tt)) AAuu ((gg//tt)) 15.8 17.0 1166..33 0.19 0.18 00..1199 CCuu ((tt)) 100,000 84,000 118844,,000000 AAgg ((OOzz)) AAuu ((OOzz)) 3,348,000 40,000 3,033,000 33,000 66,,338822,,000000 7733,,000000 Note - Totals may not add due to rounding differences The maiden JORC Code 2012 MRE is broadly in line with the previous NI 43-101 MRE, providing confidence in the updated estimate. The updated JORC Code 2012 MRE has a modest 4% increase in total tonnes when compared with the previous NI 43-101 MRE (refer ASX announcement 29 October 2019). The Company ensures good governance in relation to resource estimation through the use of third-party resource consultants and internal review in accordance with industry best practice. All reported resource estimates were generated by reputable, independent consulting firms. All drill hole data is stored in-house within a commercially available purpose designed database management system and subjected to industry standard validation procedures. Quality control on resource drill programs has been undertaken to industry standards with implementation of appropriate drilling type, survey data collection, assay standards, sample duplicates and repeat analyses. The geologic model is considered robust with information from over 600 historic surface and underground diamond drill holes. The resource reports and supporting data were subjected to internal analysis and peer review before release. The Company is not aware of any additional information, other than that reported, which would have a material effect on the estimates as reported. Due to the nature, stage and size of the Company’s existing operations, the Board believes there would be no efficiencies gained by establishing a separate mineral reserves and resources committee responsible for reviewing and monitoring the Company’s processes for calculating mineral reserves and resources estimates and for ensuring that the appropriate controls are applied to such calculations. The Company confirms it is not aware of any new information or data since the MRE was declared that materially affects the information included in this Mineral Resource Statement. TTaabbllee 22 –– SSuummmmaarryy ooff eexxiissttiinngg MMiinneerraall RReessoouurrcceess RReessoouurrccee MMiinneerraall RReessoouurrccee OOrrggaanniizzaattiioonn AASSXX RReeppoorrttiinngg PPrroojjeecctt CCoommppeetteenntt PPeerrssoonn DDaattee Oracle Ridge Rodney Brown SRK Consulting (Australasia) Pty Ltd 14 December 2020 COMPETENT PERSONS STATEMENT The information in this Annual Mineral Resources Statement is based on, and fairly represents information and supporting documentation reviewed by Mr Fabio Vergara, who is a member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience relevant to the activity which he is undertaking to qualify as a Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). Mr Vergara is the Chief Geologist of Eagle Mountain Mining Limited and consents to the inclusion in this document of the information in the form and context in which it appears. Mr Vergara holds shares and options in Eagle Mountain Mining Limited. 34 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 32 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 33 EAGLE MOUNTAIN MINING | 2021 Annual Report GGoovveerrnnaannccee aanndd IInntteerrnnaall CCoonnttrroollss The Company ensures good governance in relation to resource estimation through the use of third-party resource consultants and internal review in accordance with industry best practice. All reported resource estimates were generated by reputable, independent consulting firms. All drill hole data is stored in-house within a commercially available purpose designed database management system and subjected to industry standard validation procedures. Quality control on resource drill programs has been undertaken to industry standards with implementation of appropriate drilling type, survey data collection, assay standards, sample duplicates and repeat analyses. The geologic model is considered robust with information from over 600 historic surface and underground diamond drill holes. The resource reports and supporting data were subjected to internal analysis and peer review before release. The Company is not aware of any additional information, other than that reported, which would have a material effect on the estimates as reported. Due to the nature, stage and size of the Company’s existing operations, the Board believes there would be no efficiencies gained by establishing a separate mineral reserves and resources committee responsible for reviewing and monitoring the Company’s processes for calculating mineral reserves and resources estimates and for ensuring that the appropriate controls are applied to such calculations. The Company confirms it is not aware of any new information or data since the MRE was declared that materially affects the information included in this Mineral Resource Statement. TTaabbllee 22 –– SSuummmmaarryy ooff eexxiissttiinngg MMiinneerraall RReessoouurrcceess RReessoouurrccee PPrroojjeecctt MMiinneerraall RReessoouurrccee CCoommppeetteenntt PPeerrssoonn OOrrggaanniizzaattiioonn AASSXX RReeppoorrttiinngg DDaattee Oracle Ridge Rodney Brown SRK Consulting (Australasia) Pty Ltd 14 December 2020 COMPETENT PERSONS STATEMENT The information in this Annual Mineral Resources Statement is based on, and fairly represents information and supporting documentation reviewed by Mr Fabio Vergara, who is a member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and has sufficient experience relevant to the activity which he is undertaking to qualify as a Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). Mr Vergara is the Chief Geologist of Eagle Mountain Mining Limited and consents to the inclusion in this document of the information in the form and context in which it appears. Mr Vergara holds shares and options in Eagle Mountain Mining Limited. E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 33 35 EAGLE MOUNTAIN MINING | 2021 Annual Report AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN Pursuant to the Listing Requirements of the Australian Securities Exchange, the shareholder information set out below was applicable as at 13 October 2021. CC.. SSuubbssttaannttiiaall SShhaarreehhoollddeerrss AA.. DDiissttrriibbuuttiioonn ooff EEqquuiittyy SSeeccuurriittiieess Analysis of numbers of shareholders by size of holding: Ordinary Fully Paid Shares DDiissttrriibbuuttiioonn 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 More than 100,000 TToottaallss NNuummbbeerr ooff sshhaarreehhoollddeerrss 139 460 261 603 163 11,,662266 SSeeccuurriittiieess hheelldd %% ooff iissssuueedd ccaappiittaall Entities 85,290 1,388,571 2,134,862 21,359,619 203,095,780 222288,,006644,,112222 0.04% 0.61% 0.94% 9.37% 89.06% 110000%% DD.. UUnnqquuootteedd SSeeccuurriittiieess Options over Unissued Shares An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below: HHoollddeerr ooff RReelleevvaanntt IInntteerreesstt Silver Mountain Mining Nominee Pty Ltd and Associated 64,603,287 28.33% IIssssuueedd OOrrddiinnaarryy SShhaarreess NNuummbbeerr ooff sshhaarreess %% ooff sshhaarreess Regal Funds Management Pty Ltd (RFM) 11,007,207 6.10% There are 74 shareholders holding less than a marketable parcel of ordinary shares. BB.. TTwweennttyy LLaarrggeesstt SShhaarreehhoollddeerrss The names of the twenty largest holders of quoted shares are listed below: SShhaarreehhoollddeerr NNaammee SILVER MOUNTAIN MINING NOMINEE PTY LTDHSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CS THIRD NOMINEES PTY LIMITED CITICORP NOMINEES PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 METECH SUPER PTY LTD DR SALIM CASSIM UBS NOMINEES PTY LTD VINCERE RESOURCES HOLDINGS LLC MR PHILIP JOHN CAWOOD ARALAD MANAGEMENT PTY LTD GUNSYND PLC J P MORGAN NOMINEES AUSTRALIA PTY LIMITED QUARTZ MOUNTAIN MINING PTY LTD NATIONAL NOMINEES LIMITED EQUITY TRUSTEES LIMITED SNOWBALL 3 PTY LTD BNP PARIBAS NOMINEES PTY LTD BFB HOLDINGS PTY LTD FLUE HOLDINGS PTY LTD TToottaall OOrrddiinnaarryy SShhaarreess -- QQuuootteedd NNuummbbeerr ooff sshhaarreess %% ooff sshhaarreess 57,145,001 25.06 19,294,458 17,978,869 13,145,252 8,414,971 5,714,286 5,506,476 5,130,747 4,950,324 4,615,000 3,737,503 2,500,000 2,471,701 1,744,000 1,648,975 1,500,000 1,500,000 1,400,000 1,301,429 1,138,462 8.46 7.88 5.76 3.69 2.51 2.41 2.25 2.17 2.02 1.64 1.10 1.08 0.76 0.72 0.66 0.66 0.61 0.57 0.50 116600,,883377,,445544 7700..5522%% FF.. RReessttrriicctteedd SSeeccuurriittiieess There are no restricted securities on issue. NNuummbbeerr ooff EExxeerrcciissee PPrriiccee EExxppiirryy DDaattee NNuummbbeerr ooff HHoollddeerrss OOppttiioonnss 6,500,000 715,000 1,600,000 1,500,000 650,000 1,923,078 1,325,000 1,170,000 2,500,000 2,800,000 6,000,000 2,000,000 2,000,000 2288,,668833,,007788 20 cents 20 cents 20 cents 21.5 cents 20 cents 30 cents 20 cents 20 cents 52 cents 52 cents 55 cents $1.25 15 January 2023 1 February 2023 1 July 2023 15 January 2023 7 October 2023 22 February 2024 1 July 2022 1 July 2022 1 July 2022 1 July 2024 1 July 2024 7 May 2023 81.25 cents 12 October 2023 6 2 2 1 1 5 4 5 1 8 6 1 1 Performance Rights NNuummbbeerr ooff RRiigghhttss EExxppiirryy DDaattee 35,000 3355,,000000 1 July 2028 NNuummbbeerr ooff HHoollddeerrss 2 EE.. VVoottiinngg RRiigghhttss In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. There are no voting rights in respect of options or performance rights over unissued shares. 36 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 34 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 35 EAGLE MOUNTAIN MINING | 2021 Annual Report AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN CC.. SSuubbssttaannttiiaall SShhaarreehhoollddeerrss An extract of the Company’s Register of Substantial Shareholders (who hold 5% or more of the issued capital) is set out below: HHoollddeerr ooff RReelleevvaanntt IInntteerreesstt Silver Mountain Mining Nominee Pty Ltd and Associated Entities Regal Funds Management Pty Ltd (RFM) IIssssuueedd OOrrddiinnaarryy SShhaarreess NNuummbbeerr ooff sshhaarreess 64,603,287 %% ooff sshhaarreess 28.33% 11,007,207 6.10% DD.. UUnnqquuootteedd SSeeccuurriittiieess Options over Unissued Shares NNuummbbeerr ooff OOppttiioonnss 6,500,000 715,000 1,600,000 1,500,000 650,000 1,923,078 1,325,000 1,170,000 2,500,000 2,800,000 6,000,000 2,000,000 2,000,000 2288,,668833,,007788 EExxeerrcciissee PPrriiccee EExxppiirryy DDaattee NNuummbbeerr ooff HHoollddeerrss 20 cents 20 cents 20 cents 21.5 cents 20 cents 30 cents 20 cents 20 cents 52 cents 52 cents 55 cents $1.25 81.25 cents 15 January 2023 1 February 2023 1 July 2023 15 January 2023 7 October 2023 1 July 2022 1 July 2022 1 July 2022 22 February 2024 1 July 2024 1 July 2024 7 May 2023 12 October 2023 6 2 2 1 1 5 4 5 1 8 6 1 1 Performance Rights NNuummbbeerr ooff RRiigghhttss EExxppiirryy DDaattee 35,000 3355,,000000 1 July 2028 NNuummbbeerr ooff HHoollddeerrss 2 EE.. VVoottiinngg RRiigghhttss In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. There are no voting rights in respect of options or performance rights over unissued shares. FF.. RReessttrriicctteedd SSeeccuurriittiieess There are no restricted securities on issue. E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 35 37 EAGLE MOUNTAIN MINING | 2021 Annual Report AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN Schedule of interests in mining tenements EEaaggllee MMoouunnttaaiinn mmiinneerraall lliicceenncceess aass aatt 1133 OOccttoobbeerr 22002211 aarree aallll pprreesseennttllyy llooccaatteedd iinn tthhee SSttaattee ooff AArriizzoonnaa,, UUnniitteedd SSttaatteess ooff AAmmeerriiccaa.. AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN Prospect & Tenure type Claim Reference (Tenement) Percentage held Claim Reference (Tenement) Percentage held Prospect & Tenure type PPaacciiffiicc HHoorriizzoonn Patented Claims (26 individual claims) SSIILLVVEERR MMOOUUNNTTAAIINN PPRROOJJEECCTT Empire, Copper Ash, Palestine, Buffalo, Little Pittsburg, Austin, Wellington, Eagle, Number Ten, Number Eleven, Number Twelve, Number Thirteen, Noonday, South Noonday, Dudley, Comet, Alameda, Virginia, Mars, Ashland, Oakland, Sunnyside, Cuprite, Azurite, Yavapai and Jumbo Unpatented Claims (150 individual claims) SMM#1-14, SMM#17-145, SMM#147, SMM#149, SMM151, SMM#155, SMM#157, SMM#159, SMM#161 Exploration Permit (1 individual permit) 008-012-0870 SSccaarrlleetttt Unpatented Claims (92 individual claims) Exploration Permit (2 individual permits) RReedd MMuullee Unpatented Claims (98 individual claims) Exploration Permit (2 individual permits) RRhhyyoolliittee TTaarrggeett Unpatented Claims (70 individual claims) Exploration Permit (1 individual permit) SCA#1-15, SCA#57-133 008-120868, 008-120869 SMM#146, SMM#148, SMM#150, SMM#152, SMM#153, SMM#154, SMM#158, SMM#160, SMM#162-207, SMM#210-212, SCA#16-56 008-120871, 008-120872 SMMSO#001 - 015; SMMSO#023 - 048; SMMSO#054; SMMSO#056; SMMSO#058 - 084 008-120101 100% 100% 100% 100% 100% 100% 100% 100% 100% Patented Claims Tunnel Site) (60 individual claims) Parcel 8 (Oversight MS3504) 100% OORRAACCLLEE RRIIDDGGEE CCOOPPPPEERR PPRROOJJEECCTT Parcel 1 (Roosevelt, Way-up, Homestake, Lone Pine, Imperial and Hidden Treasure) Parcel 2 (Eagle, York, Copper Peak and Golden Peak No 2) Parcel 3 (Grand Central Lode) Parcel 4 (Tunnel Site, Major McKinley, Marble Peak, Wedge, Giant, Copper Head, Centennial, General R E Lee and Blizzard) Parcel 5 (Oversight MS3461) Parcel 6 ( Daily No3, Daily No5, Sphinx, Roskruge, Calumet, Edith, Daily Extension, Cave, Wedge No3, Wedge No2 and Katherine) Parcel 7 (Copper Princess, Apache Central and Daily Parcel 9 (Apex, Alabama, Bornite, Contact, Cuprite, Epidote, Embersite, Garnet, Over the Top, Yellow Copper, Valley, Apex No2, Keeney and Wilson) Parcel 10 (Chalcopyrite and Peacock) Parcel 11 (Daily Extension No2, Daily Extension No3, Daily Extension No4) Parcel 12 (H T Fraction) Parcel 13 (Turkey) Parcel 22 (Cochise) Parcel 27 (Holly Terror) Parcel 28 (Precious Metals) That portion of Parcels 24 and 25 lying within: (Apache, Maricopa, Yavapai, Buster, Major, Greenlee) Unpatented Claims Jody #1 – 20, Lorelei #1 – 7, (50 individual claims) Olesya #1 – 23 Unpatented Claims WTO 1-24 Lode Claims Red Hawk (24 individual claims) OREX Unpatented Claims (93 individual claims) Golden Eagle Unpatented Claims (27 individual claims) WTO 25-106, 115-124, 142-144 Lode Claims 100% WTO 106-114, 125-141 Lode Claims 100% 100% 100% 38 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 36 E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 37 EAGLE MOUNTAIN MINING | 2021 Annual Report AADDDDIITTIIOONNAALL AASSXX IINNFFOORRMMAATTIIOONN Prospect & Tenure type Claim Reference (Tenement) Percentage held Patented Claims (60 individual claims) OORRAACCLLEE RRIIDDGGEE CCOOPPPPEERR PPRROOJJEECCTT Parcel 1 (Roosevelt, Way-up, Homestake, Lone Pine, Imperial and Hidden Treasure) Parcel 2 (Eagle, York, Copper Peak and Golden Peak No 2) Parcel 3 (Grand Central Lode) Parcel 4 (Tunnel Site, Major McKinley, Marble Peak, Wedge, Giant, Copper Head, Centennial, General R E Lee and Blizzard) Parcel 5 (Oversight MS3461) Parcel 6 ( Daily No3, Daily No5, Sphinx, Roskruge, Calumet, Edith, Daily Extension, Cave, Wedge No3, Wedge No2 and Katherine) Parcel 7 (Copper Princess, Apache Central and Daily Tunnel Site) Parcel 8 (Oversight MS3504) Parcel 9 (Apex, Alabama, Bornite, Contact, Cuprite, Epidote, Embersite, Garnet, Over the Top, Yellow Copper, Valley, Apex No2, Keeney and Wilson) Parcel 10 (Chalcopyrite and Peacock) Parcel 11 (Daily Extension No2, Daily Extension No3, Daily Extension No4) Parcel 12 (H T Fraction) Parcel 13 (Turkey) Parcel 22 (Cochise) Parcel 27 (Holly Terror) Parcel 28 (Precious Metals) That portion of Parcels 24 and 25 lying within: (Apache, Maricopa, Yavapai, Buster, Major, Greenlee) Unpatented Claims (50 individual claims) Jody #1 – 20, Lorelei #1 – 7, Olesya #1 – 23 100% 100% 100% Red Hawk Unpatented Claims (24 individual claims) OREX Unpatented Claims (93 individual claims) Golden Eagle Unpatented Claims (27 individual claims) WTO 1-24 Lode Claims WTO 25-106, 115-124, 142-144 Lode Claims 100% WTO 106-114, 125-141 Lode Claims 100% E A G L E M O U N T A I N M I N I N G | 2021 Annual Report 37 39 EAGLE MOUNTAIN MINING | 2021 Annual Report Financial Report 40 EAGLE MOUNTAIN MINING | 2021 Annual Report 40 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT The Directors present their report on Eagle Mountain Mining Limited (“Eagle Mountain” or the “Company”) and its controlled entities (the “Group”) for the year ended 30 June 2021. DDIIRREECCTTOORRSS The names and details of the Group’s Directors in office during the year until the date of this report are as follows. Directors were in office for this entire year unless otherwise stated. RRiicckk CCrraabbbb - B. Juris (Hons), LLB, MBA, FAICD ((NNoonn--EExxeeccuuttiivvee CChhaaiirrmmaann)) Rick Crabb holds degrees of Bachelor of Jurisprudence (Honours), Bachelor of Laws and Master of Business Administration from the University of Western Australia. He practised as a solicitor from 1980 to 2004 with Robinson Cox (now Clayton Utz) and Blakiston & Crabb (now Gilbert + Tobin) specialising in mining, corporate and commercial law, advised in relation to numerous project developments in Australia and Africa. Rick has since focused on his public company directorships and investments. He has been involved as a director and strategic shareholder in a number of successful public companies. He is currently Non-executive Chairman of Ora Gold Limited and a Non-executive Director of WarpForge Limited. He is a former director of Paladin Energy Limited (February 1994 to October 2019). CChhaarrlleess BBaassss - B.Sc. Geology, M.Sc. Mining Engineering/Mineral Processing, FAICD, FAusIMM, FAIG ((MMaannaaggiinngg DDiirreeccttoorr.. )) Charles Bass completed his B.Sc. in Geology at Michigan Technological University, followed by a M.Sc in Mining Engineering & Mineral Processing at Queen’s University, Canada. Between his degrees Charles worked as a geologist and then Plant Metallurgist at a copper-gold mine in Northern Quebec. Charles joined AMAX Inc, an American mining company in their Head Office in 1976 and came to Perth in 1978. Between 1980 to 1981, AMAX had him work in Tucson, Arizona at the Twin Buttes copper mine. Charles returned to Australia and established his first company, Metech Pty Ltd in late 1981. Charles established Eagle Mining Corporation in 1992 with Tony Poli and was responsible for the deal that led to the discovery of the very successful Nimary Gold Mine. Eagle Mining Corporation won both Explorer of the Year and then Developer of the Year at Diggers and Dealers conference and was subject to a hostile takeover in 1997. Charles then co-founded Aquila Resources Ltd with Tony Poli in 2000 and helped transition it from a gold explorer to iron ore and coal before it too was subject to a hostile $1.4 billion takeover in 2014 at the hands of a joint bid between Baosteel and ASX listed Aurizon. Page 3 41 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT RRooggeerr PPoorrtt – BA, FCA, SF Fin, FAICD ((NNoonn--EExxeeccuuttiivvee DDiirreeccttoorr)) Roger Port was a partner of PricewaterhouseCoopers from 1997 to 2016. He has 30 years’ experience in financial analysis, company and business valuations, transaction due diligence and mergers and acquisitions and led the PricewaterhouseCoopers Perth Deals team from 2009 to 2016. He has had significant experience in the resources sector in his career and jointly led the PwC Australia Deals Energy & Mining industry group for five years. Roger is a graduate of Macquarie University and gained a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia. He is a Fellow of Chartered Accountants Australia and New Zealand, a Senior Fellow of the Financial Services Institute of Australasia and a Fellow of the Australian Institute of Company Directors. Roger is a board member of MG Kailis Holdings Pty Ltd, the Harry Perkins Institute of Medical Research and Chair of Council of Guildford Grammar School. BBrreetttt RRoowwee - BComm, MAcc, GAICD ((AAlltteerrnnaattee DDiirreeccttoorr ffoorr CChhaarrlleess BBaassss)) Brett Rowe has over 20 years’ experience in the financial services industry and is a graduate of the Australian Institute of Company Directors. He holds a Bachelor of Commerce degree and a Masters of Accounting. Brett is a director and the chief executive officer of The Bass Group, as well as a director of The Bass Family Foundation and Silver Mountain Mining Pty Ltd. Brett is responsible for managing the global financial interests of the Bass Family, as well as the Foundation’s ongoing support of education and health in disadvantaged children and youth in regional Western Australia. Brett is also a director of the Centre for Entrepreneurial Research and Innovation Limited (CERI). CERI aims to assist the growth of WA’s non-mining industry through a strong innovation base where high-knowledge start-up company formation can be accelerated. This is achieved through the co-creation of a WA-based venture capital industry. CCHHIIEEFF EEXXEECCUUTTIIVVEE OOFFFFIICCEERR TTiimm MMaassoonn – B. Eng (Hons) MBA; GAICD Mr Mason has 18 years’ experience in the mining and engineering sectors across a broad range of corporate, operations, business development and engineering roles. His recent roles of General Manager Operations and General Manager Projects and Innovation involved conducting feasibility studies, project development and operations start-up, business development, project financing and corporate presentations. Mr Mason holds a Bachelor of Engineering Honours (Geotechnical) from the Institute of Technology, a Masters of Business Royal Melbourne Administration from Murdoch University and is a Graduate Member of the Australian Institute of Company Directors. 42 Page 4 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT RRooggeerr PPoorrtt – BA, FCA, SF Fin, FAICD ((NNoonn--EExxeeccuuttiivvee DDiirreeccttoorr)) Roger Port was a partner of PricewaterhouseCoopers from 1997 to 2016. He has 30 years’ experience in financial analysis, company and business valuations, transaction due diligence and mergers and acquisitions and led the PricewaterhouseCoopers Perth Deals team from 2009 to 2016. He has had significant experience in the resources sector in his career and jointly led the PwC Australia Deals Energy & Mining industry group for five years. Roger is a graduate of Macquarie University and gained a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia. He is a Fellow of Chartered Accountants Australia and New Zealand, a Senior Fellow of the Financial Services Institute of Australasia and a Fellow of the Australian Institute of Company Directors. Roger is a board member of MG Kailis Holdings Pty Ltd, the Harry Perkins Institute of Medical Research and Chair of Council of Guildford Grammar School. BBrreetttt RRoowwee - BComm, MAcc, GAICD ((AAlltteerrnnaattee DDiirreeccttoorr ffoorr CChhaarrlleess BBaassss)) Brett Rowe has over 20 years’ experience in the financial services industry and is a graduate of the Australian Institute of Company Directors. He holds a Bachelor of Commerce degree and a Masters of Accounting. Brett is a director and the chief executive officer of The Bass Group, as well as a director of The Bass Family Foundation and Silver Mountain Mining Pty Ltd. Brett is responsible for managing the global financial interests of the Bass Family, as well as the Foundation’s ongoing support of education and health in disadvantaged children and youth in regional Western Australia. Brett is also a director of the Centre for Entrepreneurial Research and Innovation Limited (CERI). CERI aims to assist the growth of WA’s non-mining industry through a strong innovation base where high-knowledge start-up company formation can be accelerated. This is achieved through the co-creation of a WA-based venture capital industry. CCHHIIEEFF EEXXEECCUUTTIIVVEE OOFFFFIICCEERR TTiimm MMaassoonn – B. Eng (Hons) MBA; GAICD Mr Mason has 18 years’ experience in the mining and engineering sectors across a broad range of corporate, operations, business development and engineering roles. His recent roles of General Manager Operations and General Manager Projects and Innovation involved conducting feasibility studies, project development and operations start-up, business development, project financing and corporate presentations. Mr Mason holds a Bachelor of Engineering Honours (Geotechnical) from the Royal Melbourne Institute of Technology, a Masters of Business Administration from Murdoch University and is a Graduate Member of the Australian Institute of Company Directors. DIRECTORS’ REPORT CCOOMMPPAANNYY SSEECCRREETTAARRYY MMaarrkk PPiittttss - B.Bus; FCA; GAICD ((CCoommppaannyy SSeeccrreettaarryy)) Mark Pitts is a Partner in Corporate Advisory firm Endeavour Corporate and has over 30 years’ experience in business administration and corporate compliance. Having started his career with KPMG in Perth, Mark has worked at a senior management level in a variety of commercial and consulting roles including mining services, healthcare and property development. The majority of the past 15 years has been spent working for or providing services to publicly listed companies in the resources sector. Mark is a registered company auditor and holds a Bachelor of Business Degree from Curtin University, is a Fellow of Chartered Accountants Australia and New Zealand and is a graduate of the Australian Institute of Company Directors. DDIIRREECCTTOORRSS’’ IINNTTEERREESSTTSS As at the date of this report, the Directors’ interests in shares and unlisted options of the Company are as follows: DDiirreeccttoorr R Crabb C Bass R Port B Rowe (alternate for C Bass) DDiirreeccttoorrss’’ IInntteerreessttss iinn OOrrddiinnaarryy SShhaarreess 793,000 62,859,287 559,000 500,000 DDiirreeccttoorrss’’ IInntteerreessttss iinn UUnnlliisstteedd OOppttiioonnss 3,125,000 4,075,000 3,125,000 2,000,000 OOppttiioonnss vveesstteedd aatt tthhee rreeppoorrttiinngg ddaattee 3,125,000 4,075,000 3,125,000 2,000,000 The Directors’ interests include Unlisted Options which are vested or exercisable as at the date of signing this report. DDIIRREECCTTOORRSS’’ MMEEEETTIINNGGSS The number of meetings of the Company’s Directors held during the year ended 30 June 2021, and the number of meetings attended by each Director are as follows: DDiirreeccttoorr R Crabb C Bass R Port B Rowe (alternate for C Bass) BBooaarrdd ooff DDiirreeccttoorrss’’ MMeeeettiinnggss EElliiggiibbllee ttoo AAtttteenndd 6 6 6 6 AAtttteennddeedd 6 6 6 6 Page 4 Page 5 43 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT PPRRIINNCCIIPPAALL AACCTTIIVVIITTIIEESS The Company’s principal activities for the year ended 30 June 2021 focussed on exploration activities at the Oracle Ridge Copper Mine. Field work, mapping, geophysical interpretation, targeted diamond drilling programs for both resource expansion, infill and geotechnical drilling were conducted during the year. The Company also engaged in capital raising activities and completed the acquisition of the non-controlling interest in Wedgetail Operations LLC, the owner of the Oracle Ridge Copper Mine. RREEVVIIEEWW OOFF OOPPEERRAATTIIOONNSS Exploration activities Exploration activities for the financial year have been primarily focussed at the Group’s Oracle Ridge Copper Mine project in Arizona, United States of America. Drilling contractor Boart Longyear commenced an initial diamond drilling program in September 2020 and following positive drilling results and observations of mineralisation in the core, the drilling program was extended. Drilling continued during the reporting period with the aim of expanding the existing JORC mineral resource. Corporate activities and acquisitions During the financial year, the Group completed the acquisition of the remaining 20% non-controlling interest held in Wedgetail Operations LLC, the owner of the Oracle Ridge Copper Mine, from Vincere Resource Holdings LLC. The Group completed three share placements to sophisticated and institutional investors during the financial year, raising a total of $15.5 million (before costs) through the issue of 59,505,495 shares. The Group also received approximately $4.3 million (before costs) through the exercise of options and the issue of 16,953,090 shares. Results of operations and financial position The operating loss after income tax of the Group for the year ended 30 June 2021 was $21,070,239 (2020: $4,368,936). Included in the loss for the year are uncapitalised exploration costs of $9,306,222 (2020: $2,717,101) and non-cash items (in respect of depreciation, share-based payments expenses and fair value losses) amounting to $10,265,364 (2020: $367,623). At 30 June 2021, cash assets amounted to $9,119,371 (2020: $507,750). During the year ended 30 June 2021, the Company received $19,791,118 before related costs, on the issue of shares and options (2020: $1,800,001). SSIIGGNNIIFFIICCAANNTT CCHHAANNGGEESS IINN TTHHEE SSTTAATTEE OOFF AAFFFFAAIIRRSS Other than the matters stated in this report, there have been no significant changes in the Group’s state of affairs during the financial year. EEQQUUIITTYY SSEECCUURRIITTIIEESS OONN IISSSSUUEE CCllaassss ooff SSeeccuurriittyy 3300 JJuunnee 22002211 30 June 2020 Ordinary fully paid shares Unlisted options over unissued shares Performance rights 220022,,666699,,663300 2299,,445522,,778800 3355,,000000 115,901,045 26,409,716 245,000 Subsequent to the end of the financial year, the Company issued 568,953 ordinary shares on the exercise of options. 44 Page 6 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT PPRRIINNCCIIPPAALL AACCTTIIVVIITTIIEESS RREEVVIIEEWW OOFF OOPPEERRAATTIIOONNSS Exploration activities The Company’s principal activities for the year ended 30 June 2021 focussed on exploration activities at the Oracle Ridge Copper Mine. Field work, mapping, geophysical interpretation, targeted diamond drilling programs for both resource expansion, infill and geotechnical drilling were conducted during the year. The Company also engaged in capital raising activities and completed the acquisition of the non-controlling interest in Wedgetail Operations LLC, the owner of the Oracle Ridge Copper Mine. Exploration activities for the financial year have been primarily focussed at the Group’s Oracle Ridge Copper Mine project in Arizona, United States of America. Drilling contractor Boart Longyear commenced an initial diamond drilling program in September 2020 and following positive drilling results and observations of mineralisation in the core, the drilling program was extended. Drilling continued during the reporting period with the aim of expanding the existing JORC mineral resource. Corporate activities and acquisitions During the financial year, the Group completed the acquisition of the remaining 20% non-controlling interest held in Wedgetail Operations LLC, the owner of the Oracle Ridge Copper Mine, from Vincere Resource Holdings LLC. The Group completed three share placements to sophisticated and institutional investors during the financial year, raising a total of $15.5 million (before costs) through the issue of 59,505,495 shares. The Group also received approximately $4.3 million (before costs) through the exercise of options and the issue of 16,953,090 shares. Results of operations and financial position The operating loss after income tax of the Group for the year ended 30 June 2021 was $21,070,239 (2020: $4,368,936). Included in the loss for the year are uncapitalised exploration costs of $9,306,222 (2020: $2,717,101) and non-cash items (in respect of depreciation, share-based payments expenses and fair value losses) amounting to $10,265,364 (2020: $367,623). At 30 June 2021, cash assets amounted to $9,119,371 (2020: $507,750). During the year ended 30 June 2021, the Company received $19,791,118 before related costs, on the issue of shares and options (2020: $1,800,001). SSIIGGNNIIFFIICCAANNTT CCHHAANNGGEESS IINN TTHHEE SSTTAATTEE OOFF AAFFFFAAIIRRSS Other than the matters stated in this report, there have been no significant changes in the Group’s state of affairs during the financial year. EEQQUUIITTYY SSEECCUURRIITTIIEESS OONN IISSSSUUEE CCllaassss ooff SSeeccuurriittyy 3300 JJuunnee 22002211 30 June 2020 Ordinary fully paid shares Unlisted options over unissued shares Performance rights 220022,,666699,,663300 2299,,445522,,778800 3355,,000000 115,901,045 26,409,716 245,000 Subsequent to the end of the financial year, the Company issued 568,953 ordinary shares on the exercise of options. DIRECTORS’ REPORT EEQQUUIITTYY SSEECCUURRIITTIIEESS OONN IISSSSUUEE ((ccoonnttiinnuueedd)) UUnnlliisstteedd OOppttiioonnss oovveerr OOrrddiinnaarryy SShhaarreess At 30 June 2021, 29,452,780 unissued ordinary shares of the Company were under option as follows: NNuummbbeerr ooff OOppttiioonnss GGrraanntteedd 6,750,000 1 715,000 2 219,702 3 1,700,000 4 1,500,000 5 650,000 6 1,923,078 7 2,495,000 8 2,500,000 9 2,800,00010 6,000,00011 2,000,00012 200,00013 EExxeerrcciissee PPrriiccee 20 cents 20 cents 20 cents 20 cents 21.5 cents 20 cents 30 cents 20 cents 52 cents 52 cents 55 cents $1.25 $1.40 EExxppiirryy DDaattee 15 January 2023 1 February 2023 31 July 2021 1 July 2023 15 January 2023 7 October 2023 1 July 2022 1 July 2022 22 February 2024 1 July 2024 1 July 2024 7 May 2025 1 July 2024 1 Options issued to Directors, Alternate Director, employees and Company Secretary. 2 Options issued to employees pursuant to the Company’s employee incentive plan. 3 Options issued pursuant to a pro-rata entitlement offer which closed on 7 June 2019. 4 Options issued to employees pursuant to the Company’s employee incentive plan. 5 Options issued to the Chief Executive Officer. 6 Options issued to employees pursuant to the Company’s employee incentive plan. 7 Options issued to brokers. 8 Options issued to employees, Directors and Quartz Mountain Mining Pty Ltd. 9, 10, 13 Options issued to employees pursuant to the Company’s employee incentive plan. 11 Options issued to Directors. 12 Options issued under a corporate advisory mandate. During the year, 19,996,154 options were issued; 16,953,090 options were exercised and no options were cancelled. Subsequent to 30 June 2021 and the date of this report, 600,000 options have vested; 568,953 options (exercise price of $0.20) were exercised and 749 options were cancelled without being exercised on their expiry date of 31 July 2021. No options have been issued since 30 June 2021. At the date of this report there were 28,883,078 unissued ordinary shares of the Company under option. Options do not entitle the holder to participate in any share issue of the Company or any other body corporate. The holders of unlisted options are not entitled to any voting rights until the options are exercised into ordinary shares. Page 6 Page 7 45 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT EEQQUUIITTYY SSEECCUURRIITTIIEESS OONN IISSSSUUEE ((ccoonnttiinnuueedd)) PPeerrffoorrmmaannccee RRiigghhttss oovveerr OOrrddiinnaarryy SShhaarreess During the year ended 30 June 2021, 60,000 performance rights vested and 210,000 performance rights were exercised and converted into shares. No performance rights were issued or cancelled during the reporting period. Subsequent to 30 June 2021, 35,000 performance rights vested. No performance rights have been issued, exercised or cancelled between 30 June 2021 and the date of this report. DDIIVVIIDDEENNDDSS No dividend has been paid during the year and no dividend is recommended for the current financial year. EEVVEENNTTSS SSUUBBSSEEQQUUEENNTT TTOO TTHHEE EENNDD OOFF TTHHEE RREEPPOORRTTIINNGG YYEEAARR In August 2021, Quartz Mountain Mining Pty Ltd as trustee for the Bass Family Trust, an entity associated with Mr Charles Bass, agreed to accept 1,744,000 shares in the Company, subject to shareholder approval, in lieu of repayment of the US$1,000,000 loan which was due to be repaid by 31 December 2021. The issue of shares is subject to shareholder approval and the effective issue price of 78.4 cents represents a premium to the closing price on 25 August 2021 and a 10% premium to the 20 day VWAP of the Company’s shares. The impact of the COVID-19 pandemic is ongoing. The situation is dependent on measures imposed by the Australian Government, United States Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided. It is not practicable to estimate the potential impact, positive or negative, after the reporting date. Other than as stated above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. LLIIKKEELLYY DDEEVVEELLOOPPMMEENNTTSS AANNDD EEXXPPEECCTTEEDD RREESSUULLTTSS OOFF OOPPEERRAATTIIOONNSS The Group intends to undertake further exploration programs at the Oracle Ridge Copper Mine and the Silver Mountain Project in Arizona in the United States of America. Any other likely developments in the operations of the Group and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Group. EENNVVIIRROONNMMEENNTTAALL IISSSSUUEESS The Group’s operations are not regulated under any significant environmental regulation under a law of the Commonwealth of Australia, a State or a Territory. The operations and proposed activities of the Group are subject to United States Federal and Arizona State laws and regulations concerning the environment. 46 Page 8 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT EEQQUUIITTYY SSEECCUURRIITTIIEESS OONN IISSSSUUEE ((ccoonnttiinnuueedd)) PPeerrffoorrmmaannccee RRiigghhttss oovveerr OOrrddiinnaarryy SShhaarreess During the year ended 30 June 2021, 60,000 performance rights vested and 210,000 performance rights were exercised and converted into shares. No performance rights were issued or cancelled during the reporting period. Subsequent to 30 June 2021, 35,000 performance rights vested. No performance rights have been issued, exercised or cancelled between 30 June 2021 and the date of this report. DDIIVVIIDDEENNDDSS year. No dividend has been paid during the year and no dividend is recommended for the current financial EEVVEENNTTSS SSUUBBSSEEQQUUEENNTT TTOO TTHHEE EENNDD OOFF TTHHEE RREEPPOORRTTIINNGG YYEEAARR In August 2021, Quartz Mountain Mining Pty Ltd as trustee for the Bass Family Trust, an entity associated with Mr Charles Bass, agreed to accept 1,744,000 shares in the Company, subject to shareholder approval, in lieu of repayment of the US$1,000,000 loan which was due to be repaid by 31 December 2021. The issue of shares is subject to shareholder approval and the effective issue price of 78.4 cents represents a premium to the closing price on 25 August 2021 and a 10% premium to the 20 day VWAP of the Company’s shares. The impact of the COVID-19 pandemic is ongoing. The situation is dependent on measures imposed by the Australian Government, United States Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided. It is not practicable to estimate the potential impact, positive or negative, after the reporting date. Other than as stated above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. LLIIKKEELLYY DDEEVVEELLOOPPMMEENNTTSS AANNDD EEXXPPEECCTTEEDD RREESSUULLTTSS OOFF OOPPEERRAATTIIOONNSS The Group intends to undertake further exploration programs at the Oracle Ridge Copper Mine and the Silver Mountain Project in Arizona in the United States of America. Any other likely developments in the operations of the Group and the expected results of those operations in future financial years have not been included in this report as the inclusion of such information is likely to result in unreasonable prejudice to the Group. EENNVVIIRROONNMMEENNTTAALL IISSSSUUEESS The Group’s operations are not regulated under any significant environmental regulation under a law of the Commonwealth of Australia, a State or a Territory. The operations and proposed activities of the Group are subject to United States Federal and Arizona State laws and regulations concerning the environment. DIRECTORS’ REPORT EENNVVIIRROONNMMEENNTTAALL IISSSSUUEESS ((ccoonnttiinnuueedd)) The Board believes that the Group has adequate systems in place for the management of its environmental requirements. The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The Directors of the Group are not aware of any breach of environmental legislation for the financial year under review. IINNDDEEMMNNIIFFIICCAATTIIOONN AANNDD IINNSSUURRAANNCCEE OOFF DDIIRREECCTTOORRSS AANNDD OOFFFFIICCEERRSS AANNDD AAUUDDIITTOORRSS During the year ended 30 June 2021, the Company paid an insurance premium to insure certain officers of the Company. The officers of the Company covered by the insurance policy include the Directors named in this report. The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the officers in their capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under the insurance policy. The Company has not provided any insurance for an auditor of the Company. PPRROOCCEEEEDDIINNGGSS OONN BBEEHHAALLFF OOFF TTHHEE GGRROOUUPP No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. NNOONN--AAUUDDIITT SSEERRVVIICCEESS The following non-audit services were provided by William Buck Advisors (WA) Pty Ltd, a related entity of the entity’s auditor, William Buck Audit (WA) Pty Ltd. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised. William Buck Advisors (WA) Pty Ltd received or is due to receive the following amounts for the provision of non-audit services: Taxation services for Silver Mountain Mining Pty Ltd Taxation services for Eagle Mountain Mining Limited 3300 JJuunnee 22002211 30 June 2020 - $2,460 $1,660 $3,960 Page 8 Page 9 47 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) Remuneration paid to Directors and Officers of the Company is set by reference to such payments made by other ASX listed companies of a similar size and operating in the mineral exploration industry. In addition, reference is made to the specific skills and experience of the Directors and Officers. Details of the nature and amount of remuneration of each Director and other Key Management Personnel are disclosed annually in the Remuneration Report. RReemmuunneerraattiioonn CCoommmmiitttteeee The Board has adopted a formal Nomination and Remuneration Policy which provides a framework for the consideration of remuneration matters. The Company does not have a separate remuneration committee and as such, all remuneration matters are considered by the Board as a whole, with no member deliberating or considering such matter in respect of their own remuneration. In the absence of a separate Remuneration Committee, the Board is responsible for: 1. 2. Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key Management Personnel; and Implementing employee incentive and equity based plans and making awards pursuant to those plans. NNoonn--EExxeeccuuttiivvee RReemmuunneerraattiioonn The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX listed companies in the same industry, for their time, commitment and responsibilities. Non-Executive Remuneration is not linked to the performance of the Company, however, to align Directors’ interests with shareholders’ interests, remuneration may be provided to Non-Executive Directors in the form of equity based long term incentives. 1. Fees payable to Non-Executive Directors are set within the aggregate amount approved by shareholders at the Company’s Annual General Meeting; 2. Non-Executive Directors’ fees are payable in the form of cash and superannuation benefits; 3. Non-Executive Directors’ superannuation benefits are limited to statutory superannuation 4. entitlements; and Participation in equity based remuneration schemes by Non-Executive Directors is subject to consideration and approval by the Company’s shareholders. The maximum aggregate Non-Executive Directors’ fees payable is currently set at $300,000 per annum. 48 Page 10 EAGLE MOUNTAIN MINING | 2021 Annual Report made by other ASX listed companies of a similar size and operating in the mineral exploration industry. In addition, reference is made to the specific skills and experience of the Directors and Officers. Details of the nature and amount of remuneration of each Director and other Key Management Personnel are disclosed annually in the Remuneration Report. RReemmuunneerraattiioonn CCoommmmiitttteeee The Board has adopted a formal Nomination and Remuneration Policy which provides a framework for the consideration of remuneration matters. The Company does not have a separate remuneration committee and as such, all remuneration matters are considered by the Board as a whole, with no member deliberating or considering such matter in respect of their own remuneration. In the absence of a separate Remuneration Committee, the Board is responsible for: 1. Setting remuneration packages for Executive Directors, Non-Executive Directors and other Key 2. Implementing employee incentive and equity based plans and making awards pursuant to those Management Personnel; and plans. NNoonn--EExxeeccuuttiivvee RReemmuunneerraattiioonn The Company’s policy is to remunerate Non-Executive Directors, at rates comparable to other ASX listed companies in the same industry, for their time, commitment and responsibilities. Directors’ interests with shareholders’ interests, remuneration may be provided to Non-Executive Directors in the form of equity based long term incentives. 1. Fees payable to Non-Executive Directors are set within the aggregate amount approved by shareholders at the Company’s Annual General Meeting; 2. Non-Executive Directors’ fees are payable in the form of cash and superannuation benefits; 3. Non-Executive Directors’ superannuation benefits are limited to statutory superannuation entitlements; and 4. Participation in equity based remuneration schemes by Non-Executive Directors is subject to consideration and approval by the Company’s shareholders. The maximum aggregate Non-Executive Directors’ fees payable is currently set at $300,000 per annum. DIRECTORS’ REPORT RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) DIRECTORS’ REPORT RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) ((ccoonnttiinnuueedd)) Remuneration paid to Directors and Officers of the Company is set by reference to such payments EExxeeccuuttiivvee DDiirreeccttoorr aanndd OOtthheerr KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell RReemmuunneerraattiioonn Executive remuneration consists of base salary, plus other performance incentives to ensure that: 1. 2. Remuneration packages incorporate a balance between fixed and incentive pay, reflecting short and long term performance objectives appropriate to the Company’s circumstances and objectives; and A proportion of remuneration is structured in a manner to link reward to corporate and individual performance. Executives are offered a competitive level of base salary at market rates (based on comparable ASX listed companies) and are reviewed regularly to ensure market competitiveness. To date the Company has not engaged external remuneration consultants to advise the Board on remuneration matters. IInncceennttiivvee PPllaannss The Company provides long term incentives to Directors and Employees pursuant to the Company’s Employee Incentive Plan. The Board, acting in remuneration matters: 1. 2. 3. Ensures that incentive plans are designed around appropriate and realistic performance targets and provide rewards when those targets are achieved; Reviews and approves existing incentive plans established for employees; and Approves the administration of the incentive plans, including receiving recommendations for and the consideration and approval of grants pursuant to such incentive plans. Non-Executive Remuneration is not linked to the performance of the Company, however, to align EEnnggaaggeemmeenntt ooff NNoonn--EExxeeccuuttiivvee DDiirreeccttoorrss Non-Executive Directors conduct their duties under the following terms: 1. 2. A Non-Executive Director may resign from his/her position and thus terminate their contract on written notice to the Company; and A Non-Executive Director may, following resolution of the Company’s shareholders, be removed before the expiration of their period of office (if applicable). Payment is made in lieu of any notice period if termination is initiated by the Company, except where termination is initiated for serious misconduct. In consideration of the services provided by Mr Rick Crabb as Non-Executive Chairman, the Company will pay him a fee inclusive of statutory superannuation of $50,000 per annum. In consideration of the services provided by Mr Roger Port as Non-Executive Director, the Company will pay him a fee inclusive of statutory superannuation of $50,000 per annum. For the period from 1 April 2020 to 31 July 2020, Non-Executive Director fees owing to Messrs Crabb and Port were waived as part of a cost reduction exercise following the outbreak of the COVID-19 pandemic. Messrs Crabb and Port are also entitled to fees for other amounts as the Board determines where they perform special duties or otherwise perform extra services or make special exertions on behalf of the Company. There were no such fees paid during the year ended 30 June 2021. Page 10 Page 11 49 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) ((ccoonnttiinnuueedd)) EEnnggaaggeemmeenntt ooff EExxeeccuuttiivvee DDiirreeccttoorr The Company has entered into an executive service agreement with Mr Charles Bass in his role as Managing Director on the following material terms and conditions. Mr Bass received a base salary inclusive of statutory superannuation of $50,000 per annum from the commencement of the agreement until 1 June 2018, at which time the remuneration was reviewed. Mr Bass’ remuneration was unchanged as a result of this review. For the period from 1 April 2020 to 31 July 2020, Mr Bass waived his salary as part of a cost reduction exercise following the outbreak of the COVID-19 pandemic. Either party may terminate the agreement by providing 30 days written notice to the other party. Eagle Mountain may otherwise terminate the Managing Director’s employment in accordance with the Constitution or the Corporations Act. Upon termination of the agreement, Mr Bass will cease employment with Eagle Mountain as its Managing Director and will become a Non-Executive Director of Eagle Mountain. Mr Bass may, subject to shareholder approval, participate in Eagle Mountain’s Employee Incentive Plan and other long term incentive plans adopted by the Board. EEnnggaaggeemmeenntt ooff CChhiieeff EExxeeccuuttiivvee OOffffiicceerr The Company has entered into an executive service agreement with Mr Timothy Mason, effective 15 January 2020, in his role as Chief Executive Officer (“CEO”) on the following material terms and conditions. Mr Mason receives a base salary inclusive of statutory superannuation of $300,000 per annum. For the period from 1 April 2020 to 31 July 2020, Mr Mason’s salary was reduced to $210,000 per annum as part of a cost reduction exercise following the outbreak of the COVID-19 pandemic. His salary reverted to $300,000 per annum from 1 August 2020 and was increased to $330,000 per annum from 1 February 2021. The CEO may terminate the agreement by providing 3 months’ written notice. Eagle Mountain may terminate the agreement with 3 months’ written notice or the provision of 3 months’ salary in lieu of notice; or may otherwise terminate the CEO’s employment in accordance with the Constitution or the Corporations Act. Upon commencement of his employment, Mr Mason received 1,500,000 unlisted options and 150,000 unlisted performance rights over unissued shares of the Company. An expense of $54,556 (2020: $59,240) was recognised through the consolidated statement of profit or loss and other comprehensive income in the current reporting period in respect of the issue of these securities. 50 Page 12 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) ((ccoonnttiinnuueedd)) SShhoorrtt TTeerrmm IInncceennttiivvee PPaayymmeennttss The Non-Executive Directors set annual Key Performance Indicators (“KPIs”) for the Executive Director and the CEO. The KPIs are chosen to align the reward of the individual Executives to the strategy and performance of the Company. Performance objectives, which may be financial or non-financial, or a combination of both, are weighted when calculating the maximum Short Term Incentives payable to Executives. At the end of the year, the Non-Executive Directors will assess the actual performance of the Executives against the set performance objectives. The maximum amount of the Short Term Incentive, or a lesser amount depending on actual performance achieved, is paid to the Executives as a cash payment. No Short Term Incentives are payable to Executives where it is considered that the actual performance has fallen below the minimum requirement. SShhaarreehhoollddiinngg QQuuaalliiffiiccaattiioonnss The Directors are not required to hold any shares in Eagle Mountain under the terms of the Company’s Constitution. GGrroouupp PPeerrffoorrmmaannccee In considering the Company’s performance, the Board provides the following indices in respect of the current financial year: 22002211 2020 2019 2018 Loss for the year/period attributable to shareholders $$((2211,,007700,,223399)) $(3,985,856) $(6,890,466) $(1,681,900) Closing share price at 30 June $$11..0000 $0.16 $0.125 $0.42 As a Group focussed on exploration activities, the Board does not consider the loss attributable to shareholders as one of the performance indicators when implementing Short Term Incentive payments. In addition to technical exploration success, the Board considers the effective management of safety, environmental and operational matters and successful management, acquisition and consolidation of high quality landholdings, as more appropriate indicators of management performance for the financial year. RReemmuunneerraattiioonn DDiisscclloossuurreess The Key Management Personnel of the Company have been identified as: Mr Rick Crabb Mr Charles Bass Mr Roger Port Mr Brett Rowe Mr Tim Mason Non-Executive Chairman Managing Director Non-Executive Director Alternate Director for Charles Bass Chief Executive Officer Page 13 51 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) ((ccoonnttiinnuueedd)) The details of the remuneration of each Director and member of Key Management Personnel of the Company is as follows: YYeeaarr EEnnddeedd 3300 JJuunnee 22002211 BBaassee SSaallaarryy $$ RRiicckk CCrraabbbb 4411,,885577 CChhaarrlleess BBaassss 4411,,885577 RRooggeerr PPoorrtt 4411,,885577 BBrreetttt RRoowwee -- TTiimm MMaassoonn 11 228833,,559955 TToottaall 440099,,116666 Year Ended 30 June 2020 Base Salary $ Rick Crabb 34,247 Charles Bass 34,247 Roger Port 34,247 Brett Rowe - Tim Mason 1 108,418 Total 211,159 SShhoorrtt TTeerrmm PPoosstt EEmmppllooyymmeenntt SShhoorrtt TTeerrmm IInncceennttiivvee SSuuppeerraannnnuuaattiioonn CCoonnttrriibbuuttiioonnss OOtthheerr LLoonngg TTeerrmm VVaalluuee ooff EEqquuiittyy BBaasseedd RReemmuunneerraattiioonn22 $$ $$ TToottaall $$ VVaalluuee ooff EEqquuiittyy aass PPrrooppoorrttiioonn ooff RReemmuunneerraattiioonn %% 9977..00%% 9977..00%% 9977..00%% 33,,997766 11,,448844,,001133 11,,552299,,884466 33,,997766 11,,448844,,001133 11,,552299,,884466 33,,997766 11,,448844,,001133 11,,552299,,884466 -- 11,,446644,,115500 11,,446644,,115500 110000..00%% 2211,,440055 8855,,333344 339900,,333344 2211..99%% 3333,,333333 66,,000011,,552233 66,,444444,,002222 -- Other Long Term Value of Equity Based Remuneration2 $ - - - - Value of Equity as Proportion of Remuneration % - - - - Total $ 37,500 37,500 37,500 - $ 3,253 3,253 3,253 - 9,383 59,240 177,041 33.5% 19,142 59,240 289,541 - $$ -- -- -- -- -- -- $ - - - - - - Short Term Post Employment Short Term Incentive Superannuation Contributions 1 Appointed 15 January 2020. 2 The fair value of options and performance rights is calculated at the date of grant using a Black Scholes option pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed in the above table is the portion of the fair value of the securities recognised in the reporting period. The basis of the fair value is disclosed later in this Remuneration Report. 52 Page 14 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT DIRECTORS’ REPORT RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) ((ccoonnttiinnuueedd)) RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) ((ccoonnttiinnuueedd)) The details of the remuneration of each Director and member of Key Management Personnel of the Company is as follows: Details of Performance Related Remuneration SShhoorrtt TTeerrmm PPoosstt EEmmppllooyymmeenntt TTeerrmm OOtthheerr LLoonngg YYeeaarr EEnnddeedd 3300 JJuunnee 22002211 SShhoorrtt TTeerrmm SSuuppeerraannnnuuaattiioonn BBaasseedd VVaalluuee ooff EEqquuiittyy BBaassee SSaallaarryy IInncceennttiivvee CCoonnttrriibbuuttiioonnss RReemmuunneerraattiioonn22 TToottaall RReemmuunneerraattiioonn RRiicckk CCrraabbbb 4411,,885577 33,,997766 11,,448844,,001133 11,,552299,,884466 CChhaarrlleess BBaassss 4411,,885577 33,,997766 11,,448844,,001133 11,,552299,,884466 RRooggeerr PPoorrtt 4411,,885577 33,,997766 11,,448844,,001133 11,,552299,,884466 $$ $$ $$ VVaalluuee ooff EEqquuiittyy aass PPrrooppoorrttiioonn ooff %% 9977..00%% 9977..00%% 9977..00%% BBrreetttt RRoowwee -- 11,,446644,,115500 11,,446644,,115500 110000..00%% TTiimm MMaassoonn 11 228833,,559955 2211,,440055 8855,,333344 339900,,333344 2211..99%% TToottaall 440099,,116666 3333,,333333 66,,000011,,552233 66,,444444,,002222 -- Short Term Post Employment Term Other Long Year Ended 30 June 2020 Short Term Superannuation Based Value of Equity Value of Equity as Proportion Base Salary Incentive Contributions Remuneration2 Total Remuneration Rick Crabb 34,247 Charles Bass 34,247 Roger Port 34,247 Brett Rowe $ 3,253 3,253 3,253 - $ - - - - 37,500 37,500 37,500 $ - $$ -- $ - $$ -- -- -- -- -- -- $ - - - - - - of % - - - - - 1 Appointed 15 January 2020. 2 The fair value of options and performance rights is calculated at the date of grant using a Black Scholes option pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed in the above table is the portion of the fair value of the securities recognised in the reporting period. The basis of the fair value is disclosed later in this Remuneration Report. During the year ended 30 June 2021, no Short Term Incentive payments were paid to the Directors or Key Management Personnel. Equity Based Remuneration During the year ended 30 June 2021, the Directors and Key Management Personnel were granted the following options as remuneration. NNaammee Rick Crabb Charles Bass Roger Port NNuummbbeerr ooff ooppttiioonnss ggrraanntteedd GGrraanntt DDaattee 25.09.2020 125,000 30.04.2021 1,500,000 25.09.2020 125,000 30.04.2021 1,500,000 25.09.2020 125,000 30.04.2021 1,500,000 VVeessttiinngg DDaattee 25.09.2020 30.04.2021 25.09.2020 30.04.2021 25.09.2020 30.04.2021 EExxppiirryy DDaattee 01.07.2022 01.07.2024 01.07.2022 01.07.2024 01.07.2022 01.07.2024 Brett Rowe 1,500,000 30.04.2021 30.04.2021 01.07.2024 Tim Mason 530,000 500,000 500,000 23.07.2020 22.02.2021 22.02.2021 07.08.2020 01.07.2022 01.07.2023 01.07.2022 01.07.2024 01.07.2024 EExxeerrcciissee PPrriiccee $0.20 $0.55 $0.20 $0.55 $0.20 $0.55 $0.55 $0.20 $0.52 $0.52 FFaaiirr vvaalluuee ppeerr ooppttiioonn aatt ggrraanntt $0.16 $0.98 $0.16 $0.98 $0.16 $0.98 $0.98 $0.06 $0.27 $0.27 The fair value of options is determined using the Black Scholes option pricing model. Fair value of options issued as remuneration is allocated to the relevant vesting period of the securities. Options and performance rights are provided at no initial cost to the recipients. During the financial year, 8,269,000 options were exercised by Key Management Personnel. Exercise of Options Granted as Remuneration During the year ended 30 June 2021, no ordinary shares were issued in respect of the exercise of options previously granted as remuneration to Directors or Key Management Personnel of the Tim Mason 1 108,418 9,383 59,240 177,041 33.5% Company. Total 211,159 19,142 59,240 289,541 Page 14 Page 15 53 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT EEqquuiittyy IInnssttrruummeenntt DDiisscclloossuurreess RReellaattiinngg ttoo KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell Option Holdings Key Management Personnel have the following interests in unlisted options over unissued shares of the Company. YYeeaarr eennddeedd 3300 JJuunnee 22002211 NNaammee BBaallaannccee aatt bbeeggiinnnniinngg ooff tthhee yyeeaarr RReecceeiivveedd dduurriinngg tthhee yyeeaarr aass rreemmuunneerraattiioonn OOtthheerr cchhaannggeess dduurriinngg tthhee yyeeaarr BBaallaannccee aatt tthhee eenndd ooff tthhee yyeeaarr VVeesstteedd aanndd eexxeerrcciissaabbllee aatt tthhee eenndd ooff tthhee yyeeaarr Rick Crabb 1,561,000 1,625,000 (61,000) 3,125,000 3,125,000 Charles Bass 9,665,000 1,625,000 (7,215,000) 4,075,000 4,075,000 Roger Port 1,543,000 1,625,000 (43,000) 3,125,000 3,125,000 Brett Rowe 1,000,000 1,500,000 (500,000) 2,000,000 2,000,000 Tim Mason 1,500,000 1,530,000 - 3,030,000 1,030,000 Performance Rights Holdings Key Management Personnel have the following interests in unlisted performance rights over unissued shares of the Company. YYeeaarr eennddeedd 3300 JJuunnee 22002211 NNaammee Rick Crabb Charles Bass Roger Port Brett Rowe BBaallaannccee aatt bbeeggiinnnniinngg ooff tthhee yyeeaarr RReecceeiivveedd dduurriinngg tthhee yyeeaarr aass rreemmuunneerraattiioonn OOtthheerr cchhaannggeess dduurriinngg tthhee yyeeaarr BBaallaannccee aatt tthhee eenndd ooff tthhee yyeeaarr VVeesstteedd aanndd eexxeerrcciissaabbllee aatt tthhee eenndd ooff tthhee yyeeaarr - - - - - - - - - - - - - (150,000) - - - - - - - - - - Tim Mason 150,000 Exercise of Performance rights Granted as Remuneration During the year ended 30 June 2021, 150,000 ordinary shares were issued in respect of the exercise of performance rights previously granted as remuneration to Directors or Key Management Personnel of the Company. 54 Page 16 EAGLE MOUNTAIN MINING | 2021 Annual Report Key Management Personnel have the following interests in unlisted options over unissued shares of Option Holdings the Company. YYeeaarr eennddeedd 3300 JJuunnee 22002211 NNaammee BBaallaannccee aatt bbeeggiinnnniinngg ooff RReecceeiivveedd dduurriinngg tthhee OOtthheerr VVeesstteedd aanndd cchhaannggeess BBaallaannccee aatt eexxeerrcciissaabbllee yyeeaarr aass dduurriinngg tthhee tthhee eenndd ooff aatt tthhee eenndd ooff tthhee yyeeaarr rreemmuunneerraattiioonn yyeeaarr tthhee yyeeaarr tthhee yyeeaarr Rick Crabb 1,561,000 1,625,000 (61,000) 3,125,000 3,125,000 Charles Bass 9,665,000 1,625,000 (7,215,000) 4,075,000 4,075,000 Roger Port 1,543,000 1,625,000 (43,000) 3,125,000 3,125,000 Brett Rowe 1,000,000 1,500,000 (500,000) 2,000,000 2,000,000 Tim Mason 1,500,000 1,530,000 - 3,030,000 1,030,000 Performance Rights Holdings shares of the Company. Key Management Personnel have the following interests in unlisted performance rights over unissued YYeeaarr eennddeedd 3300 JJuunnee 22002211 NNaammee Rick Crabb Charles Bass Roger Port Brett Rowe BBaallaannccee aatt bbeeggiinnnniinngg ooff RReecceeiivveedd dduurriinngg tthhee OOtthheerr VVeesstteedd aanndd cchhaannggeess BBaallaannccee aatt eexxeerrcciissaabbllee yyeeaarr aass dduurriinngg tthhee tthhee eenndd ooff aatt tthhee eenndd ooff tthhee yyeeaarr rreemmuunneerraattiioonn yyeeaarr tthhee yyeeaarr tthhee yyeeaarr - - - - - - - - - - - - - - - - - - - - - - - Tim Mason 150,000 (150,000) Exercise of Performance rights Granted as Remuneration During the year ended 30 June 2021, 150,000 ordinary shares were issued in respect of the exercise of performance rights previously granted as remuneration to Directors or Key Management Personnel of the Company. DIRECTORS’ REPORT DIRECTORS’ REPORT EEqquuiittyy IInnssttrruummeenntt DDiisscclloossuurreess RReellaattiinngg ttoo KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell RREEMMUUNNEERRAATTIIOONN RREEPPOORRTT ((AAUUDDIITTEEDD)) ((ccoonnttiinnuueedd)) Share Holdings The number of shares in the Company held during the financial year by Key Management Personnel of the Company, including their related parties are set out below. There were no shares granted during the reporting period as compensation. YYeeaarr eennddeedd 3300 JJuunnee 22002211 NNaammee Rick Crabb BBaallaannccee aatt bbeeggiinnnniinngg ooff tthhee yyeeaarr RReecceeiivveedd dduurriinngg tthhee yyeeaarr aass rreemmuunneerraattiioonn 732,000 Charles Bass 48,980,001 Roger Port Brett Rowe Tim Mason 516,000 500,000 - OOtthheerr cchhaannggeess dduurriinngg tthhee yyeeaarr BBaallaannccee aatt tthhee eenndd ooff tthhee yyeeaarr 61,000 793,000 13,879,286 62,859,287 43,000 - 150,000 559,000 500,000 150,000 - - - - - LLooaannss mmaaddee ttoo KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell No loans were made to Key Management Personnel including personally related entities during the financial year. LLooaannss rreecceeiivveedd ffrroomm KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell During the prior year, the Company entered into an unsecured loan agreement with a director related entity, Quartz Mountain Mining Pty Ltd (“Quartz Mountain”) as trustee for the Bass Family Trust. The principal of US$1,000,000 attracts interest at 2% per annum with the first three months being interest free. The loan’s initial maturity date was subsequently deferred to 31 December 2021. During the reporting period, shareholders approved the issue to Quartz Mountain of 950,000 options, exercisable at 20 cents each on or before 1 July 2022, as satisfaction of interest owing to 31 December 2021. Interest expense of US$20,372 (A$28,640) was recognised during the reporting period. OOtthheerr ttrraannssaaccttiioonnss wwiitthh KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated. The Company has entered into a lease agreement with Elk Mountain Mining Limited, an entity associated with Mr Charles Bass, for the lease of the Company’s administration offices in Perth, Western Australia. Total lease repayments of $87,387 (2020: $85,847) were paid during the year, including interest of $19,064 (2020: $35,402) and lease principal repayments of $68,323 (2020: $50,445). Other than the above, there were no transactions with Key Management Personnel. EEnndd ooff RReemmuunneerraattiioonn RReeppoorrtt Page 16 Page 17 55 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT AAUUDDIITTOORR’’SS IINNDDEEPPEENNDDEENNCCEE DDEECCLLAARRAATTIIOONN Section 307C of the Corporations Act 2001 requires our auditors, William Buck Audit (WA) Pty Ltd, to provide the Directors of the Group with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on the following page and forms part of this Directors’ report for the year ended 30 June 2021. This report has been made in accordance with a resolution of the Board of Directors. RRiicckk CCrraabbbb CChhaaiirrmmaann Dated at Perth this 20th day of September 2021 56 Page 18 EAGLE MOUNTAIN MINING | 2021 Annual Report DIRECTORS’ REPORT AAUUDDIITTOORR’’SS IINNDDEEPPEENNDDEENNCCEE DDEECCLLAARRAATTIIOONN Section 307C of the Corporations Act 2001 requires our auditors, William Buck Audit (WA) Pty Ltd, to provide the Directors of the Group with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on the following page and forms part of this Directors’ report for the year ended 30 June 2021. This report has been made in accordance with a resolution of the Board of Directors. RRiicckk CCrraabbbb CChhaaiirrmmaann Dated at Perth this 20th day of September 2021 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF EAGLE MOUNTAIN MINING LIMITED I declare that, to the best of my knowledge and belief during the year ended 30 June 2021 there have been: — no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and — no contraventions of any applicable code of professional conduct in relation to the audit. William Buck Audit (WA) Pty Ltd ABN 67 125 012 124 Conley Manifis Director Dated this 20th day of September 2021 Page 18 57 EAGLE MOUNTAIN MINING | 2021 Annual Report CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Year Ended 30 June 2021 YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ Notes Other income Interest income Forgiveness of loan – Paycheck Protection Program 13 Administration and other costs Employee expenses – non-exploration Equity based payments Finance costs Depreciation expense Exploration and evaluation costs Net change in fair value of convertible notes Gain on foreign currency exchange LLoossss bbeeffoorree iinnccoommee ttaaxx Income tax expense 4 9, 10 4 5 4455,,223311 774466 114477,,992211 ((888822,,669955)) ((666611,,114455)) ((77,,554444,,006699)) ((339944,,773366)) ((444444,,222200)) ((99,,330066,,222222)) ((22,,227777,,007755)) 224466,,002255 50,000 867 - (779,231) (310,957) (248,723) (247,281) (387,772) (2,717,101) 268,872 2,390 ((2211,,007700,,223399)) (4,368,936) -- - LLoossss aafftteerr iinnccoommee ttaaxx ffrroomm ccoonnttiinnuuiinngg ooppeerraattiioonnss ((2211,,007700,,223399)) (4,368,936) OOtthheerr ccoommpprreehheennssiivvee iinnccoommee nneett ooff iinnccoommee ttaaxx Other comprehensive income that may be re- classified to profit or loss in subsequent years net of income tax Unrealised (loss)/gain on foreign currency exchange TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr 16a -- ((110000,,441188)) - 103,077 ((2211,,117700,,665577)) (4,265,859) LLoossss aattttrriibbuuttaabbllee ttoo:: Owners of the parent Non-controlling interests TToottaall ccoommpprreehheennssiivvee lloossss aattttrriibbuuttaabbllee ttoo:: Owners of the parent Non-controlling interests ((1199,,119999,,227777)) ((11,,887700,,996622)) ((2211,,007700,,223399)) (3,985,856) (383,080) (4,368,936) ((1199,,331177,,996688)) ((11,,885522,,668899)) ((2211,,117700,,665577)) (3,892,026) (373,833) (4,265,859) BBaassiicc aanndd ddiilluutteedd lloossss ppeerr sshhaarree 28 cents ((1122..11)) cents (3.7) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 58 Page 20 EAGLE MOUNTAIN MINING | 2021 Annual Report CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2021 3300 JJuunnee 22002211 3300 JJuunnee 22002200 NNoottee AA$$ AA$$ CCuurrrreenntt AAsssseettss Cash and cash equivalents Trade and other receivables Total Current Assets NNoonn--CCuurrrreenntt AAsssseettss Exploration and evaluation expenditure Property, plant and equipment Right-of-use assets Bonds and security deposits Total Non-Current Assets TTOOTTAALL AASSSSEETTSS CCuurrrreenntt LLiiaabbiilliittiieess Trade and other payables Employee leave liabilities Lease liabilities Borrowings Total Current Liabilities NNoonn--CCuurrrreenntt LLiiaabbiilliittiieess Lease liabilities Employee leave liabilities Borrowings Total Non-Current Liabilities TTOOTTAALL LLIIAABBIILLIITTIIEESS NNEETT AASSSSEETTSS EEqquuiittyy Issued capital Option capital Reserves Accumulated losses Equity attributable to owners of the parent Non-controlling interest TTOOTTAALL EEQQUUIITTYY 6 7 8 9 10 11 12 13 12 13 15 16 99,,111199,,337711 330066,,113311 99,,442255,,550022 99,,447744,,227788 997777,,995511 553311,,220022 226600,,445599 1111,,224433,,889900 507,750 138,309 646,059 10,378,496 1,265,634 208,493 132,945 11,985,568 2200,,666699,,339922 12,631,627 11,,007733,,665544 110055,,226688 221111,,112277 11,,334400,,229977 22,,773300,,334466 334400,,778811 99,,770088 1111,,000066,,771133 1111,,335577,,220022 179,444 58,923 111,315 1,636,325 1,986,007 117,895 - 9,290,293 9,408,188 1144,,008877,,554488 11,394,195 66,,558811,,884444 1,237,432 4455,,660011,,559933 44,,550000 55,,552266,,554400 ((4444,,555500,,778899)) 66,,558811,,884444 -- 66,,558811,,884444 15,322,265 4,500 (1,518,029) (12,381,375) 1,427,361 (189,929) 1,237,432 The above statement of financial position should be read in conjunction with the accompanying notes. Page 21 59 EAGLE MOUNTAIN MINING | 2021 Annual Report , 7 7 0 3 0 1 7 4 2 9 , - ) 7 6 8 2 7 , ( - - , 3 2 7 8 4 2 , 1 0 0 0 0 8 1 , - - - - - ) , 9 5 8 5 6 2 4 , ( ) , 3 3 8 3 7 3 ( , 4 0 9 3 8 1 , 4 0 9 3 8 1 - - - - - 8 1 8 6 1 , ) , 6 5 8 5 8 9 3 , ( $$ AA ll aa tt oo TT , 0 3 5 3 4 3 3 , - $$ AA tt ss ee rr ee tt nn ii ) , 6 3 9 8 6 3 4 , ( ) , 0 8 0 3 8 3 ( $$ AA ss ee ss ss oo ll ) ) , 6 5 8 5 8 9 3 , ( , 7 3 3 2 1 4 8 , ( ) , 6 7 2 4 1 0 3 , ( -- nn oo NN gg nn ii ll ll oo rr tt nn oo cc ll dd ee tt aa uu mm uu cc cc AA , 2 3 4 7 3 2 1 , ) , 9 2 9 9 8 1 ( ) , 5 7 3 1 8 3 2 1 , ( ) , 6 7 2 4 1 0 3 , ( )) )) )) )) ,, 88 11 44 00 00 11 (( 33 77 22 88 11 ,, -- ,, 22 33 44 77 33 22 11 ,, ,, 99 33 22 00 77 00 11 22 ,, (( )) )) ,, 99 22 99 99 88 11 (( ,, 22 66 99 00 77 88 11 ,, (( )) )) ,, 55 77 33 11 88 33 22 11 ,, (( ,, 77 77 22 99 99 11 99 11 ,, (( ,, 00 00 00 11 44 44 66 22 ,, )) ,, 11 33 11 11 11 22 11 ,, (( ,, 88 11 66 00 99 22 44 ,, ,, 11 00 11 22 22 99 77 ,, ,, 44 44 88 11 88 55 66 ,, ,, 99 11 55 77 22 99 00 11 ,, (( -- -- -- -- -- ,, 88 11 66 22 44 00 22 ,, ,, 77 55 66 00 77 11 11 22 ,, (( )) ,, 99 88 66 22 55 88 11 ,, (( -- -- -- -- )) )) ,, 77 77 22 99 99 11 99 11 ,, (( ,, 77 33 11 00 77 99 22 11 ,, (( )) ,, 99 88 77 00 55 55 44 44 ,, (( )) ,, 66 77 22 44 11 00 33 ,, (( $$ AA ll oo rr tt nn oo cc ee vv rr ee ss ee rr nn oo mm mm oo CC ee rr aa hh SS dd ee ss aa bb ii nn gg ee rr oo FF yy cc nn ee rr rr uu cc tt nn ee mm yy aa pp ll nn oo ii tt aa ss nn aa rr tt nn oo ii tt pp OO ee vv rr ee ss ee rr ee vv rr ee ss ee rr ll aa tt ii pp aa cc $$ AA $$ AA $$ AA , 5 2 6 8 8 8 , 9 6 0 7 9 2 0 0 5 4 , - - - - - - - - - - - - - - - ) ) 8 1 8 6 1 , ( 2 8 1 5 1 , ( , 3 2 7 8 4 2 -- -- -- -- -- -- -- -- )) ,, 66 77 22 44 11 00 33 ,, (( , 8 4 3 5 0 1 1 , -- -- -- -- -- -- ,, 88 44 33 55 00 11 11 ,, )) ,, 11 44 88 88 55 77 (( ,, 11 00 11 22 22 99 77 ,, ,, 88 00 66 88 66 22 88 ,, - - - - - - - 0 3 8 3 9 , 0 3 8 3 9 , - - - - - - - - - , 9 9 8 0 9 3 0 0 5 4 , ,, 99 99 88 00 99 33 00 00 55 44 ,, -- -- -- -- -- -- )) )) ,, 11 99 66 88 11 11 (( ,, 11 99 66 88 11 11 (( -- -- -- -- -- -- -- -- ,, 88 00 22 22 77 22 00 00 55 44 ,, - - - - $$ AA dd ee uu ss ss II ll aa tt ii pp aa cc , 9 4 9 9 7 5 3 1 , , 1 0 0 0 0 8 1 , ) 7 6 8 2 7 , ( - - 2 8 1 5 1 , , 5 6 2 2 2 3 5 1 , ,, 55 66 22 22 22 33 55 11 ,, -- -- -- -- ,, 00 00 00 11 44 44 66 22 ,, )) ,, 11 33 11 11 11 22 11 ,, (( ,, 99 55 44 99 44 00 55 ,, -- ,, 33 99 55 11 00 66 55 44 ,, e h t r o f e m o c n i i e v s n e h e r p m o c r e h t O x a t e m o c n i f o t e n r a e y i n o d e s n g o c e r t s e r e t n i g n i l l o r t n o c - n o N r a e y e h t r o f s s o l i e v s n e h e r p m o c l a t o T 9 1 0 2 y u l J 1 t a e c n a a B l r a e y e h t r o f s s o L 7) 5, 2 te 2 o n n o i t i s u q c a ( i t e s s a 5) 4, 1 te 1 o (n s n o i t p o d n a s e r a h s f o e u s s I 5) te 1 o (n s t s o c i g n s a r i l a t i p a C s n o i t p o f o n o i t a l l e c n a c n o r e f s n a r T s t h g i r e c n a m r o f r e p / s n o i t p o f o e s c r e x E i s t h g i r e c n a m r o f r e p / s n o i t p o f o g n i t s e V 0 2 0 2 e n u J 0 3 t a e c n a a B l rr aa ee yy ee hh tt rr oo ff ee mm oo cc nn ii ii ee vv ss nn ee hh ee rr pp mm oo cc rr ee hh tt OO xx aa tt ee mm oo cc nn ii ff oo tt ee nn 55)) 44,, 11 ttee 11 oo ((nn ss nn oo ii tt pp oo dd nn aa ss ee rr aa hh ss ff oo ee uu ss ss II rr aa ee yy ee hh tt rr oo ff ss ss oo ll ii ee vv ss nn ee hh ee rr pp mm oo cc ll aa tt oo TT tt ss ee rr ee tt nn ii gg nn ii ll ll oo rr tt nn oo cc -- nn oo nn ff oo nn oo ii tt ii ss uu qq cc AA ii 00 22 00 22 yy uu ll JJ 11 tt aa ee cc nn aa aa BB ll rr aa ee yy ee hh tt rr oo ff ss ss oo LL ss tt hh gg ii rr ee cc nn aa mm rr oo ff rr ee pp // ss nn oo ii tt pp oo ff oo ee ss cc rr ee xx EE ii ss tt hh gg ii rr ee cc nn aa mm rr oo ff rr ee pp // ss nn oo ii tt pp oo ff oo gg nn ii tt ss ee VV 11 22 00 22 ee nn uu JJ 00 33 tt aa ee cc nn aa aa BB ll 55)) ttee 11 oo ((nn ss tt ss oo cc ii gg nn ss aa rr ii ll aa tt ii pp aa CC 2 2 e g a P s. te o g n yin n a p m o c c e a n with th tio c n nju o d in c a e e r uld b uity s s in e o h q e g n a h nt of c e m te ta e s v o b e a h T Y T I U Q E N I S E G N A H C F O T N E M E T A T S D E T A D I L O S N O C 1 2 0 2 e n u J 0 3 d e d n E r a e Y e h t r o F 60 EAGLE MOUNTAIN MINING | 2021 Annual Report CONSOLIDATED STATEMENT OF CASH FLOWS For the Year Ended 30 June 2021 CCaasshh FFlloowwss ffrroomm OOppeerraattiinngg AAccttiivviittiieess Payments to suppliers and employees Payments for exploration and evaluation Payments for interest and other financing costs Interest received Government assistance received YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ Note ((11,,559933,,660066)) ((88,,333300,,881155)) ((3344,,008899)) 773322 5500,,000000 (1,208,540) (2,674,607) (51,911) 867 50,000 Net cash used in operating activities 17 ((99,,990077,,777788)) (3,884,191) CCaasshh FFlloowwss ffrroomm IInnvveessttiinngg AAccttiivviittiieess Payment for acquisition of exploration assets Payments for purchase of fixed assets Payments for bonds and deposits Net cash used in investing activities CCaasshh FFlloowwss ffrroomm FFiinnaanncciinngg AAccttiivviittiieess Proceeds from the issue of shares and options Payments for the issue of shares and options Proceeds from borrowings Repayments of borrowings Repayment of lease liabilities Net cash generated by financing activities -- ((112222,,660055)) ((114444,,770011)) ((226677,,330066)) 1199,,779911,,111188 ((994433,,005544)) 114444,,770011 ((115544,,992266)) ((112299,,001199)) 1188,,770088,,882200 (729,667) (8,644) - (738,311) 1,800,001 (72,867) 1,626,798 (11,373) (100,590) 3,241,969 Net increase/(decrease) in cash held 88,,553333,,773366 (1,380,533) Cash and cash equivalents at the beginning of the year Effect of foreign exchange on cash and cash equivalents 550077,,775500 1,879,883 7777,,888855 8,400 CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss aatt tthhee eenndd ooff tthhee yyeeaarr 6 99,,111199,,337711 507,750 The above statement of cash flows should be read in conjunction with the accompanying notes. Page 23 61 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 These consolidated financial statements and notes represent those of Eagle Mountain Mining Limited and its controlled entities (the “Group”). Eagle Mountain Mining Limited is a public limited liability company, incorporated and domiciled in Australia. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. The financial statements for the year ended 30 June 2021 were approved and authorised for issue by the Board of Directors on 20 September 2021. 11.. SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. ((aa)) BBaassiiss ooff PPrreeppaarraattiioonn These general purpose financial statements for the reporting year ended 30 June 2021 have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial statements and notes comply with International Financial Reporting Standards. The financial report has been prepared on an accruals basis and is based on historical cost and does not take into account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets. ((ii)) GGooiinngg CCoonncceerrnn The Group has incurred a loss of $21,070,239 and a net operating cash outflow of $9,907,778 during the year ended 30 June 2021. Cash assets at 30 June 2021 were $9,119,371 and current liabilities at that date were $2,730,346. The financial statements have been prepared on the going concern basis which contemplates the continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business. During the financial year, the Group successfully raised $15.5 million (before costs) pursuant to three placements to institutional and sophisticated investors. The Directors will continue to manage the Group’s activities with due regard to current and future funding requirements. The Directors reasonably expect that the Company will be able to raise sufficient capital to fund the Group’s exploration and working capital requirements, and that the Group will be able to settle debts as and when they become due and payable. On this basis, the Directors are of the opinion that the use of the going concern basis is appropriate in the circumstances. ((iiii)) BBaassiiss ooff CCoonnssoolliiddaattiioonn The financial information comprises the financial information of Eagle Mountain and entities (including special purpose entities) controlled by Eagle Mountain (its “subsidiaries”). Control is achieved when Eagle Mountain: • • • has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its returns. Eagle Mountain reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. 62 Page 24 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 11.. SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((aa)) BBaassiiss ooff PPrreeppaarraattiioonn ((ccoonnttiinnuueedd)) ((iiii)) BBaassiiss ooff CCoonnssoolliiddaattiioonn ((ccoonnttiinnuueedd)) The financial information of subsidiaries is prepared for the same reporting period as Eagle Mountain, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All inter-company balances and transactions, including unrealised profits arising from intra- group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Total comprehensive income of subsidiaries is attributed to the owners of Eagle Mountain and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date Eagle Mountain gains control until the date when Eagle Mountain ceases to control the subsidiary. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to Eagle Mountain. When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated as the difference between: • • the aggregate of the fair value of the consideration received and the fair value of any retained interest; and the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit and loss or transferred to another category of equity as specified/permitted by the applicable Accounting Standards). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 9, or when applicable, the cost on initial recognition of an investment in an associate or a joint venture. ((iiiiii)) NNeeww AAccccoouunnttiinngg SSttaannddaarrddss AAddoopptteedd iinn tthhee CCuurrrreenntt YYeeaarr AApppplliiccaattiioonn ooff NNeeww aanndd RReevviisseedd AAccccoouunnttiinngg SSttaannddaarrddss The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted by the Group for the reporting year ended 30 June 2021. Page 25 63 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((iiiiii)) NNeeww AAccccoouunnttiinngg SSttaannddaarrddss AAddoopptteedd iinn tthhee CCuurrrreenntt YYeeaarr ((ccoonnttiinnuueedd)) The following Accounting Standards and Interpretations are most relevant to the Group: Conceptual Framework for Financial Reporting (Conceptual Framework) The Group has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards, but it has not had a material impact on the Group's financial statements. NNeeww AAccccoouunnttiinngg SSttaannddaarrddss aanndd IInntteerrpprreettaattiioonnss NNoott YYeett MMaannddaattoorryy oorr EEaarrllyy AAddoopptteedd The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application date for future reporting periods. There are no material new or amended Accounting Standards which will materially affect the Group. ((bb)) EExxpplloorraattiioonn,, EEvvaalluuaattiioonn aanndd DDeevveellooppmmeenntt EExxppeennddiittuurree Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition of exploration properties which is capitalised and carried forward. When production commences, any accumulated costs for the relevant area of interest which have been capitalised and carried forward will be amortised over the life of the area according to the rate of depletion of the economically recoverable resources. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to the area of interest. The carrying value of any capitalised expenditure is assessed by the Directors each reporting period to determine if any provision should be made for the impairment of the carrying value. The appropriateness of the Group’s ability to recover these capitalised costs has been assessed at the end of each reporting period and the Directors are satisfied that the value is recoverable. The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at an overall level whenever facts and circumstances suggest that the carrying amount of the assets may exceed recoverable amount. An impairment exists when the carrying amount of the assets exceeds the estimated recoverable amount. The assets are then written down to their recoverable amount. Any impairment losses are recognised in the income statement. ((cc)) TTrraaddee aanndd OOtthheerr RReecceeiivvaabblleess Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days. The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. ((dd)) IInntteerreesstt IInnccoommee Interest income is recognised as it accrues. 64 Page 26 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((iiiiii)) NNeeww AAccccoouunnttiinngg SSttaannddaarrddss AAddoopptteedd iinn tthhee CCuurrrreenntt YYeeaarr ((ccoonnttiinnuueedd)) The following Accounting Standards and Interpretations are most relevant to the Group: Conceptual Framework for Financial Reporting (Conceptual Framework) The Group has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards, but it has not had a material impact on the Group's financial statements. NNeeww AAccccoouunnttiinngg SSttaannddaarrddss aanndd IInntteerrpprreettaattiioonnss NNoott YYeett MMaannddaattoorryy oorr EEaarrllyy AAddoopptteedd The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application date for future reporting periods. There are no material new or amended Accounting Standards which will materially affect the Group. ((bb)) EExxpplloorraattiioonn,, EEvvaalluuaattiioonn aanndd DDeevveellooppmmeenntt EExxppeennddiittuurree Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition of exploration properties which is capitalised and carried forward. When production commences, any accumulated costs for the relevant area of interest which have been capitalised and carried forward will be amortised over the life of the area according to the rate of depletion of the economically recoverable resources. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to the area of interest. The carrying value of any capitalised expenditure is assessed by the Directors each reporting period to determine if any provision should be made for the impairment of the carrying value. The appropriateness of the Group’s ability to recover these capitalised costs has been assessed at the end of each reporting period and the Directors are satisfied that the value is recoverable. The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at an overall level whenever facts and circumstances suggest that the carrying amount of the assets may exceed recoverable amount. An impairment exists when the carrying amount of the assets exceeds the estimated recoverable amount. The assets are then written down to their recoverable amount. Any impairment losses are recognised in the income statement. ((cc)) TTrraaddee aanndd OOtthheerr RReecceeiivvaabblleess Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days. The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. ((dd)) IInntteerreesstt IInnccoommee Interest income is recognised as it accrues. ((ee)) FFoorreeiiggnn CCuurrrreennccyy TTrraannssaaccttiioonnss The financial statements are presented in Australian dollars, which is the functional currency of the Group. Foreign currency transactions Foreign currency transactions are translated into the functional currency at the rates of exchange prevailing at the dates of the transaction. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined. Exchange differences arising on the translation of monetary items are recognised in the consolidated statement of profit or loss and other comprehensive income. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the consolidated statement of profit or loss and other comprehensive income. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rate at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates for the period, which approximate the rates at the dates of the transactions. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. ((ff)) OOppeerraattiinngg SSeeggmmeennttss An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start-up operations which are yet to earn revenues. The chief operating decision maker has been identified as the Board of Directors taken as a whole. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the Board of Directors. Operating segments have been identified based on the information provided to the Board of Directors. ((gg)) BBoorrrroowwiinnggss Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. ((hh)) CCoonnvveerrttiibbllee NNoottee –– DDeerriivvaattiivvee LLiiaabbiilliittyy Derivative financial instruments are stated at fair value. The fair value of the derivative has been valued using a valuation technique, including inputs that include reference to similar instruments and option pricing models, which is updated each period. Gains and losses arising from changes in fair value of these instruments together with settlements in the period are accounted for through the consolidated statement of profit or loss and other comprehensive income through net finance costs. The convertible note liability and derivative are removed from the statement of financial position when the obligations specified in the contract are discharged, cancelled or expired. Page 26 Page 27 65 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((ii)) CCoonnvveerrttiibbllee NNoottee –– DDeebbtt LLiiaabbiilliittyy The embedded derivative component of a convertible note is recognised initially at fair value and the debt liability component is calculated as the difference between the financial instrument as a whole and the value of the derivative liability at inception. Any directly attributable transaction costs are allocated to the convertible note debt liability and convertible note derivative liability in proportion to their initial carrying amounts. Subsequent to initial recognition, the debt liability component of the convertible note is measured at amortised cost using the effective interest method. ((jj)) LLeeaassee LLiiaabbiilliittiieess 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 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. ((kk)) CCaasshh aanndd CCaasshh EEqquuiivvaalleennttss Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts. ((ll)) IImmppaaiirrmmeenntt ooff AAsssseettss At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from the other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generated unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) 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 (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation increase. 66 Page 28 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((ii)) CCoonnvveerrttiibbllee NNoottee –– DDeebbtt LLiiaabbiilliittyy ((mm)) PPrrooppeerrttyy,, PPllaanntt aanndd EEqquuiippmmeenntt The embedded derivative component of a convertible note is recognised initially at fair value and the debt liability component is calculated as the difference between the financial instrument as a whole and the value of the derivative liability at inception. Any directly attributable transaction costs are allocated to the convertible note debt liability and convertible note derivative liability in proportion to their initial carrying amounts. Subsequent to initial recognition, the debt liability component of the convertible note is measured at amortised cost using the effective interest method. ((jj)) LLeeaassee LLiiaabbiilliittiieess 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 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. ((kk)) CCaasshh aanndd CCaasshh EEqquuiivvaalleennttss ((ll)) IImmppaaiirrmmeenntt ooff AAsssseettss Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts. At each reporting date, the Group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from the other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generated unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) 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 (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation increase. Property, plant and equipment assets are initially recognised at acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and condition necessary for the assets to be capable of operating in the manner intended by the Group’s management. Property, plant and equipment assets are subsequently measured using the cost model which reflects cost less subsequent depreciation and impairment losses. Depreciation is recognised on a diminishing value basis to write down the cost less estimated residual value of the assets. Leasehold improvements are capitalised and subsequently amortised over the term of the respective lease. The following depreciation rates are applied to property, plant and equipment assets on the diminishing value basis: • Motor vehicles: 25% • Other property, plant and equipment: 20-50% Material residual value estimates and estimates of useful life are updated as required, but at least annually. Gains or losses arising on the disposal of property, plant and equipment assets are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other expenses. ((nn)) RRiigghhtt--ooff--UUssee AAsssseettss 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 any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or 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. ((oo)) GGooooddss aanndd SSeerrvviicceess TTaaxx ((GGSSTT)) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (“ATO”). In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows. Page 28 Page 29 67 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((pp)) TTaaxxaattiioonn The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit and loss is the tax payable on the taxable income using applicable income tax rates enacted or substantially enacted as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial information. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Where temporary differences exist in relation to investments in subsidiaries and associates, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. ((qq)) TTrraaddee aanndd OOtthheerr PPaayyaabblleess Trade payables 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. ((rr)) PPrroovviissiioonnss aanndd CCoonnttiinnggeenncciieess Provisions are recognised when the Group has a legal or constructive obligation, as a result of a past event, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. ((ss)) EEmmppllooyyeeee bbeenneeffiittss Short Term Employee Benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Other Long Term Employee Benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Defined Contribution Superannuation Expense Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. 68 Page 30 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((pp)) TTaaxxaattiioonn ((tt)) SShhaarree BBaasseedd PPaayymmeenntt TTrraannssaaccttiioonnss The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit and loss is the tax payable on the taxable income using applicable income tax rates enacted or substantially enacted as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial information. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. The Group recognises the fair value of options and performance rights granted to Directors, employees and consultants as remuneration as an expense on a pro-rata basis over the vesting period in the consolidated statement of profit or loss and other comprehensive income with a corresponding adjustment to equity. The Group provides benefits to employees (including Directors) of the Group in the form of share based payment transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled transactions”). The cost of these equity-settled transactions with employees (including Directors) is measured by reference to fair value at the date they are granted. The fair value is determined using the Black Scholes option pricing model. ((uu)) IIssssuueedd CCaappiittaall Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. Where temporary differences exist in relation to investments in subsidiaries and associates, deferred tax ((vv)) CCrriittiiccaall AAccccoouunnttiinngg EEssttiimmaatteess aanndd JJuuddggmmeennttss assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. ((qq)) TTrraaddee aanndd OOtthheerr PPaayyaabblleess In preparing the financial information, the Group has been required to make certain estimates and assumptions concerning future occurrences. There is an inherent risk that the resulting accounting estimates will not equate exactly with actual events and results. Trade payables and other payables are carried at amortised cost and represent liabilities for goods and ((ii)) SSiiggnniiffiiccaanntt AAccccoouunnttiinngg JJuuddggeemmeennttss 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. Provisions are recognised when the Group has a legal or constructive obligation, as a result of a past event, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably ((rr)) PPrroovviissiioonnss aanndd CCoonnttiinnggeenncciieess measured. ((ss)) EEmmppllooyyeeee bbeenneeffiittss Short Term Employee Benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Other Long Term Employee Benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Defined Contribution Superannuation Expense Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements: AAccqquuiissiittiioonn ooff OOrraaccllee RRiiddggee CCooppppeerr MMiinnee AASB 3 Business Combinations defines a business as being “an integrated set of activities and assets that is capable of being conducted and managed for the purposes of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or other owners, members or participants.” A business usually consists of inputs, processes and outputs. Inputs and processes are the essential elements that have to be present in order to be classified as a business. Although a business usually has outputs, outputs are not required for an integrated set of assets to qualify as a business. In November 2019, the Group acquired an 80% share in the Oracle Ridge Copper Mine in Arizona in the United States of America. Management have accounted for this transaction as an acquisition of assets and not as a business combination since, at the date of acquisition, the Oracle Ridge Copper Mine did not have the processes and outputs expected of an operating business. In May 2021, the Company issued 10,000,000 shares to acquire the remaining 20% of the issued capital of Wedgetail Operations LLC, the owner of the Oracle Ridge Copper Mine, which resulted in the full consolidation of that entity in the Group’s financial statements. Page 30 Page 31 69 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((ii)) SSiiggnniiffiiccaanntt AAccccoouunnttiinngg JJuuddggeemmeennttss ((ccoonnttiinnuueedd)) CCaappiittaalliissaattiioonn ooff OOppeerraattiinngg LLeeaasseess Determination of lease term In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee. Determination of incremental borrowing rate The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used. To determine the incremental borrowing rate, where possible recent third party financing received by the individual lessee is used as a starting point and adjusted to reflect changes in financing conditions since third party financing was received. If there was no recent third party financing agreement, a build-up approach is used that starts with a risk-free interest rate adjusted for credit risk for the lessee and any further relevant adjustments specific to the lease (such as term, country, currency and security). ((iiii)) SSiiggnniiffiiccaanntt AAccccoouunnttiinngg EEssttiimmaatteess aanndd AAssssuummppttiioonnss The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: Key Estimates – Impairment of Capitalised Exploration and Evaluation Expenditure The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. Key Estimates – 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. Fair values of share options are determined using the Black Scholes option pricing model. Should the assumptions used in these calculations differ, the amounts recognised could significantly change. Key Assumptions – Oracle Ridge Mine Acquisition: Valuation of derivative liability As part of the acquisition of the Oracle Ridge Copper Mine, a US$6,423,000 secured note was issued to Vincere Resource Holdings LLC. Up to US$3,000,000 of the secured note can be converted into shares of the Company upon the occurrence of various conversion trigger events at variable conversion prices. To derive the fair value of the embedded derivative liability component of the secured note, a number of assumptions have been made. These assumptions are outlined in note 13. 70 Page 32 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) SSTTAATTEEMMEENNTT OOFF SSIIGGNNIIFFIICCAANNTT AACCCCOOUUNNTTIINNGG PPOOLLIICCIIEESS ((ccoonnttiinnuueedd)) ((ii)) SSiiggnniiffiiccaanntt AAccccoouunnttiinngg JJuuddggeemmeennttss ((ccoonnttiinnuueedd)) ((iiii)) SSiiggnniiffiiccaanntt AAccccoouunnttiinngg EEssttiimmaatteess aanndd AAssssuummppttiioonnss ((ccoonnttiinnuueedd)) CCaappiittaalliissaattiioonn ooff OOppeerraattiinngg LLeeaasseess Determination of lease term In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee. Determination of incremental borrowing rate The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used. To determine the incremental borrowing rate, where possible recent third party financing received by the individual lessee is used as a starting point and adjusted to reflect changes in financing conditions since third party financing was received. If there was no recent third party financing agreement, a build-up approach is used that starts with a risk-free interest rate adjusted for credit risk for the lessee and any further relevant adjustments specific to the lease (such as term, country, currency and security). ((iiii)) SSiiggnniiffiiccaanntt AAccccoouunnttiinngg EEssttiimmaatteess aanndd AAssssuummppttiioonnss The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual Key Estimates – Impairment of Capitalised Exploration and Evaluation Expenditure The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. Key Estimates – 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. Fair values of share options are determined using the Black Scholes option pricing model. Should the assumptions used in these calculations differ, the amounts recognised could significantly change. Key Assumptions – Oracle Ridge Mine Acquisition: Valuation of derivative liability As part of the acquisition of the Oracle Ridge Copper Mine, a US$6,423,000 secured note was issued to Vincere Resource Holdings LLC. Up to US$3,000,000 of the secured note can be converted into shares of the Company upon the occurrence of various conversion trigger events at variable conversion prices. To derive the fair value of the embedded derivative liability component of the secured note, a number of assumptions have been made. These assumptions are outlined in note 13. Key Judgement – Environmental Issues Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation. At the current stage of the Group’s development and its current environmental impact, the Directors believe such treatment is reasonable and appropriate. Key Judgement – COVID-19 pandemic Judgement has been exercised in considering the impact of the COVID-19 pandemic on the Group based on known information. 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 COVID-19 pandemic. ((ww)) FFaaiirr VVaalluuee ooff AAsssseettss aanndd LLiiaabbiilliittiieess The Group is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy based on the lowest level of input that is significant to the entire fair value measurement, being Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant to fair value and therefore which category the asset or liability is placed in can be subjective. The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard. Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly unforced transaction between independent, knowledgeable and willing market participants at the measurement date and is based on the fair value hierarchy. reporting period are: ((xx)) GGoovveerrnnmmeenntt aassssiissttaannccee aanndd ggrraannttss Assistance received from the government by way of grant or other forms of assistance designed to provide an economic benefit to the Group, is presented in the statement of financial position as deferred income, in instances where the grant is related to assets. In all other cases, grant money is presented in the profit and loss as other income. Grants are recognised when there is reasonable assurance that conditions will be complied with and the grant will be received. ((yy)) EEaarrnniinnggss ppeerr sshhaarree Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent entity, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Page 32 Page 33 71 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 22.. RREELLAATTEEDD PPAARRTTYY TTRRAANNSSAACCTTIIOONNSS Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated. o o During the prior year, the Company entered into an unsecured loan agreement with a director related entity, Quartz Mountain Mining Pty Ltd (“Quartz Mountain”) as trustee for the Bass Family Trust. The principal of US$1,000,000 attracts interest at 2% per annum with the first three months being interest free. The loan’s initial maturity date of 27 October 2020 was subsequently deferred to 31 December 2021. During the reporting period, shareholders approved the issue to Quartz Mountain of 950,000 options, exercisable at 20 cents each on or before 1 July 2022, as satisfaction of interest owing to 31 December 2021. Interest expense of US$20,372 (A$28,640) was recognised during the reporting period. The Company has entered into a lease agreement with Elk Mountain Mining Limited, an entity associated with Mr Charles Bass, for the lease of the Company’s administration offices in Perth, Western Australia. Total lease repayments of $87,387 (2020: $85,847) were paid during the year, including interest of $19,064 (2020: $35,402) and lease principal repayments of $68,323 (2020: $50,445). 33.. RREEMMUUNNEERRAATTIIOONN OOFF AAUUDDIITTOORRSS Audit and review of the financial statements Taxation services Total YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ 2266,,330000 22,,446600 2288,,776600 YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ 29,000 5,620 34,620 The auditor of Eagle Mountain Mining Limited is William Buck Audit (WA) Pty Ltd. During the reporting period a related entity of William Buck Audit (WA) Pty Ltd provided non-audit services amounting to $2,460 (2020: $5,620) to companies in the Group. 44.. LLOOSSSS FFRROOMM OORRDDIINNAARRYY AACCTTIIVVIITTIIEESS Included in the loss before income tax are the following specific items of income/(expenses): Interest paid/payable on borrowings Interest paid/payable on leases Share based payments expense - employees Share based payments expense - suppliers Movements in employee leave liabilities Project assessment/due diligence costs YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ ((336633,,882222)) ((3300,,991144)) ((66,,445500,,006699)) ((11,,009944,,000000)) ((2277,,555588)) (196,556) (50,725) (248,723) - 2,257 -- (196,260) 72 Page 34 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 22.. RREELLAATTEEDD PPAARRTTYY TTRRAANNSSAACCTTIIOONNSS 55.. IINNCCOOMMEE TTAAXX EEXXPPEENNSSEE Transactions between related parties are on commercial terms and conditions, no more favourable than those available to other parties unless otherwise stated. o o During the prior year, the Company entered into an unsecured loan agreement with a director related entity, Quartz Mountain Mining Pty Ltd (“Quartz Mountain”) as trustee for the Bass Family Trust. The principal of US$1,000,000 attracts interest at 2% per annum with the first three months being interest free. The loan’s initial maturity date of 27 October 2020 was subsequently deferred to 31 December 2021. During the reporting period, shareholders approved the issue to Quartz Mountain of 950,000 options, exercisable at 20 cents each on or before 1 July 2022, as satisfaction of interest owing to 31 December 2021. Interest expense of US$20,372 (A$28,640) was recognised during the reporting period. The Company has entered into a lease agreement with Elk Mountain Mining Limited, an entity associated with Mr Charles Bass, for the lease of the Company’s administration offices in Perth, Western Australia. Total lease repayments of $87,387 (2020: $85,847) were paid during the year, including interest of $19,064 (2020: $35,402) and lease principal repayments of $68,323 (2020: $50,445). 33.. RREEMMUUNNEERRAATTIIOONN OOFF AAUUDDIITTOORRSS Audit and review of the financial statements Taxation services Total YYeeaarr eennddeedd 3300 JJuunnee 22002211 YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ 2266,,330000 22,,446600 2288,,776600 AA$$ 29,000 5,620 34,620 The auditor of Eagle Mountain Mining Limited is William Buck Audit (WA) Pty Ltd. During the reporting period a related entity of William Buck Audit (WA) Pty Ltd provided non-audit services amounting to $2,460 (2020: $5,620) to companies in the Group. 44.. LLOOSSSS FFRROOMM OORRDDIINNAARRYY AACCTTIIVVIITTIIEESS Included in the loss before income tax are the following specific items of income/(expenses): Interest paid/payable on borrowings Interest paid/payable on leases Share based payments expense - employees Share based payments expense - suppliers Movements in employee leave liabilities Project assessment/due diligence costs YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ ((336633,,882222)) ((3300,,991144)) ((66,,445500,,006699)) ((11,,009944,,000000)) ((2277,,555588)) (196,556) (50,725) (248,723) - 2,257 -- (196,260) YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ -- -- - - ((442244,,553399)) (466,738) 442244,,553399 466,738 -- - Current tax: Current income tax charge/(benefit) Current income tax benefit not recognised Deferred tax: Relating to origination and reversal of timing differences Deferred tax benefit not recognised (a) The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss before tax ((2211,,007700,,223399)) (4,368,936) The prima facie tax on loss from ordinary activities attributable to parent entity before income tax: Prima facie tax (benefit) on loss from ordinary activities before income tax at 30% (2020: 27.5%) Add/(Less) tax effect of: Non-assessable income Exploration costs not deducted for tax Non-deductible share based payments Share issue costs deducted Unrealised movement in fair value of financial liabilities Deferred tax asset not brought to account Income tax attributable to entity (b) Deferred tax – statement of financial position Liabilities Prepaid expenses Foreign exchange Assets Employee leave and other employee liabilities Right-of-use asset Revenue losses available to offset against future taxable income Deductible equity raising costs ((66,,332211,,007722)) (1,201,457) ((1155,,000000)) 22,,116699,,111188 22,,226633,,222211 ((9944,,448866)) 668833,,112233 11,,331155,,009966 -- 4422,,999999 4411,,222288 8844,,222277 4411,,883300 66,,221122 - 747,198 68,399 (79,584) (73,940) 539,384 - 25,165 - 25,165 16,204 11,,550022,,004466 1,140,039 330022,,551199 11,,885522,,660077 212,863 1,369,106 Net deferred tax asset not recognised 11,,776688,,338800 1,343,941 Page 34 Page 35 73 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 55.. IINNCCOOMMEE TTAAXX EEXXPPEENNSSEE ((ccoonnttiinnuueedd)) (c) Deferred tax – income statement Liabilities Prepaid expenses Foreign exchange Assets Accrued expenses Employee leave and other employee liabilities Right-of-use asset Deductible equity raising costs Increase in tax losses carried forward Deferred tax benefit movement not recognised YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ YYeeaarr eennddeedd 3300 JJuunnee 22002200 AA$$ ((1177,,883344)) ((4411,,222288)) -- 2255,,662266 66,,221122 8899,,775566 336622,,000077 442244,,553399 (15,362) - (11,941) (129) 34,068 460,102 466,738 The deferred tax benefit of tax losses not brought to account will only be obtained if: (i) The Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the tax losses to be realised; The Company continues to comply with the conditions for deductibility imposed by tax legislation; and No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses. (ii) (iii) 66.. CCAASSHH AANNDD CCAASSHH EEQQUUIIVVAALLEENNTTSS Cash at bank Deposits at call Total 3300 JJuunnee 22002211 AA$$ 99,,111199,,337711 -- 99,,111199,,337711 3300 JJuunnee 22002200 AA$$ 507,750 - 507,750 Included in cash at bank of $9,119,371 (2020: $507,750) are amounts held in US dollar denominated bank accounts equivalent to $5,306,502 (2020: $302,637). 77.. TTRRAADDEE AANNDD OOTTHHEERR RREECCEEIIVVAABBLLEESS GST receivable Accrued income and other receivables Prepaid expenses and deposits Total 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 44,,551111 115588,,229911 114433,,332299 330066,,113311 22,,996611 4433,,883399 9911,,550099 113388,,330099 The carrying amounts of trade and other receivables are assumed to approximate their fair values due to their short-term nature. 74 Page 36 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 55.. IINNCCOOMMEE TTAAXX EEXXPPEENNSSEE ((ccoonnttiinnuueedd)) 88.. EEXXPPLLOORRAATTIIOONN AANNDD EEVVAALLUUAATTIIOONN EEXXPPEENNDDIITTUURREE MMoovveemmeenntt dduurriinngg tthhee yyeeaarr Carrying value – beginning of year Recognised on acquisition of Oracle Ridge Copper Mine (note 25)1 Effect of movement in foreign exchange rates CCaarrrryyiinngg vvaalluuee –– eenndd ooff tthhee yyeeaarr 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 1100,,337788,,449966 -- ((990044,,221188)) 99,,447744,,227788 1,164,027 9,281,112 (66,643) 10,378,496 1Capitalised exploration asset acquisition costs recognised on acquisition of the Oracle Ridge Copper Mine. Exploration and evaluation expenditure is held by Wedgetail Operations LLC, which is a 100% (2020: 80%) owned US based subsidiary of Wedgetail Holdings LLC, a wholly owned subsidiary in the Group. Carried forward exploration and evaluation expenditure at 30 June 2021 represents the exploration asset acquisition costs recognised on the acquisition of Silver Mountain Mining Pty Ltd and the Oracle Ridge Copper Mine. The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective areas of interest. 99.. PPRROOPPEERRTTYY,, PPLLAANNTT AANNDD EEQQUUIIPPMMEENNTT Leasehold improve- ments A$ 357,712 Office equipment and furniture A$ 91,496 Field equipment and vehicles Mine plant and equipment Total A$ 300,380 A$ A$ 1,001,221 1,750,809 (5,303) (4,075) (24,753) (87,231) (121,362) - 13,544 18,964 89,319 121,827 Cost at the beginning of the year Effect of movements Additions foreign exchange Included in cash at bank of $9,119,371 (2020: $507,750) are amounts held in US dollar denominated bank accounts equivalent to $5,306,502 (2020: $302,637). CCoosstt aatt tthhee eenndd ooff tthhee yyeeaarr 335522,,440099 110000,,996655 229944,,559911 11,,000033,,330099 11,,775511,,227744 Accumulated depreciation at the beginning of the year Effect foreign of movements Depreciation charged in the year AAccccuummuullaatteedd ddeepprreecciiaattiioonn aatt tthhee eenndd ooff tthhee yyeeaarr exchange Net book value at the beginning of the year NNeett bbooookk vvaalluuee aatt tthhee eenndd ooff tthhee yyeeaarr (189,927) (67,838) (117,976) (109,434) (485,175) 3,775 3,061 9,146 10,767 26,749 (76,711) (12,034) (42,440) (183,712) (314,897) ((226622,,886633)) ((7766,,881111)) ((115511,,227700)) ((228822,,337799)) ((777733,,332233)) 167,785 23,658 182,404 891,787 1,265,634 8899,,554466 2244,,115544 114433,,332211 772200,,993300 997777,,995511 Assets with a net book value of A$28,440 (2020: A$41,539) held by Silver Mountain Mining Operations Inc. are pledged as security in respect of vehicle loan liabilities (refer note 13). Page 36 Page 37 75 (c) Deferred tax – income statement Liabilities Prepaid expenses Foreign exchange Assets Accrued expenses Employee leave and other employee liabilities Right-of-use asset Deductible equity raising costs Increase in tax losses carried forward Deferred tax benefit movement not recognised YYeeaarr eennddeedd 3300 YYeeaarr eennddeedd 3300 JJuunnee JJuunnee 22002211 AA$$ 22002200 AA$$ ((1177,,883344)) ((4411,,222288)) -- 2255,,662266 66,,221122 8899,,775566 336622,,000077 442244,,553399 (15,362) - (11,941) (129) 34,068 460,102 466,738 The deferred tax benefit of tax losses not brought to account will only be obtained if: (i) The Company derives future assessable income of a nature and an amount sufficient to enable the benefit from the tax losses to be realised; (ii) (iii) The Company continues to comply with the conditions for deductibility imposed by tax legislation; and No changes in tax legislation adversely affect the Company realising the benefit from the deduction of the losses. 66.. CCAASSHH AANNDD CCAASSHH EEQQUUIIVVAALLEENNTTSS Cash at bank Deposits at call Total 3300 JJuunnee 22002211 3300 JJuunnee 22002200 99,,111199,,337711 AA$$ -- 99,,111199,,337711 507,750 AA$$ - 507,750 77.. TTRRAADDEE AANNDD OOTTHHEERR RREECCEEIIVVAABBLLEESS GST receivable Accrued income and other receivables Prepaid expenses and deposits Total 3300 JJuunnee 22002211 3300 JJuunnee 22002200 AA$$ 44,,551111 115588,,229911 114433,,332299 330066,,113311 AA$$ 22,,996611 4433,,883399 9911,,550099 113388,,330099 The carrying amounts of trade and other receivables are assumed to approximate their fair values due to their short-term nature. EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1100.. RRIIGGHHTT--OOFF--UUSSEE AASSSSEETT Opening balance Right-of-use asset additions Depreciation expense Foreign currency differences Total 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 220088,,449933 443399,,995577 ((112299,,332244)) 1122,,007766 553311,,220022 322,131 - (121,386) 7,748 208,493 The Group leases land and buildings for its offices in Perth, Australia and Arizona, United States of America under agreements with terms of up to five years. 1111.. TTRRAADDEE AANNDD OOTTHHEERR PPAAYYAABBLLEESS CCuurrrreenntt Trade creditors and accrued expenses Other payables Payroll liabilities Total 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 885533,,225544 11,,779977 221188,,660033 11,,007733,,665544 30,508 70,478 78,458 179,444 The carrying amounts of trade and other payables are assumed to approximate their fair values due to their short- term nature. 1122.. LLEEAASSEE LLIIAABBIILLIITTIIEESS Current liability Non-current liability Total MMoovveemmeenntt iinn lleeaassee lliiaabbiilliittiieess Opening balance Increase in liability due to additional leases Principal repayments Foreign currency differences Lease liabilities at the end of the year 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 221111,,112277 334400,,778811 555511,,990088 222299,,221100 443399,,995577 ((112299,,001177)) 1111,,775588 555511,,990088 111,315 117,895 229,210 322,131 - (100,590) 7,669 229,210 At the beginning of and during the financial year, the Group did not have any short-term leases or leases of low value assets. 76 Page 38 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 The Group leases land and buildings for its offices in Perth, Australia and Arizona, United States of America under agreements with terms of up to five years. 1100.. RRIIGGHHTT--OOFF--UUSSEE AASSSSEETT Opening balance Right-of-use asset additions Depreciation expense Foreign currency differences Total 1111.. TTRRAADDEE AANNDD OOTTHHEERR PPAAYYAABBLLEESS Trade creditors and accrued expenses CCuurrrreenntt Other payables Payroll liabilities Total term nature. 1122.. LLEEAASSEE LLIIAABBIILLIITTIIEESS Current liability Non-current liability Total MMoovveemmeenntt iinn lleeaassee lliiaabbiilliittiieess Opening balance Increase in liability due to additional leases Principal repayments Foreign currency differences Lease liabilities at the end of the year 3300 JJuunnee 22002211 3300 JJuunnee 22002200 AA$$ AA$$ 220088,,449933 443399,,995577 ((112299,,332244)) 1122,,007766 553311,,220022 322,131 - (121,386) 7,748 208,493 3300 JJuunnee 22002211 3300 JJuunnee 22002200 AA$$ AA$$ 885533,,225544 11,,779977 221188,,660033 11,,007733,,665544 30,508 70,478 78,458 179,444 3300 JJuunnee 22002211 3300 JJuunnee 22002200 AA$$ AA$$ 221111,,112277 334400,,778811 555511,,990088 222299,,221100 443399,,995577 ((112299,,001177)) 1111,,775588 555511,,990088 111,315 117,895 229,210 322,131 - (100,590) 7,669 229,210 The carrying amounts of trade and other payables are assumed to approximate their fair values due to their short- At the beginning of and during the financial year, the Group did not have any short-term leases or leases of low value assets. 1133.. BBOORRRROOWWIINNGGSS CCuurrrreenntt Vehicle loan amounts due within one year 1 Loan – Paycheck Protection Program 2 Loans from related parties 3 NNoonn--CCuurrrreenntt Loan – derivative liability Loan – debt liability Subtotal loan 4 Vehicle loan amounts due after one year 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 1100,,115566 -- 11,,333300,,114411 11,,334400,,229977 33,,229977,,559911 77,,770055,,664433 1111,,000033,,223344 33,,447799 11,126 155,763 1,469,436 1,636,325 1,134,644 8,140,713 9,275,357 14,936 1111,,000066,,771133 9,290,293 1 Vehicle loan amounts are secured over assets with a net book value of A$28,440 (2020: A$41,539) held by Silver Mountain Mining Operations Inc. (refer note 9). 2 A wholly owned US subsidiary of the Company qualified for a US$106,900 loan under the US Government’s Paycheck Protection Program, an initiative intended to incentivise employers to retain workers during the COVID crisis. The loan attracted interest at a rate of 1% per annum. In December 2020, the Small Business Administration reviewed the Company’s eligibility for loan forgiveness and approved the forgiveness of entire loan balance. 3 The Company entered into an unsecured loan agreement with a Director-related entity, Quartz Mountain Mining Pty Ltd (“Quartz Mountain”) as trustee for the Bass Family Trust. The principal of US$1,000,000 attracts interest at 2% per annum with the first three months being interest free. The loan’s maturity date was deferred from 27 October 2020 to 31 December 2021. In September 2020, shareholders approved the issue of 950,000 options to Quartz Mountain as satisfaction of interest owing to 31 December 2021. The balance outstanding in borrowings at balance date represents the principal of US$1,000,000 translated at the exchange rate at the end of the reporting period. Subsequent to the end of the reporting period, Quartz Mountain agreed to the issue of 1,744,000 shares in lieu of repayment of the US$1,000,000 principal (refer note 19). 4 In November 2019, the Group acquired an 80% interest in the Oracle Ridge Copper Mine in Arizona in the United States of America, and during the current reporting period acquired the additional 20% interest. Under the terms of the purchase agreement, Wedgetail Operations LLC, a subsidiary in which the Company now holds a 100% interest, entered into a US$6,423,000 secured loan with Vincere Resource Holdings LLC. The loan is secured over all of the assets of Wedgetail Operations LLC, has a ten year term and accrues interest at 3.15% per annum for the first five years with no interest accruing thereafter. Under the terms of the agreement, the lender has the right to convert up to US$1,000,000 of the secured loan into ordinary shares of the Company upon each of the following three conversion trigger events: i. ii. iii. The completion of a preliminary feasibility study; A commitment is made to proceed with a bankable feasibility study; and A commitment is made to commission the financing of the project as evidenced by a feasibility study sufficient to obtain third party financing. The terms of the agreement prevent the issue of ordinary shares to the lender where the cumulative amount of shares held as a result of exercising the conversion rights would exceed 10% of the Company’s ordinary shares on issue. Page 38 Page 39 77 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1133.. BBOORRRROOWWIINNGGSS ((ccoonnttiinnuueedd)) The conversion price of each conversion right held by the lender is an amount equal to a 20% discount to the 30 day volume weighted average price of the Company’s shares for the 30 days immediately after the date of public announcement of the applicable conversion trigger event. The face value of US$6,423,000 is deemed to comprise of the value of the derivative liability (or conversion right), with the residual being the debt liability component. The debt liability component of the secured loan is amortised at each reporting period using the effective interest method. The derivative liability component is revalued at each reporting date over the life of the secured loan. Fair Value Measurement The derivative liability component of the US$6,423,000 loan is measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement. Refer to accounting policy note 1(x) for a description of the three levels. The derivative liability has been categorised as Level 3 in the fair value hierarchy and the fair value at the end of the reporting period was A$3,297,591. There were no transfers between levels during the financial year. An independent valuation of the derivative liability has been undertaken at 30 June 2021 using a Monte Carlo simulation model with the following assumptions: Assumptions Valuation date Spot price (A$) 1 Exercise price 2 Risk free rate Expected future volatility Expiry date 3 Conversion Event 1 30 June 2021 $1.000 $0.814 0.20% 100% 25 November 2023 Conversion Event 2 30 June 2021 $1.000 $0.820 0.77% 100% 25 November 2024 Conversion Event 3 30 June 2021 $1.000 $0.823 0.77% 100% 25 November 2025 1 The share price of an EM2 share traded on the ASX to market close on 30 June 2021. 2 Exercise price is equal to a 20% discount to the estimated volume weighted average price of the Company’s shares for the 30 days immediately after the public announcement of the applicable conversion trigger event. 3 The expiry date is the estimated date on which the conversion right will be exercised, for each tranche of conversion rights and is estimated from the date of the agreement. Based on the above assumptions, the revaluation of the derivative liability resulted in a fair value loss of US$1,700,423 (A$2,277,075) which has been recognised through the profit and loss. In relation to the restriction of conversion rights up to 10% of the ordinary shares on issue, the valuation is based on the number of shares on issue at valuation date. Reconciliation of movement in Level 3 derivative liability MMoovveemmeenntt dduurriinngg tthhee yyeeaarr Balance at the start of the financial year Fair value on acquisition Loss/(gain) recognised in profit or loss Effect of movement in foreign exchange rates BBaallaannccee aatt tthhee eenndd ooff tthhee ffiinnaanncciiaall yyeeaarr 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 11,,113344,,664444 -- 22,,227777,,007755 ((111144,,112288)) 33,,229977,,559911 - 1,365,785 (268,872) 37,731 1,134,644 78 Page 40 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1133.. BBOORRRROOWWIINNGGSS ((ccoonnttiinnuueedd)) 1133.. BBOORRRROOWWIINNGGSS ((ccoonnttiinnuueedd)) The conversion price of each conversion right held by the lender is an amount equal to a 20% discount to the 30 Unobservable inputs for fair value measurement day volume weighted average price of the Company’s shares for the 30 days immediately after the date of public announcement of the applicable conversion trigger event. The face value of US$6,423,000 is deemed to comprise of the value of the derivative liability (or conversion right), with the residual being the debt liability component. The debt liability component of the secured loan is amortised at each reporting period using the effective interest method. The derivative liability component is revalued at each reporting date over the life of the secured loan. Fair Value Measurement The derivative liability component of the US$6,423,000 loan is measured or disclosed at fair value, using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement. Refer to accounting policy note 1(x) for a description of the three levels. The derivative liability has been categorised as Level 3 in the fair value hierarchy and the fair value at the end of the reporting period was A$3,297,591. There were no transfers between levels during the financial year. An independent valuation of the derivative liability has been undertaken at 30 June 2021 using a Monte Carlo simulation model with the following assumptions: Assumptions Conversion Event 1 Conversion Event 2 Conversion Event 3 30 June 2021 30 June 2021 30 June 2021 Valuation date Spot price (A$) 1 Exercise price 2 Risk free rate Expected future volatility Expiry date 3 $1.000 $0.814 0.20% 100% $1.000 $0.820 0.77% 100% $1.000 $0.823 0.77% 100% 25 November 2023 25 November 2024 25 November 2025 1 The share price of an EM2 share traded on the ASX to market close on 30 June 2021. 2 Exercise price is equal to a 20% discount to the estimated volume weighted average price of the Company’s shares for the 30 days immediately after the public announcement of the applicable conversion trigger event. 3 The expiry date is the estimated date on which the conversion right will be exercised, for each tranche of conversion rights and is estimated from the date of the agreement. Based on the above assumptions, the revaluation of the derivative liability resulted in a fair value loss of US$1,700,423 (A$2,277,075) which has been recognised through the profit and loss. In relation to the restriction of conversion rights up to 10% of the ordinary shares on issue, the valuation is based on the number of shares on issue at valuation date. Reconciliation of movement in Level 3 derivative liability 3300 JJuunnee 22002211 3300 JJuunnee 22002200 MMoovveemmeenntt dduurriinngg tthhee yyeeaarr Balance at the start of the financial year Fair value on acquisition Loss/(gain) recognised in profit or loss Effect of movement in foreign exchange rates BBaallaannccee aatt tthhee eenndd ooff tthhee ffiinnaanncciiaall yyeeaarr AA$$ -- 11,,113344,,664444 22,,227777,,007755 ((111144,,112288)) 33,,229977,,559911 AA$$ - 1,365,785 (268,872) 37,731 1,134,644 In determining the fair value measurement of the derivative liability, certain observable inputs such as the share price and exercise price of the conversion rights are used, together with unobservable inputs. The unobservable inputs used in the valuation of the derivative liability are deemed to be: 1. 2. Issued capital – as the conversion rights are restricted to not more than 10% of the ordinary shares on issue, any increase in issued shares may impact the number of conversion rights that can be exercised; and Timing of the three milestones to be achieved (conversion trigger events). The Level 3 unobservable inputs and sensitivity are as follows: Unobservable Input Change in input Shares on Issue +15% Date of conversion trigger event -6 months Date of conversion trigger event +6 months Sensitivity A 15% increase in share capital will result in no increase in fair value A decrease of 6 months in achieving the first and subsequent milestones will result in a decrease in fair value of approximately $176,000 An increase of 6 months in achieving the first and subsequent milestones will result in an increase in fair value of approximately $155,000 1144.. OOPPTTIIOONNSS AANNDD EEQQUUIITTYY BBAASSEEDD PPAAYYMMEENNTTSS OOppttiioonnss –– RReeccoonncciilliiaattiioonn ooff MMoovveemmeennttss Options on issue at the beginning of the year Broker options issued1 Options issued to employees2 Options issued to Directors Options issued to Quartz Mountain Mining Pty Ltd3 Options issued pursuant to corporate advisory mandate Options cancelled on expiry of offer options – entitlement offer4 Options cancelled on expiry – employee options Options exercised Options on issue at the end of the year 3300 JJuunnee 22002211 NNoo.. 2266,,440099,,771166 33,,884466,,115544 66,,882255,,000000 66,,337755,,000000 995500,,000000 22,,000000,,000000 -- -- ((1166,,995533,,009900)) 2299,,445522,,778800 3300 JJuunnee 22002200 NNoo.. 23,801,315 - 3,950,000 - - - (26,599) (1,315,000) - 26,409,716 1 Unlisted broker option issued pursuant to a capital raising mandate. 2 Unlisted options issued to employees of the Company pursuant to the Company’s employee incentive plan. 3 Unlisted options issued in lieu of interest payable on a loan from Quartz Mountain Mining Pty Ltd. 4 The Company issued options at a price of 1 cent per option pursuant to an entitlement offer exercisable at 40 cents each expiring 15 December 2018. Upon exercise into shares the holder received a further option for each share exercised at 80 cents each and expiring 12 months from issue. Page 40 Page 41 79 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1144.. OOPPTTIIOONNSS AANNDD EEQQUUIITTYY BBAASSEEDD PPAAYYMMEENNTTSS ((ccoonnttiinnuueedd)) OOppttiioonn CCaappiittaall –– RReeccoonncciilliiaattiioonn ooff MMoovveemmeennttss Balance at the beginning of the year Movements during the year 3300 JJuunnee 22002211 AA$$ 44,,550000 -- 44,,550000 Options outstanding at the beginning of the year Options granted during the year Options exercised during the year Options cancelled and expired unexercised during the year Options outstanding at 30 June 22002211 WWeeiigghhtteedd AAvveerraaggee EExxeerrcciissee PPrriiccee ((cceennttss)) 2233..55 5511..66 2255..33 -- 4411..66 NNoo.. 2266,,440099,,771166 1199,,999966,,115544 ((1166,,995533,,009900)) -- 2299,,445522,,778800 No. 23,801,315 3,950,000 - (1,341,599) 26,409,716 30 June 2020 A$ 44,,550000 -- 44,,550000 2020 Weighted Average Exercise Price (cents) 23.8 20.6 - 21.2 23.5 Basis and Assumptions Used in the Valuation of Options The options issued during the year were valued using the Black Scholes option valuation methodology, using the following inputs: DDaattee ggrraanntteedd 23 July 2020 28 July 2020 28 July 2020 25 September 2020 18 February 2021 22 February 2021 30 April 2021 5 May 2021 14 May 2021 NNuummbbeerr ooff ooppttiioonnss ggrraanntteedd 1,325,000 1,923,077 1,923,077 1,325,000 2,500,000 2,800,000 6,000,000 2,000,000 200,000 EExxeerrcciissee pprriiccee ((cceennttss)) 20 20 30 20 52 52 55 125 140 EExxppiirryy ddaattee 1 July 2022 30 June 2021 1 July 2022 1 July 2022 22 February 2024 1 July 2024 1 July 2024 7 May 2023 1 July 2024 RRiisskk ffrreeee iinntteerreesstt rraattee uusseedd 0.26% 0.26% 0.26% 0.21% 0.11% 0.11% 0.11% 0.07% 0.10% VVoollaattiilliittyy aapppplliieedd 102% 102% 102% 97% 103% 103% 103% 103% 103% VVaalluuee ooff OOppttiioonnss $82,415 $124,615 $143,462 $210,544 $354,350 $746,480 $5,856,600 $1,094,000 $105,900 Historical volatility over the previous 12 months has been used as the expected share price volatility. An expense of $7,498,742 has been recognised through the consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2021 (2020: $89,106) in respect of the vesting of options during the year. Weighted Average Contractual Life The weighted average contractual life for unexercised options is 38.2 months (2020: 19.2 months). 80 Page 42 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1144.. OOPPTTIIOONNSS AANNDD EEQQUUIITTYY BBAASSEEDD PPAAYYMMEENNTTSS ((ccoonnttiinnuueedd)) 1144.. OOPPTTIIOONNSS AANNDD EEQQUUIITTYY BBAASSEEDD PPAAYYMMEENNTTSS ((ccoonnttiinnuueedd)) OOppttiioonn CCaappiittaall –– RReeccoonncciilliiaattiioonn ooff MMoovveemmeennttss 3300 JJuunnee 30 June Balance at the beginning of the year Movements during the year 22002211 WWeeiigghhtteedd AAvveerraaggee EExxeerrcciissee PPrriiccee Exercise Price NNoo.. ((cceennttss)) No. (cents) 22002211 AA$$ 44,,550000 -- 44,,550000 2020 A$ 44,,550000 -- 44,,550000 2020 Weighted Average 23.8 20.6 - 21.2 23.5 Options outstanding at the beginning of the year Options granted during the year Options exercised during the year Options cancelled and expired unexercised during the year Options outstanding at 30 June 2266,,440099,,771166 1199,,999966,,115544 ((1166,,995533,,009900)) -- 2299,,445522,,778800 2233..55 5511..66 2255..33 -- 4411..66 23,801,315 3,950,000 - (1,341,599) 26,409,716 Basis and Assumptions Used in the Valuation of Options The options issued during the year were valued using the Black Scholes option valuation methodology, using the following inputs: NNuummbbeerr ooff EExxeerrcciissee DDaattee ggrraanntteedd 23 July 2020 28 July 2020 28 July 2020 ooppttiioonnss ggrraanntteedd 1,325,000 1,923,077 1,923,077 25 September 2020 1,325,000 18 February 2021 2,500,000 22 February 2021 2,800,000 30 April 2021 5 May 2021 14 May 2021 6,000,000 2,000,000 200,000 pprriiccee ((cceennttss)) 20 20 30 20 52 52 55 125 140 RRiisskk ffrreeee iinntteerreesstt rraattee uusseedd VVoollaattiilliittyy aapppplliieedd EExxppiirryy ddaattee 1 July 2022 30 June 2021 1 July 2022 1 July 2022 1 July 2024 1 July 2024 7 May 2023 1 July 2024 22 February 2024 0.26% 0.26% 0.26% 0.21% 0.11% 0.11% 0.11% 0.07% 0.10% VVaalluuee ooff OOppttiioonnss $82,415 $124,615 $143,462 $210,544 $354,350 $746,480 $5,856,600 $1,094,000 $105,900 102% 102% 102% 97% 103% 103% 103% 103% 103% Historical volatility over the previous 12 months has been used as the expected share price volatility. An expense of $7,498,742 has been recognised through the consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2021 (2020: $89,106) in respect of the vesting of options during the year. Weighted Average Contractual Life The weighted average contractual life for unexercised options is 38.2 months (2020: 19.2 months). PPeerrffoorrmmaannccee RRiigghhttss During the year ended 30 June 2021, 60,000 performance rights vested and 210,000 performance rights were exercised. No performance rights were issued or cancelled during the financial year. An expense of $4,327 has been recognised for the year ended 30 June 2021 (2020: $19,252) in respect of the vesting of performance rights during the year. 1155.. IISSSSUUEEDD CCAAPPIITTAALL SShhaarreess Balance at the beginning of the year Shares issued on exercise of options Shares issued on exercise of performance rights Entitlement issue shares issued Placement shares issued Placement shares issued Placement shares issued Shares issued for acquisition Employee incentive shares issued Less: share issue costs – cash * Balance at 30 June YYeeaarr eennddeedd 3300 JJuunnee 22002211 Year ended 30 June 2020 IIssssuuee pprriiccee $0.20 $0.30 SShhaarreess AA$$ Shares A$ 111155,,990011,,004455 1155,,332222,,226655 103,816,039 13,579,949 1166,,995533,,009900 55,,001111,,000099 - - - 221100,,000000 3388,,445500 85,000 15,182 $0.15 $0.13 $0.30 $0.35 $1.09 $0.41 - -- -- 12,000,006 1,800,001 2233,,007766,,992233 33,,000000,,000000 55,,000000,,000000 11,,550000,,000000 3311,,442288,,557722 1111,,000000,,000000 1100,,000000,,000000 1100,,990000,,000000 110000,,000000 4411,,000000 -- ((11,,221111,,113311)) - - - - - - - - - - - (72,867) 220022,,666699,,663300 4455,,660011 559933 115,901,045 15,322,265 * No deferred tax asset has been recognised in respect of the share issue costs as at the date of the financial report as it is not probable that it will be realised (refer note 5). The Company is a public company limited by shares. The Company was incorporated in Perth, Western Australia. The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid on the shares respectively held by them. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares have no par value. There is no limit to the authorised share capital of the Company. 1166.. RREESSEERRVVEESS Foreign currency translation reserve Share based payments reserve Common control reserve 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 227722,,220088 390,899 88,,226688,,660088 1,105,348 ((33,,001144,,227766)) (3,014,276) 55,,552266,,554400 (1,518,029) Page 42 Page 43 81 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1166.. RREESSEERRVVEESS ((ccoonnttiinnuueedd)) Movements in reserves: aa)) FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn rreesseerrvvee Balance at the beginning of the year Exchange (loss)/gain for the year Non-controlling interest in translation differences Balance at the end of the year YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ Year ended 30 June 2020 A$ 339900,,889999 ((110000,,441188)) ((1188,,227733)) 227722,,220088 297,069 103,077 (9,247) 390,899 FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn rreesseerrvvee The foreign currency translation reserve records unrealised exchange gains and losses on translation of controlled entities accounts during the year. bb)) SShhaarree bbaasseedd ppaayymmeennttss rreesseerrvvee Balance at the beginning of the year Fair value vesting expense of options and performance rights Fair value of options/performance rights exercised during the year Fair value of options cancelled during the year Balance at the end of the year YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ Year ended 30 June 2020 A$ 11,,110055,,334488 77,,992222,,110011 ((775588,,884411)) -- 888,625 248,723 (15,182) (16,818) 88,,226688,,660088 1,105,348 SShhaarree bbaasseedd ppaayymmeennttss rreesseerrvvee The share based payments reserve has been used to recognise the fair value of options and performance rights issued and vested but not exercised as at the end of the reporting year. cc)) CCoommmmoonn ccoonnttrrooll rreesseerrvvee Balance at the beginning of the year Common control transactions during the year Balance at the end of the year YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ Year ended 30 June 2020 A$ ((33,,001144,,227766)) (3,014,276) -- - ((33,,001144,,227766)) (3,014,276) CCoommmmoonn ccoonnttrrooll rreesseerrvvee The amount recognised in the common control reserve represents the excess in fair value consideration given, over the net assets acquired, on the acquisition of Silver Mountain Mining Pty Ltd from Silver Mountain Mining Nominees Pty Ltd on 7 December 2017. 82 Page 44 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1166.. RREESSEERRVVEESS ((ccoonnttiinnuueedd)) Movements in reserves: aa)) FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn rreesseerrvvee Balance at the beginning of the year Exchange (loss)/gain for the year Non-controlling interest in translation differences Balance at the end of the year YYeeaarr eennddeedd Year ended 3300 JJuunnee 22002211 30 June 2020 AA$$ A$ 339900,,889999 ((110000,,441188)) ((1188,,227733)) 227722,,220088 297,069 103,077 (9,247) 390,899 YYeeaarr eennddeedd Year ended 3300 JJuunnee 22002211 30 June 2020 AA$$ A$ 11,,110055,,334488 77,,992222,,110011 ((775588,,884411)) -- 888,625 248,723 (15,182) (16,818) 88,,226688,,660088 1,105,348 YYeeaarr eennddeedd Year ended 3300 JJuunnee 22002211 30 June 2020 AA$$ -- ((33,,001144,,227766)) (3,014,276) ((33,,001144,,227766)) (3,014,276) A$ - FFoorreeiiggnn ccuurrrreennccyy ttrraannssllaattiioonn rreesseerrvvee controlled entities accounts during the year. The foreign currency translation reserve records unrealised exchange gains and losses on translation of bb)) SShhaarree bbaasseedd ppaayymmeennttss rreesseerrvvee Balance at the beginning of the year Fair value vesting expense of options and performance rights Fair value of options/performance rights exercised during the year Fair value of options cancelled during the year Balance at the end of the year SShhaarree bbaasseedd ppaayymmeennttss rreesseerrvvee The share based payments reserve has been used to recognise the fair value of options and performance rights issued and vested but not exercised as at the end of the reporting year. cc)) CCoommmmoonn ccoonnttrrooll rreesseerrvvee Balance at the beginning of the year Common control transactions during the year Balance at the end of the year CCoommmmoonn ccoonnttrrooll rreesseerrvvee The amount recognised in the common control reserve represents the excess in fair value consideration given, over the net assets acquired, on the acquisition of Silver Mountain Mining Pty Ltd from Silver Mountain Mining Nominees Pty Ltd on 7 December 2017. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1177.. CCAASSHH FFLLOOWW IINNFFOORRMMAATTIIOONN RReeccoonncciilliiaattiioonn ooff ccaasshh fflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess wwiitthh lloossss aafftteerr iinnccoommee ttaaxx Loss after income tax NNoonn--ccaasshh iitteemmss iinncclluuddeedd iinn pprrooffiitt oorr lloossss Depreciation expense Gains on foreign exchange Fair value loss/(gain) on derivative liability Share based payment expense Forgiveness of Paycheck Protection Program loan Accrued interest expense CChhaannggeess iinn aasssseettss aanndd lliiaabbiilliittiieess:: (Increase)/decrease in receivables (Increase)/decrease in prepayments (Decrease)/increase in employee leave liabilities (Decrease)/increase in accounts payable and accruals YYeeaarr eennddeedd 3300 JJuunnee 22002211 AA$$ Year ended 30 June 2020 A$ ((2211,,007700,,223399)) (4,368,936) 444444,,222200 ((224466,,002255)) 22,,227777,,007755 77,,554444,,006699 ((114477,,992211)) 336611,,444499 ((111166,,000022)) ((5511,,882200)) 5566,,005533 11,,004411,,336633 387,772 (2,390) (268,872) 248,743 - 195,370 (27,822) (55,861) (468) 8,273 NNeett ccaasshh oouuttfflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess ((99,,990077,,777788)) (3,884,191) 1188.. SSEEGGMMEENNTT IINNFFOORRMMAATTIIOONN AASB 8 Operating Segments requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Group operates in one segment, being exploration for mineral resources. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the Group. Following the acquisition of Silver Mountain Mining Pty Ltd on 7 December 2017, and the Oracle Ridge Copper Mine in November 2019, the Group operates in Australia and United States of America. Information regarding the non-current assets by geographical location is reported below. No segment information is provided for United States of America in relation to revenue and profit or loss for the year ended 30 June 2021 or year ended 30 June 2020. Reconciliation of Non-Current Assets by Geographical Location Australia United States of America 3300 JJuunnee 22002211 AA$$ 3300 JJuunnee 22002200 AA$$ 220022,,991111 329,533 1111,,004400,,997799 11,656,035 1111,,224433,,889900 11,985,568 Page 44 Page 45 83 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1199.. SSUUBBSSEEQQUUEENNTT EEVVEENNTTSS In August 2021, Quartz Mountain Mining Pty Ltd as trustee for the Bass Family Trust, an entity associated with Mr Charles Bass, has agreed to accept 1,744,000 shares in the Company in lieu of repayment of a US$1,000,000 loan which was due to be repaid by 31 December 2021. The issue of shares is subject to shareholder approval and the effective issue price of 78.4 cents represents a premium to the closing price on 25 August 2021 and a 10% premium to the 20 day VWAP of the Company’s shares. The impact of the COVID-19 pandemic is ongoing. The situation is dependent on measures imposed by the Australian Government, United States Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided. It is not practicable to estimate the potential impact, positive or negative, after the reporting date. Other than as stated above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. 2200.. KKEEYY MMAANNAAGGEEMMEENNTT PPEERRSSOONNNNEELL (a) Directors and Key Management Personnel The following persons were Directors or Key Management Personnel of Eagle Mountain Mining Limited during the financial year: (i) (ii) (iii) (iv) Chairman – Non-Executive Rick Crabb Executive Director Charles Bass, Managing Director Non-Executive Director Roger Port Brett Rowe (as Alternate Director to Charles Bass) Chief Executive Officer Timothy Mason There were no other persons employed by or contracted to the Company during the financial year, having responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly. (b) Key Management Personnel Compensation A summary of total compensation paid to Key Management Personnel is as follows: Total short term employment benefits Total equity-based payments Total post-employment benefits 3300 JJuunnee 22002211 AA$$ 440099,,116666 66,,000011,,552233 3333,,333333 30 June 2020 A$ 211,159 59,240 19,142 66,,444444,,002222 289,541 84 Page 46 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 1199.. SSUUBBSSEEQQUUEENNTT EEVVEENNTTSS 2211.. CCOONNTTIINNGGEENNTT AASSSSEETTSS AANNDD LLIIAABBIILLIITTIIEESS In August 2021, Quartz Mountain Mining Pty Ltd as trustee for the Bass Family Trust, an entity associated with Mr Charles Bass, has agreed to accept 1,744,000 shares in the Company in lieu of repayment of a US$1,000,000 loan which was due to be repaid by 31 December 2021. The issue of shares is subject to shareholder approval and the effective issue price of 78.4 cents represents a premium to the closing price on 25 August 2021 and a 10% premium to the 20 day VWAP of the Company’s shares. The impact of the COVID-19 pandemic is ongoing. The situation is dependent on measures imposed by the Australian Government, United States Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided. It is not practicable to estimate the potential impact, positive or negative, after the reporting date. Other than as stated above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years. The following persons were Directors or Key Management Personnel of Eagle Mountain Mining Limited during the 2200.. KKEEYY MMAANNAAGGEEMMEENNTT PPEERRSSOONNNNEELL (a) Directors and Key Management Personnel financial year: (i) Chairman – Non-Executive Rick Crabb (ii) Executive Director Charles Bass, Managing Director (iii) Non-Executive Director Roger Port (iv) Chief Executive Officer Timothy Mason Brett Rowe (as Alternate Director to Charles Bass) There were no other persons employed by or contracted to the Company during the financial year, having responsibility for planning, directing and controlling the activities of the Company, either directly or indirectly. (b) Key Management Personnel Compensation A summary of total compensation paid to Key Management Personnel is as follows: The Group has an exploration service agreement with Dragon’s Deep Exploration, Inc., an Arizona corporation (“Dragon”). Included in this agreement is a performance bonus payable to Dragon consisting of cash together with shares in Eagle Mountain Mining Limited (shares at market price, escrowed as required by the appropriate exchange) within 10 days of the events detailed below: CCrriitteerriiaa ((SSppeecciiffiiccaallllyy rreellaatteedd ttoo tthhee SSiillvveerr MMoouunnttaaiinn PPrroojjeecctt)) Minimum of 24 holes completed by the Group with 70% success within 24 months of first drilling1 Commencement of a preliminary feasibility study in respect of any land covered by any mining claims or permits held by Silver Mountain Mining LLC and located in Arizona, USA.2 CCaasshh BBoonnuuss SShhaarreess ooff VVaalluuee US$50,000 US$150,000 US$100,000 US$200,000 1. 2. Success defined as a minimum 40 gram-metre zone (Au equivalent) within each drill hole for 70% of non- condemnation holes drilled. The milestone satisfaction date is the date on which the Company announces to the Australian Securities Exchange that it has commenced a pre-feasibility study on the relevant mining claims or permits. “Pre- feasibility Study” is as defined in the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 Edition). Phase 1 drilling commenced at the Silver Mountain Project on 1 October 2018 and ended in early June 2019. On this basis, the first criterion listed above has not been met. The Group does not currently foresee a preliminary feasibility study covering the claims held by Silver Mountain Mining LLC commencing in the near future. Other than the above, the Group has no contingent assets or liabilities outstanding at the end of the year. 2222.. CCOOMMMMIITTMMEENNTTSS ((aa)) EExxpplloorraattiioonn EExxppeennddiittuurree In order to maintain the current tenure status of its exploration assets, the Group has certain obligations and minimum expenditure requirements with respect to unpatented claims and Arizona state exploration permits located in Arizona in the United States of America, as follows: Within 1 year After 1 year but not more than 5 years Total 3300 JJuunnee 22002211 AA$$ 449955,,445588 11,,888866,,006600 22,,338811,,551188 3300 JJuunnee 22002200 AA$$ 464,192 1,943,611 2,407,803 Total short term employment benefits Total equity-based payments Total post-employment benefits 3300 JJuunnee 22002211 30 June 2020 AA$$ 440099,,116666 66,,000011,,552233 3333,,333333 66,,444444,,002222 A$ 211,159 59,240 19,142 289,541 ((bb)) ((cc)) AAsssseett AAccqquuiissiittiioonn The Group has no commitments for asset acquisitions at 30 June 2021 or 30 June 2020. OOtthheerr CCoommmmiittmmeennttss A 30-day notice period is required under the drilling contract with Boart Longyear during which time Boart Longyear is entitled to claim standby rates. The estimated commitment, should the contract be terminated, is approximately US$500,000. Page 46 Page 47 85 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2222.. CCOOMMMMIITTMMEENNTTSS ((ccoonnttiinnuueedd)) ((cc)) OOtthheerr CCoommmmiittmmeennttss ((ccoonnttiinnuueedd)) In April 2021 the Company acquired the remaining 20% of the issued capital of Wedgetail Operations LLC (“WTO”) (refer Note 25). Having completed that acquisition and with the Group considering requirements for development it notes the existence of a Reversionary Interest in the Mineral Rights held by Marble Mountain Ventures LLC (MMV) over certain of the Patented Claims covering the mine and also related to surface access rights as noted in an Industrial Property Lease agreement (Lease Agreement). In order to maintain access to the surface infrastructure and undertake the current drill program the Company makes lease payments of approximately US$160,000 per annum to MMV pursuant to the Lease Agreement (refer Note 22(a)) together with additional access payments for drilling. The Company was of the view that the Reversionary Interest (being the reversion back to MMV of all rights to minerals in the mine area) may have been extinguished through the Receivership process which took place. However recent legal advice has confirmed that the Reversionary Interest is likely to have survived. The Reversionary Interest is provided for in a deed dated 18 February 2010, with reversion set to occur on 18 February 2025, unless an Extension Option is exercised by WTO. In order to exercise the Extension Option WTO needs to provide 30 days written Notice; make an Extension Payment in the order of US$3 million adjusted for CPI; and remain in compliance with various related agreements. Should WTO agree to exercise the Extension Option, WTO’s interest in the mineral rights related to certain of the Patented Claims will be extended to 18 February 2040. 2233.. FFIINNAANNCCIIAALL RRIISSKK MMAANNAAGGEEMMEENNTT The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents information about the Company’s exposure to the specific risks, and the policies and processes for measuring and managing those risks. The Board of Directors has the overall responsibility for the risk management framework and has adopted a Risk Management Policy. ((aa)) CCrreeddiitt RRiisskk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from transactions with customers and investments. Trade and Other Receivables The nature of the business activity of the Group does not result in trading receivables. The receivables that the Group does experience through its normal course of business are short term and the most significant recurring by quantity is receivable from the Australian Taxation Office. The risk of non-recovery of receivables from this source is considered to be negligible. Cash Deposits The Directors believe any risk associated with the use of predominantly one bank is addressed through the use of at least an A-rated bank as a primary banker. Except for this matter the Group currently has no significant concentrations of credit risk. ((bb)) LLiiqquuiiddiittyy RRiisskk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is cognisant of the future demands for liquid finance resources to finance the Company’s current and future operations, and consideration is given to the liquid assets available to the Company before commitment is made to future expenditure or investment. 86 Page 48 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2222.. CCOOMMMMIITTMMEENNTTSS ((ccoonnttiinnuueedd)) ((cc)) OOtthheerr CCoommmmiittmmeennttss ((ccoonnttiinnuueedd)) In April 2021 the Company acquired the remaining 20% of the issued capital of Wedgetail Operations LLC (“WTO”) (refer Note 25). Having completed that acquisition and with the Group considering requirements for development it notes the existence of a Reversionary Interest in the Mineral Rights held by Marble Mountain Ventures LLC (MMV) over certain of the Patented Claims covering the mine and also related to surface access rights as noted in an Industrial Property Lease agreement (Lease Agreement). In order to maintain access to the surface infrastructure and undertake the current drill program the Company makes lease payments of approximately US$160,000 per annum to MMV pursuant to the Lease Agreement (refer Note 22(a)) together with additional access payments for drilling. The Company was of the view that the Reversionary Interest (being the reversion back to MMV of all rights to minerals in the mine area) may have been extinguished through the Receivership process which took place. However recent legal advice has confirmed that the Reversionary Interest is likely to have survived. The Reversionary Interest is provided for in a deed dated 18 February 2010, with reversion set to occur on 18 February 2025, unless an Extension Option is exercised by WTO. In order to exercise the Extension Option WTO needs to provide 30 days written Notice; make an Extension Payment in the order of US$3 million adjusted for CPI; and remain in compliance with various related agreements. Should WTO agree to exercise the Extension Option, WTO’s interest in the mineral rights related to certain of the Patented Claims The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents information about the Company’s exposure to the specific risks, and the policies and processes for measuring and managing those risks. The Board of Directors has the overall responsibility for the risk management framework will be extended to 18 February 2040. 2233.. FFIINNAANNCCIIAALL RRIISSKK MMAANNAAGGEEMMEENNTT and has adopted a Risk Management Policy. ((aa)) CCrreeddiitt RRiisskk investments. Trade and Other Receivables The nature of the business activity of the Group does not result in trading receivables. The receivables that the Group does experience through its normal course of business are short term and the most significant recurring by quantity is receivable from the Australian Taxation Office. The risk of non-recovery of receivables from this source is considered to be negligible. Cash Deposits The Directors believe any risk associated with the use of predominantly one bank is addressed through the use of at least an A-rated bank as a primary banker. Except for this matter the Group currently has no significant concentrations of credit risk. ((bb)) LLiiqquuiiddiittyy RRiisskk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is cognisant of the future demands for liquid finance resources to finance the Company’s current and future operations, and consideration is given to the liquid assets available to the Company before commitment is made to future expenditure or investment. 2233.. FFIINNAANNCCIIAALL RRIISSKK MMAANNAAGGEEMMEENNTT ((ccoonnttiinnuueedd)) ((cc)) MMaarrkkeett RRiisskk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising any return. Interest Rate Risk The Group has cash assets which may be susceptible to fluctuations in changes in interest rates. Whilst the Group requires the cash assets to be sufficiently liquid to cover any planned or unforeseen future expenditure, which prevents the cash assets being committed to long term fixed interest arrangements, the Group does mitigate potential interest rate risk by entering into short to medium term fixed interest investments. Equity Risk The Group has no direct exposure to equity risk. Foreign Exchange Risk The Group holds a portion of its cash assets in US dollar denominated bank accounts and bank deposits. The Group is also significantly exposed to foreign exchange risk through transactions and arrangements in respect of its US based operations. Other than the above, the Group does not have any direct contact with foreign exchange fluctuations other than their effect on the general economy. The Group seeks to mitigate foreign exchange risk by considering capital requirements and foreign exchange rates when undertaking treasury transactions, such as utilising US dollar denominated term deposits. Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from transactions with customers and 2244.. FFIINNAANNCCIIAALL IINNSSTTRRUUMMEENNTTSS CCrreeddiitt RRiisskk The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible level of credit risk, and as such no disclosures are made (refer note 23(a)). IImmppaaiirrmmeenntt LLoosssseess The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting date. No impairment expense or reversal of impairment charge has occurred during the financial year. IInntteerreesstt RRaattee RRiisskk At the reporting date the interest profile of the Group’s interest-bearing financial instruments was: FFiixxeedd rraattee iinnssttrruummeennttss Financial liabilities VVaarriiaabbllee rraattee iinnssttrruummeennttss Financial assets CCaarrrryyiinngg aammoouunntt (($$)) 22002211 Carrying amount ($) 2020 ((88,,999922,,004488)) (10,926,618) 99,,111199,,337711 507,750 Page 48 Page 49 87 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2244.. FFIINNAANNCCIIAALL IINNSSTTRRUUMMEENNTTSS ((ccoonnttiinnuueedd)) Cash Flow Sensitivity Analysis for Variable Rate Instruments A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. 22002211 VVaarriiaabbllee rraattee iinnssttrruummeennttss 2020 Variable rate instruments PPrrooffiitt oorr lloossss 11%% iinnccrreeaassee 11%% ddeeccrreeaassee EEqquuiittyy 11%% iinnccrreeaassee 11%% ddeeccrreeaassee 9911,,119933 ((9911,,119933)) 9911,,119933 ((9911,,119933)) 5,077 (5,077) 5,077 (5,077) FFoorreeiiggnn EExxcchhaannggee RRiisskk At the reporting date the Australian dollar equivalent of amounts recognised by the Group in US dollars were as follows: FFiinnaanncciiaall aasssseettss Cash at bank Deposits at call FFiinnaanncciiaall lliiaabbiilliittiieess Trade and other payables Borrowings CCaarrrryyiinngg aammoouunntt (($$)) 22002211 Carrying amount ($) 2020 55,,330066,,550022 -- 55,,330066,,550022 302,637 - 302,637 ((996622,,770033)) ((1122,,334477,,001100)) (93,695) (10,926,618) ((1133,,330099,,771133)) (11,020,313) Cash Flow Sensitivity Analysis for Foreign Exchange A change in foreign exchange rates of 5% at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. PPrrooffiitt oorr lloossss EEqquuiittyy 55%% iinnccrreeaassee 55%% ddeeccrreeaassee 55%% iinnccrreeaassee 55%% ddeeccrreeaassee 22002211 FFiinnaanncciiaall aasssseettss 221177,,113344 ((221177,,113344)) 4488,,119911 ((4488,,119911)) FFiinnaanncciiaall lliiaabbiilliittiieess 666655,,448866 ((666655,,448866)) 666655,,448866 ((666655,,448866)) 2020 Financial assets - - 15,132 (15,132) Financial liabilities 551,016 (551,016) 551,016 (551,016) 88 Page 50 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2244.. FFIINNAANNCCIIAALL IINNSSTTRRUUMMEENNTTSS ((ccoonnttiinnuueedd)) Cash Flow Sensitivity Analysis for Variable Rate Instruments A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. PPrrooffiitt oorr lloossss 11%% 11%% EEqquuiittyy 11%% 11%% iinnccrreeaassee ddeeccrreeaassee iinnccrreeaassee ddeeccrreeaassee VVaarriiaabbllee rraattee iinnssttrruummeennttss 9911,,119933 ((9911,,119933)) 9911,,119933 ((9911,,119933)) Variable rate instruments 5,077 (5,077) 5,077 (5,077) At the reporting date the Australian dollar equivalent of amounts recognised by the Group in US dollars were as 22002211 2020 FFoorreeiiggnn EExxcchhaannggee RRiisskk follows: FFiinnaanncciiaall aasssseettss Cash at bank Deposits at call FFiinnaanncciiaall lliiaabbiilliittiieess Trade and other payables Borrowings CCaarrrryyiinngg Carrying aammoouunntt (($$)) amount ($) 22002211 2020 55,,330066,,550022 302,637 -- - 55,,330066,,550022 302,637 ((996622,,770033)) (93,695) ((1122,,334477,,001100)) (10,926,618) ((1133,,330099,,771133)) (11,020,313) Cash Flow Sensitivity Analysis for Foreign Exchange A change in foreign exchange rates of 5% at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. PPrrooffiitt oorr lloossss EEqquuiittyy 55%% 55%% 55%% 55%% iinnccrreeaassee ddeeccrreeaassee iinnccrreeaassee ddeeccrreeaassee 221177,,113344 ((221177,,113344)) 4488,,119911 ((4488,,119911)) 22002211 FFiinnaanncciiaall aasssseettss 2020 Financial assets FFiinnaanncciiaall lliiaabbiilliittiieess 666655,,448866 ((666655,,448866)) 666655,,448866 ((666655,,448866)) Financial liabilities 551,016 (551,016) 551,016 (551,016) - - 15,132 (15,132) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2244.. FFIINNAANNCCIIAALL IINNSSTTRRUUMMEENNTTSS ((ccoonnttiinnuueedd)) LLiiqquuiiddiittyy RRiisskk The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements (refer note 23(b)): CCoonnssoolliiddaatteedd 22002211 Non-Derivatives Trade and other payables Borrowings Lease liabilities Derivatives Derivative liability 22002200 Non-Derivatives Trade and other payables Borrowings Lease liabilities Derivatives Derivative liability CCaarrrryyiinngg aammoouunntt $$ CCoonnttrraaccttuuaall ccaasshh fflloowwss $$ << 66 mmoonntthhss $$ 66--1122 mmoonntthhss $$ 11--22 yyeeaarrss 22--55 yyeeaarrss >> 55 yyeeaarrss $$ $$ $$ 11,,007733,,665544 99,,004499,,441199 555511,,990088 11,,007733,,665544 99,,005500,,448833 555511,,990088 11,,007733,,665544 11,,333355,,661188 110011,,117744 -- 55,,447777 110099,,995533 -- 33,,774455 119955,,337700 -- -- 114455,,441111 -- 77,,770055,,664433 -- 1100,,667744,,998811 1100,,667766,,004455 22,,551100,,444466 111155,,443300 119999,,111155 114455,,441111 77,,770055,,664433 33,,229977,,559911 33,,229977,,559911 33,,229977,,559911 33,,229977,,559911 -- -- -- -- -- -- -- -- 33,,229977,,559911 33,,229977,,559911 179,444 9,791,974 229,210 179,444 9,794,013 229,210 179,444 1,475,436 60,396 - 6,000 50,918 - 167,762 77,067 - 4,102 40,829 - 8,140,713 - 10,200,628 10,202,667 1,715,276 56,918 244,829 44,931 8,140,713 1,134,644 1,134,644 1,134,644 1,134,644 - - - - - - - - 1,134,644 1,134,644 Page 50 Page 51 89 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2244.. FFIINNAANNCCIIAALL IINNSSTTRRUUMMEENNTTSS ((ccoonnttiinnuueedd)) FFaaiirr VVaalluueess Fair Values Versus Carrying Amounts The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows: CCoonnssoolliiddaatteedd 22002211 CCaarrrryyiinngg aammoouunntt $$ FFaaiirr vvaalluuee $$ Consolidated 2020 Carrying amount $ Fair value $ Cash and cash equivalents Trade and other payables Borrowings Lease liabilities 99,,111199,,337711 ((11,,007733,,665544)) ((1122,,334477,,001100)) ((555511,,990088)) 99,,111199,,337711 ((11,,007733,,665544)) ((1122,,334477,,001100)) ((555511,,990088)) 507,750 (179,444) (10,926,618) (229,210) 507,750 (179,444) (10,926,618) (229,210) ((44,,885533,,220011)) ((44,,885533,,220011)) (10,827,522) (10,827,522) The Group’s policy for recognition of fair values is disclosed at note 1(w). 2255.. AACCQQUUIISSIITTIIOONNSS In the prior financial year, the purchase of the Oracle Ridge Copper Mine in Arizona in the United States of America was completed. The mine is held 100% within Wedgetail Operations LLC, which, at the beginning of the current reporting period, was held 80% by Wedgetail Holdings LLC, a wholly owned subsidiary of the Company. The non- controlling interest of 20% was held by Vincere Resource Holdings LLC (“Vincere”). Management accounted for this transaction as an acquisition of assets and not as a business combination since, at the date of acquisition, the Oracle Ridge Copper Mine did not have the processes and outputs expected of an operating business. On 4 May 2021, Wedgetail Holdings LLC acquired the remaining 20% of the share capital of Wedgetail Operations LLC from Vincere. The Company issued 10,000,000 fully paid ordinary shares to Vincere as consideration for the additional 20% interest. At acquisition date, the fair value of the shares issued was $10,900,000. AASB 10 Consolidated Financial Statements states that changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions (ie transactions with owners in their capacity as owners). As such, the consideration and the change in non-controlling interest were transferred to accumulated losses. 90 Page 52 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2244.. FFIINNAANNCCIIAALL IINNSSTTRRUUMMEENNTTSS ((ccoonnttiinnuueedd)) 2266.. CCOONNTTRROOLLLLEEDD EENNTTIITTIIEESS FFaaiirr VVaalluueess Fair Values Versus Carrying Amounts financial position, are as follows: The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of CCoonnssoolliiddaatteedd 22002211 CCaarrrryyiinngg aammoouunntt $$ FFaaiirr vvaalluuee $$ Consolidated 2020 Carrying amount $ 507,750 (179,444) Fair value $ 507,750 (179,444) Cash and cash equivalents Trade and other payables 99,,111199,,337711 ((11,,007733,,665544)) 99,,111199,,337711 ((11,,007733,,665544)) Borrowings Lease liabilities ((1122,,334477,,001100)) ((1122,,334477,,001100)) (10,926,618) (10,926,618) ((555511,,990088)) ((555511,,990088)) (229,210) (229,210) ((44,,885533,,220011)) ((44,,885533,,220011)) (10,827,522) (10,827,522) The Group’s policy for recognition of fair values is disclosed at note 1(w). 2255.. AACCQQUUIISSIITTIIOONNSS In the prior financial year, the purchase of the Oracle Ridge Copper Mine in Arizona in the United States of America was completed. The mine is held 100% within Wedgetail Operations LLC, which, at the beginning of the current reporting period, was held 80% by Wedgetail Holdings LLC, a wholly owned subsidiary of the Company. The non- controlling interest of 20% was held by Vincere Resource Holdings LLC (“Vincere”). Management accounted for this transaction as an acquisition of assets and not as a business combination since, at the date of acquisition, the Oracle Ridge Copper Mine did not have the processes and outputs expected of an operating business. On 4 May 2021, Wedgetail Holdings LLC acquired the remaining 20% of the share capital of Wedgetail Operations LLC from Vincere. The Company issued 10,000,000 fully paid ordinary shares to Vincere as consideration for the additional 20% interest. At acquisition date, the fair value of the shares issued was $10,900,000. AASB 10 Consolidated Financial Statements states that changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions (ie transactions with owners in their capacity as owners). As such, the consideration and the change in non-controlling interest were transferred to accumulated losses. Eagle Mountain Mining Limited is the ultimate parent entity of the Group. The following were controlled entities at the end of the financial year and have been included in the consolidated financial statements: Name Country of Incorporation Date acquired/incorporated PPeerrcceennttaaggee IInntteerreesstt HHeelldd 22002211 Percentage Interest Held 2020 Silver Mountain Mining Pty Ltd Silver Mountain Mining LLC Silver Mountain Mining Operations Inc Wedgetail Arizona Pty Ltd Wedgetail Holdings LLC Wedgetail Operations LLC Australia 7 December 2017 United States of America United States of America 7 December 2017 18 January 2018 Australia 18 July 2019 United States of America United States of America 25 June 2019 18 July 2019 110000%% 110000%% 110000%% 110000%% 110000%% 11000%% 100% 100% 100% 100% 100% 80% Silver Mountain Mining LLC and Silver Mountain Mining Operations Inc are both 100% owned subsidiaries of Silver Mountain Mining Pty Ltd. Wedgetail Operations LLC and Wedgetail Holdings LLC are both 100% owned subsidiaries of Wedgetail Arizona Pty Ltd. The following amounts are payable by subsidiary companies to the parent company at the reporting date: NNaammee Silver Mountain Mining Pty Ltd Silver Mountain Mining LLC Silver Mountain Mining Operations Inc Wedgetail Holdings LLC AAmmoouunntt dduuee ttoo EEaaggllee MMoouunnttaaiinn MMiinniinngg LLiimmiitteedd 2020 A$ 69,727 528,472 8,670,459 1,909,877 22002211 AA$$ 7700,,118833 552288,,447722 99,,007733,,442222 2222,,115544,,552200 The loans to subsidiary companies are non-interest bearing and the Directors of Eagle Mountain Mining Limited do not intend to call for repayment within 12 months. Page 52 Page 53 91 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2277.. NNOONN--CCOONNTTRROOLLLLIINNGG IINNTTEERREESSTT During the financial year, Wedgetail Holdings LLC, a wholly owned subsidiary of the Company, increased its interest in Wedgetail Operations LLC from 80% to 100%. The non-controlling interest (“NCI”) of 20% was previously held by Vincere Resource Holdings LLC. The following table summarises the NCI information relating to Wedgetail Operations LLC before any intra-group eliminations. SSuummmmaarriisseedd SSttaatteemmeenntt ooff FFiinnaanncciiaall PPoossiittiioonn NNCCII PPeerrcceennttaaggee AAsssseettss Current assets Non-current assets TToottaall AAsssseettss LLiiaabbiilliittiieess Current liabilities Non-current liabilities TToottaall LLiiaabbiilliittiieess NNeett AAsssseettss 3300 JJuunnee 22002211 AA$$ 00%% 3300 JJuunnee 22002200 AA$$ 2200%% -- -- -- -- -- -- -- 1122,,111133 1100,,114477,,773388 1100,,115599,,885511 669922,,330099 99,,227755,,335577 99,,996677,,666666 119922,,118855 SSuummmmaarriisseedd SSttaatteemmeenntt ooff PPrrooffiitt aanndd LLoossss aanndd OOtthheerr CCoommpprreehheennssiivvee IInnccoommee Revenue Loss before income tax Other comprehensive income TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr AA$$ AA$$ -- ((1111,,993388,,770033)) 3333,,778800 -- ((11,,991155,,440033)) 4466,,223366 ((1111,,990044,,992233)) ((11,,886699,,116677)) Loss allocated to NCI Other comprehensive income allocated to NCI ((11,,887700,,996622)) ((338833,,008800)) 1188,,227733 99,,224477 SSuummmmaarriisseedd SSttaatteemmeenntt ooff CCaasshh FFlloowwss Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities NNeett ddeeccrreeaassee iinn ccaasshh aanndd ccaasshh eeqquuiivvaalleennttss AA$$ ((88,,773366,,229911)) ((224499,,005500)) 55,,665566,,445544 ((33,,332288,,888877)) AA$$ ((11,,115588,,669966)) ((775544,,556699)) 11,,117711,,009900 ((774422,,117755)) 92 Page 54 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2277.. NNOONN--CCOONNTTRROOLLLLIINNGG IINNTTEERREESSTT During the financial year, Wedgetail Holdings LLC, a wholly owned subsidiary of the Company, increased its interest in Wedgetail Operations LLC from 80% to 100%. The non-controlling interest (“NCI”) of 20% was previously held by Vincere Resource Holdings LLC. The following table summarises the NCI information relating to Wedgetail Operations LLC before any intra-group SSuummmmaarriisseedd SSttaatteemmeenntt ooff FFiinnaanncciiaall PPoossiittiioonn eliminations. NNCCII PPeerrcceennttaaggee AAsssseettss Current assets Non-current assets TToottaall AAsssseettss LLiiaabbiilliittiieess Current liabilities Non-current liabilities TToottaall LLiiaabbiilliittiieess NNeett AAsssseettss 3300 JJuunnee 22002211 3300 JJuunnee 22002200 AA$$ 00%% AA$$ 2200%% -- -- -- -- -- -- -- AA$$ -- 1122,,111133 1100,,114477,,773388 1100,,115599,,885511 669922,,330099 99,,227755,,335577 99,,996677,,666666 119922,,118855 AA$$ -- ((1111,,993388,,770033)) ((11,,991155,,440033)) 3333,,778800 4466,,223366 ((1111,,990044,,992233)) ((11,,886699,,116677)) SSuummmmaarriisseedd SSttaatteemmeenntt ooff PPrrooffiitt aanndd LLoossss aanndd OOtthheerr CCoommpprreehheennssiivvee IInnccoommee Revenue Loss before income tax Other comprehensive income TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr Loss allocated to NCI Other comprehensive income allocated to NCI ((11,,887700,,996622)) ((338833,,008800)) 1188,,227733 99,,224477 SSuummmmaarriisseedd SSttaatteemmeenntt ooff CCaasshh FFlloowwss Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities NNeett ddeeccrreeaassee iinn ccaasshh aanndd ccaasshh eeqquuiivvaalleennttss AA$$ AA$$ ((88,,773366,,229911)) ((11,,115588,,669966)) ((224499,,005500)) 55,,665566,,445544 ((33,,332288,,888877)) ((775544,,556699)) 11,,117711,,009900 ((774422,,117755)) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2288.. LLOOSSSS PPEERR SSHHAARREE Loss used in calculation of loss per share Weighted average number of shares used in the calculation of loss per share 3300 JJuunnee 22002211 $$((1199,,119999,,227777)) 30 June 2020 $(3,985,856) 115588,,995533,,994444 108,321,041 Basic and diluted loss per share ((1122..11 cceennttss)) (3.7 cents) Options and performance rights to acquire ordinary shares granted by the Company and not exercised at the reporting date are included in the determination of diluted loss per share, to the extent that they are considered dilutive. There are 29,452,780 options and 35,000 performance rights on issue at 30 June 2021 (2020: 26,409,716 options and 245,000 performance rights) that have not been considered in calculating diluted loss per share as they are not considered to be dilutive to the reported earnings per share. 2299.. PPAARREENNTT EENNTTIITTYY IINNFFOORRMMAATTIIOONN AAsssseettss Current assets Non-current assets1 TToottaall AAsssseettss LLiiaabbiilliittiieess Current liabilities Non-current liabilities TToottaall LLiiaabbiilliittiieess NNeett AAsssseettss EEqquuiittyy Issued capital Option capital Reserves Accumulated losses TToottaall EEqquuiittyy Loss for the period1 Other comprehensive income TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee ppeerriioodd PPaarreenntt 3300 JJuunnee 22002211 AA$$ Parent 30 June 2020 A$ 88,,224466,,999999 -- 226,699 2,981,224 88,,224466,,999999 3,207,923 11,,553399,,772200 112255,,443366 1,662,667 117,895 11,,666655,,115566 1,780,562 66,,558811,,884433 1,427,361 4455,,660011,,559933 44,,550000 88,,226688,,660088 ((4477,,229922,,885588)) 15,322,265 4,500 1,105,348 (15,004,752) 66,,558811,,884433 1,427,361 ((2211,,007700,,223399)) -- (3,875,208) - ((2211,,007700,,223399)) (3,875,208) 1The Company has recognised a provision against the investment in subsidiary holdings to the extent that parent company net assets exceed those of the Group. Page 54 Page 55 93 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2299.. PPAARREENNTT EENNTTIITTYY IINNFFOORRMMAATTIIOONN ((ccoonnttiinnuueedd)) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity is the guarantor in relation to the US$6,423,000 loan from Vincere Resource Holdings LLC (“Vincere”). In addition, the parent entity has entered into a Guarantee of Performance with Vincere under which the parent entity guarantees the full and timely performance of the conversion obligations under the note with Vincere. Refer to note 13. Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020. Commitments The parent had no exploration or capital commitments as at 30 June 2021 and 30 June 2020. Accounting policies The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1. 94 Page 56 EAGLE MOUNTAIN MINING | 2021 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 30 June 2021 2299.. PPAARREENNTT EENNTTIITTYY IINNFFOORRMMAATTIIOONN ((ccoonnttiinnuueedd)) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity is the guarantor in relation to the US$6,423,000 loan from Vincere Resource Holdings LLC (“Vincere”). In addition, the parent entity has entered into a Guarantee of Performance with Vincere under which the parent entity guarantees the full and timely performance of the conversion obligations under the note with Vincere. Refer to note 13. Contingent liabilities Commitments Accounting policies note 1. The parent entity had no contingent liabilities as at 30 June 2021 and 30 June 2020. The parent had no exploration or capital commitments as at 30 June 2021 and 30 June 2020. The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in DIRECTORS’ DECLARATION In the opinion of the Directors of Eagle Mountain Mining Limited (“the Company”) (a) the financial statements and notes set out on pages 58 to 94 are in accordance with the Corporations Act 2001, including: (i) (ii) complying with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements which, as stated in accounting policy note 1 to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended on that date of the Group. (b) (c) the remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures, The Corporations Act 2001 and the Corporations Regulations 2001. there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. (d) the financial statements comply with International Financial Reporting Standards as set out in note 1. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2021. This declaration is made in accordance with a resolution of the Directors. Signed at Perth this 20th day of September 2021. RRiicckk CCrraabbbb CChhaaiirrmmaann Page 56 Page 57 95 EAGLE MOUNTAIN MINING | 2021 Annual Report Eagle Mountain Mining Limited Independent auditor’s report to members Report on the Audit of the Financial Report Opinion We have audited the financial report of Eagle Mountain Mining Limited (the Company and its subsidiaries (the Group)), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the directors’ declaration. In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under 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. 96 EAGLE MOUNTAIN MINING | 2021 Annual Report Independent auditor’s report to members (continued) 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. Acquisition of the remaining 20% interest in Wedgetail Operations LLC Area of focus Refer also to note 25 How our audit addressed it During the current financial year, Wedgetail Holdings LLC acquired the remaining 20% of the share capital of Wedgetail Operations LLC. The Directors determined in accordance with AASB 10 Consolidated Financial Statements, as there was no change in control of the entity acquired, the transaction should be treated as an equity transaction. The Directors performed their assessment in line with AASB 10 paragraph 23 which states that changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are equity transactions (i.e. transactions with owners in their capacity as owners). Our audit procedures included: — A review of the purchase and transfer of membership agreement for the acquisition of the remaining 20% interest in Wedgetail Operations LLC to evaluate the nature of the acquisition. — An evaluation of the Directors assessment that the acquisition falls under paragraph 23 of AASB 10. — An assessment of the adequacy of the Group’s disclosures in respect of the acquisition. We concluded that the treatment of the acquisition of the remaining 20% of Wedgetail Operations LLC as an equity transaction was appropriate and in accordance with the relevant Australian Accounting Standards. 97 EAGLE MOUNTAIN MINING | 2021 Annual Report Independent auditor’s report to members (continued) Exploration costs capitalised Area of focus Refer also to notes 1(b), 1v(ii) and 8 The Group have recognised exploration costs in relation the Group's exploration programs at the Silver Mountain Project and Oracle Ridge Copper Mine Project located in Arizona, USA. There is a risk that the capitalisation of exploration and evaluation expenditure may exceed the value in use. An impairment review is only required if an impairment trigger is identified. Due to the nature of the resources industry, indicators of impairment applying the value in use model could include: — Viability of the projects — Changes to exploration plans and permits — Loss of rights to tenements — Changes to reserve estimates — Costs of extraction and production Share based payments Area of focus Refer also to notes 1(t), 1v(ii) and 14 The Group has entered into share-based payment arrangements during the year. The options were issued to provide long term incentives for executives and consultants to deliver long term shareholder returns. Participation in the plan was at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. This was a key audit matter because the arrangements required significant judgements and estimations by management, including the following: How our audit addressed it Our audit procedures included: — A review of the directors’ assessment of the criteria for the capitalisation of exploration expenditure and evaluation as to whether there are any indicators of impairment of capitalised costs. — An assessment of viability of the tenements and whether there were any indicators of impairment of those costs capitalised in the current period. — An assessment of the adequacy of the Group’s disclosures in respect of the transactions. We concluded that the recognition treatment and impairment assessment were in accordance with the relevant Australian Accounting Standards. How our audit addressed it Our audit procedures included: — Evaluating the grant dates based on the terms and conditions of the share- based payment arrangements; — Evaluating the fair values of share- based payment arrangements by understanding and documenting the assumptions used; and — For the specific application of the Black Scholes model, we assessed the experience of Management in preparing these calculations. We retested some of the assumptions 98 EAGLE MOUNTAIN MINING | 2021 Annual Report — The evaluation of the grant date of each arrangement, and the evaluation of the fair value of the underlying share price of the Company as at the grant date; — The evaluation of key inputs into the Black Scholes option pricing model, including the significant judgment of the forecast volatility of the share option over its exercise period. The results of these share-based payment arrangements materially affect the disclosures. used in the model and recalculated those fair values using volatility applied in the model to be appropriately reasonable and within industry norms. We also reconciled the vesting of the share-based payment arrangements to disclosures made in both the key management personnel compensation note and the disclosures in the Remuneration Report. Other Information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2021 but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 99 EAGLE MOUNTAIN MINING | 2021 Annual Report Independent auditor’s report to members (continued) 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 these financial statements is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf This description forms part of our independent auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 48 to 55 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Eagle Mountain Mining Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. William Buck Audit (WA) Pty Ltd ABN 67 125 012 124 Conley Manifis Director Date this day 20th of September 2021 100 EAGLE MOUNTAIN MINING | 2021 Annual Report ASX:EM2 | eaglemountain.com.au