Annual Report 2022 EQUUS MINING LIMITED and its controlled entities ABN 44 065 212 679 Corporate Directory Directors Mark Lochtenberg Non-Executive Chairman John Braham Managing Director Damien Koerber Executive Director – Chief Operating Officer Robert Yeates Non-Executive Director David Coupland Non-Executive Director Ryan Austerberry Non-Executive Director Company Secretary Marcelo Mora Principal Place of Business Level 2 and Registered Office 66 Hunter Street Sydney NSW 2000 Australia Telephone: Facsimile: (61 2) 9300 3366 (61 2) 9221 6333 Email address: info@equusmining.com Website: www.equusmining.com Share Registry Advanced Share Registry Limited 110 Stirling Highway Nedlands, Western Australia 6009 Telephone: Facsimile: (61 8) 9389 8033 (61 8) 9262 3723 Auditors KPMG Level 16, Riparian Plaza 71 Eagle Street Brisbane QLD 4000 Stock Exchange Listings Australian Securities Exchange (Code – EQE) Equus Mining Limited Annual Report 2022 Chairman’s Letter Review of Operations Corporate Governance Statement Directors’ Report Lead 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 Additional Stock Exchange Information Contents 2 3 18 19 33 34 35 36 37 38 73 74 80 Equus Mining Limited Annual Report 2022 1 Chairman and Managing Director’s Letter Dear fellow shareholders, It gives me great pleasure to present the 2022 Annual Report for Equus Mining Limited (ASX:EQE) (Equus or Company). The Company is proud to have completed its acquisition of 100% of the Cerro Bayo Project from Mandalay Resources effective 1 December 2021 and now owning 100% of all the mine infrastructure, including the operational 0.5Mtpa Cerro Bayo flotation plant and stockpile processing, mining infrastructure, existing mineral resources and 295 km2 mining claim package. the mining methodology and introduced pre- processing of feed material. Continued optimization of mining, screening and processing of finer feed is expected to provide improvements in gold and silver feed grades. The Company is well positioned and entering an exciting phase in the Company’s strategy towards becoming a significant near term gold- silver producer at Cerro Bayo, and with growing confidence in exploration potential combined with operational processing infrastructure in place, we firmly believe that it represents one of the more compelling projects in a world class, gold-silver producing district on the ASX. We are greatly appreciative of your support throughout the period and believe that the Company will continue to increase value for shareholders over the upcoming year. We especially value our in-country staff for their efforts and success achieved safely for the seamless change of control of the Cerro Bayo Project to Equus and welcome them into the team to execute the next exciting growth phase of the Cerro Bayo Project. Yours Sincerely Mark H. Lochtenberg Chairman John Braham Managing Director This exciting milestone uniquely positions the Company amongst its peers to leverage off a fully operational plant producing gold and silver, a significant existing resource base and a large, highly prospective land package in what is considered one of the premier epithermal gold- silver mining provinces globally, located in a highly ranked mining and investment jurisdiction. During the year the Company is proud to have accomplished an aggressive phase of exploration, which delivered exciting drill results from a series of compelling new targets ideally situated within 1km from the Cerro Bayo mine and processing plant infrastructure. Importantly, the large scale and high gold and silver grades of these new targets, relative to styles of mineralization exploited historically, provide high confidence for the capacity of the district to host new, significant resources. Additionally, a large portion of these results were reported from close proximity to the JORC compliant maiden Inferred Mineral Resource of 302,000 gold equivalent ounces announced by the Company in December 2020, situated under and peripheral to the historically mined Taitao Pit. Equus continues to aggressively drill test these high priority brownfields targets and is especially excited with the planned drilling of these targets at deeper levels which the Company interprets to hold exceptional potential for discovery of further high- grade mineralization. Furthermore, the Company believes that compelling additional exploration potential remains throughout the expansive 295km2 mining claim package at Cerro Bayo. Equus has continued with processing of low- grade stockpiles since acquisition on 1 December 2021 following the successful recommissioning by Mandalay Resources of the Cerro Bayo 0.5Mtpa flotation plant and commencement of processing of low-grade stockpiles on 20 February 2021. Although stockpile processing operations have been impacted by inflationary pressures, particularly higher fuel and transportation costs during the first semester of 2022, to attain the required cut-off grade to maintain a viable operation, Equus has implemented changes to 2 Equus Mining Limited Annual Report 2022 Review of Operations CERRO BAYO PROJECT ACQUISITION CERRO BAYO PROJECT OVERVIEW Following shareholder approval obtained on 27 November 20211, Equus completed its acquisition of the Cerro Bayo Project from Mandalay Resources effective 1 December 2021. The acquisition provided a near zero cash outlay to acquire 100% of the Cerro Bayo Project including the Project´s mining properties, resources and mine infrastructure, including the now fully operational plant. Key Terms of the Acquisition – The issue to Mandalay of Equus shares such that Mandalay acquired a 19% shareholding in Equus effective 1 December 2021 and a 2.25% NSR on production from the Cerro Bayo mining claims subsequent to production of 50,000 oz Aueq. – Equus holds the right to repurchase the NSR at any time by paying Mandalay US$4M and issuing US$2M in ordinary shares. – Equus will assume the closure costs at Cerro Bayo with a guarantee from Mandalay covering 50% of the closure costs at the Closing Date. The Cerro Bayo Project lies within the northwest extension of the premier, world class epithermal silver-gold province titled the Deseado Massif, in southern Chile (Figure 1). This epithermal province hosts seven operating mines with cumulative past production-remaining resources of approximately 30Moz Au equivalent, several of the largest of which are owned by major gold-silver producers including Newmont, Yamana Gold, Pan American Silver and Hochschild Mining. The Cerro Bayo Project is centred approximately 10km west of the township of Chile Chico (Figure 2). Throughout the 295km² Cerro Bayo mining property there are 9 historical mines located within 15km of the fully operational Cerro Bayo 1,500 tpd flotation processing plant for which historical production between 1995-2017 totals approximately 0.65Moz Au and 45Moz Ag at average grades of 5.42 g/t AuEq2 (2.81 g/t Au, 196 g/t Ag)3. Figure 1 – Cerro Bayo project regional location within the Deseado Massif epithermal Gold-Silver district showing operating gold-silver mines, operators and cumulative Au and Ag past production-remaining resources 1ASX Announcement 25th Nov 2021 - Results of Meeting ASX:EQE 1 2Gold Equivalent (AuEq) is based on the formula AuEq g/t = Au g/t + (Ag g/t / 75). The AuEq formula assumes a gold and silver price of US$1,800/oz and US$24/oz respectively and similar recoveries for gold and silver. Gold and silver recovery assumptions are based on historical performance of the Cerro Bayo processing plant 3Based on Mandalay Resources Corporation, Cerro Bayo Mine NI 43-101 Technical Reports dated May 14, 2010 & March 21, 2017 Report #2699 Equus Mining Limited Annual Report 2022 3 Review of Operations PUERTO CHACABUCO AND PUERTO AYSÉN PUERTO IBAÑEZ CERRO DIABLO Equus Mining CERRO BAYO Equus Mining C O N C E N T R A T E T R A N S P O R T R O U T E CHILE CHICO CHILE EQUUS MINING PROJECTS LOS DOMOS Equus Mining 10km Figure 2 – Cerro Bayo Project district location positioned centrally to Equus Minings’ Los Domos and Cerro Diablo satellite exploration projects CERRO BAYO EXPLORATION POTENTIAL AND MINERAL RESOURCES Equus is aggressively advancing drill testing of compelling newly generated high priority brownfields drill targets, the majority of which are located within 3km from the processing plant and infrastructure at our Taitao-Appaloosa Fault and Pegaso Targets, as well as systematic surface exploration of >100 historically identified veins throughout the Cerro Bayo district that the Company considers underexplored (Figure 3). In parallel, throughout the expansive 295km2 mining claim package at Cerro Bayo, Equus is also evaluating potential for future higher grade feedstock for the plant based on the 2020 JORC compliant inferred resource at Taitao of 302koz gold equivalent at 2.5 g/t Au equivalent4, the remnant NI 43.101 resource at the Marcela Mine (21.8KOz gold, 2.74Moz silver with an average grade of 2.53 g/t gold, 318 g/t silver)5 and potential extensions to mineralisation adjacent to the numerous other historic mines throughout the Cerro Bayo Project. 4ASX Announcement – 22 Dec 2020 Maiden Inferred Mineral Resource Estimate, Cerro Bayo Project & Gold equivalent (AuEq) is based on the formula AuEq g/t = Au g/t + 0.0128 x Ag g/t 5Based on Mandalay Resources Corporation, Cerro Bayo Mine NI 43-101 Technical Reports dated May 14, 2010 & March 21, 2017 Report #2699 4 Equus Mining Limited Annual Report 2022 CHILEARGENTINAARGENTINABRAZILPARAGUAYBOLIVIAPERUURUGUAY Review of Operations Figure 3 – Cerro Bayo Project Area, with Brownfields/Greenfields targets, historical mines and interpreted geology including faults and veins Based on Mandalay Resources Corporation, Cerro Bayo Mine NI 43-101 Technical Reports dated May 14, 2010. & March 21, 2017 Report #2699 ASX Announcement 25/05/21 - Standout Intersection Bolsters Droughtmaster Potential Gold Equivalent (AuEq) is based on the formula AuEq g/t = Au g/t + (Ag g/t / 75) 1. 2. 3. ASX:EQE 3 TAITAO- APPALOOSA FAULT EXPLORATION DRILL RESULTS During the March and June 2022 quarters and post the reporting period, the Company announced significant high-grade gold and silver drill results from a newly defined zone peripheral to the Taitao Pit, titled the Appaloosa Fault complex. This zone comprises a potentially large, shallowly dipping, high Au-Ag grade mineralised target extending from the margins of the existing Taitao Mineral Resource at depth to the east, towards the Pegaso II and III Targets (Figures 4 and 5), throughout which limited historical exploration drilling has been conducted. Importantly, shallower portions of this zone were previously interpreted as being part of a localised low-grade stockwork zone within the December 2020 Taitao Inferred Mineral Resource of 302k AuEq oz @ 2.5 g/t AuEq4. During and post the reporting period up to 26 July 2022, a total of 5,029 metres in 26 holes (CBD080- CBD104) had been drilled on the Appaloosa Fault- breccia target, broadly testing an approximate 500m strike length and down to approximately 150m down-dip along the structure. The majority of closer spaced drilling was centred below and to the east of the central eastern margin of the Taitao Pit. This drilling was focused on testing extensions of epithermal vein-hydrothermal breccia hosted in the 10-40m wide, low-moderate (30-60°) easterly dipping fault, both along strike and down dip. Equus Mining Limited Annual Report 2022 5 Review of Operations Significant intercepts from these holes included6,7: – CBD080: › 0.89m @ 12.4 g/t AuEq² (1.8 g/t Au and 800.4 g/t Ag) from 45.31m › 1.61m @ 6.23 g/t AuEq² (6.1 g/t Au and 9.8 g/t Ag) from 153.3m – CBD081: › 0.73m @ 23.64 g/t AuEq² (3.64 g/t Au and 1500.0 g/t Ag) from 56.1m › 2.44m @ 6.73 g/t AuEq² (6.13 g/t Au and 44.5 g/t Ag) from 135.91m including › 0.76m @ 14.44 g/t AuEq² (13.45 g/t Au, 74.0 g/t Ag) from 136.72m – CBD082: › 4.14m @ 17.9 g/t AuEq² (11.0 g/t Au, 520.0 g/t Ag) from 92.01m (Photo 1) including Additionally, holes CBD084 and CBD086 were drilled approximately 400m to the north of hole CBD082 for which the more significant results include: – CBD084 › 1.8m @ 4.42 g/t AuEq² (3.95 g/t Au, 35.45 g/t Ag) from 175.61m including 0.51m @ 11.06 g/t AuEq² (10.3 g/t Au, 57.0 g/t Ag) from 175.61m Drill intersections from progressively shallower, interpreted up-dip extensions of the higher-grade intercepts mentioned above, approximately 60m below and 80m to the east of the base of the Taitao open pit, include : – CBD097: › 5.82m @ 4.38 g/t AuEq² (1.76 g/t Au, 195.84 g/t Ag) from 60.53m including: 1.56m @ 5.9 g/t AuEq² (2.6 g/t Au, 250.4 g/t Ag) from 63.66m › 2.64m @ 26.1 g/t AuEq² (16.3 g/t Au, 736.1 g/t Ag) from 92.01m – CBD096: › 0.42m @ 18.9 g/t AuEq² (18.65 g/t Au and 19.0 g/t Ag) from 105.73m › 0.59m @ 6.1 g/t AuEq² (3.66 g/t Au and 182.0 g/t Ag) from 134.92m – CBD083: › 0.73m @ 31.71 g/t AuEq² (16.97 g/t Au, 1105.1 g/t Ag) from 117.12m including › 5.83m @ 3.16 g/t AuEq² (1.43 g/t Au, 130.1 g/t Ag) from 58m including: 0.73m @ 13.24 g/t AuEq² (4.73 g/t Au, 638.0 g/t Ag) from 60.34m Progressively shallower intercepts, to within approximately 25m below the base of the Taitao Pit, and which are encompassed in 10-15m wide intervals of lower grade (0.3-0.5 g/t AuEq) stockwork-breccia style mineralization, include8: › 0.49 @ 46.67 AuEq² (24.80 g/t Au, 1,640 g/t – CBD098: Ag) from 117.36m › 3.60m @ 3.20 g/t AuEq² (2.20 g/t Au, 74.77 g/t Ag) from 172.51m including › 1.49 @ 7.00 AuEq² (4.91 g/t Au, 157 g/t Ag) from 174.62m – CBD085: › 7.5m @ 8.7 g/t AuEq² (6.0 g/t Au, 206.3 g/t Ag) from 86.08m including › 4.79m @ 0.85 g/t AuEq² (0.52 g/t Au, 25.3 g/t Ag) from 51.99m including: 0.38m @ 3.1 g/t AuEq² (1.8 g/t Au, 98.0 g/t Ag) from 54.51m – CBD099: › 4.45m @ 2.12 g/t AuEq² (1.04 g/t Au, 80.3 g/t Ag) from 39.27m including: 0.97m @ 4.4 g/t AuEq² (1.65 g/t Au, 206 g/t Ag) from 40.28m – CBD100: › 2.47m @ 24.1 g/t AuEq² (17.7 g/t Au, 483.9 g/t › 5.22m @ 1.56 g/t AuEq² (1.3 g/t Au, 20.0 g/t Ag) Ag) from 87.87m from 35.68m including: 0.6m @ 4.12 g/t AuEq² (2.73 g/t Au, 105.0 g/t Ag) from 36.48m 6ASX Announcement 20 Jan 2022 – Cerro Bayo Exploration Update 7ASX Announcement 1 Apr 2022 – High Grade Mineralisation Intersected 6 Equus Mining Limited Annual Report 2022 Review of Operations Drill intersections from progressively deeper, interpreted down-dip extensions of the moderate- grade intercepts mentioned above, approximately 40m below and 160m to the east respectively to the base of the Taitao open pit, include8: – CBD102: › 8.76m @ 8.05 g/t AuEq² (4.9 g/t Au, 237.4 g/t Ag) from 70.44m including: 1.25m @ 29.3 g/t AuEq² (20.5 g/t Au, 667.0 g/t Ag) from 77.25m – CBD103: › 29.91m @ 1.84 g/t AuEq² (1.0 g/t Au, 63.5 g/t Ag) from 84.81m including: 8.0m @ 3.53 g/t AuEq² (1.4 g/t Au, 162.7 g/t Ag) from 84.81m – CBD104: › 1.46m @ 12.1 g/t AuEq² (6.46 g/t Au, 422 g/t Ag) from 83.99m › 4.89m @ 8.5 g/t AuEq² (4.31 g/t Au, 313.9 g/t Ag) from 101.57m including: 3.0m @ 12.81 AuEq² (6.43 g/t Au, 478.4 g/t Ag) from 103.46m › 7.44m @ 5.68 g/t AuEq² (4.59 g/t Au, 81.57 g/t Ag) from 117.46m including: 2.23m @ 12.61 AuEq² (10.34 g/t Au, 170.0 g/t Ag) from 119.88m 8ASX Announcement 26 Jul 2022 – Cerro Bayo Update Equus Mining Limited Annual Report 2022 7 Review of Operations Figure 4 – Plan view showing location of the Taitao-Appaloosa Fault, Pegaso II- V targets, location of cross section A -A´(see Figure 5) and historic underground mine workings and summary resources of the Delia, Dagny, Fabiola and Coyita Mines, and historic production of the Taitao Pit. Collectively, the intercepts in the above holes relate to vein-breccia mineralisation interpreted to be hosted within a large scale, 10-40m wide, gently (30-60°) easterly dipping normal fault-breccia complex, the westernmost surface expression of which broadly corresponds to the Taitao Pit (Figures 3 & 4). Historical production from the Taitao Pit from between 1995-2002 totalled approximately 153Koz AuEq2 @ 3.4 g/t AuEq2 (1.9 g/t Au, 115 g/t Ag)9 over pit dimensions of <35m depth x 30-200m wide x 1,200m length. This fault is interpreted to extend down dip at depth towards the sub vertical dipping Pegaso II and III structures and presents a series of highly prospective additional targets below the current level of drilling. Importantly, the high-grade gold-silver mineralization in these holes is comprised of brecciated, massive to crudely banded chalcedonic veining and vein clasts (Photo 1- hole CBD082), in which the origin of the vein clasts is interpreted to be from a potentially deeper source. This coupled with the overall increasing grade distribution from the multiple intercepts at differing elevations between holes CBD096 to CBD104 strongly suggests a vector of potentially increasing grade with depth (i.e. down dip to the east and for which it remains open). Furthermore, the chalcedonic texture of veining intersected in the above holes (the deepest of which to date is at approximately 280m RL) is commonly characteristic of lower temperature and hence upper levels of low-sulphidation type epithermal systems. The Pegaso II target structure, defined approximately 450-500m east of current drilling along the Appaloosa Fault (see Figure 5), is interpreted to represent the higher level, north- west extension of the nearest historic mine, Delia NW, and possibly represents a sub-vertical splay, emanating at depth, off the east dipping Appaloosa Fault complex. 9Based on Mandalay Resources Corporation, Cerro Bayo Mine NI 43-101 Technical Reports dated May 14, 2010. & March 21, 2017 Report #2699 8 Equus Mining Limited Annual Report 2022 Review of Operations Figure 5 – A-A´Section view showing a summary of Equus and historic drill results, interpreted mineralisation and exploration targets along and at intersections of low and high angle splays along the Taitao-Appaloosa Fault and Pegaso I-II zones (west to east). Vein hosted mineralization mined from Delia NW was emplaced throughout an approximate 150m vertical interval between lower elevations of approximately 50m to 200m RL, as compared to the 300m RL intercepts in holes CBD102 to CBD104. Veining at Delia NW is characterized texturally by higher temperature saccharoidal quartz than that observed from veining intersected in the holes CBD096 to CBD104. The above comparative distribution of vein textures also suggests potential for increases in grade with depth exist down dip along the Appaloosa Fault. Based on the above, the company believes that highly prospective, deeper drill targets are provided by both the along strike and down dip extension of the large-scale Appaloosa Fault and particularly at the intersection of it with the Pegaso II and other subsidiary fault splays (See Figure 5). Subsequent drilling will be focused along a +750m long portion of the host fault complex broadly extending from hole CBD084 to beneath the operational plant infrastructure. Drilling is designed to test the down dip extension of the Appaloosa Fault structure at depth, east of the Taitao Pit, and below the underground resource component of the 2020 Inferred Mineral Resource4. The styles of mineralisation and alteration within the Taitao Pit and that intersected in relatively shallow drilling to date are characteristic of the upper levels of a large, low-sulphidation type epithermal system and hence it is interpreted that compelling potential exists for grades to considerably improve at depth along the gently easterly dipping, normal fault complex. Equus Mining Limited Annual Report 2022 9 Review of Operations 1.41m @ 11.1 g/t Au, 458 g/t Ag 1.23m @ 22.2 g/t Au, 1055 g/t Ag 0.78m @ 1.75 g/t Au, 140 g/t Ag 0.72m @ 1.52 g/t Au, 139 g/t Ag Photo 1. CBD102 drill core displaying the high grade epithermal vein-breccia interval which returned 4.14m @ 17.9 g/t AuEq2 (11.0 g/t Au, 520.0 g/t Ag) from 92.01m -96.15m including 2.64m @ 26.1 g/t AuEq2 (16.3 g/t Au, 736.1 g/t Ag) from 92.01-94.65m 10 Equus Mining Limited Annual Report 2022 Review of Operations PEGASO TARGET EXPLORATION DRILL RESULTS The Pegaso I-V Targets represent five high-priority brownfield targets with a cumulative strike length of more than 3.5km located within 2km from the Cerro Bayo flotation plant (Figure 6). The targets geologically comprise the interpreted, underexplored north-western extensions of major host faults to mineralisation mined historically in the Delia, Dagny, Yasna-Fabiola and Coyita mines which represent a combined 560,000oz AuEq² past production-remnant resources inventory3. Drill testing of the targets was focused on the intersection of the host faults and favourable stratigraphy for vein development beneath and along strike of relatively shallow high-grade results reported from low density and wide spaced historic drilling. The Pegaso exploration drill program commenced in the previous reporting period for which the initial focus was exploring potential extensions to high- grade historical intercepts10 and beneath high Au- Ag grade rock chip geochemical results that were reported during that period11 & 12 During the reporting period, the Company continued with systematic drill testing of the Pegaso II-V Targets as part of a cumulative total 33 holes (9,574.3 m) diamond drill program. Significant results reported during the reporting period include: – CBD061 › 0.81m @ 7.37 g/t AuEq² (3.81 g/t Au and 267 g/t Ag) from 89.91m. – CBD062 › 0.92m @ 7.26 g/t AuEq² (3.83 g/t Au and 257 g/t Ag) from 87.62m – CBD063 › 1.31m @ 4.92 g/t AuEq² (3.51 g/t Au, 106.1 g/t Ag) from 187.39m – CBD068 › 0.75m @ 6.91 g/t AuEq² (3.48 g/t Au, 257.0 g/t Ag) from 153.05m – CBD070 › 0.71m @ 8.66 g/t AuEq² (1.1 g/t Au, 568 g/t Ag) from 102.65m › 0.89m @ 4.98 g/t AuEq² (1.1 g/t Au and 291 g/t Ag) from 145.0m › 2.62m @ 4.89 g/t AuEq² (1.8 g/t Au and 229 g/t Ag) from 166.81m Significant results reported in the preceding reporting period included:13 & 14 Pegaso II – CBD051 Four principal subparallel veins were intersected by this drilling, which returned high-grade gold and silver results. Drilling to date has confirmed the extension of high-grade mineralisation in multiple structures along a significant portion of the 1km long trend between the northeast extension of the Taitao Pit along trend to within 250m of the Delia NW mine (Figures 6 & 7). › 0.35m @ 5.74 g/t AuEq² (3.37 g/t Au and 154 g/t Ag) from 151.45m › 0.2m @ 7.29 g/t AuEq² (4.49 g/t Au and 182 g/t Ag) from 258.95m – CBD052 › › 1.53m @ 4.26 g/t AuEq² (1.35 g/t Au and 189.14 g/t Ag) from 96m incl. 0.25m @ 5.73 g/t AuEq² (1.6 g/t Au, 269.0 g/t Ag) from 96.47m 1.66m @ 5.22 g/t AuEq² (2.88 g/t Au and 152.25 g/t Ag) from 189.02m incl. 0.78m @ 9.03 g/t AuEq² (5.11 g/t Au, 254.6 g/t Ag) from 189.9m – CBD053 › 0.24m @ 8.05 g/t AuEq² (7.07 g/t Au and 63.8 g/t Ag) from 187.56m – CBD054 › 0.38m @ 15.93 g/t AuEq² (5.84 g/t Au and 656 g/t Ag) from 169.27m 10ASX Announcement 13 Aug 2020 New Gold and Silver Targets at Cerro Bayo 11ASX announcement 25th Aug 2020 Sampling Delivers High Grade Silver Results 12ASX announcement 11 September 2020 High grade silver rock chip results at Cerro Bayo 13ASX Announcement 18 May 2021 - High Grade Pegaso Drill Results 14ASX Announcement 5 August 2021 – Further High Garde Gold Silver Results at Pegaso Equus Mining Limited Annual Report 2022 11 Review of Operations – CBD056 – DCO010 › 14.05m @ 2.62 g/t AuEq² (0.48 g/t Au and 139.21 g/t Ag) from 53.15 Incl. 2.77m @ 5.14 g/t AuEq² (1.09 g/t Au, 263.34 g/t Ag) from 55.95m › 0.7m @ 6.35 g/t AuEq² (1.35 g/t Au and 324.79 g/t Ag) from 74.85m › 0.68m @ 5.34 g/t AuEq² (2.25 g/t Au and 201.0 g/t Ag) from 87.47m › 0.53m @ 7.74 g/t AuEq² (3.17 g/t Au and 297.0 g/t Ag) from 133.27m – CBD057 › 0.41m @ 8.07 g/t AuEq² (5.62 g/t Au and 159 g/t Ag) from 18.29m › 0.65m @ 5.25 g/t AuEq² (2.8 g/t Au and 159 g/t Ag) from 229.56m Collectively these results correlate well with the mineralised intercepts from the sparse historic drilling along the Pegaso II trend (see Figure 7) which include14: – DCO001 › 7.04m @ 5.73 g/t AuEq² (3.37 g/t Au, 153.6 g/t Ag) from 69.51m incl. 1.23m @ 12.26 g/t AuEq² (7.57 g/t Au, 304.9 g/t Ag) from 69.51m – DCO005 › 1.32m @ 9.72 g/t AuEq² (1.90 g/t Au, 508.61 g/t Ag) from 29.8m – DCO009 › 1.9m @ 7.49 g/t AuEq² (1.33 g/t Au, 400.43 g/t Ag) from 191.7m › 1.05m @ 25.12 g/t AuEq² (21.04 g/t Au, 265.74 g/t Ag) from 130.9m – DCO015 › 1.4m @ 14.42 g/t AuEq² (5.23 g/t Au, 597.9 g/t Ag) from 129.75m incl. 0.45m @ 39.88 g/t AuEq² (14.95 g/t Au, 1620.4 g/t Ag) from 130.70m – DLV13-049 › 4.10m @ 7.36 g/t AuEq² (6.74 g/t Au, 40.10 g/t Ag) from 156.8m – BPR260 › 2m @ 6.13 g/t AuEq² (4.41 g/t Au, 112.0 g/t Ag) from 58.0m Pegaso V Target – CBD064 › 0.22m @ 36.4 g/t AuEq² (12.55 g/t Au and 1790 g/t Ag) from 27.14m Further drill testing of the Pegaso II and III Targets at deeper levels, is planned along the Pegaso II and III Targets to further test this significant new mineralised trend during the remainder of 2022-23, particularly at prospective structural intersections of it with the highly prospective, east dipping Appaloosa major fault hosted vein/breccia. 12 Equus Mining Limited Annual Report 2022 Review of Operations P O R V E N I R - C H A T I T O M I N E 5 4 0 D B C 2.05m @ 7.29 g/t AuEq 0.59m @ 7.92 g/t AuEq 0.78m @ 8.60 g/t AuEq 0 500m 1 5 0 D B C 0.35m @ 5.74 g/t AuEq 0.20m @ 7.29 g/t AuEq TAITAOPIT 6 4 0 D B C 0.40m @ 22.82 g/t AuEq 0.77m @ 6.20 g/t AuEq CBD046 CBD045 CBD049 PEGASO IV PEGASO V CBD047 CBD051 CBD048 7 5 0 D B C 0.41m @ 8.07 g/t AuEq 0.53m @ 3.26 g/t AuEq 0.20m @ 5.28 g/t AuEq 0.65m @ 5.25 g/t AuEq C O A Y p p I T r o A x M 1 I 4 N 0 E k O z A u E q @ Y A A S p N p A r o - F x A 1 1 B I 0 O k L O A z M A u I N E E q @ 5 6 . 6 g / t A u E q CBD056 CBD057 CBD052 CBD053 PEGASO III 3 5 0 D B C 1.32m @ 3.70 g/t AuEq PEGASO II D A A G p p N Y r o 1,500 TPD FLOTATION PLANT CBD054 CBD055 L O N G S E C TIO N 4 5 0 D B C 0.38m @ 15.93 g/t AuEq 0.34m @ 4.71 g/t AuEq 0.73m @ 2.58 g/t AuEq D E A p LIA N pro x 2 W 0 0 MIN E z A O k u E q @ M x 1 I N 0 9 E k O z A u E q @ 5 . 2 5 g / t A u E q 5.9 2 g/t A u E q g / t A u E q PEGASO TARGETS Mine tunnel infrastructure T Mine production/Remnant Resources Planned Pit Development Brownfields Exploration Targets Vein Trends Historical Drill Intercepts (Au Equiv g/t) 0.1 - 2.0 2.0 - 5.0 >5.0 Results this release Results previously released 20210804 6 5 0 D B C 14.05m @ 2.62 g/t AuEq incl 8.05m @ 3.62 g/t AuEq incl 2.77m @ 5.14 g/t AuEq 0.70m @ 6.35 g/t AuEq 0.68m @ 5.34 g/t AuEq 0.53m @ 7.73 g/t AuEq 1.26m @ 2.10 g/t AuEq 2 5 0 D B C 1.53m @ 4.29 g/t AuEq 1.66m @ 5.21 g/t AuEq Incl 0.78m @ 9.03 g/t AuEq Figure 6 – Plan view showing summary Pegaso II Target drill results and interpreted intersected vein trends and B-B’ long section (presented in Figure 7) SE B 600RL DCO001 DCO005 1.32m @9.72 AuEq65, 1.90 g/t Au, 508.61 g/t Ag 0 7 0 D CBD053 B C 1.32m @ 3.70AuEq65, 2.48g/t Au, 0.71m @ 8.66 g/t Au eq 2.62m @ 4.89 g/t Au eq 1 6 0 D B C 0.81m @ 7.37 g/t Au eq 0.46m @ 4.83 g/t Au eq 0.69 m @ 8.33 g/t Au eq DCO002 2.38m @ 3.50 g/t AuEq65, 1.20 g/t Au, 150.01 g/t Ag, from 141,50m 1.32m @3.54 g/t Au eq 3 5 0 D B C 1.19m @ 5.84 g/t g/t Au eq 0.41m @ 8.07 g/t AuEq65, 5.62 Au g/t, 159 g/t Ag, from 18.29m 0.53m @ 3.26 g/t AuEq65, 2.94 Au g/t, 20.70 g/t Ag, from 193.91m 0.20m @ 5.28g/t AuEq65, 3.84 g/t Au, 93.40 g/t Ag, from 0.41m @ 7.74 g/t Au eq 212.66m 0.20m @ 5.1 g/t Au eq 0.65m @ 5.25 g/t AuEq65, 2.80 g/t Au, 159 g/t Ag, from 0.65m @ 4.92 g/t Au eq 229.56m CBD057 7 5 0 D B C NW B 600RL 2 6 0 D B C 5 0 0 O C D 1.32m @ 8.7 g/t Au eq 1 5 0 D B C CBD051 0.35m @ 5.42 g/t Au eq 6 6 0 D B C 0,35m @ 5,74 g/t AuEq65, 3,37 g/t Au, 154 g/t Ag from 151,45m 0.20m @ 7.29g/t AuEq65, 4.49 g/t Au, 182 g/t Ag, 0.21m @ 3.9 g/t g/t Au eq 0.20m @ 6.92 g/t Au eq BRECHA-PORVENIR-CHATITO MINE BRECHA-PORVENIR-CHATITO MINE BRECHA-PORVENIR-CHATITO MINE Approx mined out area Approx mined out area Approx mined out area 8 7.04m @ 5.73AuEq65, 3.37 g/t Au, 153.60 g/t 6 0 D Ag, incl 1,23m@7,57 g/t Aum 304,9 g/t Ag B C 2.42 m @ 1.82 g/t Au eq 1.83m @ 2.5 g/t Au eq 0.75m @ 6.91 g/t Au eq DELIA NORTHWEST MINE Approx 200K Oz Au Eq @ 5,92 g/t Au Eq Production/Remnant Resources 7.04m @ 5.42 g/t Au eq 1 0 0 O C D DELIA MINE Approx 200K Oz Au Eq @ 5,92 g/t Au Eq Production/Remnant Resources DELIA NORTHWEST MINE Approx 200K Oz Au Eq @ 5.92 g/t Au Eq Production/Remnant Resources 4 5 0 D B C 0.38m @ 14.58 g/t Au eq 0.34m @ 4.54 g/t Au eq 0.73m @ 2.4 g/t Au eq Coigues Temer contact 0RL 2 0 0 O C D 9 0 0 O C D 2.38m @ 3.2 g/t g/t Au eq 1.90m @ 6.67 g/t Au eq DCO009 Coigues Temer Contact I N T E R P R E T E D I N T E R S E C T I O N O F T A I T A O L O W A N G L E F A U L T & P E G A S O TA R G E T 1.90m @ 7.49AuEq65, 1.33 g/t Au, 400.43 g/t Ag, from 191.70m I I CBD045 0 1 0 0 O C D DCO0010 0 CBD054 2 5 0 D B C 1.53m @ 3.87 g/t Au eq 1.66m @ 4.91 g/t Au eq 0.38m @15.93 g/t AuEq65, 5.84 g/tAu, 656 g/tAg from 169.27m 0.34m @ 4.71 g/t AuEq65, 3.39 g/tAu, 86.10 250m g/tAg from 173.83m 0.73m @ 2.58 g/t AuEq65, 1.29 g/tAu, 84.20 g/tAg from 175.72m CBD052 1.53m @4.29g/t AuEq65, 1.38 g/t Au, 189.13 3 1.31m @ 4.92 g/t g/t Au eq 6 g/t Ag from 96m 0 D 0.70m @ 6.53 g/t g/t Au eq B 1.66m @5.21AuEq65, 2.87 g/t Au, 152.25 C g/t Ag from 189,90m Incl 0,78m@ 9,03 g/t AuEq65, 5,11 g/t Au, 254,65 g/t Ag 8 7 0 D B C 1.05m @ 25.12 g/t AuEq65, 21.04 g/t Au, 265.74 g/t Ag, from 130.90m 14.1m @ 2.3 g/t Au eq incl 2.77@ 4.6 g/t Au eq 0RL 0.45m @ 4.23 g/t g/t Au eq 0.52m @ 3.75 g/t g/t Au eq 0.39 m @ 4.48 g/t g/t Au eq CBD056 0.70m @ 5.68 g/t Au eq 14.05m @ 2.62g/t AuEq65, 0.48 g/t Au, 139.21g/t Ag from 53,15m 6 5 incl 8,05m@ 3.62AuEq, 0.67Au, 191.34 Ag 0 D B incl 2.77@ 5.14AuEq65, 1.089Au, 263.33Ag from 55.95 C 0.70m @ 6.35 g/t AuEq65, 1.35 g/t Au, 324.79 g/t Ag, from 74.85m 0.68m @ 5.34 g/t AuEq65, 2.25 g/t Au, 201 g/t Ag, from 87.47m 0.53m @ 7.73g/t AuEq65, 3.17 g/t Au, 297g/t Ag, from 133.24m 1.26m @ 2.096g/t AuEq65, 1.71 g/t Au, 23.07g/t Ag, from 176.14m 0.68m @ 4.93 g/t Au eq 0.53m @ 7.13 g/t Au eq Lower Temer Fm 5 4 0 D B C 2.05 m @ 7.2 g/t Au eq 0.59 m @ 7.4 g/t Au eq 2.98m @ 4.82 g/t Au, 36.64 g/t Ag, 0.78 m @ 8.56 g/t Au eq from 9.10m 1.5 m @ 8.57 g/t Au eq 1.91m @ 3.97 g/t AuEq65, 3.82g/t Au, 9.65 g/t Ag, from 288.75m 2.35m @ 5.95 g/t AuEq65, 4.08g/t Au, 1.05m @ 24.58 g/t Au eq 121 g/t Ag, from 344.85m PEGASO II LONG SECTION LEGEND Equus exploration hole traces and collars Historical Pierce points SIGNIFICANT DRILL RESULTS 2 8 0 D B C 4.14m @ 17.9 g/t AuEq Drill Hole, Downhole intercept length and AuEq g/t = Au g/t + (Ag g/t /75) Target g/t Au eq is based on the formula Au eq g/t = Au g/t + (Ag g/t /75) Historical and EQE drill intercept (Au Equiv g/t) 0.5 a 1.0 1.0 a 2.0 2.0 a 3.0 3.0 a 5.0 > = 5.0 Figure 7 – Pegaso II long section B-B´- showing summary Equus and historic drill result pierce points, interpreted exploration target at the intersection of the low angle Appaloosa Fault and subvertical Pegaso II structure and underground mine workings of the Delia NW mine Equus Mining Limited Annual Report 2022 220124 13 Review of Operations CERRO BAYO STOCKPILE PROCESSING Equus has continued with processing of low-grade stockpiles since acquisition on 1 December 2021 following the successful recommissioning by Mandalay Resources of the Cerro Bayo 0.5Mtpa flotation plant and commencement of processing of low-grade stockpiles on 20 February 2021. Production and sales results through the end of November 2021 corresponded to the ownership of Mandalay and have been reported by Mandalay. Production and sales for the March 202215 and June 202216 quarters correspond to the operation under the ownership and control of Equus since 1 December 202117 (Tables 1-3) in which production for the full year ended 30 June 2022 is also provided. Overall, higher comparable production costs in the June 2022 quarter related to the processing of lower gold and silver grades plus higher fuel and transportation costs. Continued optimization of mining, screening and processing of finer feed is expected to provide improvements in gold and silver feed grades in the coming quarters. During the 12 month period between 30 June 2021 and 30 June 2022 combined production by both Mandalay and Equus since acquisition achieved processing of 491,040t of ore to produce 5,997 oz of gold and 294,517 oz of silver for a total of 10,737 oz gold equivalent. 15,16,17 & 18 The operation’s complete Quarter ended 30 June 2022 and Full Year ended 30 June 2022 results are provided in Tables 1-316. Table 1. March and June Quarters 2022 and Full-Year to 30 June 2022 Production and Cash Cost Highlights Group Production and Cash Cost Quarter ended 31 March 2022 Quarter ended 30 June 2022 Year ended 30 June 2022 Ore Milled DMT 120,401 Feed Grade Au Feed Grade Ag Gold in Mill Feed Silver in Mill Feed g/t g/t Oz Oz Concentrate produced DMT Concentrate Grade Au g/t Concentrate Grade Ag g/t Recovery Au Recovery Ag Gold Production Silver Production % % Oz Oz Gold Production Au Eq Oz Cash Cost (Oz AuEq) $/oz 0.47 33.6 1,834 129,908 1,053 44.4 3,045 81.9 79.3 1,503 103,074 2,819 1,518 119,856 0.44 25.7 1,688 98,907 846 49.8 2,773 80.3% 76.3% 1,356 75,425 2,272 2,230 491,040 0.49 28.4 7,705 448,781 3,719 52.9 2,863 82.1% 76.3% 6,325 342,254 10,737 1,505 15ASX Announcement 29 Apr 2022 Quarterly Activities Report 16ASX Announcement 29 Jul 2022 Quarterly Activities Report 17ASX Announcement 28 January 2022 – Dec 2021 Quarterly Activities Report 18TSX Announcement - Mandalay Resources Corporation Announces Financial Results for the three and six months ended June 30, 2021 (*). Quarterly gold equivalent ounces (“Au Eq. oz”) produced is calculated by multiplying the saleable quantities of gold (“Au”), silver (“Ag”) in the period by the respective average market prices of the commodities in the period, adding the amounts to get a “total contained value based on market price”, and then dividing that total contained value by the average market price of Au in the period. Average Au and Ag prices in the periods are calculated as the average of the monthly LBMAAM/PM Precious Metals Prices in the period, with price on weekend days and holidays taken of the last business day, average. The source for Au and Ag prices is www.lbma.org.uk. 14 Equus Mining Limited Annual Report 2022 Review of Operations Table 2. Saleable Production for the March and June Quarters 2022 and Full-Year to 30 June 2022 Metal Quarter ended 31 March 2022 Quarter ended 30 June 2022 Year ended 30 June 2022 Gold (oz) Silver (oz) Average prices Gold US$/oz Silver US$/oz Total Gold Eq. (oz) (*) 1,503 103,074 1,873.7 23.9 2,819 1,356 75,425 1,873.0 22.6 2,272 5,997 294,517 1,832.8 23.6 10,737 Table 3. Sales for March and June Quarters 2022 and Full-Year to 30 June 2022 Quarter ended 31 March 2022 Quarter ended 30 June 2022 Year ended 30 June 2022 Metal Gold (oz) Silver (oz) Average Prices Gold US$/oz Silver US$/oz 1,631 77,647 1,873.7 23.9 Total Gold Eq. (oz) (*) 2,621 1,726 116,761 1,873.0 22.6 3,135 6,393 341,159 1,832.8 23.6 10,786 (*). Quarterly gold equivalent ounces (“Au Eq. oz”) produced is calculated by multiplying the saleable quantities of gold (“Au”), silver (“Ag”) in the period by the respective average market prices of the commodities in the period, adding the amounts to get a “total contained value based on market price”, and then dividing that total contained value by the average market price of Au in the period. Average Au and Ag prices in the periods are calculated as the average of the monthly LBMAAM/PM Precious Metals Prices in the period, with price on weekend days and holidays taken of the last business day, average. The source for Au and Ag prices is www.lbma.org.uk. Resource comparison 2021 to 2022 The companys´ maiden resource estimate was first reported on 22 December 2020 after which, to date, no further drilling or update to the resource estimate has been made, and hence no material changes have occurred since its´ original publication. Governance Arrangements Equus management and Board of Directors include individuals with many years’ work experience in the mineral exploration and mining industry who monitor all exploration programs and oversee the preparation of reports on behalf of the Company by independent consultants. The exploration data is produced by or under the direct supervision of qualified geoscientists. In the case of drill hole data half core samples are preserved for future studies and quality assurance and quality control. The Company uses only accredited laboratories for analysis of samples and records the information in electronic databases that are automatically backed up for storage and retrieval purposes. LOS DOMOS & CERRO DIABLO PROJECTS With the focus of exploration efforts during the reporting period targeted towards evaluation and discovery of resources close to infrastructure throughout the Cerro Bayo Project, work and expenditure on both the Los Domos and Cerro Diablo Projects were limited principally to the maintenance of claim tenure. Both projects are viewed to host good, underexplored potential for precious and base metals and the Company during the course of the 2023 financial year plans to undertake work including mapping and sampling. LOS DOMOS PROJECT The Los Domos gold-silver project is located 15km south of the township of Chile Chico and 20km southeast of the Cerro Bayo gold-silver mine and processing plant (Refer to Figure 2). During the year ended 30 June 2020, Equus incorporated a joint venture company “Equus Equus Mining Limited Annual Report 2022 15 Review of Operations Patagonia SpA” with Patagonia Gold SCM, the Chilean subsidiary of Patagonia Gold Corp (TSXV: PGDC). This entity incorporates the Company´s 75% interest in the mining concessions owned by Patagonia Gold SCM, which form part of the Los Domos Project. Southern Gold SpA can acquire a further 20% interest in the Mining Concessions via sole funding exploration through the Equus Patagonia SpA joint venture company at which point Patagonia Gold SCM has the right to retain a 5% free carried interest or convert its equity into a 1.5% NSR. Only limited surface exploration activities and environmental studies were completed during the reporting period. CERRO DIABLO PROJECT The Cerro Diablo Project is located approximately 25km to the north-northwest of the Cerro Bayo gold-silver mine and processing plant (Refer to Figure 2). The project is situated in the interpreted northwest limit of the world-class Deseado Massif mineral province, where it extends into southern Chile, in a corridor also broadly coincident with the slightly younger Andean-type arc and back- arc tectonic belt which host epithermal, skarn, porphyry and volcanic-hosted massive sulfide (VHMS) style mineral occurrences. CORPORATE During the year ended 30 June 2022, the significant changes in the state of affairs of the Group were as follows: During July 2021, the Company obtained approval at a shareholders’ meeting to issue tranche two of the placement announced in May 2021 to institutional investors and a Director of the Company by issuing 204,973,636 ordinary shares at an issue price of $0.011 raising $2,254,710 before costs. During September 2021, the Company issued 1,250,000 new ordinary shares fully paid shares to a consultant as consideration for Geological Technical Services provided in connection with the Cerro Bayo project in southern Chile. During October 2021, Mr. John Sadek was appointed as Country Manager in Chile. Mr Sadek holds a Bachelor of Engineering from the University of Sydney and brings with him over 35 years of international industry experience in operational, technical, managerial, executive and consulting roles. Mr Sadek has extensive knowledge in both open pit and underground mining and has held management roles in junior and major mining companies that focused on gold, silver, base metals, and uranium which included WMC, MIM, Newmont, Orosur Mining Inc. and Scorpio Mining Corporation. He was issued 2,500,000 new ordinary shares fully paid shares as part of his employment agreement. During October 2021, Mr Richard Tapia was appointed as Vice President of Finance. MrTapia holds a degree in Accounting and Auditing from the Universidad of Santiago de Chile and Diploma in international accounting from the Universidad de Chile. Mr Tapia has more than 20 years of experience as head of accounting and finance in international mining companies including Anglo American and Antofagasta Minerals. On 11 October 2021, Equus executed its option with Mandalay Resources Corporation (‘Mandalay’) over the Cerro Bayo Project in Southern Chile to acquire 100% equity in Compañía Minera Cerro Bayo Limitada (‘CMCB’). During November 2021, at the Annual General Meeting, shareholders approved the acquisition of CMCB from Mandalay, and on 2 December 2021, Equus issued 587,502,438 ordinary shares to Mandalay to acquire 100% of the equity interest in CMCB. In addition, the Equus will pay Mandalay 2.25% of the Net Smelter Returns (NSR Royalty) upon the production of 50,000 gold equivalent ounces. On 2 December 2021, Equus appointed Mr. Ryan Austerberry as Non-executive Director. Mr. Ryan Austerberry is the General Manager-Mandalay Resources Costerfield Operations and was nominated by Mandalay Resources Corporation to the Board of Equus Mining Limited. Mr Austerberry has previously assisted with developing Cerro Bayo and has operational knowledge of the Cerro Bayo Mine in Chile. On 8 December 2021, the Company consolidated its issued securities (ordinary shares and options) on a 1 for 20 basis. During December 2021, the Company announced a placement to be conducted on two tranches on a post consolidated basis. – The Placement was conducted under two tranches. Under tranche 1 the Company issued 13,080,000 new ordinary shares at an issue price of $0.17 per share for a total consideration of $2,223,600 before costs. – Tranche 2 of the placement was completed on 9 February 2022 the company issued 6,355,294 ordinary shares raising $1,080,400 before costs. 16 Equus Mining Limited Annual Report 2022 Review of Operations Compliance Statement No Material Changes The information in this report that relates to Exploration Results for the Cerro Bayo Project is based on information compiled by Damien Koerber. Mr Koerber is a fulltime employee to the Company. Mr Koerber is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activities which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Koerber has a beneficial interest as shareholder of Equus Mining Limited and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Equus Mining Limited confirms that it is not aware of any new information or data that materially affects the information included in this Annual Report and that all information continues to apply. Yours sincerely John Braham Executive Director Dated this 30th day of September 2022 Equus Mining Limited Annual Report 2022 17 Corporate Governance Statement CORPORATE GOVERNANCE STATEMENT The Board is committed to maintaining the highest standards of Corporate Governance. Corporate Governance is about having a set of core values and behaviours that underpin the Company’s activities and ensure transparency, fair dealing and protection of the interests of stakeholders. The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. The 2022 corporate governance statement is dated 30 September 2022 and reflects the corporate governance practices throughout the 2022 financial year. The board approved the 2022 corporate governance on 30 September 2022. A description of the Company’s current corporate governance practices is set out in the Company’s corporate governance statement, which can be viewed at http://www.equusmining. com/corporate-governance/. 18 Equus Mining Limited Annual Report 2022 Directors’ Report The Directors present their report, together with the consolidated financial statements of the Group, comprising of Equus Mining Limited (‘Equus’ or ‘the Company’) and its controlled entities for the financial year ended 30 June 2022 and the auditor’s report thereon. DIRECTORS The names and details of the Directors in office during or since the end of the previous financial year are as follows. Directors were in office for the entire year unless otherwise stated. Mark Hamish Lochtenberg, Non-Executive Chairman Director since 10 October 2014 John Richard Braham, Managing Director Director since 13 November 2018 Mr Braham is an experienced Mining Finance and Investment professional with a 24-year career at Macquarie Bank, the last 11 of which were as an Executive Director within the Mining Finance Division. John built and ran a successful mining finance business in New York for Macquarie Bank from 2001 to 2008, providing capital to the junior mining industry. This involved providing debt and equity to exploration companies and mine developers in both North and South America including companies operating in Argentina, Peru and Chile. On returning to Australia, John built a successful bulk commodity finance business for Macquarie Bank which he ran from 2008 to 2017 based in Sydney. John is a Director of public listed company Castile Resources Limited. He has not served as a director of any other listed company during the past three years. Mr Lochtenberg graduated with a Bachelor of Law (Hons) degree from Liverpool University, U.K. and has been actively involved in the coal industry for more than 30 years. Mark Lochtenberg is Non Executive Director of public listed companies Nickel Mines Limited and Terracom Limited. He is the former Executive Chairman and founding Managing Director of ASX-listed Baralaba Coal Company Limited (formerly Cockatoo Coal Limited). He was a principal architect of Cockatoo’s inception and growth from an early-stage grassroots explorer through to an emerging mainstream coal producer. He was also formerly the co-head of Glencore International AG’s worldwide coal division, where he spent 13 years overseeing a range of trading activities including the identification, due diligence, negotiation, acquisition and aggregation of the coal project portfolio that would become Xstrata Coal. Prior to this Mark established a coal “swaps” market for Bain Refco, (Deutsche bank) after having served as a senior coal trader for Hansen Neuerburg AG and as coal marketing manager for Peko Wallsend Limited. Mr Lochtenberg is currently Non-Executive Director of public listed company Nickel Mines Limited, Director of Australian Transport, Energy Corridor Pty Limited and Montem Resources Limited. He has not served as a director of any other listed company during the past three years. Equus Mining Limited Annual Report 2022 19 Directors’ Report Damien John Koerber, Executive Director, Chief Operating Officer Director since 27 November 2019 Robert Ainslie Yeates, Non-Executive Director Director since 20 July 2015 Mr Koerber commenced with Equus in 2012 as exploration manager at the Naltagua copper project in Chile which brought considerable senior management and technical experience in the resources industry, from both in Australia and throughout South America. Mr Koerber is a geologist with 32 years of exploration experience, mainly throughout and based in Latin America. He has held senior management and consulting exploration and business development positions in companies including Billiton Gold (Northern Territory and Western Australia), North (Chile), Rio Algom (Chile), Newcrest (Chile, Argentina and Peru), MIM (Argentina and Brazil), Patagonia Gold SA (Chile and Argentina) and Mirasol Resources (Chile and Argentina). During his career, he has been directly involved in several discoveries including Cleo-Sunrise Dam (Western Australia), Tanami (Northern Territory), Union Reefs (Northern Territory) and Cap Oeste- COSE (Argentina). Mr Koerber graduated from the UNSW (BSc. Geology Hons Class 1) in 1989 and is a bilingual, Australian geologist. He has not served as a director of any other listed company during the past three years. Dr Yeates is a graduate of the University of NSW, completing a Bachelor of Engineering (Honours 1) in 1971 and a PhD in 1977 and then an MBA in 1986 from Newcastle University. He began his career with Peko Wallsend working in a variety of roles including mining engineering, project management, mine management and marketing. He became General Manager Marketing for Oakbridge Pty Limited in 1989 following a merger with the Peko Wallsend coal businesses and went on to become Managing Director of Oakbridge, which was the largest coal mining company in NSW at that time, operating one open cut and five underground coal mines. Dr Yeates also has gained operating, business development and infrastructure experience as a director of Port Waratah Coal Services (Newcastle Port), Port Kembla Coal Terminal, Great Northern Mining Corporation NL and Cyprus Australia Coal and for the past 20 years has been principal of his own mine management consultancy, providing a wide range of technical, management and strategic planning services to the mining industry. Until 2014 he was also Project Director then CEO of Newcastle Coal Infrastructure Group, which has developed and is operating coal export facilities in Newcastle. Dr Yeates was until 2015 and for the prior ten years a director in ASX-listed Baralaba Coal Company Limited (formerly Cockatoo Coal Limited), and from 2016 to 2019 he was a director of Watagan Mining Ltd and from 2018 to early 2020 was a director of Montem Resources Limited. He has not served as a director of any other listed company during the past three years. 20 Equus Mining Limited Annual Report 2022 Directors’ Report David (Ted) Harcourt Coupland, Non-Executive Director Director since 21 June 2021 Ryan Kane Austerberry, Non-Executive Director Director since 2 December 2021 Ted Coupland has over 30 years of experience in the mining, exploration and resource finance industry and holds qualifications in geology, geostatistics, mineral economics and finance. Ted has had a comprehensive technical career in the resources sector covering exploration, mine geology, resource estimation, risk analysis, resource consulting and business management. Ted spent 6 years between 2013 and 2018 working in Macquarie Bank’s Mining Finance team where he specialised in technical due diligence, deal origination, client relationship management, principal equity investing, mezzanine finance, structured project finance and commodity derivative structures. As a professional Geologist and Geostatistician, Ted has been involved with many technically challenging resource projects around the globe covering a range of commodities including gold, silver, copper, base metals, PGM’s, bauxite and coal. Ted holds a Bachelor of Science (Geology) from the University of New England, Post-Graduate Degree in Geostatistics from the Paris School of Mines, Post-Graduate Diploma in Mineral Economics from Macquarie University and a Post-Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia. Ted is a Corporate Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr. Coupland is currently a Director of public listed company Odin Metals Limited. He has not served as a director of any other listed company during the past three years. Ryan Austerberry has over 18 years of experience in the resource industry with a background in Mining Engineering, predominantly undertaking technical roles and operations management. Ryan has had comprehensive technical roles and operations management through a variety of mining engineering roles into project work. Ryan has been with Mandalay Resources Corporation (TSX:MDN) (‘Mandalay’) for most of his career, he is the current General Manager of Operations at Costerfield in Victoria and previously was General Manager of Björkdal in Sweden. Ryan has previously assisted with developing Cerro Bayo and has operational knowledge of the Cerro Bayo Mine in Chile. Ryan holds a Bachelor of Applied Science from the Royal Melbourne Institute of Technology, a Post- Graduate Diploma in Mining from the University of Ballarat, and an MBA from the Australian Institute of Business. Ryan is a Chartered Professional in Mining with the Australasian Institute of Mining and Metallurgy (AusIMM) and a graduate of the Australian Institute of Company Directors. He has not served as a director of any other listed company during the past three years. COMPANY SECRETARY Marcelo Mora Company Secretary since 16 October 2012 Marcelo Mora holds a Bachelor of Business degree and Graduate Diploma of Applied Corporate Governance. Mr Mora has been an accountant for more than 30 years and has experience in resources and mining companies both in Australia and internationally, providing financial reporting and company secretarial services to a range of publicly listed companies. Equus Mining Limited Annual Report 2022 21 Directors’ Report DIRECTORS’ MEETINGS The number of Directors’ meetings and number of meetings attended by each of the Directors (while they were a Director) of the Company during the year are: Director Mark H. Lochtenberg John R. Braham Damien J. Koerber Robert A. Yeates David (Ted) H. Coupland Ryan K. Austerberry Board Meetings Held Attended 4 4 4 4 4 2 4 4 4 4 4 2 DIRECTORS’ INTERESTS At the date of this report, the beneficial interests of each director of the Company in the issued share capital of the Company and options, each exercisable to acquire one fully paid ordinary share of the Company are: Director Fully Paid Ordinary Shares Options over ordinary shares Option Terms (Exercise Price and Term) Mark H. Lochtenberg 12,487,431 555,555 $0.30 at any time up to 16 September 2023 John R. Braham 1,038,953 277,777 $0.30 at any time up to 16 September 2023 - - - - - - 250,000 $1.40 at any time up to 13 November 2023 333,333 $0.60 at any time up to 13 November 2022 333,333 $0.70 at any time up to 13 November 2024 333,333 $0.44 at any time up to 25 November 2023 333,333 $0.50 at any time up to 25 November 2024 333,333 $0.54 at any time up to 25 November 2025 Damien J. Koerber 2,173,370 111,111 $0.30 at any time up to 16 September 2023 - - - 83,333 $0.44 at any time up to 25 November 2023 83,333 $0.50 at any time up to 25 November 2024 83,333 $0.54 at any time up to 25 November 2025 Robert A. Yeates David (Ted) H. Coupland 343,538 944,684 166,666 $0.30 at any time up to 16 September 2023 55,555 $0.30 at any time up to 16 September 2023 Ryan K. Austerberry 29,375,122 - During the year ended 30 June 2022, no options were granted as compensation to directors of the Company (2021: 1,249,998 unlisted options were on a post-consolidation basis of 20 to 1). During the year ended 30 June 2022, 11,666,666 pre-consolidation unlisted options expired unexercised. There were no options over unissued ordinary shares granted as compensation to directors or executives of the Company during or since the end of the financial year. 22 Equus Mining Limited Annual Report 2022 Directors’ Report OPTION HOLDINGS Options granted to directors’ and officers’ Since the end of the financial year, the Company did not grant any options over unissued ordinary shares to directors or officers as part of their remuneration. UNISSUED SHARES UNDER OPTIONS At the date of this report, unissued ordinary shares of the Company under option are: Number of Options Employee Options Attaching Options Exercise Price Expiry Date 250,000(1) 333,333(1) 333,333(1) 416,666(1) 416,666(1) 416,666(1) 125,000(1) - - - - - - - - 20,094,427 $1.40 $0.60 $0.70 $0.44 $0.50 $0.54 $0.44 $0.30 13 November 2023 13 November 2022 13 November 2024 25 November 2023 25 November 2024 25 November 2025 01 December 2023 16 September 2023 (1) In the event that the employment of the option holder is terminated by breach of its obligations to the Company, then the options shall lapse upon written notification to the holder. All options expire on their expiry date. The persons entitled to exercise the options do not have, by virtue of the options, the right to participate in a share issue of the Company or any other body corporate. SHARES ISSUED ON EXERCISE OF OPTIONS During the financial year ended 30 June 2022, no ordinary shares were issued as a result of the exercise of options (2021: 2,000,000 on a pre-consolidation basis of 20 to 1). Since the end of the financial year, the Company has not issued ordinary shares as a result of the exercise of options. Equus Mining Limited Annual Report 2022 23 Directors’ Report CORPORATE INFORMATION Corporate Structure Equus Mining Limited is a limited liability company that is incorporated and domiciled in Australia. It has prepared a consolidated financial report incorporating the entities that it controlled during the financial year. The Group’s structure at 30 June 2022 is outlined below. EQUUS MINING LIMITED – GROUP STRUCTURE AT 30 JUNE 2022 Equus Mining Limited 100% Okore Mining Pty Ltd 100% Hotrock Enterprises Pty Ltd 100% Dataloop Pty Ltd 100% Equus Resources Pty Ltd 100% 100% Leo Shield Exploration Ghana Ltd Andean Coal Pty Ltd 100% Derrick Pty Ltd 100% 100% Southern Gold SpA Equus Resources Chile SpA 100% Minera Carbones Del Sur SpA 75% Equus Patagonia SpA Minera Equus Chile SpA The Companies referred above comprise the “Consolidated Entity” for the purposes of the Financial Statements included in this report. 100% Compañía Minera Cerro Bayo SpA 24 Equus Mining Limited Annual Report 2022 Directors’ Report PRINCIPAL ACTIVITIES The principal activities of the Group during the course of the financial year were continuing its dual-track strategy of Brownfields resource evaluation and Brownfields/Greenfields exploration to define sufficient resources to sustain a potential Cerro Bayo mine restart and the maintenance of claims held by Equus for the nearby Los Domos and Cerro Diablo Projects. Together with the processing of low-grade stockpiles at Cerro Bayo since its acquisition on 1 December 2021. FINANCIAL RESULTS The consolidated loss after income tax attributable to members of the Company for the year was $3,981,385 (2021: $1,716,498 loss). REVIEW OF OPERATIONS A review of the Group’s operations for the year ended 30 June 2022 is set out on pages 3 to 17 of this Annual Report. DIVIDENDS The Directors do not recommend the payment of a dividend in respect of the financial year ended 30 June 2022. No dividends have been paid or declared during the financial year (2021 - $nil). CHANGES IN STATE OF AFFAIRS In the opinion of the Directors, significant changes in the state of affairs of the Group that occurred during the year ended 30 June 2022 were as follows: On 7 July 2021, the Company obtained approval at a shareholders’ meeting to issue tranche two of the placement announced in May 2021 to institutional investors and a Director of the Company by issuing 204,973,636 ordinary shares at an issue price of $0.011 raising $2,254,710 before costs. On 14 September 2021, the Company issued 1,250,000 new ordinary shares fully paid shares to a consultant as consideration for Geological Technical Services provided in connection with the Cerro Bayo project in southern Chile. On 1 October 2021, Mr. John Sadek was appointed as Country Manager in Chile and was issued 2,500,000 new ordinary shares fully paid shares as part of his employment agreement. On 11 October 2021, Equus executed its option with Mandalay Resources Corporation (‘Mandalay’) over the Cerro Bayo Project in Southern Chile to acquire 100% equity in Compañía Minera Cerro Bayo Limitada (‘CMCB’). On 25 November 2021, at the Annual General Meeting, shareholders approved the acquisition of CMCB from Mandalay, and on 2 December 2021, Equus issued 587,502,438 ordinary shares to Mandalay to acquire 100% of the equity interest in CMCB. In addition, Equus will pay Mandalay 2.25% of the Net Smelter Returns (NSR Royalty) upon the production of 50,000 gold equivalent ounces. On 1 December 2021, Equus completed its acquisition of the Cerro Bayo Project from Mandalay Resources Corporation (TSX:MND, OTCQB: MNDJF), which remains the company’s key focus. The Cerro Bayo Project and infrastructure is optimally situated nearby Equus’s Los Domos and Cerro Diablo Projects. Equus gained control of processing of the low-grade stockpiles which Mandalay Resources (‘Mandalay’) had commenced in late February 2021. Production from the low- grade stockpiles is providing important information on plant operational parameters and efficiencies to support Equus’s further Cerro Bayo mine restart studies during 2022-2023. The Cerro Bayo mining property comprises 29,495 hectares of mining claims which are optimally located with respect to the mine infrastructure. As identified by drilling and mapping to date, from which a large database of surface and drill hole geochemical and geological data was compiled, the Cerro Bayo Project area hosts at least 100 veins, stockwork and breccia structures hosting gold and silver mineralization for which the company considers highly prospective. The project includes an operational 1,500tpd flotation processing plant for which Mandalay Resources commenced processing of low- grade stockpiles in late February 2021 via the commissioning of the plant which was previously on care and maintenance. The mine infrastructure also includes a permitted tailings storage facility and all power generation, in addition to a large proportion of the fixed and mobile plant required for a potential restart of mining of insitu resources. Within the expansive 295km2 mining claim package at Cerro Bayo, Equus is evaluating the potential for future higher-grade feedstock for the plant based on several potential sources which include the JORC 2012 compliant inferred resource at Taitao and potential extensions to mineralisation adjacent to the numerous other historic mines throughout the Cerro Bayo Project. In parallel, the Company is aggressively exploring what it believes to be compelling potential at our Taitao, Pegaso, Brahman and Droughtmaster targets, and other large portions of the Cerro Bayo district that the Company considers underexplored. Equus Mining Limited Annual Report 2022 25 Directors’ Report On 2 December 2021, Equus appointed Mr. Ryan Austerberry as Non-executive Director. LIKELY DEVELOPMENTS On 8 December 2021, the Company consolidated its issued securities (ordinary shares and options) on a 1 for 20 basis. During December 2021, the Company announced a placement to be conducted on two tranches on a post-consolidated basis. – The Placement was conducted under two tranches. Under tranche 1 the Company issued 13,080,000 new ordinary shares at an issue price of $0.17 per share for a total consideration of $2,223,600 before costs. – Tranche 2 of the placement was completed on 9 February 2022 the company issued 6,355,294 ordinary shares raising $1,080,400 before costs. Other than the matters detailed above, there were no other significant changes in the affairs of the Company during the year. ENVIRONMENTAL REGULATIONS The Group’s operations are subject to various environmental laws and regulations in Chile where it has operations. The group measures its performance against environmental regulations by monitoring incidents according to their actual environmental impact. Incidents are reported to the Managing Director immediately after occurring. There were no environmental incidents for the year ended 30 June 2022. The Company is undertaking a range of mine related baseline and drill permitting environmental studies throughout the Cerro Bayo Project pertaining to future potential mining, increasing tailings dam capacity and exploration. The Group has provided for the rehabilitation obligations at the Cerro Bayo Project. The Board believes that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Group. During the course of the 2023 financial year, the Company will focus principally on advancing brownfield and greenfields exploration drilling programs, resource evaluation, and optimising the current production from the low-grade stockpiles of the Cerro Bayo Project. Ongoing strategic assessment will continue for the nearby Los Domos and Cerro Diablo Projects and additional areas of exploration interest in the vicinity of the Cerro Bayo Mine infrastructure. Results from which they will make public in accordance with ASX listing rules once the information is received. Further information as to likely developments in the operations of the Group and the expected results of those operations in subsequent years have not been included in this report because disclosure of this information would be likely to result in unreasonable prejudice to the Group. EVENTS SUBSEQUENT TO BALANCE DATE On 2 September 2022, the Company issued 12,755,000 ordinary shares to institutional investors at an issue price of $0.10 raising $1,275,500 before costs. Other than the matters detailed above, no other matters or circumstances have 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 or unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years. INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS During or since the end of the financial, the Company has not indemnified or made a relevant agreement to indemnify an officer or auditor of the Company against a liability incurred as such by an officer or auditor. The Group has not paid or agreed to pay, a premium in respect of a contract insuring against a liability incurred by an officer or auditor. 26 Equus Mining Limited Annual Report 2022 Directors’ Report REMUNERATION REPORT - Audited Principals of compensation - Audited Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Group. Key management personnel comprise the directors of the Company. No other employees have been deemed to be key management personnel. The remuneration policy of Directors is to ensure the remuneration package properly reflects the persons’ duties and responsibilities, and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Board is responsible for reviewing its own performance. The evaluation process is designed to assess the Group’s business performance, whether long-term strategic objectives are being achieved, and the achievement of individual performance objectives. The Constitution and ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by a general meeting. The latest determination was at a shareholders meeting on 25 November 2021 when the shareholders approved an aggregate remuneration of $300,000 per year. Remuneration generally comprises of salary and superannuation. Long-term incentives are able to be provided through the Company’s share option program, which acts, to align the Director’s and senior executive’s actions with the interests of the shareholders. The remuneration disclosed below represents the cost to the Group for services provided under these arrangements. John Braham, Mark Lochtenberg, Damien Koerber and Ryan Austerberry are paid through the Company’s payroll. All other Directors services are paid by way of an arrangement with related parties. There were no remuneration consultants used by the Company during the year ended 30 June 2022, or in the prior year. Consequences of performance on shareholders’ wealth - Audited In considering the Group’s performance and benefits for shareholders’ wealth, the Board has regard to the following indices in respect of the current financial year and the previous four financial years. 2022 $ 2021 $ 2020 $ 2019 $ 2018 $ Net loss attributable to equity holders of the parent 3,981,385 1,716,498 1,728,160 942,751 2,142,214 Dividends paid Change in share price - (0.12) - - - - - (0.02) - - The overall level of key management personnel’s compensation has been determined based on market conditions, the advancement of the Group’s projects and the financial performance of the Group. Remuneration Structure - Audited In accordance with better practice corporate governance, the structure of Executive Director and Non- Executive Director remuneration is separate and distinct. Equus Mining Limited Annual Report 2022 27 Directors’ Report Service contracts - Audited In accordance with better practice corporate governance, the company provided each key management personnel with a letter detailing the terms of appointment, including their remuneration. Key management personnel may at any time resign by written notice. Details of the nature and amount of each major element of the remuneration of each Director of the Company and other key management personnel of the Company and Group are: Primary Salary / Fees $ Bonus $ Super- annuation $ Year Share-Based Payments Options $ Other Short Term Benefit(4) $ Total $ Executive Directors John Braham 2022 272,917 150,000 42,292 - 35,952 501,161 2021 200,000 - 19,000 160,000 1,469 380,469 Damien Koerber 2022 229,166 25,000 25,417 - 31,507 311,090 19,000 40,000 16,799 275,799 2021 200,000 Non-Executive Directors Mark Lochtenberg 2022 75,000 2021 33,750 Robert Yeates 2022 50,000 David (Ted) Coupland(1), (3) 2022 119,900 2021 31,667 Ryan K. Austerberry(2) 2022 29,167 2020 1,644 2021 - - - - - - - - - - 7,500 3,206 - - - - 2916 - Total all directors 2022 776,150 175,000 78,125 - - - - - - - - - - - - - - - 82,500 36,956 50,000 31,667 119,900 1,644 32,083 - 67,459 1,096,734 2021 467,061 - 41,206 200,000 18,268 726,535 (1) Appointed as Director on 21 June 2021. (2) Appointed as Director on 2 December 2021 (3) Mr. Coupland received $50,000 in Director’s fees and $69,900 for technical services. (4) Other short term benefit relates to annual leave expensed during the year Executive Directors - Audited During the financial year ended 30 June 2022, John Braham and Damien Koerber were considered Executive Directors. Their remuneration for the year ended 30 June 2022 comprised of fixed remuneration plus 10% statutory superannuation paid through the Company’s payroll. In addition, Mr. Braham and Mr. Koerber received a combined Bonus payment of $175,000 which was determined at the discretion of the board. 28 Equus Mining Limited Annual Report 2022 Directors’ Report Options granted as compensation - Audited Refer below for the Options granted to John Braham and Damien Koerber. The Company employed no other key management personnel. The options granted to key management personnel were not subject to any performance or service conditions and vested immediately. Details of options granted as compensation to each key management person in the current and prior year: Director Grant Date Number of Options Granted Fair value per option at grant date Fair Value at Grant Date Option Terms (Exercise Price and Term) John Braham 14 October 2019 (1)250,000 $0.172 $43,000 $1.00 at any time to 13 November 2021 John Braham 14 October 2019 (1)250,000 $0.236 $59,000 $1.40 at any time to 13 November 2023 John Braham 29 November 2019 (2)333,333 $0.168 $56,000 $0.54 at any time to 13 November 2021 John Braham 29 November 2019 (2)333,333 $0.202 $67,333 $0.60 at any time to 13 November 2022 John Braham 29 November 2019 (2)333,333 $0.24 $80,000 $0.70 at any time to 13 November 2024 John Braham 25 November 2020 (3)333,333 $0.14 $46,667 $0.44 at any time to 25 November 2023 John Braham 25 November 2020 (4)333,333 $0.16 $53,333 $0.50 at any time to 25 November 2024 John Braham 25 November 2020 (4)333,333 $0.18 $60,000 $0.54 at any time to 25 November 2025 Damien Koerber 25 November 2020 (3)83,333 $0.14 $11,667 $0.44 at any time to 25 November 2023 Damien Koerber 25 November 2020 (4)83,333 $0.16 $13,333 $0.50 at any time to 25 November 2024 Damien Koerber 25 November 2020 (4)83,333 $0.18 $15,000 $0.54 at any time to 25 November 2025 – The fair value of the (1) 250,000 options on a post-consolidated basis at grant date was determined based on a Black- Scholes formula. The model inputs of the options issued, were the Company’s share price of $0.0155 (share price post consolidation $0.31) at the grant date, a volatility factor of 152.60% based on historic share price performance, a risk free rate of 0.71% based on the 2 year government bond rate and no dividends paid. – The fair value of the (2) 666,666 options on a post-consolidation basis at grant date was determined based on a Black- Scholes formula. The model inputs of the options issued, were the Company’s share price of $0.014 (share price post consolidation $0.28) at the grant date, a volatility factor of 149.46% based on historic share price performance, a risk free rate of 0.65% based on the 3 year government bond rate and no dividends paid. – The fair value of the (3) 416,666 options on a post-consolidated basis at grant date was determined based on a Black- Scholes formula. The model inputs of the options issued, were the Company’s share price of $0.011 (share price post consolidation $0.22) at the grant date, a volatility factor of 136.20% based on historic share price performance, a risk free rate of 0.11% based on the 3 year government bond rate and no dividends paid. – The fair value of the (4) 833,332 options on a post-consolidated basis at grant date was determined based on a Black- Scholes formula. The model inputs of the options issued, were the Company’s share price of $0.011 (share price post consolidation $0.22) at the grant date, a volatility factor of 136.20% based on historic share price performance, a risk free rate of 0.30% based on the 5 year government bond and no dividends paid. During the year ended 30 June 2022 583,333 unlisted options on a post consolidated basis lapsed (2021: 250,000 on a post consolidated basis) and no options held by key management personnel were exercised during the 2022 or 2021 financial years. Equus Mining Limited Annual Report 2022 29 Directors’ Report Modification of terms of equity-settled share-based payment transactions - Audited No terms of equity- settled share based payment transactions (including options granted as compensation to a key management person) have been altered or modified by the issuing entity during the 2022 and 2021 financial years. Exercise of options granted as compensation - Audited There were no shares issued to Directors on the exercise of options previously granted as compensation during the 2022 and 2021 financial years. Analysis of options and rights over equity instruments granted as compensation - Audited All options refer to options over ordinary shares of Equus Mining Limited, which are exercisable on a one-for- one basis. Director Number Date Options granted % vested at year end Expired during the year Balance at year end Financial year in which grant vests John Braham 500,000 14 October 2019 John Braham 999,999 29 November 2019 John Braham 999,999 25 November 2020 Damien Koerber 249,999 25 November 2020 100% 100% 100% 100% 250,000 250,000 30 June 2020 333,333 666,666 30 June 2020 - - 999,999 30 June 2021 249,999 30 June 2021 The number of options that had vested on a post-consolidation basis as at 30 June 2022 is 2,166,664 (2021 – 2,750,000 on a post-consolidation basis). No options were granted as remuneration during the year (2021: 1,250,000 on a post-consolidation basis). No options were granted as compensation subsequent to year end. Analysis of movements in options granted as compensation - Audited Director John Braham Damien Koerber Value of options granted in the year Value of options exercised in the year - - - - Options and rights over equity instruments - Audited The movement during the reporting period in the number of options over ordinary shares in the Company held directly, indirectly or beneficially, by each key management person, including their personally related entities, is as follows: Option holdings 2022 - Audited Held at 1 July 2021 Post consolidation Granted / Purchased Exercised / Sold Expired Held at 30 June 2022 Vested and exercisable at 30 June 2022 Directors Mark Lochtenberg - John Braham Damien Koerber Robert Yeates David (Ted) Coupland Ryan Austerberry 2,499,998 249,999 - - - - - - - - - - - - - - - - - - 583,333 1,916,665 1,916,665 - - - - 249,999 249,999 - - - - - - 30 Equus Mining Limited Annual Report 2022 Directors’ Report Loans to key management personnel and their related parties - Audited There were no loans made to key management personnel or their related parties during the 2022 and 2021 financial years and no amounts were outstanding at 30 June 2022 (2021 - $nil). Other transactions with key management personnel - Audited There were no other transactions with key management personnel or their related parties during 2022. At 30 June 2022, the amount outstanding for salaries, superannuation and directors fees were $22,492 (2021: nil). Movements in shares - Audited The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or beneficially by each key management personnel, including their related parties, is as follows: Fully paid ordinary shareholdings and transactions - 2022 Key management personnel Held at 30 June 2021 Post Consolidation Purchases Sales Other Mark Lochtenberg 3,155,538 9,331,893 John Braham Damien Koerber Robert Yeates David (Ted) Coupland* Ryan Austerberry 742,483 2,114,546 343,538 799,978 - 296,470 58,824 - 144,706 - - - - - - - - - - - - - Held at 30 June 2022 12,487,431 1,038,953 2,173,370 343,538 944,684 - * Number of shares held at date of appointment as a Director Non-Executive Directors - Audited During the financial year ended 30 June 2022, the following Directors were considered Non-Executive Directors: – Mark Lochtenberg; – Robert Yeates; – David (Ted) Coupland; – Ryan Austerberry. The salary component of Non-Executive Directors was made up of: – fixed remuneration; – 10% statutory superannuation for Australian resident directors pay through the Company’s payroll; and – an entitlement to receive options, subject to shareholders’ approval. The services of non-executive directors who are not paid through the Company’s payroll system are provided by way of arrangements with related parties. End of remuneration report. Equus Mining Limited Annual Report 2022 31 Directors’ Report NON-AUDIT SERVICES During the year ended 30 June 2022 KPMG, the Group’s auditor, did not perform other services in addition to the audit and review of the financial statements. Details of the amounts paid to the auditor of the Group, KPMG, and its network firms for audit and non-audit services provided during the year are set out below. Services other than audit and review of financial statements: Other services Audit and review of financial statements AUDITOR’S INDEPENDENCE DECLARATION 2022 $ 2021 $ - - 134,500 134,500 90,750 90,750 The lead auditor’s independence declaration is set out on page 33 and forms part of the Directors’ Report for the financial year ended 30 June 2022. Signed at Sydney this 30th day of September 2022 in accordance with a resolution of the Board of Directors: Mark H. Lochtenberg Chairman John R. Braham Executive Director 32 Equus Mining Limited Annual Report 2022 Lead Auditor’s Independence Declaration Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Equus Mining Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Equus Mining Limited for the financial year ended 30 June 2022 there have been: i. ii. 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. KPMG Jason Adams Partner Brisbane 30 September 2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation Equus Mining Limited Annual Report 2022 33 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 30 June 2022 CONTINUING OPERATIONS Revenue from contracts with customers – sales revenue Other revenue Cost of sales Gross Profit Government grant income Expenses Employee, directors and consultants costs Administration expenses Other expenses Results from operating activities Finance income Finance costs Net finance income Loss before tax Tax benefit/(expense) Loss for the year Notes 2022 $ 2021 $ 4 4 4 5 5 6 15,622,699 253,677 (17,647,398) (1,771,022) - - - - - 50,000 (1,245,834) (952,285) (417,325) (464,399) (1,219,681) (355,837) (4,653,862) (1,722,521) 698,141 (28,525) 669,616 3,514 - 3,514 (3,984,246) (1,719,007) - - (3,984,246) (1,719,007) Other comprehensive income for the year Items that may be classified subsequently to profit or loss: Exchange differences on translation of foreign operations 18 (1,377,401) (1,377,401) 252,926 252,926 Items that will not be classified subsequently to profit or loss Net change in fair value of equity instruments at fair value through other comprehensive income Total other comprehensive gain/(loss) Total comprehensive loss for the year Loss for the year attributable to: Equity holders of the Company Non-controlling interest Total comprehensive loss attributable to: Equity holders of the Company Non-controlling interest 5 (13,096) (999) (1,390,497) 251,927 (5,374,743) (1,467,080) (3,981,385) (1,716,498) (2,861) (2,509) (3,984,246) (1,719,007) (5,371,882) (1,464,571) (2,861) (2,509) (5,374,743) (1,467,080) Earnings per share Basic and diluted loss per share (cents) 19 (2.63) (1.89)* *Restated for share consolidation during the year ended 30 June 2022, refer to Note 17. The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 34 Equus Mining Limited Annual Report 2022 Consolidated Statement of Financial Position Current Assets Cash and cash equivalents Receivables Inventories Prepayments Total Current Assets Non-Current Assets Other receivables Other financial assets Property plant and equipment Exploration and evaluation expenditure Total Non-Current Assets Total Assets Current Liabilities Payables Lease liability Total Current Liabilities Non-Current Liability Lease liability Provision for rehabilitation Total Non-Current Liabilities Total Liabilities Net Assets Equity Share capital Reserves Accumulated losses Parent entity interest Non-controlling interest Total Equity As at 30 June 2022 Notes 2022 $ 2021 $ 7 8 9 10 8 11 12 13 14 15 15 16 17 18 2,148,443 4,724,429 2,209,154 2,325,794 574,087 51,834 - - 7,257,478 4,776,263 7,158,568 - 777 13,803 365,060 - 23,091,596 11,203,674 30,616,001 11,217,477 37,873,479 15,993,740 2,975,736 894,025 165,360 - 3,141,096 894,025 82,680 14,207,888 14,290,568 - - - 17,431,664 894,025 20,441,815 15,099,715 140,177,143 129,460,300 (1,351,513) 137,984 (118,385,050) (114,502,665) 20,440,580 15,095,619 1,235 4,096 20,441,815 15,099,715 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. Equus Mining Limited Annual Report 2022 35 Consolidated Statement of Changes in Equity For the Year Ended 30 June 2022 Balance at 1 July 2020 Profit/(Loss) for the year Total other comprehensive income / (loss) Total comprehensive profit/(loss) for the year Transactions with owners recorded directly in equity Ordinary shares issued Transaction costs on issue of shares Share base payments Changes in ownership interest in subsidiaries Transfer of expired options Balance at 30 June 2021 Balance at 1 July 2021 Profit/(Loss) for the year Total other comprehensive income / (loss) Total comprehensive profit/(loss) for the year Transactions with owners recorded directly in equity Ordinary shares issued Transaction costs on issue of shares Share base payments Changes in ownership interest in subsidiaries Transfer of expired options Balance at 30 June 2022 17 8,987,340 (709,402) - - 17 10,885,232 (168,389) - - - - - - - - - - - (3,981,385) - (3,981,385) Share Capital $ Accumulated Losses $ Option Reserve $ Fair Value Reserve $ Note Foreign Currency Translation Reserve $ Non- controlling Interest $ Total Equity $ Total $ 121,182,362 (112,819,667) 338,833 402,161 (1,234,022) 7,869,667 6,605 7,876,272 - - - (1,716,498) - (1,716,498) - - - - - 412,585 - (1,716,498) (2,509) (1,719,007) (999) 252,926 251,927 - 251,927 (999) 252,926 (1,464,571) (2,509) (1,467,080) - - - - - - - - 8,987,340 (709,402) 412,585 - - - - - 8,987,340 (709,402) 412,585 - 33,500 (33,500) 129,460,300 (114,502,665) 717,918 401,162 (981,096) 15,095,619 4,096 15,099,715 129,460,300 (114,502,665) 717,918 401,162 (981,096) 15,095,619 4,096 15,099,715 - - - - - - - - (3,981,385) (2,861) (3,984,246) (13,096) (1,377,401) (1,390,497) - (1,390,497) (13,096) (1,377,401) (5,371,882) (2,861) (5,374,743) - - - - - 10,885,232 - 10,885,232 - - - (168,389) - - - - - (168,389) - - 99,000 (99,000) 140,177,143 (118,385,050) 618,918 388,066 (2,358,497) 20,440,580 1,235 20,441,815 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. 36 Equus Mining Limited Annual Report 2022 Consolidated Statement of Cash Flows Cash flows from operating activities Cash receipts in the course of operations Cash payments in the course of operations Net cash used in operations Interest received For the Year Ended 30 June 2022 Notes 2022 $ 2021 $ 15,998,345 50,000 (18,989,750) (1,296,129) (2,991,405) (1,246,129) 3,269 3,514 Net cash used in operating activities 20 (2,988,136) (1,242,615) Cash flows from investing activities Payments for exploration and development expenditure Net cash used in investing activities (4,895,336) (3,590,646) (4,895,336) (3,590,646) Cash flows from financing activities Proceeds from share issues Transaction costs on share issue Lease payments Net cash provided by financing activities Net increase / (decrease) in cash held Cash and cash equivalents at 1 July Effects of exchange rate fluctuations on cash held 5,558,710 8,775,290 (168,389) (516,816) (82,835) - 5,307,486 8,258,474 (2,575,986) 3,425,213 4,724,429 1,304,130 - (4,914) Cash and cash equivalents at 30 June 7 2,148,443 4,724,429 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. Equus Mining Limited Annual Report 2022 37 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 1. REPORTING ENTITY Equus Mining Limited (the ‘Company’) is a company domiciled in Australia. The address of the Company’s registered office is Level 2, 66 Hunter Street, Sydney, NSW, 2000. The consolidated financial statements of the Company as at and for the year ended 30 June 2022 comprises the Company and its subsidiaries (together referred to as the ‘Group’). The Group is a for-profit entity and is primarily engaged in identifying and evaluating mineral resource opportunities in Southern Chile, South America. 2. BASIS OF PREPARATION (a) Statement of compliance The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (‘IFRSs’) and interpretations adopted by the International Accounting Standards Board (‘IASB’). The consolidated financial statements were authorised for issue by the Directors on 30 September 2022. (b) Basis of measurement The consolidated financial statements have been prepared on the historical cost basis except for certain financial assets which are measured at fair value. (c) Functional and presentation currency These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency. (d) Going concern The consolidated financial statements have been prepared on a going concern basis, which contemplates the realisation of assets and settlement of liabilities in the ordinary course of business. During the year, the Company raised $5,558,710 (net of associated costs) through the issue of ordinary shares via placements. The Group recorded a loss attributable to equity holders of the Company of $3,981,385 for the year ended 30 June 2022 and has accumulated losses of $118,385,050 as at 30 June 2022. The Group has cash on hand of $2,148,443 at 30 June 2022 and used $7,883,472 of cash in operations, including payments for exploration and evaluation, for the year ended 30 June 2022. Since the end of the financial year, Equus raised $1,275,500 (before costs) through a share placement. The additional funding will primarily be used by the Group to fund its exploration program at the Cerro Bayo project and working capital. The Directors have prepared cash flow projections for the period 1 July 2022 to 30 September 2023 that support the ability of the Group to continue as a going concern. The cash flow projections assume the Group continues substantial exploration activities in the Cerro Bayo area of interest and the processing of low- grade waste stockpiles at Cerro Bayo that were acquired in December 2021. The ability to generate net cash inflows from the processing of these low-grade stockpiles is uncertain and highly sensitive to fluctuations in commodity prices, stockpile grades, processing plant performance and cash operating costs. As a result, the Group plans to seek additional funding from shareholders or other parties to continue its operations that is yet to be secured at the date of this report. If such funding is not secured, the Group plans to reduce expenditure to the level of funding available. 38 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 1. REPORTING ENTITY (Cont’d) These conditions give rise to a material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern. The ongoing operation of the Group is dependent upon the Group raising additional funding from shareholders or other parties and/or the Group reducing expenditure in-line with available funding. In the event that the Group does not obtain additional funding and/or reduce expenditure in line with available funding, which are uncertain until secured or realised, it may not be able to continue its operations as a going concern and therefore may not be able to realise its assets and extinguish its liabilities in the ordinary course of operations and at the amounts stated in the consolidated financial statements. (e) Use of estimates and judgements The preparation of the consolidated financial statements in conformity with AASBs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the consolidated financial statements are described in the following notes: – Going Concern (Note 2 (d)); – Inventories (Note 9); – Provision for rehabilitation (Note 16); – Exploration and evaluation (Note 13); – Acquisition of controlled entities (Note 28). (f) Business combinations The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Subsequent changes in fair value are adjusted against the cost of the acquisition where they qualify as measurement period adjustments. Any goodwill that arises is tested annually for impairment. Any gain on bargain purchase is recognised in the profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss. Equus Mining Limited Annual Report 2022 39 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (a) Changes in accounting policies The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by entities in the Group. (b) Revenue Revenue from contracts with customers is recognised when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company has generally concluded that it is the principal in its revenue contracts because it typically controls the goods or services before transferring them to the customer. Sales of certain commodities are provisionally priced such that the price is not settled until a predetermined future date based on the market price at that time. Revenue on these sales is initially recognised at the current market price. The receivables relating to provisionally priced sales are marked to market at each reporting date using the forward price for the period equivalent to that outlined in the contract. This mark to market adjustment is recognised in revenue but is not considered to be revenue from contracts with customers. (c) Inventories Finished goods, work-in-process and stockpiled ore are valued at the lower of average production cost or net realisable value. Production costs include the cost of raw materials, direct labour, mine-site overhead expenses and depreciation and depletion of mining interests. Net realisable value is calculated as the estimated price at the time of sale based on prevailing and long-term metal prices less estimated future production costs to convert the inventories into saleable form and the costs necessary to make the sale. In-process inventories represent materials that are currently in the process of being converted into finished goods. The average production cost of finished goods represents the average cost of in-process inventories incurred prior to the refining process, plus applicable refining costs and associated royalties. Consumables are valued at the lower of average cost and net realisable value. (d) Finance income and finance costs Finance income comprises interest income on funds invested, dividend income. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date. Finance costs comprise interest expense on borrowings. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Foreign currency gains and losses are reported on a net basis. 40 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (e) Plant and equipment Plant and equipment are recorded at cost less accumulated depreciation, depletion and impairment charges. Where an item of plant and equipment comprises major components with different useful lives, the components are accounted for as separate items of plant and equipment. Expenditures incurred to replace a component of an item of plant and equipment that is accounted for separately, including major inspection and overhaul expenditures, are capitalised. Any remaining book value associated with the component being replaced is derecognised upon its replacement. Directly attributable costs incurred for major capital projects and site preparation are capitalised until the asset is brought to a working condition for its intended use. These costs include dismantling and site restoration costs to the extent these are recognized as a provision. (f) Depreciation Management reviews the estimated useful lives, residual values and depreciation methods of the Company’s property, plant and equipment at the end of each reporting period and when events and circumstances indicate that such a review should be made. Changes to estimated useful lives, residual values or depreciation methods resulting from such review are accounted for prospectively. Plant and equipment cost is depreciated, using the units of production method over their estimated useful lives. Assets under construction are not depreciated until their construction is substantially complete and they are available for their intended use. In the case of projects involving the development of mineral properties, this is when the property has achieved commercial production. (g) Exploration and evaluation expenditure Exploration and evaluation expenditure, including the costs of acquiring licences, are capitalised as intangible exploration and evaluation assets on an area of interest basis, less any impairment losses. Costs incurred before the Group has obtained the legal rights to explore an area are recognised in profit or loss. Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either: – the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or – activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to, the area of interest are continuing. Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability and facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. The cash generating unit shall not be larger than the area of interest. Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to developing mine properties. Equus Mining Limited Annual Report 2022 41 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (h) Financial instruments Non-derivative financial assets Recognition and initial measurement The Group initially recognises trade receivables on the date that they are originated. All other financial assets are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. Classification and subsequent measurement On initial recognition, a financial asset is classified as measured at: – Amortised cost; – Fair value through other comprehensive income – equity investment; or – Fair value through profit or loss. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model. A financial asset is measured at amortised cost if it meets both the following conditions and is not designated as fair value through profit or loss: – It is held within a business model whose objective is to hold assets to collect contractual cash flows; and – Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value through OCI. This election is made on an investment-by-investment basis. All financial assets not classified as measured at amortised cost or fair value through other comprehensive income as described above are measured at fair value through profit or loss. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at fair value through other comprehensive income as at fair value through profit or loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. The Group has trade receivables with embedded derivatives for provisional pricing. These receivables are generally held to collect but do not meet the SPPI criteria and as a result must be held at FVTPL. 42 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) Non-derivative financial liabilities Financial liabilities are measured at amortised cost. The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Other financial liabilities comprise loans and borrowings and trade and other payables. (i) Basis of consolidation Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Non-controlling interests NCI are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Loss of control When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. Transactions eliminated on consolidation Intra-group balances and any unrealised gains and losses or income and expenses arising from intragroup transactions are eliminated in preparing the consolidated financial statements. (j) Share Capital Ordinary Shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. (k) Trade and other receivables and payables Trade receivables and payables are carried at amortised cost. For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. All other receivables and payables are discounted to determine the fair value. Equus Mining Limited Annual Report 2022 43 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (l) Impairment Non-derivative financial assets The Group recognises loss allowances to an amount equal to lifetime expected credit losses (ECLs), except for the following, which are measured at 12-month ECLs: – Debt securities that are determined to have a low credit risk at the reporting date; and – Other debt securities and bank balances for which credit risk (i.e the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition. Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs. Measurement of ECLs ECLs are a probability weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. ECL’s are discounted at the effective interest rate of the financial asset. Non-financial assets An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset or CGU is the greater of their 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 or CGU. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Impairment losses are recognised in profit or loss. Reversals of impairment An impairment loss in respect of a financial asset carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. In respect of non-financial assets, an impairment loss is reversed if there has been a conclusive change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (m) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. 44 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (n) Income tax Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or in other comprehensive income. Current tax Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for: – temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; – temporary differences related to investments in subsidiaries to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; or – taxable temporary differences arising on the initial recognition of goodwill. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. (o) Foreign currency transactions Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at the reporting date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of investments in equity securities designated as FVOCI, a financial liability designated as a hedge of the net investment in a foreign operation or qualifying cash flow hedges, which are recognised in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Equus Mining Limited Annual Report 2022 45 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (p) Foreign operations The assets and liabilities of foreign operations are translated to Australian dollars at foreign exchange rates ruling at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in the foreign currency translation reserve (‘FCTR’), a separate component of equity. Foreign exchange gains and losses arising from a monetary item receivable or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognised directly in the FCTR. Any references to functional currency, unless otherwise stated, are to the functional currency of the Company, Australian dollars. When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss as part of the profit or loss on disposal. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented within equity in the FCTR. (q) Segment reporting Determination and presentation of operating segments The Group determines and presents operating segments based on the information that is provided internally to the Executive Director, who is the Group’s chief operating decision maker. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are regularly reviewed by the Group’s Executive Director to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Segment results that are reported to the Executive Director include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head office expenses, and income tax assets and liabilities. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill. (r) Provisions Provisions are recorded when a present legal or constructive obligation exists as a result of past events, where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount of the obligation can be made. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation estimated at the end of each reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset. 46 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (s) Goods and services tax (GST) 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. 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 balance sheet are shown inclusive of GST. Cash flows are presented in the Consolidated Statement of Cash Flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (t) Employee benefits Short-term employee benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Share-based payment transactions The grant-date fair value of share-based payment awards granted is recognised as an employee and consultants expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. (u) Determination of fair values A number of the Group’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/ or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Investments in equity securities The fair values of investments in equity securities are determined with reference to the quoted market price that is most representative of the fair value of the security at the measurement date. Share-based payment transactions The fair value of the share options is measured using the Black-Scholes formula. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility), expected dividends, and the risk-free interest rate (based on government bonds). The grant-date fair value of share-based payment awards is recognised as an expense, with a corresponding increase in equity, over the period that the recipient unconditionally become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. Service and non-market performance conditions are not taken into account in determining fair value. Equus Mining Limited Annual Report 2022 47 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 3. SIGNIFICANT ACCOUNTING POLICIES (Cont’d) (v) Lease accounting The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group applies a single measurement recognition and approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group’s exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. 48 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements 4. LOSS FROM OPERATING ACTIVITIES Other revenue For the Year Ended 30 June 2022 2022 $ 253,677 253,677 2021 $ - - The other revenue relates to the changes between provisionally priced invoices and the final price recorded per the quotation periods stipulated in the sales contracts. Other income Recognised in profit or loss Government grant Other expenses Depreciation Travel Audit and review services – KPMG Accounting and secretarial fees Legal fees ASIC and ASX fees 5. FINANCE INCOME AND FINANCE COSTS Recognised in profit and loss Interest income on cash deposits Foreign exchange gain / (loss) Finance income Finance costs 2022 $ 2021 $ - - 50,000 50,000 81,920 126,118 134,500 72,922 692,016 112,205 - - 90,750 28,300 139,012 97,775 1,219,681 355,837 2022 $ 2021 $ 3,269 3,514 694,872 698,141 (28,525) - 3,514 - Net finance income/(costs) recognised in profit or loss 669,616 3,514 Recognised in other comprehensive income Net change in fair value of equity instruments at fair value Finance cost recognised in other comprehensive income, net of tax (13,096) (13,096) (999) (999) Equus Mining Limited Annual Report 2022 49 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 6. INCOME TAX EXPENSE Current tax expense Current year Overprovision in prior year Losses not recognised 2022 $ 2021 $ (352,838) (526,520) - - 352,838 526,520 - - Numerical reconciliation of income tax expense to prima facie tax payable: Loss before tax 3,984,248 1,719,007 Prima facie income tax benefit at the Australian tax rate of 25% (2021: 26%) (1,095,668) (446,942) Decrease in income tax benefit due to: - non-deductible expenses 381,100 76,541 - effect of deferred tax asset (DTA) for capital losses not brought to account - - - effect of DTA for tax losses not brought to account - effect of DTA for temporary differences not brought to account Income tax expense/(benefit) 687,303 37,876 27,265 332,525 - - Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Capital losses Tax losses – Australian entities Tax losses – Chilean entities Net deductible temporary differences Potential tax benefit at 25% (2021: 26%) 5,908,891 5,574,426 4,158,744 4,023,021 14,955,384 - 245,973 272,483 25,268,992 9,869,930 The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits there-from. The Australian and Chilean tax losses do not expire under current tax legislation. 7. CASH AND CASH EQUIVALENTS Cash at bank Deposits at call 2022 $ 2021 $ 1,088,308 615,889 1,060,135 4,108,540 2,148,443 4,724,429 50 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 8. RECEIVABLES Current Trade receivables Income tax paid in advanced Goods and service tax and value added tax Other Non-current Reimbursement for rehabilitation costs 2022 $ 2021 $ 1,863,555 181,296 160,038 4,265 2,209,154 - - - 51,834 51,834 7,158,568 - 9,367,722 51,834 In accordance with the acquisition agreement, Mandalay Resources Corporation has agreed to contribute 50% of the closure cost up to AU $7,158,568 (plus V.A.T.). The Group has recognised a receivable from Mandalay in relation to this reimbursement right. 9. INVENTORIES INVENTORIES Gold and silver concentrate Consumables Impairment of consumables 2022 $ 2021 $ 1,864,115 1,823,326 (1,361,647) 2,325,794 - - - - Compañía Minera Cerro Bayo SpA has an offtake agreement with Glencore Chile SpA. (‘Glencore’) for the supply of gold and silver concentrate. The contract duration of twelve months, from April 2022 to March 2023. The contract can be extended for a period of up to 6 (six) months until September 2023.The price of the material is calculated using the official LBMA price in USD as published on the Fastmarket MB. Inventories are measured at the lower of cost and net realisable value. Equus Mining Limited Annual Report 2022 51 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 10. PREPAID EXPENSES Prepaid expenses 11. INVESTMENTS 2022 $ 574,087 574,087 2021 $ - - At 30 June 2022, the Group holds 1,327,000 shares (30 June 2021: 1,327,000) in Blox Inc., a US over the counter traded company at which had a closing share price of US$0.00048 at 30 June 2021 (30 June 2021: US$0.0078). The Group recognises its financial assets at fair value and classifies its investments as follows: 2022 $ 2021 $ Equity instruments at fair value through other comprehensive income Equity securities – Investment in Blox Inc. 777 13,803 Equity instruments at fair value through other comprehensive income are equity instruments which the Group intends to hold for the foreseeable future. Any dividends received are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in the fair value reserve in OCI and are never reclassified to profit or loss. Movement of the carrying amount of investment. Movement during the period Opening balance Net change in fair value Equity securities – at fair value through other comprehensive income 2022 $ 13,803 (13,026) 777 2021 $ 14,802 (999) 13,803 52 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements 12. PLANT AND EQUIPMENT Plant and office equipment - at cost Additions Accumulated depreciation Foreign currency exchange Computers - at cost Additions Accumulated depreciation Foreign currency exchange Motor Vehicles Additions Accumulated depreciation Foreign currency exchange Total plant and equipment - net book value For the Year Ended 30 June 2022 2022 $ 2021 $ - 108,439 (2,512) (104) 105,823 - 14,276 (761) (32) 13,483 - 327,672 (78,647) (3,271) 245,754 365,060 - - - - - - - - - - - - Equus Mining Limited Annual Report 2022 53 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 12. PLANT AND EQUIPMENT (Cont’d) Reconciliations of the carrying amounts for each class of plant and equipment are set out below: Plant and office equipment Balance at 1 July Additions Depreciation Foreign currency exchange Carrying amount at the end of the financial year Computers Balance at 1 July Additions Depreciation Foreign currency exchange Carrying amount at the end of the financial year Motor Vehicles Balance at 1 July Addition new lease Depreciation Foreign currency exchange Carrying amount at the end of the financial year Total carrying amount at the end of the financial year 2022 $ 2021 $ - 108,439 (2,512) (105) 105,823 - 14,276 (761) (32) 13,483 - 327,672 (78,647) (3,271) 245,754 365,060 - - - - - - - - - - - - - - - 54 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 13. EXPLORATION AND EVALUATION EXPENDITURE Los Domos gold-silver Cerro Diablo gold-silver Cerro Bayo Net Book Value Los Domos gold-silver Carrying amount at the beginning of the year Additions Foreign currency translation movement Balance carried forward Cerro Diablo gold-silver Carrying amount at the beginning of the year Additions Foreign currency translation movement Balance carried forward Cerro Bayo Carrying amount at the beginning of the year Additions Additions via acquisition of Compañía Minera Cerro Bayo Foreign currency translation movement Balance carried forward Net book value 2022 $ 2021 $ 4,374,815 4,979,807 73,478 72,404 18,643,303 6,151,463 23,091,596 11,203,674 4,979,807 4,743,528 45,466 70,044 (650,458) 166,235 4,374,815 4,979,807 72,404 11,443 (10,369) 73,478 58,423 11,751 2,230 72,404 6,151,463 2,093,325 4,895,336 3,941,212 8,552,360 - (955,856) 116,926 18,643,303 6,151,463 23,091,596 11,203,674 The ultimate recoupment of exploration and evaluation expenditure is dependent on the successful development and commercial exploitation, or alternatively sale of the respective areas of interest. Equus Mining Limited Annual Report 2022 55 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 14. TRADE AND OTHER PAYABLES Current liabilities Trade creditors and accruals Employee leave entitlements 15. LEASE LIABILITY Current Non-current 2022 $ 2021 $ 2,688,123 842,710 287,613 51,315 2,975,736 894,025 2022 $ 2021 $ 165,360 82,680 - - 248,040 894,025 16. PROVISION FOR REHABILITATION Compañía Minera Cerro Bayo has a closure plan approved by the Chilean National Service of Geology and Mining (Sernageomin) dated 17 May 2019 and amended on 23 June 2020. The closure plan cost is the amount of 332.65 UF (Chilean Unidades de Fomento) AU $14,207,888 (plus V.A.T.) as determined by Sernageomin. In accordance with the acquisition agreement, Mandalay Resources Corporation has agreed to contribute 50% of the closure cost up to AU $7,158,568 (plus V.A.T.). The Group has recognised a receivable from Mandalay in relation to this contribution. 56 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 17. ISSUED CAPITAL (a) Fully paid ordinary shares 2022 2021 Nº $ Nº $ Balance at beginning of financial year 2,296,617,251 129,460,300 1,412,045,355 121,182,362 Issued ordinary shares 20 July 2020 for $0.009 Issued ordinary shares 20 September 2020 for $0.009 Issued ordinary shares 9 December 2020 – non cash Issued ordinary shares 14 January 2021 – non cash Issued ordinary shares 3 February 2021 for $0.015 Issued ordinary shares 24 February 2021 – non cash Issued ordinary shares 12 May 2021 – non cash Issued ordinary shares 28 May 2021 for $0.0111 Issued ordinary shares 18 June 2021 for $0.011 348,886,300 3,139,977 40,002,589 360,023 3,300,000 36,300 11,538,462 150,000 2,000,000 1,250,000 750,000 30,000 16,375 9,375 431,390,000 4,745,290 45,454,545 500,000 Issued ordinary shares 7 July 2021 for $0.011 11 204,973,636 2,254,710 Issued ordinary shares 14 September 2021 – non cash2 1,250,000 Issued ordinary shares 1 October 2021 – non cash3 2,500,000 14,000 25,000 Issued ordinary shares 2 December 2021 – non cash4 587,502,438 5,287,522 Consolidation of 1 share for every 20 (2,938,201,665) - Issued ordinary shares 16 December 2021 for $0.175 13,080,000 2,223,600 Issued ordinary shares 9 February 2022 for $0.175 6,355,294 1,080,400 Less cost of issue - (168,389) (709,402) 174,076,954 140,177,143 2,296,617,251 129,460,300 1 On 21 May 2021, the Company announced a share placement of 636,363,636 shares in two tranches: – Pursuant to tranche 1, the Company issued 431,390,000 ordinary shares under the offer at $0.011 per share raising $4,745,290 before costs during the financials ended 30 June 2021. – Pursuant to tranche 2, the Company issued 204,973,636 ordinary shares under the offer at $0.011 per share raising $2,254,710 before costs. 2 Shares issued on 14 September 2021 related to the issued of shares as consideration for Geological Technical Services provided in connection with the Cerro Bayo project in southern Chile. 3 Shares issued on 1 October 2021 related to the issued of shares to John Sadek appointed as Country Manager in Chile as part of his employment agreement. 4 Shares issued on 2 December 2021 related to the acquisition of the issued capital of Compañía Minera Cerro Bayo Limited. 5 On 8 December 2021, the Company announced a share placement of 19,435,294 shares in two tranches: – Pursuant to tranche 1, the Company issued 13,080,000 ordinary shares under the offer at $0.17 per share raising $2,223,600 before costs during the half year ended 31 December 2021. – Pursuant to tranche 2, the Company issued 6,355,294 ordinary shares under the offer at $0.17 per share raising $1,080,400 before costs during February 2022. Fully paid ordinary shares carry one vote per share and carry the right to dividends. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the shareholders meetings. In the event of winding up of the Company, ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation. Equus Mining Limited Annual Report 2022 57 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 17. ISSUED CAPITAL (Cont’d) (b) Share Options During the year ended 30 June 2022, there were no options granted by the Group, the following options were grated during the year ended 30 June 2021: – The Company announced on 20 July 2020, a share placement of 19,444,444 shares post-consolidation. For every one placement share, the company issued one free attaching option. The options are unlisted and have an exercise price of $0.30 post-consolidation, vest immediately and expire on 16 September 2023. The Company has recognised these options as part of the issued share capital amount recorded of $3,500,000 within equity and no allocation to reserves has been made in accordance with the Group’s accounting policy. – The Company announced on 20 July 2020, pursuant to the share placement to grant 750,000 unlisted options post-consolidation to the brokers of the placement. The options have an exercise price of $0.30, vest immediately and expire on 16 September 2023. The fair value of the options was $192,585. The Black-Scholes formula model inputs were the Company’s share price of $0.34 post-consolidation at the grant date, a volatility factor of 129.63% based on historical share price performance and a risk-free interest rate of 0.24% based on the 3-year government bond rate. As the options are not subject to vesting conditions, the total grant date fair value of $192,585 has been recognised in equity as cost of the offer in the year ended 30 June 2021. – During the year ended 30 June 2022 the Company has not granted options to Directors of the Company (2021: options 1,250,000 post-consolidation). On 25 November 2020, 20,000,000 unlisted options were granted to the Managing Director (‘MD’) and 5,000,000 unlisted options were granted to the Chief Operating Officer (‘COO’) as follows: Number of options Post- concolidation Exercise price Post- consolidation Fair Value per Option at Grant Date Post- Vesting Expiry Date consolidation Fair Value Tranche 1 Tranche 2 Tranche 3 416,666 416,666 416,666 $0.44 $0.50 $0.54 Immediately 25 November 2023 Immediately 25 November 2024 Immediately 25 November 2025 $0.14 $0.16 $0.18 $58,333 $66,667 $75,000 The fair value of the options granted on 25 November 2020 to the MD and the COO was $200,000. The Black-Scholes formula model inputs were the Company’s share price of $0.22 post-consolidation at the grant date, a volatility factor of 136.2% based on historical share price performance and a risk-free interest rate of 0.11% based on the 3-year government bond rate. – On 1 December 2020, 125,000 unlisted options post-consolidation were granted to the Group’s Exploration Manager. The options have an exercise price of $0.44 post-consolidation, vest immediately and expire on 1 December 2023. The fair value of the options granted to the Exploration Manager was $20,000. The Black-Scholes formula model inputs were the Company’s share price of $0.24 post-consolidation at the grant date, a volatility factor of 137.27% based on historical share price performance and a risk-free interest rate of 0.12% based on the 3-year government bond rate. – The options issued to the MD, COO and the Exploration manager are not subject to vesting conditions, the total grant date fair value of $220,000 (30 June 2020: $338,833) has been recognised as an expense in the year ended 30 June 2021. The expense has been included in “employee, director and consultants costs” in the income statement. 58 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 17. ISSUED CAPITAL (Cont’d) The following unlisted options were on issue as at 30 June 2022: Opening Balance 1 July 2021 Post- consolidation Number Exercise Price Post- consolidation $ Granted during the year Post- consolidation Number Expired during the year Post- consolidation Number Exercised during the year Post- consolidation Number Closing Balance 30 June 2022 Post- consolidation Number 250,000 250,000 333,333 333,333 333,333 416,666 416,666 416,666 125,000 20,094,427 1.00 1.40 0.54 0.60 0.70 0.44 0.50 0.54 0.44 0.30 - - - - - - - - - - (250,000) - (333,000) - - - - - - - - - - - - - - - - - - 250,000 - 333,333 333,333 416,666 416,666 416,666 125,000 20,094,427 The following unlisted options were on issue as at 30 June 2021: Opening Balance 1 July 2020 Post- consolidation Number Exercise Price Post- consolidation $ Granted during the year Post- consolidation Number Expired during the year Post- consolidation Number Exercised during the year Post- consolidation Number Closing Balance 30 June 2021 Post- consolidation Number 250,000 250,000 250,000 333,333 333,333 333,333 - - - - - 0.60 1.00 1.40 0.54 0.60 0.70 0.44 0.50 0.54 0.44 0.30 250,000 250,000 250,000 333,333 333,333 333,333 416,666 416,666 416,666 125,000 20,194,427 (250,000) - - - - - - - - - - - - - - - - - - - - - 250,000 250,000 333,333 333,333 333,333 416,666 416,666 416,666 125,000 (100,000) 20,094,427 Equus Mining Limited Annual Report 2022 59 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 18. RESERVES Fair value reserve (a) Foreign currency translation reserves (b) Equity based compensation reserve (c) Movements during the period: (a) Fair value reserve Balance at beginning of period Net change in fair value Balance at end of period (b) Foreign currency translation reserves Balance at beginning of period Currency translation differences Balance at end of period (c) Equity based compensation reserve Balance at beginning of period Share based payment – vested share options Options expired during the period Balance at end of period Nature and purpose of reserves Fair value reserve: 2022 $ 2021 $ 388,066 401,162 (2,358,497) (981,096) 618,918 717,918 (1,351,513) 137,984 401,162 402,161 (13,096) (999) 388,066 401,162 (981,096) (1,234,022) (1,377,401) 252,926 (2,358,497) (981,096) 717,918 338,833 - 412,585 (99,000) (33,500) 618,918 717,918 The fair value reserve comprises the cumulative net change in the fair value of equity securities designated at fair value through other comprehensive income. Foreign currency translation reserve: The foreign currency translation reserve records the foreign currency differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the reporting entity. Equity based compensation reserve: The equity based compensation reserve is used to record the options issued to directors and executives of the Company as compensation. 60 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 2022 $ 2021 $ 19. LOSS PER SHARE Basic and diluted loss per share has been calculated using: Net loss for the year attributable to equity holders of the parent (3,981,385) (1,716,498) Weighted average number of ordinary shares (basic and diluted) Issued ordinary shares at beginning of year Share consolidation Effect of shares issued (Note 17) 2,296,617,251 1,412,045,355 (2,181,786,893) - 36,674,841 410,859,626 Weighted average ordinary shares at the end of the year 151,505,199 1,822,904,981 As the Group is loss making, none of the potentially dilutive securities are currently dilutive in the calculation of total earnings per share. 20. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES Cash flows from operating activities Loss for the year Non-cash items Depreciation Impairment consumables Share based payments Foreign currency exchange loss/(gain) Changes in assets and liabilities Decrease/(increase) in receivables Decrease/(increase) in inventories Decrease/(increase) in other assets (Decrease)/Increase in payables Decrease/(increase) in provisions 2022 $ 2021 $ (3,984,246) (1,719,007) 81,920 1,361,647 - - 39,000 220,000 (698,141) 4,914 (153,700) (33,728) 306,181 (574,087) 396,992 236,298 - - 285,206 - Net cash used in operating activities (2,988,136) (1,242,615) Reconciliation of cash For the purposes of the statement of cash flows, cash includes cash on hand and at bank and cash on deposit net of bank overdrafts and excluding security deposits. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows: Cash and cash equivalents 2,148,443 4,724,429 Equus Mining Limited Annual Report 2022 61 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 21. SHARE BASED PAYMENT No options were granted during the year ended 30 June 2022 to Directors of the Company to acquire options over unissued ordinary shares in the Company (2021: 1,250,000 post-consolidation). The terms and conditions of the options held by key management personnel during the year ended 30 June 2022 are as follows: Grant date Expiry date Vesting date 14 October 2019 13 November 2023 14 October 2019 29 November 2019 13 November 2022 29 November 2019 29 November 2019 13 November 2024 29 November 2019 25 November 2020 25 November 2023 25 November 2020 25 November 2020 25 November 2024 25 November 2020 25 November 2020 25 November 2025 25 November 2020 Exercise price Post- Consolidation Fair value of options granted Total granted Number Post- consolidation Balance at end of the period Post- consolidation Total Exercised Number $1.40 $59,000 250,000 $0.60 $67,333 333,333 $0.70 $80,000 333,333 $0.44 $58,334 416,666 $0.50 $66,666 416,666 $0.54 $75,000 416,666 - - - - - - 250,000 333,333 333,333 416,666 416,666 416,666 Weighted average of options in the equity based compensation reserve during the year Number of options 2021 Post-consolidation Weighted average exercise price 2021 Post-consolidation Number of options 2021 Post-consolidation Weighted average exercise price 2021 Post-consolidation Outstanding 2,166,664 $0.627 2,750,000 $0.78 The equity based compensation reserve is used to record the options issued to directors and executives of the Company as compensation. Options are valued using the Black-Scholes option pricing model. The weighted average remaining contractual life of share options outstanding at the end of the year in the equity based compensation reserve was 1.97 years (2021 – 2.42). During the year, no ordinary shares were issued as a result of the exercise of options granted to Directors (2021 – nil). 62 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 22. RELATED PARTIES Parent and ultimate controlling party Equus Mining Limited is both the parent and ultimate controlling party of the Group. Key management personnel and director transactions During the year ended 30 June 2022 and 2021, no key management persons, or their related parties, held positions in other entities that provide material professional services resulting in them having control or joint control over the financial or operating policies of those entities. 23. KEY MANAGEMENT PERSONNEL DISCLOSURES Information regarding individual key management personnel’s compensation and some equity instruments disclosures as permitted by Corporations Act and Corporations Regulations 2M.3.03 are provided in the Remuneration Report section of the Director’s Report. Key management personnel compensation Primary fees/salary Bonus Superannuation Share based payment Short term benefits 2022 $ 2021 $ 776,150 175,000 78,125 467,061 - 41,206 - 200,000 67,459 18,268 1,096,734 726,535 At 30 June 2022 $22,492 fees were outstanding (2021 – $nil). There were no loans made to key management personnel or their related parties during the 2022 and 2021 financial years. The Board reviews remuneration arrangements annually based on services provided. Apart from the details disclosed in this note, there were no material contracts involving Directors’ interest’s existing at year-end. 24. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE The Group’s financial instruments comprise deposits with banks, receivables, trade and other payables and from time to time short term loans from related parties. The Group has trade receivables with embedded derivatives for provisional pricing. The main risks arising from the Group’s financial instruments are market risk, credit risk and liquidity risks. This note presents information about the Group’s exposure to each of these risks, its objectives, policies and processes for measuring and managing risk, and the Group’s management of capital. Risk management framework The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. These policies are reviewed regularly to reflect changes in market conditions and the Group’s activities. The primary responsibility to monitor the financial risks lies with the Managing Director and the Company Secretary under the authority of the Board. Equus Mining Limited Annual Report 2022 63 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 24. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont’d) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligation 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 monitors rolling forecasts of liquidity based on expected fund raisings, trade payables and other obligations for the ongoing operation of the Group. At balance date, the Group has available funds of $2,148,443 for its immediate use. The following are the contractual maturities of financial liabilities: Financial liabilities Trade and other payables 30 June 2022 30 June 2021 Carrying amount $ Contractual cash flows $ Less than 6 months $ 6 to 12 months $ 1 to 5 years $ More than 5 years $ 3,223,776 (3,223,776) (3,058,416) (82,680) (82,680) 894,025 (894,025) (894,025) - - - - It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. Credit risk 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. The carrying amount of the Group’s financial assets represents the maximum credit risk exposure as follows: Cash and cash equivalents Receivables Other receivables Cash and cash equivalents 2022 $ 2021 $ 2,148,443 4,724,429 2,209,154 7,158,568 51,834 - 11,516,165 4,776,263 At 30 June 2022, the Group held cash and cash equivalents of $2,148,443 (2021: $4,724,429), which represents its maximum credit exposure on these assets. The cash and cash equivalents are held with reputable banks and financial institution counterparties, which are rated AA- to AAA+, based on rating agency ‘Moody’s rating’. 64 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 24. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont’d) Receivables For the year ended 30 June 2022, the Group holds US$1,863,555 of trade receivables and the Company considers its trade receivables to be of low risk as the Company has one contractual debtor. Other receivables primariliy relates to the receivable from Mandalay Resources to cover 50% of the closure costs of Cerro Bayo. The Group has assessed the credit risk associated with the Mandalay Resources receivable and considers the risk to be low at 30 June 2022. The remaing other receivables are with government departments for the recoupment of VAT and prepaid taxes. Market risk Market risk is the risk that changes in market prices, such as commodity prices, 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 the return. The Group sell products to their customer under a contract that includes a provisional pricing mechanism and the revenue generated from the sales will be adjusted if the product does not conform to the terms specified in the sales contract. At the date revenue is recognised, the product is provisionally priced for a three month quotational period at the LBMA Gold and Silver prices published on Fastmarkets MB and adjusted for the average price over the quotational period. The Group is exposed to fluctuations in these prices. Interest Rate Risk The Group’s exposure to market interest rate relates to cash assets At balance date, the Group interest rate risk profile in interest bearing financial instruments was: Cash and cash equivalents 2022 $ 2021 $ 2,148,443 4,724,429 There are no fixed rate instruments (2021 - $nil) and the Group does not have interest rate swap contracts. Sensitivity analysis A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit for the period by current and prior reporting date would have increased/(decreased) equity and loss for the period by an immaterial amount. Equus Mining Limited Annual Report 2022 65 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 24. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont’d) Currency risk The Group is exposed to currency risk on bank accounts denominated in USD and CLP. 2022 CLP 2021 CLP 569,013,794 19,501,856 2022 USD 45,262 2021 USD 15 Sensitivity analysis The following sensitivity analysis is based on the exchange rates exposure at balance date. +10% higher exchange rate -10% lower exchange rate Price risk Post-tax profit/(loss) Higher/(lower) 2022 $ 87,767 (107,271) Total equity Higher/(lower) 2022 $ 87,767 (107,271) The Group is exposed to equity securities price risk. This arises from investments held by the Group and classified in the balance sheet as other financial assets. The Group’s investments are publicly traded on the Over-The-Counter-Market (‘OTC market’) in the USA. Sensitivity analysis A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) profit for the period by current and prior reporting date would have increased/(decreased) equity and loss for the period by an immaterial amount. Capital management Management aim to control the capital of the Group in order to maintain an appropriate debt to equity ratio, provide the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going concern. The Group’s capital includes ordinary share capital supported by financial assets. There are no externally imposed capital requirements on the Group. Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of cash levels, distributions to shareholders and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. 66 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 24. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont’d) Financial instruments carried at fair value The carrying amounts of financial assets and financial liabilities included in the balance sheet approximate fair values. The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: – Level 1 - fair value measurements are those instruments valued based on quoted prices (unadjusted) in active markets for identical assets or liabilities. – Level 2 - fair value measurements are those instruments valued based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). – Level 3 - fair value measurements are those instruments valued based on inputs for the asset or liability that are not based on observable market data (unobservable inputs). Equity instruments at fair value through other comprehensive* income 30 June 2022 30 June 2021 Equity instruments at fair value through profit and loss** 30 June 2022 30 June 2021 Level 1 $ Level 2 $ Level 3 $ Total $ - - - - 777 13,803 1,863,555 - - - - - 777 13,803 1,865,555 - * The financial assets held at fair value through other comprehensive income relate to investments held in quoted equity securities. ** The financial assets held at fair value through profit and loss relate to trade receivables including provisionally priced invoices. The related revenue is based on forward market selling prices for the quotation periods stipulated in the contract with changes between the provisional price and the final price recorded as other revenue. The selling price can be measured reliably for the Group’s products, as it operates in active and freely traded commodity markets. Equus Mining Limited Annual Report 2022 67 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 25. CONTROLLED ENTITIES Parent entity Equus Mining Limited is an Australian incorporated company listed on the Australian Securities Exchange. Wholly owned controlled entities Country of incorporation 2022 % 2021 % Ownership Interest Hotrock Enterprises Pty Ltd (i) Okore Mining Pty Ltd Dataloop Pty Ltd Equus Resources Pty Ltd (ii) (i) Subsidiary of Hotrock Enterprises Pty Ltd Derrick Pty Ltd Andean Coal Pty Ltd (iii) (iii) Subsidiary of Andean Coal Pty Ltd Minera Carbones Del Sur SpA (ii) Subsidiary of Equus Resources Pty Ltd Equus Resources Chile SpA (iv) Minera Equus Chile SpA Southern Gold SpA (v) (iv) Subsidiary of Equus Resources Chile SpA Minera Equus Chile SpA (v) Subsidiary of Southern Gold SpA Equus Patagonia SpA (vi) Subsidiary of Minera Equus SpA Compañía Minera Cerro Bayo SpA 26. COMMITMENTS Exploration expenditure commitments Australia Australia Australia Australia Australia Australia Chile Chile Chile Chile Chile Chile Chile 100 100 100 100 100 100 100 100 100 100 100 100 99.9 99.9 100 0.1 100 100 0.1 100 99.9 99.9 75 100 75 - The Group does not have any minimum expenditure commitments in relation to its mineral interests in the Cerro Bayo project, Los Domos Gold-Silver project, or Cerro Diablo project. 27. SUBSEQUENT EVENTS On 2 September 2022, the Company issued 12,755,000 ordinary shares to institutional investors at an issue price of $0.10 raising $1,275,500 before costs. Other than the matters detailed above, no other matters or circumstances have 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 or unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years. 68 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 28. ACQUISITION OF CONTROLLED ENTITIES During the year ended 30 June 2022, the Company acquired 100% of the issued capital of Compañía Minera Cerro Bayo SpA (‘CMCB’). As consideration for CMCB the Company issued 587,502,438 ordinary shares pre- consolidation(equivalent to a fair value of $5,287,522, based on the listed share price of the Company at 1 December 2021 of $0.009 per share pre-consolidation) to the vendor Mandalay Resources Corporation. CMCB is situated nearby Equus’s Los Domos and Cerro Diablo Projects. The CMCB mining property comprises 29,495 hectares of mining claims and includes an operational 1,500tpd flotation processing plant. From 1 December 2021 to 30 June 2022 CMBC contributed revenue of $15,876,376 and loss of $1,771,022 to the Group’s results. If the acquisition had occurred on 1 July 2021, management estimates that consolidated revenue would have been $26,012,575 and consolidated loss for the year would have been $3,819,550. In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 July 2021. The acquisition of CMBC had the following effect on the Group’s assets and liabilities on acquisition date, determined on a provisional basis: Cash Trade receivables Inventories Exploration and evaluation assets Property, plant and equipment Non-current receivable Trade and other payables Rehabilitation provision Pre-acquisition carrying amounts $ Fair value adjustment $ Recognised value on acquisition $ 38,366 1,985,524 3,318,260 66,986 - - (1,448,421) (14,317,135) - - - 8,485,374 - 7,158,568 - 38,366 1,985,524 3,318,260 8,552,360 - 7,158,568 (1,448,421) (14,317,135) (10,356,420) 15,643,942 5,287,522 No fair value has been allocated to the processing plant and related infrastructure due to it being highly uncertain that the Group will be able to generate net cash inflows from its use. The ability to generate net cash inflows from these assets is dependent on the Group obtaining access to ore of sufficient grade to feed the processing plant (either from its exploration activities or existing waste ore stockpiles) and is sensitive to fluctuations in commodity prices, stockpile grades, processing plant performance and cash operating costs. Compañía Minera Cerro Bayo Limitada operations are subject to specific Chilean environmental regulations. In accordance with the sale and purchase agreement, 50% of the rehabilitation cost up to $7,158,567 is payable by Mandalay Resources Corporation this amount has been recognised as a non-current receivable. The above fair values recognised on acquisition are determined on a provisional basis. If new information is obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised. The Group incurred $108,211 in costs related to the acquisition of CMBC Equus Mining Limited Annual Report 2022 69 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 29. OPERATING SEGMENTS The Group’s chief operating decision maker has considered the requirements of AASB 8, Operating Segments, and has concluded that, during the year ended 30 June 2022, the reportable segments of the Group are mineral processing and mineral exploration within the geographical segment of Chile. 30 June 2022 External revenues Processing $ Mineral Exploration $ Total $ 15,876,376 - 15,876,376 Reportable segment profit /(loss) before tax (1,771,022) (406,479) (2,177,501) Interest income Interest expense Depreciation Impairment of consumables - (28,525) (81,920) (1,361,647) 2 - - - 2 (28,525) (81,920) (1,361,647) Reportable segment assets Reportable segment liabilities 12,058,576 16,623,774 23,091,596 483,677 35,150,172 17,107,451 30 June 2021 External revenues Reportable segment profit /(loss) before tax Interest income Interest expense Depreciation Reportable segment assets Reportable segment liabilities - - - - - - - - (109,502) (109,502) - - - - 11,339,830 11,339,830 564,102 564,102 70 Equus Mining Limited Annual Report 2022 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 29. OPERATING SEGMENTS (Cont’d) Reconciliations of reportable segment revenues and profit or loss Revenues Total revenue for reportable segments Total revenue unallocated Consolidated revenue Profit or loss 2022 $ 2021 $ 15,876,376 - 15,876,376 - - - Total loss for reportable segments (2,177,501) (109,502) Unallocated amounts: Other income Net finance income Net other corporate expenses Consolidated loss before tax from continuing operations Assets Total assets for reportable segments Unallocated corporate assets Consolidated total assets Liabilities Total liabilities for reportable segments Unallocated corporate liabilities Consolidated total liabilities Geographical information - 3,337 50,000 3,514 (1,810,082) (1,663,019) (3,984,246) (1,719,007) 35,150,172 11,339,830 2,723,307 4,653,910 37,873,479 15,993,740 17,107,451 324,213 17,431,664 564,102 329,923 894,025 In presenting information on the basis of geography, segment revenue and segment assets are based on the geographical location of the operations. 2022 2021 Revenue $ 15,876,376 Non-current assets $ Revenues $ Non-current assets $ 30,615,223 - 11,203,674 Chile Equus Mining Limited Annual Report 2022 71 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2022 30. PARENT ENTITY DISCLOSURES As at, and throughout the financial year ended 30 June 2022 the parent entity of the Group was Equus Mining Limited. Result of the parent entity Net (loss)/profit Other comprehensive income Total comprehensive profit/(loss) Financial position of the parent entity at year end Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets Equity Share capital Accumulated losses Reserve Total equity Company 2022 $ 2021 $ (5,823,935) (13,727,852) - - (5,823,935) (13,727,852) 1,150,218 4,640,107 19,489,788 11,224,795 20,640,006 15,864,902 324,215 329,923 - - 324,215 329,923 20,315,791 15,534,979 140,177,143 129,460,300 (120,868,336) (115,044,401) 1,006,984 1,119,080 20,315,791 15,534,979 The Directors are of the opinion that no commitments or contingent liabilities existed at or subsequent to year end. 72 Equus Mining Limited Annual Report 2022 Directors’ Declaration 1. In the opinion of the Directors of Equus Mining Limited (the ‘Company’): (a) the consolidated financial statements and notes there to, set out on pages 34 to 72, and the Remuneration Report as set out on pages 27 to 31 of the Directors’ Report are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance, for the financial year ended on that date; (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. The Directors have been given the declarations required under section 295A of the Corporations Act 2001 for the financial year ended 30 June 2022. The Director’s draw attention to Note 2(a) to the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards. 2. 3. Signed at Sydney this 30th day of September 2022 in accordance with a resolution of the Board of Directors: Mark H. Lochtenberg Director John R. Braham Director Equus Mining Limited Annual Report 2022 73 Independent Auditor’s Report Independent Auditor’s Report To the shareholders of Equus Mining Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Equus Mining Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • • giving a true and fair view of the Group's financial position as at 30 June 2022 and of its financial performance for the year ended on that date; and complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • • • • Consolidated statement of financial position as at 30 June 2022; Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; Notes including a summary of significant accounting policies; and Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 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 fulfilled our other ethical responsibilities in accordance with the Code. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation 74 Equus Mining Limited Annual Report 2022 Independent Auditor’s Report Material uncertainty related to going concern We draw attention to Note 2(d), “Going Concern” in the financial report. The conditions disclosed in Note 2(d), indicate a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report. Our opinion is not modified in respect of this matter. In concluding there is a material uncertainty related to going concern, we evaluated the extent of uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going concern. This included: • • • • Analysing the cash flow projections by: - - Evaluating the underlying data used to generate the projections for consistency with other information tested by us, our understanding of the Group’s intentions, and past results and practices; Assessing the planned levels of operating and capital expenditures for consistency of relationships and trends to the Group’s historical results, results since year end, and our understanding of the business, industry and economic conditions of the Group; Assessing significant non-routine forecast cash inflows and outflows, including the expected impact of planned debt and capital raisings for feasibility, quantum and timing. We used our knowledge of the client, its industry and current status of those initiatives to assess the level of associated uncertainty; Reading minutes of Directors’ meetings and relevant correspondence with the Group’s advisors to understand the Group’s ability to raise additional funds, and assessed the level of associated uncertainty; Evaluating the Group’s going concern disclosures in the financial report by comparing them to our understanding of the matter, the events or conditions incorporated into the cash flow projections assessment, the Group’s plans to address those events or conditions, and accounting standard requirements. We specifically focused on the principal matters giving rise to the material uncertainty. Key Audit Matters In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the Key Audit Matters: Key Audit Matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Report of the current period. • • Exploration and evaluation expenditure; and Acquisition accounting. 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. 69 Equus Mining Limited Annual Report 2022 75 Independent Auditor’s Report Exploration and evaluation expenditure ($23,091,596) Refer to Note 13 to the Financial Report The key audit matter How the matter was addressed in our audit Capitalised exploration and evaluation (E&E) expenditure is a key audit matter due to: • The significance of the activity to the Group’s business and the balance (being 61% of total assets); and • The greater level of audit effort to evaluate the Group’s application of the requirements of the industry specific accounting standard AASB 6 Exploration for and Evaluation of Mineral Resources, in particular the conditions allowing capitalisation of relevant expenditure and the presence of impairment indicators. The presence of impairment indicators would necessitate a detailed analysis by the Group of the value of capitalised E&E, therefore given the criticality of this to the scope and depth of our work, we involved senior team members to challenge the Group’s determination that no such indicators existed. In assessing the conditions allowing capitalisation of relevant expenditure, we focused on: • The determination of the areas of interest (areas); • Documentation available regarding rights to tenure, via licensing, and compliance with relevant conditions to maintain current rights to an area of interest; • The Group’s intention and capacity to continue the relevant E&E activities; and • The Group’s determination of whether the capitalised E&E meets the carry forward conditions of AASB 6, including whether it is expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale. In assessing the presence of impairment indicators, we focused on those that may draw into question the commercial continuation of E&E activities for areas of interest where significant capitalised E&E exists. In addition to the assessments above, we paid particular attention to: Our procedures included: • We evaluated the Group’s accounting policy to recognise exploration and evaluation assets using the criteria in the accounting standard; • We assessed the Group’s determination of its areas of interest for consistency with the definition in the accounting standard. This involved analysing the licenses in which the Group holds an interest and the exploration programmes planned for those for consistency with documentation such as license related technical conditions, contractual agreements, and planned work programmes; For each area of interest, we assessed the Group’s current rights to tenure by checking the ownership of the relevant license to government registries or government correspondence and evaluating agreements in place with other parties. We also tested licences for compliance with conditions where applicable under the terms of agreements with the other party; • • We tested the Group’s additions to capitalised E&E for the year by evaluating a statistical sample of recorded expenditure for consistency to underlying records, the capitalisation requirements of the Group’s accounting policy and the requirements of the accounting standard; • We evaluated Group documents, such as minutes of Directors’ meetings and management’s cash flow projections, for consistency with their stated intentions for continuing E&E activities in certain areas. We corroborated this through interviews with key personnel; • We obtained project and corporate budgets identifying areas with existing funding and those requiring alternate funding sources. We compared this for consistency with areas with capitalised E&E, for evidence of the ability to fund continued activities. We identified those areas relying on alternate funding sources and evaluated the capacity of the Group to secure such funding; 70 76 Equus Mining Limited Annual Report 2022 Independent Auditor’s Report • • • The strategic direction of the Group and its intention to continue E&E activities in each area of interest; The ability of the Group to fund the continuation of activities; and Results from latest activities regarding the existence or otherwise of economically recoverable reserves for each area of interest. • We assessed the Group’s evaluation of the carry forward conditions of AASB 6 including the determination of whether the capitalised E&E is expected to be recouped through successful development and exploitation of the area or by its sale. We did this by analysing the Group’s activities in each area of interest and assessing the Group’s documentation of planned future activities including work programmes and corporate budgets. Acquisition accounting Refer to Note 28 to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s acquisition of Compañía Minera Cerro Bayo SpA (CMCB) in December 2021 for consideration of $5,287,522 represents a significant transaction. This was a key audit matter due to the size of the acquisition. The acquisition had a pervasive impact on the financial statements and consequently required significant audit effort and senior team involvement. Significant judgement was required by us in assessing the Group’s determination of the fair values of acquired assets and liabilities, in particular exploration and evaluation assets, property, plant and equipment and provisions for rehabilitation. Our procedures included: • We read the Acquisition Agreement and related key transaction documents to: - - Understand the key terms and conditions of the acquisition; and Assess the acquisition against the criteria of a business combination in the accounting standards. • We assessed the fair value of property, plant and equipment and exploration and evaluation assets having regard to the status of CMCB’s operations at the time of acquisition and the uncertainty relating to the grade of the waste ore stockpiles and costs of processing. We used our knowledge of the business and our industry experience; • We assessed the fair value of the provision for rehabilitation with reference to the closure plan approved by government authorities in Chile; • We assessed the Group’s disclosures in respect of business combination with reference to the requirements of the accounting standards. 71 Equus Mining Limited Annual Report 2022 77 Independent Auditor’s Report Other Information Other Information is financial and non-financial information in Equus Mining Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • • • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error assessing the Group and Company's ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • • 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 Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They 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 the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. 72 78 Equus Mining Limited Annual Report 2022 Independent Auditor’s Report Report on the Remuneration Report Opinion Directors’ responsibilities In our opinion, the Remuneration Report of Equus Mining Limited for the year ended 30 June 2022, complies with Section 300A of the Corporations Act 2001. 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 responsibilities We have audited the Remuneration Report included in pages 26 to 30 of the Directors’ report for the year ended 30 June 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Jason Adams Partner Brisbane 30 September 2022 73 Equus Mining Limited Annual Report 2022 79 Additional Stock Exchange Information Additional information as at 31 August 2022 required by the Australian Stock Exchange Listing Rules and not disclosed elsewhere in this report. Home Exchange The Company is listed on the Australian Securities Exchange. The Home Exchange is Sydney. Audit Committee As at the date of the Directors’ Report, an audit committee of the Board of Directors is not considered warranted due to the composition of the Board and the size, organisational complexity, and scope of operations of the Group. Class of Shares and Voting Rights The voting rights attached to ordinary shares, as set out in the Company’s Constitution, are that every member in person or by proxy, attorney or representative, shall have one vote on a show of hands and one vote for each share held on a poll. A member holding partly paid shares is entitled to a fraction of a vote equivalent to the proportion, which the amount paid up bears to the issue price for the share. Distribution of Shareholders The total distribution of fully paid shareholders as at 31 August 2022 was as follows: Range 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total Total Shareholders Total Number of Shares 993 735 253 552 161 2,694 353,799 1,892,468 1,899,754 19,643,701 150,287,232 174,076,954 Less than Marketable Parcels On 31 August 2022, 1,735 shareholders held less than marketable parcels of 5,102 shares. On Market Buy Back There is no current on-market buy-back. Substantial Holders Substantial shareholders and the number of equity securities in which it has an interest, as shown in the Company’s Register of Substantial Shareholders are set out below. Mandalay Resources Corporation Tribeca Investment Partners Pty Ltd Rigi Investments Pty LimitedHSBC Custody Nominees (Australia Number of Ordinary Shares 29,375,122 16,626,280 10,562,449 9,929,445 80 Equus Mining Limited Annual Report 2022 Additional Stock Exchange Information Twenty Largest Shareholders As at 31 August 2022, the twenty largest quoted shareholders held 63.03% of the fully paid ordinary shares as follows: Number % 29,375,122 16.87 16,626,280 10,562,449 9,929,445 8,167,100 7,564,506 5,138,910 2,771,925 2,524,118 2,501,247 2,479,493 2,070,853 9.55 6.07 5.70 4.69 4.35 2.95 1.59 1.45 1.44 1.42 1.19 1.11 0.86 0.80 0.63 0.61 0.60 0.57 0.56 Name 1 Mandalay Resources Corporation 2 Tribeca Investments Partners Pty Ltd 3 Rigi Investments Pty Ltd 4 HSBC Custody Nominees (Australia) Limited 5 Hodgson Capital Limited 6 Gerard C Toscan Management Pty Limited 7 Ringwood Management Pty Limited 8 Perrin Legal Pty Ltd 9 John Wardman & Associates Pty Ltd 10 BNP Paribas Nominees Pty Ltd 11 JP Morgan Nominees Australia Pty Limited 12 Terrane Minerals SpA 13 Mark Hamish Lochtenberg & Michael Lochtenberg 1,924,982 14 DRYCA Pty Ltd 15 Simon Gary Sedorenko 16 BNP Paribas Nominees Pty Ltd ACF Clear Sream 17 Northcliffe Holdings Pty Ltd < Northcliffe Holdings A/C> 18 John Richard Braham 19 Simon (Sui Hee) Lee 20 Serlett Pty Ltd Optionholders In The Company 1,500,002 1,400,000 1,094,880 1,067,941 1,038,953 1,000,000 977,045 Total optionholders as at 31 August 2022 86, holding 22,386,091 unlisted options. Substantial Optionholders In The Company As at 31 August 2022, the twenty largest optionholders that held 20% or more of the unquoted options. Name 1 USB Nominees Pty Ltd Escrow securities As at 31 August 2022, there were escrow securities. Unlisted Options Quantity % 4,591,250 20.51 Equus Mining Limited Annual Report 2022 81 Additional Stock Exchange Information Group Mineral Concession Interests at 31 August 2022 The Company provides the following information regarding its mining tenements: Project Tenement Name Location Ownership % Interest Type of tenement Cerro Bayo ARROYO 1-25 Chile Minera Equus Chile Limitada ARROYO 31-40 Chile Minera Equus Chile Limitada BUITRERA 61-90 Chile Minera Equus Chile Limitada BUITRERA 91-120 Chile Minera Equus Chile Limitada GUANACA 101-106 Chile Minera Equus Chile Limitada GUANACA 131-158 Chile Minera Equus Chile Limitada GUANACA 161-190 Chile Minera Equus Chile Limitada GUANACA 191-220 Chile Minera Equus Chile Limitada GUANACA 221-243 Chile Minera Equus Chile Limitada JARA 1-100 Chile Minera Equus Chile Limitada NIEVES 1-30 Chile Minera Equus Chile Limitada NIEVES 31-60 Chile Minera Equus Chile Limitada NIEVES 61-90 Chile Minera Equus Chile Limitada NIEVES 91-120 Chile Minera Equus Chile Limitada NIEVES 121-150 Chile Minera Equus Chile Limitada LAPIZ 1-7 Chile Minera Equus Chile Limitada PERRA 101-123 Chile Minera Equus Chile Limitada PERRA 131-160 Chile Minera Equus Chile Limitada PERRA 161-190 Chile Minera Equus Chile Limitada PERRA 191-220 Chile Minera Equus Chile Limitada PERRA 221-244 Chile Minera Equus Chile Limitada CARRERA 1-37 Chile Minera Equus Chile Limitada MALLINES 1-100 Chile Minera Equus Chile Limitada HORQUETAS 1-75 Chile Minera Equus Chile Limitada BUITRERA 1-60 Chile Minera Equus Chile Limitada BRILLANTES 1-100 Chile Minera Equus Chile Limitada BAYO 1-70 Chile Minera Equus Chile Limitada MESETA 1-100 Chile Minera Equus Chile Limitada AGUILA 1-100 Chile Minera Equus Chile Limitada 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession 82 Equus Mining Limited Annual Report 2022 Additional Stock Exchange Information Project Tenement Name Location Ownership % Interest Type of tenement Cerro Bayo SINTER 1-100 Chile Minera Equus Chile Limitada BAHIA 1-100 Chile Minera Equus Chile Limitada VERDE 1-60 Chile Minera Equus Chile Limitada PERRA 1-66 Chile Minera Equus Chile Limitada VICUNA 1-45 Chile Minera Equus Chile Limitada LARGA 1-84 Chile Minera Equus Chile Limitada CASCADA 1-100 Chile Minera Equus Chile Limitada 100 100 100 100 100 100 100 Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession ALPACA 4-15 Y 19-45 GUANACA 6-17, 23-34 Y 38-87 LAGUNA 10-20, 30-40, 45-60, 62-80 Y 82-100 RIBERA 6-12, 18-24, 30-36, 41-48 Y 50-60 ROCA 5-15, 20-30 Y 32-100 PUNTA 3-15, 18-30, 33-45, 47-60, 62-75, 78-81 Y 88-90 ORILLA 12-15, 27-30, 37-45, 47-60 Y 62-75 Chile Minera Equus Chile Limitada 100 Mining Concession Chile Minera Equus Chile Limitada 100 Mining Concession Chile Minera Equus Chile Limitada 100 Mining Concession Chile Minera Equus Chile Limitada 100 Mining Concession Chile Minera Equus Chile Limitada 100 Mining Concession Chile Minera Equus Chile Limitada 100 Mining Concession Chile Minera Equus Chile Limitada EDITH 3 1/60 Chile Minera Equus Chile Limitada EDITH 4 1/60 Chile Minera Equus Chile Limitada EDITH 5 1/60 Chile Minera Equus Chile Limitada EDITH 6 1/60 Chile Minera Equus Chile Limitada EDITH 7 1/28 Chile Minera Equus Chile Limitada EDITH 8 1/56 Chile Minera Equus Chile Limitada EDITH 9 1/56 Chile Minera Equus Chile Limitada EDITH 10 1/38 Chile Minera Equus Chile Limitada EDITH 11 1/60 Chile Minera Equus Chile Limitada MIRASOL 1 1/56 Chile Minera Equus Chile Limitada MIRASOL 2 1/36 Chile Minera Equus Chile Limitada MIRASOL 3 1/36 Chile Minera Equus Chile Limitada EDITH 12 1/40 Chile Minera Equus Chile Limitada EDITH 13 1/60 Chile Minera Equus Chile Limitada EDITH 14 1/60 Chile Minera Equus Chile Limitada EDITH 15 1/50 Chile Minera Equus Chile Limitada 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Equus Mining Limited Annual Report 2022 83 Additional Stock Exchange Information Project Tenement Name Location Ownership % Interest Type of tenement Cerro Bayo EDITH 16 1/50 Chile Minera Equus Chile Limitada EDITH 17 1/43 Chile Minera Equus Chile Limitada MIRASOL 4 1/20 Chile Minera Equus Chile Limitada MIRASOL 5 1/30 Chile Minera Equus Chile Limitada MIRASOL 6 1/45 Chile Minera Equus Chile Limitada JOE 1 1/20 Chile Minera Equus Chile Limitada EDITH 2 1/40 Chile Minera Equus Chile Limitada MIRASOL 7 1/15 Chile Minera Equus Chile Limitada Los Domos Electrum 3A 1 - 24 Chile Southern Gold SpA Electrum 4A 1 - 26 Chile Southern Gold SpA Electrum 5A 1 - 42 Chile Southern Gold SpA Electrum 6A 1 - 32 Chile Southern Gold SpA Electrum 7A 1 - 44 Chile Southern Gold SpA Electrum 8B Electrum 10 1-20 Electrum 11B Pedregoso I 1 - 30 Chile Chile Chile Chile Southern Gold SpA Southern Gold SpA Southern Gold SpA 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession Mining Concession1 Mining Concession1 Mining Concession1 Mining Concession1 Exploration Mining Concession1 Exploration Equus Patagonia SpA Note 1 Mining Concession2 Cerro Diablo Pedregoso VII 1 - 30 Chile Equus Patagonia SpA Note 1 Mining Concession2 Honda 20 1 - 20 Chile Equus Patagonia SpA Note 1 Mining Concession2 Diablo 1 Diablo 2 Diablo 3 Diablo 4 Diablo 5 Diablo 6 Diablo 7 Diablo 8 Diablo 9 Diablo 10 Diablo 11 Diablo 12 Diablo 13 Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada Chile Minera Equus Chile Limitada 100 100 100 100 100 100 100 100 100 100 100 100 100 Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Exploration Notes to Table 2: 1 Converted from exploration to mining claim 2 Renewed Exploration claims The Company incorporated effective 12 August 2019 a joint venture company titled Equus Patagonia SpA with Patagonia Gold SCM, the Chilean subsidiary of Patagonia Gold Corp (TSXV: PGDC). This entity incorporates the Company ́s 75% interest in mining concessions owned by Patagonia Gold SCM, which form part of the Los Domos Project. Southern Gold SpA can acquire a further 20% interest in the Mining Concessions via sole funding exploration through the Equus Patagonia SpA joint venture company at which point Patagonia Gold SCM has the right to retain a 5% free carried interest or convert its equity into a 1.5% NSR. 84 Equus Mining Limited Annual Report 2022 Annual Report 2022 EQUUS MINING LIMITED and its controlled entities ABN 44 065 212 679 www.equusmining.com NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the 2022 Annual General Meeting (AGM) of members of Equus Mining Limited (Company) to be held on Tuesday, 29 November 2022 at 11am Australian Eastern Daylight Time (AEDT) at Level 5, 66 Pitt Street Sydney NSW 2000 to consider the business set out in this Notice of Meeting. ORDINARY BUSINESS AGENDA The items of business should be read in conjunction with the explanatory notes on the pages to follow. The explanatory notes form part of this Notice of Meeting. Financial Statements To receive and consider the Company's Annual Financial Report, the Directors' Report and the Auditor's Report for the year ended 30 June 2022. Item 1 Adoption of the Remuneration Report To consider and, if thought fit, to pass the following as a non-binding resolution*: Resolution 1: 'That the Remuneration Report for the year ended 30 June 2022 be and is hereby adopted.' *Note: this resolution is advisory only and does not bind the Company. The Directors will consider the outcome of the vote and feedback from shareholders at the meeting when considering the Company’s remuneration policies. Item 2 Re-election of Damien J. Koerber as a Director To consider and, if thought fit, to pass the following as an ordinary resolution: Resolution 2: 'That Damien J. Koerber having retired in accordance with clause 3.6 of the Company’s Constitution and the Listing Rules, and being eligible, offers himself for re-election, be re-elected as a Director of the Company with effect from the close of the AGM.' Item 3 Re-election of Mr Ryan K. Austerberry as a Director To consider and, if thought fit, to pass the following as an ordinary resolution: Resolution 3: 'That Ryan K. Austerberry who was appointed during the year retires in accordance with clause 3.5 of the Company’s Constitution and being eligible, offers himself for re-election, be re-elected as a Director of the Company with effect from the close of the AGM.' Item 4 Ratification of 12,755,000 Shares To consider and, if thought fit, to pass the following as an ordinary resolution: Resolution 4: 'That for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve the issue and allotment of 12,755,000 fully paid ordinary shares issued under Listing Rule 7.1 and 7.1A on 2 September 2022, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.' Equus Mining Limited ABN 44 065 212 679 Level 2, 66 Hunter Street, Sydney NSW 2000, Australia T: +61 2 9300 3366 F: +61 2 9221 6333 Item 5 Ratification of 22,863,081 Unlisted Options To consider and, if thought fit, to pass the following as an ordinary resolution: Resolution 5: 'That for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve the issue and allotment of 22,863,081 unlisted options issued under Listing Rule 7.1 on 14 October 2022, on the terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.' Item 6 Approval of the Propose Issue of 2,500,000 Shares to Mark Lochtenberg To consider and, if thought fit, to pass the following as an ordinary resolution: Resolution 6: 'That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of up to 2,500,000 fully paid ordinary shares in the Company to a Director Mr Mark Lochtenberg and/or his nominee as set out in the Explanatory Memorandum accompanying this Notice of Meeting.' Item 7 Approval of the Propose Issue of 100,000 Shares to John Braham To consider and, if thought fit, to pass the following as an ordinary resolution: Resolution 7: 'That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of up to 100,000 fully paid ordinary shares in the Company to a Director Mr John Braham and/or his nominee as set out in the Explanatory Memorandum accompanying this Notice of Meeting.' Item 8 Approval of the Propose Issue of 100,000 Shares to David Coupland To consider and, if thought fit, to pass the following as an ordinary resolution: Resolution 8: 'That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of up to 100,000 fully paid ordinary shares in the Company to a Director Mr David Coupland and/or his nominee as set out in the Explanatory Memorandum accompanying this Notice of Meeting.' Item 9 Approval of 10% Placement Facility To consider and, if thought fit, to pass with or without amendment, as a special resolution the following: Resolution 9: “That pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of Equity Securities up to 10% of the issued capital of the Company (at the time of issue) on the terms and conditions set out in the Explanatory Memorandum.” QUESTIONS FROM SHAREHOLDERS In accordance with the Corporations Act 2001 (Cth) (Corporations Act), a reasonable opportunity will be provided to shareholders attending the AGM physically or electronically to ask questions about, or make comments upon, matters in relation to the Company. All shareholders who want to ask questions must submit in writing any questions in relation to the AGM to the Company by email to: info@equusmining.com by 5:00pm on 26 November 2022. Shareholders attending the meeting virtually will be able to submit their questions/comments in writing to a moderator. The moderator will relay those questions/comments to the meeting Chair at the relevant time on behalf of the shareholder. During the course of the meeting, the Chair will seek to address as many shareholder questions as reasonably practicable, and where appropriate, However, there may not be sufficient time to answer all questions at the AGM. DETERMINATION OF VOTING ENTITLEMENT For the purposes of this meeting, all persons who are registered holders of shares in the Company at 7:00pm Sydney time on 27 November 2022 will be entitled to vote. VOTING AT THE MEETING It is intended that voting on each of the proposed resolutions at this meeting will be conducted by a poll, rather than on a show of hands. APPOINTING A PROXY A member entitled to vote may appoint a proxy to attend and vote on behalf of the member. If the member is entitled to cast more than two votes, the member may appoint two proxies to attend and vote instead of the member. Where more than one proxy is appointed, each proxy may be appointed to represent a specified portion of the member’s voting rights. If no such specification is given and two proxies are appointed, each may exercise half the votes to which the member is entitled. A proxy need not be a member. Proxies must be executed in accordance with the instructions in the notes accompanying the proxy form. Enclosed is a proxy form to be completed if you would like to be represented at the AGM by proxy. By order of the Board Marcelo Mora Company Secretary 28 October 2022 pjn11409 Explanatory Memorandum to the Notice of Annual General Meeting This Explanatory Memorandum has been prepared to assist members to understand the business to be put to members at the Annual General Meeting to be held on Tuesday, 29 November 2022 at 11 am Eastern Daylight Saving Time (EDST) at Level 5, 66 Pitt Street Sydney NSW 2000. Financial Report The Financial Report, Directors' Report and Auditor's Report for the Company for the year ended 30 June 2022 will be laid before the meeting. There is no requirement for shareholders to approve these reports, however, the Chair of the meeting will allow a reasonable opportunity to ask the auditor questions about the conduct of the audit and the content of the Auditor's Report. Resolution 1 Adoption of Remuneration Report The Remuneration Report, which forms part of the Directors’ Report in the Company’s 2022 Annual Report, contains certain prescribed details, sets out the policy adopted by the Board of Directors and discloses the Company’s payments to its Directors. None of the Corporations Act, the ASX Listing Rules or the Company’s Constitution requires a vote of shareholders at the Annual General Meeting on such report. In accordance with section 250R of the Corporations Act, a resolution that the Remuneration Report be adopted must be put to the vote. The resolution is advisory only and does not bind the Directors or the Company. Shareholders will be given a reasonable opportunity at the meeting to comment on and ask questions about the Company’s Remuneration Report. The Chair intends to exercise all undirected proxies in favour of Resolution 1. If the Chair of the Meeting is appointed as your proxy and you have not specified the way the Chair is to vote on Resolution 1, by signing and returning the Proxy Form, you are considered to have provided the Chair with an express authorisation for the Chair to vote the proxy in accordance with the Chair's intention. Voting Exclusion Statement The company will disregard any votes cast on Resolution 1 (in any capacity, whether as proxy or as shareholder) by any of the following persons: Key Management Personnel and Closely Related Parties of Key Management Personnel. However, the Company need not disregard a vote if it is: • Cast by a person as a proxy or attorney for a person who is entitled to vote on the resolution, in accordance with the directions of the proxy form that specifies how the proxy is to vote on Resolution 1; or • Cast by the chair of the Meeting as proxy or attorney appointed in accordance with the directions of the proxy form for a person who is entitled to vote, and such appointment on the proxy form expressly authorises the chair to exercise the proxy even if the resolution is connected directly with the remuneration report; or • Cast by a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: o The beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting on the resolution; and o The holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way. The Directors recommend that you vote IN FAVOUR of this advisory Resolution 1. The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 1. 1 Resolution 2 Re-election of Damien J. Koerber In accordance with clause 3.6 of the Company's Constitution and ASX Listing Rule 14.4, a Director must not hold office without re-election past the third Annual General Meeting following the Director’s appointment or three years, whichever is longer. A Director who retires in accordance with these requirements is eligible for re-election. Mr Damien Koerber retires by rotation and, being eligible, offers himself for re-election. Mr Koerber commenced with Equus in 2012 as exploration manager at the Naltagua copper project in Chile which brought considerable senior management and technical experience in the resources industry, from both in Australia and throughout South America. Mr Koerber is a geologist with 32 years of exploration experience, mainly throughout and based in Latin America. He has held senior management and consulting exploration and business development positions in companies including Billiton Gold (Northern Territory and Western Australia), North (Chile), Rio Algom (Chile), Newcrest (Chile, Argentina and Peru), MIM (Argentina and Brazil), Patagonia Gold SA (Chile and Argentina) and Mirasol Resources (Chile and Argentina). During his career, he has been directly involved in several discoveries including Cleo-Sunrise Dam (Western Australia), Tanami (Northern Territory), Union Reefs (Northern Territory) and Cap Oeste-COSE (Argentina). Mr Koerber graduated from the UNSW (BSc. Geology Hons Class 1) in 1989 and is a bilingual, Australian geologist.. In circumstances where the shareholders vote in favour of Resolution 2 and Resolution 2 is passed, Mr Koerber will be re- appointed as a Director with effect from the end of the meeting. In circumstances where the shareholders do not vote in favour of Resolution 2, Mr Koerber will not be re-appointed as a Director. The Directors recommend that you vote IN FAVOUR of Resolution 2. The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 2. Resolution 3 Re-election of Mr. Ryan K. Austerberry In accordance with clause 3.5 of the Company’s Constitution and the Corporations Act, Mr. Ryan K. Austerberry who was appointed as a director during the year retires in accordance with these requirements and, being eligible, offers himself for re-election. Ryan Austerberry has over 18 years of experience in the resource industry with a background in Mining Engineering, predominantly undertaking technical roles and operations management. Ryan has had comprehensive technical roles and operations management through a variety of mining engineering roles into project work. Ryan has been with Mandalay Resources Corporation (TSX:MDN) (‘Mandalay’) for most of his career, he is the current General Manager of Operations at Costerfield in Victoria and previously was General Manager of Björkdal in Sweden. Ryan has previously assisted with developing Cerro Bayo and has operational knowledge of the Cerro Bayo Mine in Chile. Ryan holds a Bachelor of Applied Science from the Royal Melbourne Institute of Technology, a Post-Graduate Diploma in Mining from the University of Ballarat, and an MBA from the Australian Institute of Business. Ryan is a Chartered Professional in Mining with the Australasian Institute of Mining and Metallurgy (AusIMM) and a graduate of the Australian Institute of Company Directors. In circumstances where the shareholders vote in favour of Resolution 3 and Resolution 3 is passed, Mr. Ryan K. Austerberry will be re-appointed as a Director with effect from the end of the meeting. In circumstances where the shareholders do not vote in favour of Resolution 2, Mr. Ryan K. Austerberry will not be re- appointed as a Director. The Directors recommend that you vote IN FAVOUR of Resolution 3. The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 3. 2 Resolution 4 Ratification of Prior Issue of Securities Tranche 1 - Listing Rule 7.4 On 2 September 2022, the Company issued 12,755,000 ordinary shares under Tranche 1 at an issue price of $0.10 per share utilising the Company's capacity under Listing Rules 7.1 and 7.1A. The Company confirms that the issue of the Placement Shares did not breach Listing Rules 7.1 and 7.1A. Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of Equity Securities that a listed company can issue without the approval of its shareholders over any 12 month period to 15% of the fully paid ordinary Equity Securities it had on issue at the start of that period. In addition, under Listing Rule 7.1A, an eligible entity can seek approval from its members, by way of a special resolution passed at its annual general meeting, to increase this 15% limit by an extra 10% to 25%. Shareholders approved this additional capacity at the Company’s last annual general meeting. The issue of these shares does not fit within any of these exceptions and, as it has not yet been approved by the Company’s Shareholders. It effectively uses up part of the 15% limit in Listing Rule 7.1, by reducing the Company’s capacity to issue further Equity Securities without Shareholder approval under Listing Rule 7.1 for the 12 months following the date the Company issued the Shares. The issue of the shares under Listing Rule 7.1A does not fit within any of these exceptions and, as it has not yet been approved by the Company’s Shareholders, it effectively used the 10% limit in Listing Rule 7.1A, reducing the Company’s capacity to issue further Equity Securities without Shareholder approval under 7.1A for the period ending on the earliest of: • • • the date that is 12 months after the last annual general meeting at which the Listing Rule 7.1A mandate was approved; the time and date of the next annual general meeting; and the time and date on which Shareholders approve a transaction under Listing Rule 11.1.2 (for a significant change to the nature or scale of the Company’s activities) or Listing Rule 11.2 (disposal of the Company’s main undertaking). Listing Rule 7.4 allows the shareholders of a company to ratify and subsequently approve an issue of Equity Securities after it has been made or agreed to be made. If the Shareholders ratify and subsequently approve the issue of Shares the issue is taken to have been approved under Listing Rules 7.1 and 7.1A and so does not reduce the company’s capacity to issue further Equity Securities without shareholder approval under that rule. The Company wishes to retain as much flexibility as possible to issue additional Equity Securities in the future without having to obtain Shareholder approval for such issues under Listing Rules 7.1 and 7.1A. To this end, resolution 4 seeks Shareholder approval to ratify the issue of the Shares under and for the purposes of Listing 7.4. If Resolution 4 is passed, the issue of these Shares will be excluded in calculating the Company’s 15% limit in Listing Rule 7.1, effectively increasing the number of Equity Securities the Company can issue without Shareholder approval over the 12 months following the date the Company issued the shares. If Resolution 4 is passed, the shares issued under Listing Rule 7.1A will be excluded in calculating the Company’s 25% limit in Listing Rules 7.1 and 7.1A, effectively increasing the number of Equity Securities the Company can issue without Shareholder approval for the period ending on the Listing 7.1A Mandate Expiry Date. If Resolution 4 is not passed, the issue of these Shares will be included in calculating the Company’s 15% limit in Listing Rules 7.1 and 7.1A, effectively decreasing the number of Equity Securities the Company can issue without Shareholder approval under Listing Rules 7.1 and 7.1A, for the periods noted immediately above. Details of the issue, as required by ASX Listing Rule 7.5 are as follows: Name of allottees: The shares were issued to sophisticated investors clients of Shaw and Partners, Arganonaut Partners Pty Limited, Taylor Collison Limited and to Hodgson Capital Limited, DTM Holdings Pty Ltd and Tribeca Investment Partners Pty Ltd. The Company confirmed that the subscribers of the shares are not related parties, key management personnel, substantial holders, adviser to the Company or an associate of any of the above, as outlined under Listing Rule 10.1 or 10.11except for Tribeca Investments Investment Partners Pty Ltd who is currently a Substantial Holder (as defined in the Listing Rules) within the Company and subsequently issued a notice of change of interests of substantial holder (Form 604). 3 Number of securities allotted: 12,755,000 ordinary shares were issued as follows: 900,000 ordinary shares were issued under Listing Rule 7.1 11,855,000 ordinary shares were issued under Listing Rule 7.1A Terms: Date of issue: Issue price: Intended use of funds: Fully paid ordinary shares ranking pari passu with existing fully paid ordinary shares. The shares were issued on 2 September 2022. $0.10 per share. The Funds from the placement will be used to advance the drilling campaign, other exploration activities and resource evaluation across the Cerro Bayo Project and for working capital. Voting Exclusion Statement The Company will disregard any votes cast in favour on Resolution 4 by or on behalf of: • • a person who participated in the issue or; an associate of that person or those persons. However, this does not apply to a vote cast in favour of Resolution 4 by: • • • a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: • • the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way. The Directors recommend that you vote IN FAVOUR of Resolution 4. The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 4. Resolution 5 Ratification of Prior Issue Unlisted Options - Listing Rule 7.4 On 14 October 2022, the Company issued 22,863,081 options to Equity Trustees Limited (ABN 46 004 031 298) in its capacity as trustee of the Tribeca Global Natural Resources Fund (ABN 97 533 912 939), Tribeca Global Natural Resources Fund, Tibecca Global Natural Resources Limited (ABN 16 627 596 418) and Tribeca Segregated Portfolio Company on behalf and for the account Tribecca Global Natural Resources Segregated Portfolio (each, a Holder). The options were issued as part consideration for the facility agreement provided by the Holdersto Equus Mining for US$2,200,000. The material terms and conditions of the option agreement and the Options are set out in Annexure B. Broadly speaking, and subject to a number of exceptions, Listing Rule 7.1 limits the amount of Equity Securities that the Company can issue without the approval of its shareholders over any 12 months to 15% of the fully paid ordinary Shares it had on issue at the start of that period. The issue of the Options, which is an Equity Security as defined under the Listing Rules, does not fall within any of the exceptions set out in Listing Rule 7.2 as it has not yet been approved by the Company’s Shareholders, it effectively uses up part of the 15% limit in Listing Rule 7.1, reducing the Company’s capacity to issue further Equity Securities without Shareholder approval under Listing Rule 7.1 for the 12 months following the date the Company issued the Shares. Listing Rule 7.4 allows the shareholders of a company to ratify and subsequently approve an issue of Equity Securities after it has been made or agreed to be made. If the Shareholders ratify and subsequently approve the issue of the Option the issue is taken to have been approved under Listing Rules 7.1 and so does not reduce the company’s capacity to issue further Equity Securities without shareholder approval under that rule. If Resolution 5 is passed, the issue of these options will be excluded in calculating the Company’s 15% limit in Listing Rule 7.1, effectively increasing the number of Equity Securities the Company can issue without Shareholder approval over the 12 months following the date the Company issued the options. 4 If Resolution 5 is not passed, the issue of these options will be included in calculating the Company’s 15% limit in Listing Rule 7.1, effectively decreasing the number of Equity Securities the Company can issue without Shareholder approval over the 12 months following the issued date. If all of the Options the subject of Resolution 5 are exercised the Company will receive approximately $3,429,462 in exercise monies Resolution 5 seeks Shareholder approval of the options issued under and for the purposes of Listing 7.4 Details as required by ASX Listing Rule 7.5: Names of allottees: Number of equity securities allotted: Issue price: Terms: Exercise price: Vesting date: Expiry date: Intended use of funds The Holders. The Holders in their absolute discretion may nominate a nominee to be issued with the new ordinary shares upon the exercising of the Options. It should be noted that the Holders are not related parties of the Company, key management personnel, an adviser to the Company or an associate of any of the above, as outlined under Listing Rule 10.1 or 10.11. However Tribeca Investments Partners Pty Ltd is currently a Substantial Holder within the Company. 22,863,081 Options. Nil cash consideration The material terms and conditions of the option agreement and the Options issued are set out in Annexure B. Each Option entitles the holder to subscribe for and be allotted one fully paid ordinary share. The options vest on the Issue Date and are exercisable at any time before the Expiry Date. $0.15 per share The options vested on the issued Date. 14 October 2025. The options were issued as part consideration for the credit facility provided by the Holders to Equus Mining Limited for US$2,200,000. Therefore no funds were raised from the issue. Any funds raised from the exercise options will be used to advance exploration and drill test high-priority targets, further progress resource evaluation and upgrading of the JORC-compliant resources throughout the Cerro Bayo Project, and for general corporate and working capital purposes. Voting Exclusion Statement The Company will disregard any votes cast in favour of Resolution 5 by or on behalf of • A person who participated in the issue or; • an associate of person or those persons. However, this does not apply to a vote cast in favour of a Resolution by: • • • a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: • • the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way. The Directors recommend that you vote IN FAVOUR of Resolution 5. The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 5. 5 Resolution 6 Approval of Director Participation in Tranche 2 Placement Shares For the purposes of Chapter 2E of the Corporations Act, Mr Mark Lochtenberg is a related party of the Company. Resolution 6 relates to a proposed issued of 2,500,000 Shares to Mr Lochtenberg (or entities related to him or in which he has an indirect interest), which is a financial benefit that requires Shareholder approval for the purposes of section 208 of the Corporations Act. The Company has agreed, subject to Shareholder approval to issue 2,500,000 Shares to Mr Lochtenberg, at an issue price of $0.10 per Share (or his nominees) under Tranche 2 for Directors to participate in accordance with the announcement dated 26 August 2022. Information Requirements - Listing Rules 10.11 and 10.13 Listing Rule 10.11 provides that unless one of the exceptions in Listing Rule 10.12 applies, the Company must not issue or agree to issue equity securities to: • • • • • • a related party (Listing Rule 10.11.1); a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the Company (Listing Rule 10.11.2); a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the Company and who has nominated a Director to the Board pursuant to a relevant agreement which gives them a right or expectation to do so (Listing Rule 10.11.3); an associate of a person referred to in Listing Rules 10.11.1 to 10.11.3 (Listing Rule 10.11.4); or a person whose relationship with the Company or a person referred to in Listing Rules 10.11.1 to 10.11.4 is such that, in ASX’s opinion, the issue or agreement should be approved by Shareholders (Listing Rule 10.11.5), unless it obtains the approval of its Shareholders. The issue is not part of the director remuneration package or an incentive to the director. The proposed issue of Shares under Resolution 6 will be to a party who fall within Listing Rule 10.11.1 and does not fall within any of the exceptions in Listing Rule 10.12. It, therefore, requires the approval of Shareholders under Listing Rule 10.11. Resolution 6 seeks the required Shareholder approval to the issue under and for the purposes of Listing Rule 10.11 and for all other purposes to allow the Company Director or his nominees participation on the same terms as the Placement made to the unrelated parties. If Resolution 6 is passed, the Company will be able to proceed with the issue to the Director and the Company will raise $250,000 before costs. If Resolution 6 is not passed, the Company will not be able to proceed with the issue of the Placement Shares to the Director or his nominees and the Company will not receive $250,000 in application funds. Details of the issue, as required by ASX Listing Rule 10.13 are as follows: Names of the allottees: Resolution 6 the shares to be issued to Mark Lochtenberg or his nominee. The category under Listing Rule 10.11 Resolution 6 Listing Rule 10.11.1 because Mark Lochtenberg is a related party as Director of the Company; The number and class of securities to be issued: Terms: Allotment date: 2,500,000 ordinary shares; Fully paid ordinary shares in the Company. The shares will be issued no later than 1 month after the date of the General Meeting and it is intended that issue will occur on the same date that the shareholder approves the issue. Issue price: $0.10 per share Intended use of funds The funds raised by the placement will be used to advance exploration and drill test high- priority targets, further progress resource evaluation and upgrading of the JORC- compliant resources throughout the Cerro Bayo Project, and for general corporate and working capital purposes. If approval is given for the issue of the Shares under Listing Rule 10.11, approval is not required under Listing Rule 7.1. The Company confirms that the shares are not issued under an agreement. 6 Voting Exclusion Statement The Company will disregard any votes cast in favour on Resolution 6 by or on behalf of Mark Lochtenberg or any other person who is to receive the securities and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company). However, this does not apply to a vote cast in favour of Resolution 6 by: • • • a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: • • the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way. The Directors recommend that you vote IN FAVOUR of Resolution 6. The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 6. 7 Resolution 7 Approval of Director Participation in Tranche 2 Placement Shares For the purposes of Chapter 2E of the Corporations Act, Mr John Braham is a related party of the Company. Resolution 7 relates to a proposed issue of 100,000 Shares to Mr John Braham (or entities related to him or in which he has an indirect interest), which is a financial benefit that requires Shareholder approval for the purposes of section 208 of the Corporations Act. The Company has agreed, subject to Shareholder approval to issue 100,000 Shares to Mr Braham, at an issue price of $0.10 per Share (or his nominees) under Tranche 2 for Directors to participate in accordance with the announcement dated 26 August 2022. Information Requirements - Listing Rules 10.11 and 10.13 Listing Rule 10.11 provides that unless one of the exceptions in Listing Rule 10.12 applies, the Company must not issue or agree to issue equity securities to: • • • • • • a related party (Listing Rule 10.11.1); a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the Company (Listing Rule 10.11.2); a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the Company and who has nominated a Director to the Board pursuant to a relevant agreement which gives them a right or expectation to do so (Listing Rule 10.11.3); an associate of a person referred to in Listing Rules 10.11.1 to 10.11.3 (Listing Rule 10.11.4); or a person whose relationship with the Company or a person referred to in Listing Rules 10.11.1 to 10.11.4 is such that, in ASX’s opinion, the issue or agreement should be approved by Shareholders (Listing Rule 10.11.5), unless it obtains the approval of its Shareholders. The issue is not part of the director remuneration package or an incentive to the director. The proposed issue of Shares under Resolution 7 will be to a party who fall within Listing Rule 10.11.1 and does not fall within any of the exceptions in Listing Rule 10.12. It, therefore, requires the approval of Shareholders under Listing Rule 10.11. Resolution 7 seeks the required Shareholder approval to the issue under and for the purposes of Listing Rule 10.11 and for all other purposes to allow the Company Director or his nominees participation on the same terms as the Placement made to the unrelated parties. If Resolution 7 is passed, the Company will be able to proceed with the issue to the Director and the Company will raise $10,000 before costs. If Resolution 7 is not passed, the Company will not be able to proceed with the issue of the Placement Shares to the Director or his nominees and the Company will not receive $10,000 in application funds. Details of the issue, as required by ASX Listing Rule 10.13 are as follows: Names of the allottees: Resolution 7 the shares to be issued to John Braham or his nominee. The category under Listing Rule 10.11 Resolution 7 Listing Rule 10.11.1 because John Braham is a related party as Director of the Company; The number and class of securities to be issued: 100,000 ordinary shares; Terms: Allotment date: Fully paid ordinary shares in the Company. The shares will be issued no later than 1 month after the date of the General Meeting and it is intended that issue will occur on the same date that the shareholder approves the issue. Issue price: $0.10 per share Intended use of funds The funds raised by the placement will be used to advance exploration and drill test high-priority targets, further progress resource evaluation and upgrading of the JORC- compliant resources throughout the Cerro Bayo Project, and for general corporate and working capital purposes. If approval is given for the issue of the Shares under Listing Rule 10.11, approval is not required under Listing Rule 7.1. The Company confirms that the shares are not issued under an agreement. 8 Voting Exclusion Statement The Company will disregard any votes cast in favour on Resolution 7 by or on behalf of John Braham or any other person who is to receive the securities and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company). However, this does not apply to a vote cast in favour of Resolution 7 by: • • • a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: • • the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way. The Directors recommend that you vote IN FAVOUR of Resolution 7. The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 7. 9 Resolution 8 Approval of Director Participation in Tranche 2 Placement Shares For the purposes of Chapter 2E of the Corporations Act, Mr David Coupland is a related party of the Company. Resolution 8 relates to a proposed issue of 100,000 Shares to Mr David Coupland (or entities related to him or in which he has an indirect interest), which is a financial benefit that requires Shareholder approval for the purposes of section 208 of the Corporations Act. The Company has agreed, subject to Shareholder approval to issue 100,000 Shares to Mr Coupland, at an issue price of $0.10 per Share (or his nominees) under Tranche 2 for Directors to participate in accordance with the announcement dated 26 August 2022. Information Requirements - Listing Rules 10.11 and 10.13 Listing Rule 10.11 provides that unless one of the exceptions in Listing Rule 10.12 applies, the Company must not issue or agree to issue equity securities to: • • • • • • a related party (Listing Rule 10.11.1); a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (30%+) holder in the Company (Listing Rule 10.11.2); a person who is, or was at any time in the 6 months before the issue or agreement, a substantial (10%+) holder in the Company and who has nominated a Director to the Board pursuant to a relevant agreement which gives them a right or expectation to do so (Listing Rule 10.11.3); an associate of a person referred to in Listing Rules 10.11.1 to 10.11.3 (Listing Rule 10.11.4); or a person whose relationship with the Company or a person referred to in Listing Rules 10.11.1 to 10.11.4 is such that, in ASX’s opinion, the issue or agreement should be approved by Shareholders (Listing Rule 10.11.5), unless it obtains the approval of its Shareholders. The issue is not part of the director remuneration package or an incentive to the director. The proposed issue of Shares under Resolution 8 will be to a party who fall within Listing Rule 10.11.1 and does not fall within any of the exceptions in Listing Rule 10.12. It, therefore, requires the approval of Shareholders under Listing Rule 10.11. Resolution 8 seeks the required Shareholder approval to the issue under and for the purposes of Listing Rule 10.11 and for all other purposes to allow the Company Director or his nominees participation on the same terms as the Placement made to the unrelated parties. If Resolution 8 is passed, the Company will be able to proceed with the issue to the Director and the Company will raise $10,000 before costs. If Resolution 8 is not passed, the Company will not be able to proceed with the issue of the Placement Shares to the Director or his nominees and the Company will not receive $10,000 in application funds. Details of the issue, as required by ASX Listing Rule 10.13 are as follows: Names of the allottees: Resolution 8 the shares to be issued to David Coupland or his nominee. The category under Listing Rule 10.11 Resolution 8 Listing Rule 10.11.1 because David Coupland is a related party as Director of the Company; The number and class of securities to be issued: 100,000 ordinary shares; Terms: Allotment date: Fully paid ordinary shares in the Company. The shares will be issued no later than 1 month after the date of the General Meeting and it is intended that issue will occur on the same date that the shareholder approves the issue. Issue price: $0.10 per share Intended use of funds The funds raised by the placement will be used to advance exploration and drill test high- priority targets, further progress resource evaluation and upgrading of the JORC- compliant resources throughout the Cerro Bayo Project, and for general corporate and working capital purposes. If approval is given for the issue of the Shares under Listing Rule 10.11, approval is not required under Listing Rule 7.1. The Company confirms that the shares are not issued under an agreement. 10 Voting Exclusion Statement The Company will disregard any votes cast in favour on Resolution 8 by or on behalf of David Coupland or any other person who is to receive the securities and any other person who will obtain a material benefit as a result of the issue of the securities (except a benefit solely by reason of being a holder of ordinary securities in the Company). However, this does not apply to a vote cast in favour of Resolution 8 by: • • • a person as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with directions given to the proxy or attorney to vote on the resolution in that way; or the chair of the meeting as proxy or attorney for a person who is entitled to vote on the resolution, in accordance with a direction given to the chair to vote on the resolution as the chair decides; or a holder acting solely in a nominee, trustee, custodial or other fiduciary capacity on behalf of a beneficiary provided the following conditions are met: • • the beneficiary provides written confirmation to the holder that the beneficiary is not excluded from voting, and is not an associate of a person excluded from voting, on the resolution; and the holder votes on the resolution in accordance with directions given by the beneficiary to the holder to vote in that way. The Directors recommend that you vote IN FAVOUR of Resolution 8. The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 8. 11 Resolution 9 Approval of 10% Placement Facility ASX Listing Rule 7.1A enables the Company to issue equity securities up to 10% of its issued share capital through placements over a 12 month period after the AGM ('10% Placement Facility). The 10% Placement Facility is in addition to the Company's 15% placement capacity under ASX Listing Rule 7.1. Listed entities with a market capitalisation of $300 million or less and not in the S&P/ASX 300 are eligible to seek shareholder approval under Listing Rule 7.1A and the Company’s approximate market capitalisation at the time of this Notice of Meeting is $16.4 million and not in the S&P/ASX300 If Resolution 9 is not passed, the Company would not be able to issue securities and it will not be able to raise funds under this 10% placement facility. If Resolution 9 is passed, The Company will be able to raise funds to the maximum of 10% of the placement facility in accordance with Listing Rule 7.1A. Resolution 9, which is a Special Resolution requiring 75% of votes cast to be in favour of the resolution, seeks shareholder approval for the Company to have the ability to issue equity securities under the 10% Placement Facility on the following terms: (a) Placement Period Shareholder approval of the 10% Placement Facility is valid from the date of the AGM and expires on the earlier of: (i) The date that is 12 months after the date of the AGM at which the approval is obtained. (ii) The time and date of the entity’s next annual general meeting. (iii) The time and date of the approval by shareholders of a transaction under ASX Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking). (b) Equity Securities Any equity securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of equity securities of the Company which, in the Company's case, are fully paid ordinary shares. (c) The formula for calculating 10% Placement Facility The maximum number of shares that can be issued under the 10% Placement Facility is calculated as follows: (A x D) - E Where: A is the number of fully paid ordinary shares on issue in the 12 months before the date of issue or agreement: (i) (ii) plus the number of fully paid ordinary securities issued in the relevant period under an exception in ASX Listing Rule 7.2 other than exception 9, 16 or 17; plus the number of fully paid ordinary securities issued in the relevant period on the conversion of convertible securities within ASX Listing Rule 7.2 exception 9 where; • • The convertible securities were issued or agreed to be issued before the commencement of the relevant period; or The issue of. or agreement to issue, the convertible securities was approved, or taken under the ASX Listing Rule to have been approved, under ASX Listing Rule 7.1 or - 7.4. (iii) plus the number of fully paid ordinary securities issued in the relevant period under an agreement to issue securities within ASX Listing Rule 7.2 exception 16 where: • • The agreement was entered into before the commencement of the relevant period; or The agreement or issue was approved, or taken under the ASX Listing Rules to have been approved, under ASX Listing Rule 7.1 or 7.4. (iv) plus the number of any other fully paid ordinary securities issued in the relevant period with approval under ASX Listing Rule 7.1 or 7.4. (ii) plus the number of partly paid ordinary securities that became fully paid in the relevant period. (iv) less the number of fully paid ordinary securities cancelled in the relevant period. D is 10%. E is the number of equity securities issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the relevant period where the issue or agreement has not been subsequently approved by the holders of its ordinary securities under ASX Listing Rule 7.4; and “relevant period” has the same meaning as in ASX Listing Rule 7.1 12 The current maximum number of ordinary shares, as at the date of this Notice of Meeting, that can be issued under the 10% Placement Facility is 5,552,695. The Company’s current capacity to issue securities as at the date of this Notice Meeting pursuant to Listing Rule 7.1 is 2,348,462. (d) Minimum Issue Price The minimum issue price of equity securities issued for the purpose of Listing Rule 7.1.A.3 must be not less than 75% of the volume weighted average price of equity securities in the same class calculated over the 15 trading days on which trades were recorded immediately before: (i) (ii) the date on which the price at which the equity securities are to be issued is agreed by the entity and the recipient of the securities; or if the equity securities are not issued within 10 trading days of the date in paragraph (i) above, the date on which the equity securities are issued. (e) Purposes for which the funds raised by an issue of equity securities may be used The Company may issue Equity Securities under the 10% Placement Capacity for cash consideration only, and the Company intends to use any funds raised under such an issue for continued exploration and evaluation of the Company’s exploration projects, provide appropriate working capital for Cerro Bayo and for general working capital. (f) Risk of Economic and Voting Dilution If Resolution 9 is approved by Shareholders and the Company issues equity securities under the 10% Placement Facility, the existing Shareholders' voting power in the Company will be diluted as shown in the table below. Further, there is a risk that: (i) the market price for the Company's equity securities may be significantly lower on the date of the issue of the equity securities than on the date of the AGM; and (ii) the equity securities may be issued at a price that is at a discount to the market price for the Company's equity securities on the issue date. Because Variable A in the formula for calculating 10% Placement Facility, and consequently the number of shares that can be issued under the 10% Placement Facility, can change during the Placement Period, the table below shows a matrix of scenarios of the potential dilution of existing shareholders as at the date of the AGM on the basis of: (i) (ii) the issue price of equity securities being the current approximate market price of fully paid ordinary shares, plus 50% and minus 50%; and the maximum number of shares that can be issued under the 10% Placement Facility in accordance with the definition of Variable A in the formula for calculating 10% Placement Facility increasing by 50% and 100%. Variable A in 10% Placement Facility under ASX Listing Rule 7.1A.2 Voting Dilution and Placement Facility Capacity Current Variable A 186,831,954 shares 50% increase in current Variable A 280,247,931 shares 100% increase in current Variable A 373,663,908 shares 10% 18,683,195 Shares 10% 28,024,793 Shares 10% 37,366,391 shares 50% Decrease in Current Approximate Market Price $0.044 Issue Price and Funds Raised Current Approximate Market Price $0.088* 50% Increase in Current Approximate Market Price $0.132 $822,061 $1,644,121 $2,466,182 $1,233,091 $2,466,182 $3,699,273 $1,644,121 $3,288,242 $4,932,364 *The current approximate market price of $0.088 was the closing price as at 11 October 2022. As an example, if Variable A is increased to 373,663,908 shares, the 10% Placement Facility capacity is 37,366,391 shares and therefore the dilution of existing shares as at the date of the AGM, being 186,831,954 shares, is calculated as: 37,366,391 ÷ (186,831,954 + 37,366,391) = 16.67% 13 (g) Other Matters The Company may issue equity securities under the 10% Placement Facility for cash consideration to support the Company's ongoing exploration activities and working capital The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. As there is no issue currently proposed, the identity of the allottees is not currently known and will be determined on a case-by-case basis at the time of allotment, having regard to factors including, but not limited to, the following: (i) the methods of raising funds that are available to the Company, including but not limited to, rights issues or other issues in which existing security holders can participate; (ii) the effect of the issue of the equity securities on the control of the Company; (iii) the financial situation and solvency of the Company; and (iv) advice from corporate, financial and broking advisers (if applicable). The allottees under the 10% Placement Facility have not currently been determined but may include existing substantial shareholders and/or new shareholders who are not related parties or associates of a related party of the Company. The Company issued a total of 11,885,000 ordinary shares pursuant to Listing Rule 7.1A in the 12 month preceding the date of this Notice of Annual General Meeting which based on the number of Equity Securities on issue at the commencement of that period represents 9.48% of the Company’s Equity Securities. At the date of the Notice of Meeting, the Company has not invited and has not determined to invite any particular existing Shareholder or an identifiable class of existing Shareholder to participate in an offer under ASX Listing Rule 7.1A. Accordingly, no existing Shareholder will be excluded from voting on this Resolution 9. Further details of the issues of Equity Securities by the Company during the 12 months period preceding the date of this Notice of Meeting are set out in Appendix “A” of this Explanatory Memorandum. Information relating to the issue of Equity Securities in the preceding 12 months is as follows: • Number of securities issued: 11,855,000 ordinary shares issued under ASX Listing Rule 7.1A. The Company confirmed that the subscribers of the shares are not related parties, key management personnel, substantial holders, adviser to the Company or an associate of any of the above as outlined under Listing Rule 10.1 or 10.11,except for Tribeca Investments Partners Pty Ltd which is a Substantial Holder within the Company. • Class of securities issued: Ordinary fully paid shares; • Issued of the Securities: • Issue price: • The issue was for cash: The shares were issued to sophisticated investors clients of Shaw and Partners, Arganonaut Partners Pty Limited, Taylor Collison Limited, Hodgson Capital Limited, DTM Holdings Pty Ltd and Tribeca Investment Partners Pty Ltd On 2 September 2022, the Company issued 12,755,000 ordinary shares, 900,000 shares issued under listing rule 7.1 and 11,855,000 shares issued under listing rule 7.1A. The shares were issued at $0.10 per share and the closing price on the date of the issue was $0.11. The total cash consideration received before cost was $1,275,000. The cash is used to continue with the drilling and resource evaluation programs at Cerro Bayo and for general corporate and working capital purposes. As of 30 September 2022, the Company has spent $328,000 on its drilling program at Cerro Bayo. The Company will use the remaining cash to continue drilling at its Cerro Bayo project and for working capital Voting Exclusion: As at the date of this Notice, the Company is not proposing to make an issue of Equity Securities under Listing Rule 7.1A. Accordingly, a voting exclusion statement is not included in respect of Resolution 9. The Directors recommend that you vote IN FAVOUR of Resolution 9. The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 9. 14 Appendix “A” Issue of Equity Securities since 25 November 2021 under ASX Listing Rules 7.1 and 7.1A Date Number of Equity Securities Class of Equity Securities and summary of terms and the ASX Listing Rule under which the Equity Securities were issued Names of recipients or basis on which recipients determined Issue price of Equity Securities and discount to market price on the trading day prior to the issue Form of Consideration 2 September 2022 11,855,000 Ordinary shares Under L.R. 7.1A To professional and sophisticated investors who participated in the placement the subject of the announcement dated 26/8/2022 $0.10 Represent a discount of 9.1% to the market price Cash consideration of $1,185,500 before costs. The cash was used to continue with the drilling and resource evaluation programs at Cerro Bayo and for general corporate and working capital purposes.. . 15 Annexure “B” Term and Conditions of Unlisted Options 1. Entitlement and Exercise Price The Options entitle Option Holders to subscribe for 1 fully paid ordinary share in the Company for each option exercised at an exercise price of $0.15 per share. 2. Vesting and Expiry Date of the options Subject to paragraph 6, the Options vest immediately and will expire 36 months from the issue date. 3. Exercise Period The Options not exercised on or before the Expiry Date (being, 36 months from the issue date) will automatically lapse. 4. Notice of Exercise The Options may be exercised at any time prior to the Expiry Date wholly or in part by delivering a duly completed form of notice of exercise together with payment of the Exercise Price for each Option being exercised to the Company. 5. Exercise Date A Notice of Exercise is only effective on and from the later of the date of receipt of the Notice of Exercise and the date of receipt of the payment of the Exercise Price for each Option being exercised in cleared funds. 6. If the Option Holder has acted fraudulently, dishonestly or in breach of its obligations to the Company (as determined by the Board, acting reasonably), then the Options shall lapse upon written notification to the Option Holder. 7. Shares issued on exercise All Shares allotted on the exercise of Options will rank equally in all respects with the Company’s then existing ordinary fully paid ordinary Shares. 8. Quotation of Options: The Options will be issued unlisted and the Company will not seek ASX official quotation of these Options. 9. Participation in new issue The Option Holders may only participate in new issues of securities to holders of ordinary shares in the Company if their Options have been exercised and Shares allotted in respect of the Options before the record date for determining entitlements to the issue. 10. Change in Exercise Price There will be no change to the Exercise Price of the Options or the number of Shares over which an Option is exercisable in the event of the Company making a pro-rata issue of shares or other securities to the holders of ordinary shares in the Company. 11. Timing of issue of shares on exercise Within 15 Business Days after the Exercise Date, if the Company’s ordinary shares are quoted by ASX, the Company must: a. on the date that the shares are allotted pursuant to the exercise of Options, apply for quotation of all shares allotted; and b. perform such other acts or take such other actions to ensure the shares that are allotted pursuant to the exercise of the Options are quoted by the ASX and freely tradeable. 12. Reconstruction of Capital If prior to the Expiry Date there is a reorganisation of the issued capital of the Company, the rights of a holder of Options will be changed to the extent necessary to comply with the applicable ASX Listing Rules in force at the time of the reorganisation. 13. Transferability Unless quoted, the Options are transferable to sophisticated investors as that term is defined under the Corporations Act 2001 (Cth). 16 THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY LODGE YOUR PROXY APPOINTMENT ONLINE ONLINE PROXY APPOINTMENT www.advancedshare.com.au/investor-login MOBILE DEVICE PROXY APPOINTMENT Lodge your proxy by scanning the QR code below, and enter your registered postcode. It is a fast, convenient and a secure way to lodge your vote. ANNUAL GENERAL MEETING PROXY FORM I/We being shareholder(s) of Equus Mining Limited and entitled to attend and vote hereby: APPOINT A PROXY The Chair of the Meeting OR PLEASE NOTE: If you leave the section blank, the Chair of the Meeting will be your proxy. 1 P E T S or failing the individual(s) or body corporate(s) named, or if no individual(s) or body corporate(s) named, the Chair of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf, including to vote in accordance with the following directions (or, if no directions have been given, and to the extent permitted by law, as the proxy sees fit), at the Annual General Meeting of the Company to be held at Level 5, 66 Pitt Street Sydney NSW 2000 on 29 November 2022 at 11.00am (AEDT) and at any adjournment or postponement of that Meeting. Chair’s voting intentions in relation to undirected proxies: The Chair intends to vote all undirected proxies in favour of all Resolutions. In exceptional circumstances, the Chair may change his/her voting intentions on any Resolution. In the event this occurs, an ASX announcement will be made immediately disclosing the reasons for the change. Chair authorised to exercise undirected proxies on remuneration related resolutions: Where I/we have appointed the Chair of the Meeting as my/our proxy (or the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolutions 1 & 6 to 8 (except where I/we have indicated a different voting intention below) even though these resolutions are connected directly or indirectly with the remuneration of a member(s) of key management personnel, which includes the Chair. VOTING DIRECTIONS Resolutions 1 2 3 4 5 6 7 8 9 Adoption of Remuneration Report Re-election of Damien J. Koerber as a Director Re-election of Mr Ryan K. Austerberry as a Director Ratification of 12,755,000 Shares Ratification of 22,863,081 Unlisted Options Approval of the Propose Issue of 2,500,000 Shares to Mark Lochtenberg Approval of the Propose Issue of 100,000 Shares to John Braham Approval of the Propose Issue of 100,000 Shares to David Coupland Approval of 10% Placement Facility For ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ Against Abstain* ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ * If you mark the Abstain box for a particular Resolution, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll. SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director This form should be signed by the shareholder. If a joint holding, all the shareholders should sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth). Email Address Please tick here to agree to receive communications sent by the Company via email. This may include meeting notifications, dividend remittance, and selected announcements. 2 P E T S 3 P E T S HOW TO COMPLETE THIS SHAREHOLDER PROXY FORM IF YOU WOULD LIKE TO ATTEND AND VOTE AT THE MEETING, PLEASE BRING THIS FORM WITH YOU. THIS WILL ASSIST IN REGISTERING YOUR ATTENDANCE. CHANGE OF ADDRESS CORPORATE REPRESENTATIVES This form shows your address as it appears on Company’s share register. If this information is incorrect, please make the correction on the form. Shareholders sponsored by a broker should advise their broker of any changes. APPOINTMENT OF A PROXY If you wish to appoint the Chair as your proxy, mark the box in Step 1. If you wish to appoint someone other than the Chair, please write that person’s name in the box in Step 1. A proxy need not be a shareholder of the Company. A proxy may be an individual or a body corporate. DEFAULT TO THE CHAIR OF THE MEETING If you leave Step 1 blank, or if your appointed proxy does not attend the Meeting, then the proxy appointment will automatically default to the Chair of the Meeting. VOTING DIRECTIONS – PROXY APPOINTMENT You may direct your proxy on how to vote by placing a mark in one of the boxes opposite each resolution of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any resolution by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given resolution, your proxy may vote as they choose to the extent they are permitted by law. If you mark more than one box on a resolution, your vote on that resolution will be invalid. PROXY VOTING BY KEY MANAGEMENT PERSONNEL If you wish to appoint a Director (other than the Chair) or other member of the Company’s key management personnel, or their closely related parties, as your proxy, you must specify how they should vote on Resolutions 1 & 6 to 8, by marking the appropriate box. If you do not, your proxy will not be able to exercise your vote for Resolutions 1 & 6 to 8. PLEASE NOTE: If you appoint the Chair as your proxy (or if they are appointed by default) but do not direct them how to vote on a resolution (that is, you do not complete any of the boxes “For”, “Against” or “Abstain” opposite that resolution), the Chair may vote as they see fit on that resolution. APPOINTMENT OF A SECOND PROXY You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning Advanced Share Registry Limited or you may copy this form and return them both together. To appoint a second proxy you must: (a) on each Proxy Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and (b) return both forms together. COMPLIANCE WITH LISTING RULE 14.11 In accordance to Listing Rule 14.11, if you hold shares on behalf of another person(s) or entity/entities or you are a trustee, nominee, custodian or other fiduciary holder of the shares, you are required to ensure that the person(s) or entity/entities for which you hold the shares are not excluded from voting on resolutions where there is a voting exclusion. Listing Rule 14.11 requires you to receive written confirmation from the person or entity providing the voting instruction to you and you must vote in accordance with the instruction provided. By lodging your proxy votes, you confirm to the company that you are in compliance with Listing Rule 14.11. If a representative of a nominated corporation is to attend the Meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A Corporate Representative Form may be obtained from Advanced Share Registry. SIGNING INSTRUCTIONS ON THE PROXY FORM Individual: Where the holding is in one name, the security holder must sign. Joint Holding: Where the holding is in more than one name, all of the security holders should sign. Power of Attorney: If you have not already lodged the Power of Attorney with Advanced Share Registry, please attach the original or a certified photocopy of the Power of Attorney to this form when you return it. Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. LODGE YOUR PROXY FORM This Proxy Form (and any power of attorney under which it is signed) must be received at an address given below by 11.00am (AEDT) on 27 November 2022, being not later than 48 hours before the commencement of the Meeting. Proxy Forms received after that time will not be valid for the scheduled Meeting. ONLINE PROXY APPOINTMENT www.advancedshare.com.au/investor-login BY MAIL Advanced Share Registry Limited 110 Stirling Hwy, Nedlands WA 6009; or PO Box 1156, Nedlands WA 6909 BY FAX +61 8 6370 4203 BY EMAIL admin@advancedshare.com.au IN PERSON Advanced Share Registry Limited 110 Stirling Hwy, Nedlands WA 6009 ALL ENQUIRIES TO Telephone: +61 8 9389 8033