Genesis Minerals Limited and controlled entities ABN 72 124 772 041 Annual Financial Report and Directors’ Report for the year ended 30 June 2021 Genesis Minerals Limited and controlled entities Corporate Directory ABN 72 124 772 041 Directors Tommy McKeith (Non-Executive Chairman) Michael Fowler (Managing Director) Craig Bradshaw (Non-Executive Director) Gerry Kaczmarek (Non-Executive Director) Nic Earner (Non-Executive Director) Company Secretary Geoff James Registered Office and Principal Place of Business Unit 6, 1 Clive Street WEST PERTH WA 6005 Telephone: +61 8 9322 6178 Postal Address PO Box 937 WEST PERTH WA 6872 Share Register Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace PERTH WA 6000 Auditors Hall Chadwick WA Audit Pty Ltd (formerly Bentleys Audit & Corporate (WA) Pty Ltd) 238 Rokeby Road SUBIACO WA 6008 Internet Address www.genesisminerals.com.au Email Address info@genesisminerals.com.au Securities Exchange Listing Genesis Minerals Limited shares are listed on the Australian Securities Exchange (ASX code: GMD). 1 Genesis Minerals Limited and controlled entities Contents Chairman's Report Directors' Report Auditor’s Independence Declaration Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors' Declaration Independent Auditor’s Report to Members ASX Additional Information Mineral Resource Information 3 5 26 27 28 29 30 31 54 55 61 65 2 Genesis Minerals Limited and controlled entities Chairman’s Report Dear Shareholders, It is my pleasure to introduce Genesis Minerals’ 2021 Annual Report and to update you on what has been a very positive, rewarding and ultimately transformational year for the Company as we made further substantial progress towards our goal of becoming a new mid-tier Australian gold producer based on our expanded Ulysses Gold Project in Western Australia. During the 2021 financial year, we were able to build quickly on the strong foundations established by the acquisition of the adjoining Kookynie Gold Project. This deal has proven to be a game-changer for Genesis, allowing us to embark on a major drilling effort aimed at upgrading both the quality and scale of our resources and making new discoveries that will allow us to achieve a step-change in our growth trajectory. As a result of the Kookynie acquisition, our Mineral Resource inventory almost doubled to 1.28 million ounces. The acquisition also consolidated Genesis’ ownership of the southern extension of the highly-endowed Leonora Gold Corridor. Our strategic 650 square kilometre footprint in this prolific gold province includes a 15km strike length of the extremely prospective but under-explored Ulysses-Orient Well trend. In light of the significant increase in the size and scope of the Ulysses Project, Genesis immediately broadened the ongoing Feasibility Study to consider the development of a standalone mining and processing operation, rather than pursuing the toll- treatment and partnership options we had initially envisaged. We also commenced a major drilling program aimed at expanding and upgrading our Mineral Resource inventory with up to 35,000m of Reverse Circulation (RC) and diamond drilling initially planned across the Admiral, Clark, Butterfly and Orient Well areas. This work was highly successful, delivering outstanding results from within the known resources and prompting us to extend the program in key areas. This first phase of work culminated in the announcement of an updated Mineral Resource of 27.3Mt at 1.8g/t for 1.608 million ounces in March – an increase of 26% or 327,000 ounces. Importantly, the higher-confidence Measured and Indicated component increased by 32% or 237,000 ounces to 984,000 ounces. All of these ounces are located in the heart of one of the world’s premier mining districts, the Leonora-Laverton region of Western Australia’s Eastern Goldfields, putting us in an outstanding position to unlock the value of this high-quality asset base for our shareholders. This resource update paved the way for us to complete an $11 million capital raising via an institutional placement and $1 million Share Purchase Plan, giving us the ability to maintain significant drilling momentum into the second half of the year with an aggressive exploration push targeting the next leg of resource growth and discovery at Ulysses. The focus of ongoing drilling has been to confirm and upgrade existing resources while also beginning the process of systematically testing for extensions of the known deposits at depth and along strike and searching for completely new discoveries. I am pleased to say that we have been successful on all counts, with a steady flow of impressive results generated over the course of the year. These included an exciting new discovery in the Puzzle North area, where we have intersected a large zone of shallow gold mineralisation, and outstanding high-grade results from extensional and step-out drilling at the Admiral Deposit. The Company has budgeted to completed at least a further 40,000m of RC and diamond drilling in the second half of calendar year 2021, in conjunction with over 20,000m of air-core drilling across the 15km long Ulysses-Orient Well corridor and 6km strike length of the Puzzle granite-greenstone contact. This work will feed into a further major Mineral Resource update to be delivered towards the end of 2021. Despite interruptions and delays due to the highly competitive market for services, people and equipment in WA (largely due to the flow-on impacts of the COVID-19 pandemic), we were able to make substantial progress with the Feasibility Study on a standalone open pit and underground mining operation at the expanded Ulysses Project during the year. While this work is well advanced, the success we have been enjoying with the drill rig (as well as the lengthy turnaround times being experienced at assay laboratories due to the upsurge in exploration activity) has prompted us to reconsider the timing of its completion. With another major resource uplift pending by year-end, we are now reassessing the Feasibility Study on the basis of a larger project with the potential for an enhanced production profile, improved economics and stronger financial returns. Subsequent to the end of the financial year, Genesis unveiled a landmark strategic $20.8 million funding package and board restructure led by highly-regarded gold mining executive Raleigh Finlayson, the former Managing Director of Saracen Mineral Holdings and Northern Star Resources (as announced on 22 September 2021). 3 Genesis Minerals Limited and controlled entities Chairman’s Report Under this proposal (which is subject to shareholder approval), Genesis will raise $16 million via a share Placement at 6c per share with Mr Finlayson subscribing for $7 million of shares and Northern Star subscribing for $3 million of shares. Existing Genesis shareholders will have the opportunity to participate in a 1-for-30 non renounceable Entitlement Offer, also at 6c per share, with both the Placement shares and the Entitlement Offer coming with a free one-for-two attaching unlisted option exercisable at 10c. The plan will see Mr Finlayson appointed as Managing Director of Genesis by no later than 31 March 2022 as part of a wide- ranging board restructure that will also see former FMG Managing Director and CEO Neville Power and highly-experienced corporate lawyer Michael Bowen invited to join the Board as Non-Executive Directors. Under the transition plan, Michael Fowler will remain Genesis Managing Director until Mr Finlayson's appointment becomes effective, at which time he will retire from the Board. Current non-executive Directors Craig Bradshaw and Nic Earner will retire from the Board at the upcoming Genesis AGM, assuming all necessary shareholder approvals for the Placement and Board restructure are obtained. I will remain as non-executive Chairman. This landmark announcement was very well received by the market, sparking a sharp increase in the Company’s market capitalisation and providing an exceptional platform for Genesis to take the next important steps as an emerging mid-tier gold player, marking the culmination of what has been an incredibly successful few years for the Company. As a result of the strategic restructure unveiled in September and the new leadership group coming into the Company, I have no doubt that we will be able to elevate Genesis quite rapidly into the ranks of Australia’s mid-tier gold producers. In conclusion, I would like to take this opportunity to extend my sincere thanks to the small but hard-working team at Genesis, led by our Managing Director, Michael Fowler. The fact that we have been able to achieve so much over the past two years and grow our resource base to the point where we have been able to attract one of the most successful management teams in the Australian gold sector to our Company is testament to their experience, expertise and resilience. Finally, I would like to again thank you – our shareholders – for your support over the course of the year. I am confident that all of the hard work the Genesis team has put in over the past few years will be richly rewarded in 2022 and beyond. Tommy McKeith Chairman 4 Genesis Minerals Limited and controlled entities Directors' Report Directors’ Report Your directors submit their report on the consolidated entity (referred to hereafter as the Group) consisting of Genesis Minerals Limited and the entities it controlled at the end of, or during, the year ended 30 June 2021. DIRECTORS The names and details of the Company's directors in office during the financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Information on Directors Tommy McKeith Qualifications Experience Non-Executive Chairman (Appointed 29 November 2018) BSc (Hons), GradDip Eng (Mining), MBA Mr McKeith is a geologist with 30 years’ experience in various mine geology, exploration and business development roles. He was formerly Executive Vice President (Growth and International Projects) for Gold Fields Limited, where he was responsible for global greenfields exploration and project development. Mr McKeith was also Chief Executive Officer of Troy Resources Limited and has held Non-Executive Director roles at Sino Gold Limited and Avoca Resources Limited. Interest in shares and options 9,333,908 fully paid ordinary shares 966,666 options expiring 10 December 2022, exercisable at $0.106 966,667 options expiring 10 December 2023, exercisable at $0.114 966,667 options expiring 10 December 2024, exercisable at $0.122 Other directorships in listed entities held in the previous three years Mr McKeith is a non-executive director of Evolution Mining Limited and Arrow Minerals Limited and is formerly non-executive Chairman of Prodigy Gold NL. Michael Fowler Qualifications Experience Managing Director (Appointed 16 April 2007) BSc, MSc, MAusIMM Mr Fowler is a geologist and holds a Bachelor of Applied Science degree majoring in geology from Curtin University and a Master of Science degree majoring in Ore Deposit Geology from the University of Western Australia. Mr Fowler brings to the Board 30 years’ experience as an exploration and mining professional with extensive corporate and operational management skills in the minerals industry. Interest in shares, options and performance rights 15,461,017 fully paid ordinary shares 3,600,000 options expiring 13 December 2021, exercisable at $0.045 4,500,000 performance rights expiring 31 December 2021 Other directorships in listed entities held in the previous three years Mr Fowler resigned as a director of PolarX Limited (formerly Coventry Resources Limited) on 1 December 2017. Craig Bradshaw Non-Executive Director (Appointed 7 September 2017) Qualifications Experience B.Eng. (Mining) Mr Bradshaw is a mining engineer with 25 years’ experience in the Australian and international mining industry. During his career, he has held numerous senior operational and executive roles with a range of companies and spanning several different commodities. He was formerly CEO of Adaman Resources, a privately owned resource investment company. He was Chief Operating Officer for Saracen Mineral Holdings from 2013 to 2017, a leading mid-tier gold producer. He was Chief Operating Officer for Inter Mining and Navigator Resources, Operations Manager at St Ives Gold Mines for Gold Fields Australia, Mining Manager for Albidon at the Munali Nickel Project in Zambia and Chief Operating Officer for Fox Resources. He also worked for WMC Limited at the Perseverance Nickel Mine and Leinster Nickel Operations. Interest in shares and options 2,000,000 fully paid ordinary shares 583,333 options expiring 10 December 2022, exercisable at $0.106 583,333 options expiring 10 December 2023, exercisable at $0.114 583,334 options expiring 10 December 2024, exercisable at $0.122 Other directorships in listed entities held in the previous three years None 5 Genesis Minerals Limited and controlled entities Directors' Report Gerry Kaczmarek Non-Executive Director (Appointed 20 March 2018) Qualifications Experience Interest in shares and options B.Ec (Acc), CPA, MAICD Mr Kaczmarek has over 40 years’ experience working predominantly in the resource sector and specialising in accounting and finance and company management with several emerging and leading mid-tier Australian gold companies. He was Chief Financial Officer and Company Secretary for Saracen Mineral Holdings from 2012 to 2016. He served as Chief Financial Officer and Company Secretary at Troy Resources from 1998 to 2008 and from 2017 to 2019. Earlier in his career, he held a range of positions with the CRA/Rio Tinto group and was Chief Financial Officer for a number of other Mid-Tier and Junior Mining Companies. 1,180,925 fully paid ordinary shares 800,000 options expiring 29 November 2021, exercisable at $0.053 1,200,000 options expiring 29 November 2022, exercisable at $0.056 583,333 options expiring 10 December 2022, exercisable at $0.106 583,333 options expiring 10 December 2023, exercisable at $0.114 583,334 options expiring 10 December 2024, exercisable at $0.122 Other directorships in listed entities held in the previous three years None Nic Earner Qualifications Experience Non-Executive Director (Appointed 24 October 2019) B.Eng. (Hons) Mr Earner is a chemical engineer with over 25 years’ experience in technical and operational optimisation and management, and has held a number of executive roles in mining and processing. He is currently the Managing Director of Alkane Resources Limited and is Non-Executive director of Australian Strategic Materials Limited. Mr Earner is the appointed representative of Alkane Resources Limited under the ongoing strategic relationship between the companies. Interest in shares and options None Other directorships in listed entities held in the previous three years Mr Earner is managing director of Alkane Resources Limited and is non-executive director of Australian Strategic Materials Limited. COMPANY SECRETARY Geoff James Qualifications Experience Appointed 20 October 2015 B Bus, CA, AGIA, ACG Mr James is a Chartered Accountant and a Chartered Secretary. He is an experienced finance professional with over 20 years’ experience in senior management roles. DIRECTORS' MEETINGS Attendances by each director during the year were as follows: Directors Meetings Tommy McKeith Michael Fowler Craig Bradshaw Gerry Kaczmarek Nic Earner A 5 5 5 5 3 B 5 5 5 5 5 Notes A – Number of meetings attended. B – Number of meetings held during the time the director held office during the year. PRINCIPAL ACTIVITIES The principal activities of the Group during the year were the exploration and development of gold deposits in Western Australia. DIVIDENDS No dividend was declared or paid during the current or previous year. 6 Genesis Minerals Limited and controlled entities Directors' Report OPERATING REVIEW Ulysses Gold Project, WA (Genesis: 100%) The Ulysses Gold Project is located in Western Australia, approximately 30km south of Leonora and 200km north of the regional mining centre of Kalgoorlie (Figure 1). During the year the Company’s activities were mainly focused on the Ulysses Gold Project where the Company undertook a major drilling program, announced a major resource upgrade and advanced work on an expanded Feasibility Study on the construction of a standalone treatment facility at Ulysses following the acquisition of the Kookynie tenements. Drilling Results Following the announcement of the acquisition of the Kookynie tenements in late June 2020, the Company commenced a +35,000m Reverse Circulation (RC) and diamond drilling program aimed at expanding and upgrading the 1.28Moz Resource as the foundation for the expanded Feasibility Study for the Greater Ulysses Project. The RC and diamond drilling program delivered highly encouraging results 1 at the Admiral, Butterfly, Clark and Orient Well deposits (Figures 3 and 4), located on the recently acquired Kookynie tenements and now part of the expanded 100%-owned Ulysses Gold Project. The results have confirmed the presence of significant shallow gold mineralisation at all deposits which are open at depth and along strike. The Admiral, Butterfly, Clark and Orient Well deposits are within the Ulysses-to-Orient Well structural corridor that are continuing to be targeted by systematic resource drilling. The ongoing drilling program successfully expanded and upgraded the existing Mineral Resources. Figure 1. Project location Figure 2. Genesis exploration team reviewing Admiral core 1 Refer to GMD’s ASX announcements dated 31 August, 15 September, 29 September, 21 October, 9 November, 9 December 2020, 13 January, 8 February, 15 February, 17 February, 23 March, 9 April, 12 May, 15 June, 1 July and 24 August 2021 for full details of the exploration results contained in this report. 7 Genesis Minerals Limited and controlled entities Directors' Report Figure 3. Deposit locations Figure 4. Ulysses-to-Orient Well structural corridor with current gold resources highlighted 8 Genesis Minerals Limited and controlled entities Directors' Report Updated Mineral Resource Estimate The highly successful drilling programs completed at the Ulysses Project over the second half of 2020 allowed Genesis to update the Mineral Resource in late March 2021 at which time Genesis reported a Mineral Resource Estimate of 1,608,000oz of gold, a 26 per cent increase in contained ounces from the June 2020 Mineral Resource. The updated Measured, Indicated and Inferred Mineral Resource now totals 27.3Mt @ 1.8g/t gold for 1,608,000 ounces of contained gold (refer to Table 1 for full details), which represents an increase of 327,000 ounces over the previous June 2020 Mineral Resource. Importantly, the higher-confidence Measured and Indicated component has increased by 237,000 ounces (32%) to 984,000 ounces, with this component of the Resource available for conversion to Ore Reserves following the completion of mining studies. Refer to the ASX announcement dated 29 March 2021 for full details of the updated Mineral Resource Estimate. • Admiral-Butterfly-Clark Group The total combined Mineral Resource for the Admiral-Butterfly-Clark (“ABC”) Group deposits (see Figure 4) has increased by 87% (213,000 ounces) to 10.3Mt @ 1.4g/t Au for 459,000 ounces. Details of the individual Resources are tabulated in Table 1 and shown in plan view in Figure 5. The 2020 drill program was successful in confirming historical drilling data and the continuity of mineralisation, as well as upgrading parts of the Inferred Resources for the Admiral, Butterfly and Clark deposits. Drilling also extended the limits of those deposits. The combined Admiral, Butterfly and Clark Resource has increased from 245,000 to 339,000 ounces, a 39% increase in contained ounces. Importantly the Measured and Indicated categories have increased by 59,000 ounces from 137,000 ounces to 196,000 ounces for these three deposits, with the grade remaining steady. Initial Resources were estimated for the King, Danluce and Butterfly North deposits (see Figure 5 and Table 1) and have been included in the combined shallow Resource. The inclusion of the King, Danluce and Butterfly North Resources has added 121,000 ounces to the total Mineral Resource. All Resources remain open, and drilling programs will continue throughout 2021 targeting extensions to all Resources as well as new near-mine discoveries. Figure 5. ABC Group Resource locations 9 Genesis Minerals Limited and controlled entities Directors' Report • Orient Well Group The combined Mineral Resource for the Orient Well Group of deposits (see Figure 4) has increased by 305% (186,000 ounces) to 7.3Mt @ 1.1g/t Au for 247,000 ounces. Details of the individual Resources are tabulated in Table 1. The Orient Well Resource has increased by 210% (128,000 ounces) to 5.43Mt @ 1.1g/t Au for 189,000 ounces. The 2020 drill program was successful in confirming historical drilling data at Orient Well, confirming the continuity of mineralisation and upgrading parts of the Inferred Resources for the Orient Well deposit. Drilling also significantly extended the limits of the Orient Well deposit. Initial Resource estimates were completed for the Orient Well East and Orient Well NW deposits. The inclusion of the Orient Well East and NW deposits has added an additional 42,000 ounces to the total Mineral Resource. The Orient Well, Orient Well East and Orient Well NW deposits remain open and extensions to all of these Resources will continue to be targeted in 2021. • Ulysses The Ulysses Mineral Resource was reduced by 29,000 ounces to 838,000 ounces as a result of adjusting the portion of the Resource model that is above 0.5g/t Au and constraining the model to a depth of <~130m below surface (previously ~200mbs) to reflect potential development by open pit mining. The Ulysses Resource now stands at 7.74Mt @ 3.4g/t Au for 838,000 ounces. Drilling in 2020 to upgrade part of the high-grade portion of the Mineral Resource and to define the margins of the Ulysses West shoot, reported at a cut off of 2g/t gold, resulted in a slight increase in the Mineral Resource from 695,000 ounces to 705,000 ounces (refer to Table 1 for details) which will form part of the mining evaluation for the Feasibility Study. The overall Mineral Resource for the Ulysses Project has increased by +900% in contained ounces over the past 5-years. The combined acquisition and discovery cost is approximately A$26/oz with 61% of the total contained ounces for the Ulysses Project in the Measured and Indicated categories. Figure 6. Ulysses Project resource growth 10 Genesis Minerals Limited and controlled entities Directors' Report Resource Growth and New Discovery Drilling Figure 7. Drilling at the Puzzle pit during the year During the year Genesis has been successful in identifying significant mineralisation at Admiral where drilling intersected a high- grade zone with a 5m composite sample from 21USRC892 of 5m @ 60.7g/t Au from 265m. Coarse visible gold was observed between from 265m to 266m. This hole was part of a program of five holes with further results pending from a diamond drilling program. High-grade mineralisation was intersected at Admiral West with 2m @ 10.55g/t Au from 103m returned from 21USRC925 targeting Ulysses style high-grade gold mineralisation. Drilling will continue to follow up this high-grade mineralisation targeting the intersection of either the Hercules shear or shallow-dipping shears in the footwall of the Admiral shear and the Butterfly dolerite as the dolerite changes orientation to the north-west from east to west. Figure 8. Location of target zones at Admiral-Clark-Butterfly 11 Genesis Minerals Limited and controlled entities Directors' Report A new discovery is emerging at Puzzle North which is developing into a significant zone of shallow gold mineralisation (see Figures 3 and 9). The Puzzle North discovery is located 700m north of the shallow 59,000oz Puzzle Mineral Resource. Significant mineralisation defined at Puzzle North included: o 106m @ 0.71g/t Au from 10m Including 16m @ 1.54g/t Au from 37m o 41m @ 1.20g/t Au from 38m 21USRC853 21USRC855 Including 10m @ 2.77g/t Au from 62m o 14m @ 2.44g/t Au from 106m to end of hole 21USRC855 o 40m @ 2.52g/t Au from 44m 21USRC911 o 84m @ 1.98g/t Au from 84m 21USRC912 Including 10m @ 6.31g/t Au from 116m Including 8m @ 5.94g/t Au from 157m o 11m @ 4.23g/t Au from 89m o 18m @ 0.69g/t Au from 61m o 34m @ 1.16g/t Au from 101m o 3m @ 3.40g/t Au from 148m o 60m @ 3.03g/t Au from 106m 21USRC916 21USRC917 21USRC852 (extension) 21USRC852 (extension) 21USRC855 (extension) Including 8m @ 12.9g/t Au from 126m o 69m @ 2.59g/t Au from 21m 21USRC919 Including 8m @ 11.70g/t Au from 78m Figure 9. Puzzle and Puzzle North hole locations and results. 12 Genesis Minerals Limited and controlled entities Directors' Report Gold mineralisation is constrained to the granite immediately adjacent to the moderately east-dipping granite-greenstone contact. Mineralisation is drill defined over ~400m and is interpreted to be best developed within a zone up to 40 to 80m wide, with a north-south orientation and dipping parallel to the granite-greenstone contact. Gold mineralisation is associated with increased pyrite content (0.5 to 3%) and quartz veining within the hematite-sericite altered granite. Due to the success of the results to date, a major 8,300m RC and diamond program was completed at Puzzle North and Puzzle in July and August targeting extensions at depth and to the north and south of the Puzzle North prospect. Results are pending. In-fill drilling will also be undertaken to allow a Mineral Resource Estimate to be completed as soon as possible and to better understand the controls on the gold mineralisation. The granite-greenstone contact (Figure 10) that controls the location of the new Puzzle North discovery and the Puzzle deposit is interpreted to extend over 6km of strike. No significant drilling has been completed along this corridor for nearly 20 years. This extensive mineralised corridor represents a very large target for the discovery of new gold deposits. Exploration in 2021 along this corridor outside of the Puzzle and Puzzle North areas will include geological mapping, geophysical surveying and air- core drilling which will be followed up by RC drilling as required. Figure 10. Puzzle Mineralised Corridor 13 Genesis Minerals Limited and controlled entities Directors' Report During 2021 a regional mapping and 3D geological interpretation program was completed that identified a number of target zones outside of the known resource areas within the Ulysses to Orient Well mine corridor that will be tested during the 2022 FY (see Figure 11). Feasibility Study Figure 11. Exploration targets FY 2022 highlighted by red polygons Genesis progressed work on a Feasibility Study that allows for the construction of a standalone treatment facility at Ulysses. The Feasibility Study will consider that mineralisation will be sourced from both the Ulysses deposit and a focus on the Admiral- Clark-Butterfly area and Orient Well for initial sources of open pit mineralisation. A number of study work packages were advanced during the year including: • Significant advancement towards completion of the Metallurgical test work program except for Puzzle; • Open Pit Geotechnical wall stability analysis; • Process plant and NPI design finalisation; • Detailed hydrological and hydrogeological work packages; • Advancement of Open Pit and Underground optimisations and mine design; • Operating and Capital cost estimation; • Completion and submission of the Works Approval submission; • Advancement of Mining Proposal and Mine Closure Plan submissions; • • Ongoing negotiations to secure the Miscellaneous Licences supporting the mining proposal. Finalisation of the licences to take and use water across the project; and As announced to the ASX on 22 September 2021, the Feasibility Study is being reassessed on the basis of a larger project with the potential for an enhanced production profile, improved economics and stronger financial returns. Desdemona South JV Gold Project, WA (Genesis: RTE 80%) Desdemona South comprises a strategically located (Figure 3) tenement package covering a total area of ~156km2 immediately north of and contiguous with Genesis’ 100%-owned 1.6Moz Ulysses Gold Project, and includes a range of exploration targets which will strengthen and expand the Company’s growth pipeline in the Leonora region. The Joint Venture provides Genesis with over 10km of strike of mafic stratigraphy (similar to Ulysses) to explore within the same regional structural corridor that controls gold mineralisation in the district. The initial Farm-In terms for the Desdemona South Project are as follows: • Stage 1 Expenditure: Genesis must incur expenditure of not less than $250,000 (Minimum Expenditure) on the JV Area within 18 months of commencement. Genesis has met this requirement. • Stage 2 Expenditure: Genesis may earn a 60% interest in the JV Area by incurring additional expenditure of $750,000 expenditure (total spend of $1,000,000) on the JV Area within 36 months of commencement. 14 Genesis Minerals Limited and controlled entities Directors' Report Once Genesis earns a 60% interest, Kin may elect to form a Joint Venture with participating interests of 60% Genesis and 40% Kin or grant Genesis the right to elect to sole contribute or form a JV. Once Genesis earns a 70% interest (if Kin does not elect to from a JV at 60%), Kin may elect to form a Joint Venture with participating interests of 70% Genesis and 30% Kin or grant Genesis the right to elect to sole contribute or form a JV to move to 80%. Genesis would need to spend $2.6 million in total to earn an 80% interest in the JV. A 5,000m aircore drilling program was completed in July 2021. Assay results are pending for this program. Barimaia JV Gold Project, WA (Genesis: 65%) The Barimaia Gold Project is located in the Murchison District of Western Australia, 10km south-east of the 6Moz 2 Mt Magnet Gold Mine, operated by ASX-listed Ramelius Resources Limited. No exploration activities were completed during the 2021 FY however a small aircore program was completed in August and September of 2021. TABLE 1: MINERAL RESOURCE ESTIMATE – ULYSSES GOLD PROJECT March 2021 Resource Estimate 0.5g/t Cut off above 280mRL 2g/t Below 280mRL C O G g/t Deposit Ulysses Measured Indicated Inferred Total Tonnes Au Au Tonnes Au Au Tonnes Au Au Tonnes Au Au T g/t Ounces T g/t Ounces T g/t Ounces T g/t Ounces High Grade 2.0 658,000 6.1 129,000 908,000 6.3 184,000 188,000 8.2 50,000 1,754,000 Shear 137,000 1.3 6,000 2,911,000 2.4 221,000 1,765,000 3.2 183,000 4,813,000 522,000 1.8 29,000 653,000 1.7 36,000 1,175,000 6.4 2.6 1.7 363,000 410,000 65,000 Ulysses East Sub Total ABC Admiral Clark Butterfly 0.5 0.5 0.5 Butterfly North 0.5 0.5 0.5 0.5 0.3 0.5 0.5 0.3 0.5 King Danluce Historic Stockpiles Sub Total Orient Well Orient Well OW Laterites Orient Well East Orient Well NW Double J Sub Total Kookynie Puzzle Historic Stockpile Sub Total 795,000 5.3 135,000 4,341,000 3.1 434,000 2,607,000 3.2 269,000 7,743,000 3.4 838,000 1,783,000 2.0 112,000 1,671,000 757,000 857,000 1.2 2.0 30,000 946,000 55,000 779,000 1,305,000 1.0 42,000 591,000 623,000 958,000 1.4 1.2 1.4 1.4 1.0 0.9 73,000 3,453,000 35,000 1,703,000 35,000 1,636,000 28,000 623,000 20,000 1,896,000 28,000 958,000 80,000 1.1 3,000 80,000 1.7 1.2 1.7 1.4 1.0 0.9 1.1 185,000 65,000 89,000 28,000 62,000 28,000 3,000 4,702,000 1.6 238,000 5,649,000 1.2 221,000 10,351,000 1.4 459,000 3,605,000 1.1 123,000 1,833,000 142,000 0.6 3,000 177,000 457,000 603,000 434,000 0.7 10,000 25,000 1.1 0.7 1.3 1.2 0.5 66,000 5,438,000 4,000 319,000 19,000 457,000 23,000 603,000 400 459,000 1.1 0.7 1.3 1.2 0.7 189,000 7,000 19,000 23,000 10,000 4,180,000 1.0 136,000 3,094,000 1.1 112,000 7,274,000 1.1 247,000 1,002,000 1.1 36,000 725,000 1.0 23,000 1,727,000 1.1 59,000 175,000 0.7 4,000 175,000 0.7 4,000 1,177,000 1.1 40,000 725,000 1.0 23,000 1,902,000 1.0 63,000 Project Total 795,000 5.3 135,000 14,400,000 1.8 849,000 12,075,000 1.6 625,000 27,270,000 1.8 1,608,000 NB. Rounding discrepancies may occur 2 Refer Ramelius Resources’ ASX Announcement dated 22 February 2017. 15 Genesis Minerals Limited and controlled entities Directors' Report Full details of the Ulysses Mineral Resource estimate are provided in the Company’s ASX announcement dated 29 March 2021 titled “Ulysses Mineral Resource Increases to 1.6 Million Ounces Following Continued Drilling Success”. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements dated 29 March 2021 and the Company confirms that all material assumptions and technical parameters underpinning the mineral resource estimates in the market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons’ findings are presented have not materially changed from the original market announcements. COMPETENT PERSONS STATEMENTS The information in this report that relates to Exploration Results is based on information compiled by Mr Michael Fowler who is a full-time employee of the Company, a shareholder of Genesis Minerals Limited and is a member of the Australasian Institute of Mining and Metallurgy. Mr Fowler has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Fowler consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The Information in this report that relates to Mineral Resources is based on information compiled by Mr Paul Payne, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Payne is a full-time employee of Payne Geological Services and is a shareholder of Genesis Minerals Limited. Mr Payne has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Payne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 16 Genesis Minerals Limited and controlled entities Directors' Report FINANCE REVIEW The Group recorded an operating loss after income tax for the year ended 30 June 2021 of $16,349,740 (2020: $5,851,124). The operating loss for the year arose from expenditure on exploration activities as part of its strategy to develop a long-life, standalone mining operation at the Ulysses Gold Project. At 30 June 2021 cash assets available totalled $10,966,166 (2020: $11,145,421). The net assets of the consolidated entity increased from $15,104,943 to $23,908,787 at June 2021. This increase is largely attributable to the issues of equity during the year of $24,804,351 (net of costs) offset by the operating loss recorded for the year. Operating Results for the Year Summarised operating results are as follows: 2021 2020 Revenues $ Results $ Revenues $ Results $ Group revenues and loss from ordinary activities before income tax expense 79,981 (16,349,740) 71,385 (5,851,124) Shareholder Returns Basic and diluted loss per share (cents) 2021 (0.85) 2020 (0.45) Factors and Business Risks Affecting Future Business Performance The following factors and business risks could have a material impact on the Group’s success in delivering its strategy: Access to Funding The Group’s ability to successfully develop projects is contingent on the ability to fund those projects from operating cash flows or through affordable debt and equity raisings. Exploration and Development The business of exploration, project development and ultimately production, by its nature, contains elements of significant risk with no guarantee of success. Ultimate and continued success of these activities is dependent on many factors such as: discovery of economically recoverable ore reserves; access to adequate capital for project development; design and construction of efficient development and production infrastructure within capital expenditure budgets; securing and maintaining title to interests; obtaining necessary consents and approvals; access to competent operational management and appropriately skilled personnel; • • • • • • • mining risks; • • • operating risks; environmental risks; and financial risks. Commodity Prices and Exchange Rates Commodity prices fluctuate according to changes in demand and supply. The Group is exposed to changes in commodity prices, which could affect the profitability of the Group’s projects. Significant adverse movements in commodity prices could also affect the ability to raise debt and equity to fund exploration and development of projects. The Group will be exposed to changes in the US Dollar. Gold sales are denominated in US Dollars. SHARES UNDER OPTION At the date of this report there are 13,200,000 unissued ordinary shares in respect of which options are outstanding. 17 Genesis Minerals Limited and controlled entities Directors' Report Balance at the beginning of the year Movements of share options during the year Exercise of options: Exercised at 4.2 cents Exercised at 4.5 cents Exercised at 4.8 cents Exercised at 4.9 cents Issue of options: Exercisable at 10.6 cents Exercisable at 11.4 cents Exercisable at 12.2 cents Total number of options outstanding as at 30 June 2021 Exercise of options: Exercised at 5.3 cents Exercised at 5.6 cents Total number of options outstanding at the date of this report The balance is comprised of the following: Expiry date 29 November 2021 13 December 2021 29 November 2022 10 December 2022 10 December 2023 10 December 2024 Total Exercise price (cents) 5.3 4.5 5.6 10.6 11.4 12.2 Number of options 25,800,000 (4,000,000) (1,200,000) (10,000,000) (800,000) 2,133,332 2,133,333 2,133,335 13,200,000 (1,500,000) (1,500,000) 13,200,000 Number of options 800,000 4,800,000 1,200,000 2,133,332 2,133,333 2,133,335 13,200,000 No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to participate in any share issue of any other body corporate. At the date of this report there are 12,050,000 unissued ordinary shares in respect of which performance rights are outstanding. Balance at the beginning of the year Movement of performance rights during the year Issued 15 September 2020, expiring 31 December 2021 Total number of performance rights outstanding as at 30 June 2021 Exercise of vested performance rights Total number of performance rights outstanding at the date of this report The balance is comprised of the following: Expiry date 31 December 2021 Total Number of performance rights - 13,500,000 13,500,000 (1,450,000) 12,050,000 Number of performance rights 12,050,000 12,050,000 No person entitled to exercise any performance right referred to above has or had, by virtue of the performance right, a right to participate in any share issue of any other body corporate. INSURANCE OF DIRECTORS AND OFFICERS During or since the financial year, the company has paid premiums insuring all the directors of Genesis Minerals Limited against costs incurred in defending proceedings for conduct involving: (a) a wilful breach of duty; or (b) a contravention of sections 182 or 183 of the Corporations Act 2001, as permitted by section 199B of the Corporations Act 2001. The contract of insurance prohibits disclosure of the amount of the premium paid. NON-AUDIT SERVICES There were no non-audit services provided by the entity's auditor, Hall Chadwick (formerly Bentleys), or associated entities. 18 Genesis Minerals Limited and controlled entities Directors' Report RISK MANAGEMENT The board is responsible for ensuring that risks and also opportunities, are identified on a timely basis and that activities are aligned with the risks and opportunities identified by the board. The Group believes that it is crucial for all board members to be a part of this process, and as such the board has not established a separate risk management committee. The board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with the risks identified by the board. These include the following: • Board approval of a strategic plan, which encompasses strategy statements designed to meet stakeholders needs and manage business risk. Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets. • SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS The Group raised $24,900,121 (before costs) through the issue of 514,288,416 ordinary shares to institutional and sophisticated investors during the year. The group issued 16,000,000 ordinary shares pursuant to the exercise of options raising $741,200. AFTER BALANCE DATE EVENTS On 22 September 2021, Genesis announced a strategic funding and Board restructure initiative led by Raleigh Finlayson, which will see him appointed as Managing Director and become a significant shareholder. Mr Finlayson is the former Managing Director of Saracen Mineral Holdings (ASX: SAR) and Northern Star Resources (ASX: NST). Under the proposal, which is subject to shareholder approval, Genesis will raise $16 million via a share Placement at 6c a share. Mr Finlayson will subscribe for $7 million of shares in the Placement and Northern Star will subscribe for $3 million of shares. The remainder of the Placement will be offered to existing and new institutional and sophisticated investors, including current and proposed Directors. Existing Genesis shareholders will have the opportunity to participate in a 1-for-30 non renounceable Entitlement Offer at 6c per share raising up to an additional $4.8 million. Placement shares will qualify for the Entitlement Offer. Shares acquired via the Placement and the Entitlement Offer will come with a free one-for-two attaching two-year unlisted option exercisable at 10c. Placement options will not be able to be exercised to participate in the Entitlement Offer. Mr Finlayson has entered into a part-time consulting agreement with Genesis and he has the right to be issued 245 million unlisted options with a 10.5c strike price. Mr Finlayson will be appointed Managing Director of Genesis by no later than 31 March 2022. Mr Finlayson has the right (subject to shareholder approval), upon appointment as Managing Director, to be issued 30 million performance rights under the Genesis Incentive Performance Rights Plan, which will have vesting hurdles tied to a 2.5Moz JORC Resource, a 1.0Moz JORC Reserve and Genesis becoming a gold producer (Performance Rights). Former FMG Managing Director and CEO Neville Power and highly experienced corporate lawyer Michael Bowen will be invited to join the Board as Non-Executive Directors following conclusion of the Placement. Each will be issued with 15 million options at an exercise price of 10.5c with a four-year expiry (Director Options). Tommy McKeith will continue as Non-Executive Chairman and Gerry Kaczmarek will continue as Non-Executive Director. Under the transition plan, Michael Fowler will remain Genesis Managing Director until Mr Finlayson's appointment becomes effective. At that time, Mr Fowler will retire from the Board. Current Non-Executive Director Craig Bradshaw will retire from the Genesis Board at the upcoming Genesis AGM. Non-Executive Director and Alkane Resources Limited (“Alkane”) representative Nic Earner will retire from the Board at the upcoming Genesis AGM, assuming all necessary shareholder approvals for the Placement and Board restructure are obtained. Alkane has also agreed to subscribe for any shortfall under the Entitlement Offer subject to scale back to ensure Alkane’s voting power in Genesis does not exceed 20%. In addition, the 2019 Subscription Agreement between Alkane and Genesis, under which Alkane was provided with Board representation and certain other rights, will be terminated with effect from completion of the Entitlement Offer. Shareholder approvals for the Placement, Alkane Subscription, Consultant Options, Performance Rights, Board appointments and Director Options will be sought at the forthcoming AGM. Refer to the ASX announcement dated 22 September 2021 for full details of the strategic funding and Board restructure. Subsequent to the end of the financial year 1,450,000 performance rights vested on 4 September 2021 following satisfaction of performance hurdles. Apart from the above, no matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 19 Genesis Minerals Limited and controlled entities Directors' Report LIKELY DEVELOPMENTS AND EXPECTED RESULTS All information regarding likely developments and expected results is contained in the “Operating and Financial Review” section in this report. ENVIRONMENTAL REGULATION AND PERFORMANCE The Group is subject to significant environmental regulation in respect to its exploration activities. The Group aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The directors of the Group are not aware of any breach of environmental legislation for the year under review. The directors have considered the National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduces a single national reporting framework for the reporting and dissemination of information about greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current stage of development, the directors have determined that the NGER Act will have no effect on the Group for the current, nor subsequent, financial year. The directors will reassess this position as and when the need arises. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 26. CORPORATE GOVERNANCE A copy of Genesis’ 2021 Corporate Governance Statement, which provides detailed information about governance, and a copy of Genesis’ Appendix 4G which sets out the Company’s compliance with the recommendations in the fourth edition of the ASX Corporate Governance Council’s Principles and Recommendations is available on the corporate governance section of the Company’s website at http://www.genesisminerals.com.au/governance.php REMUNERATION REPORT (AUDITED) The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. REMUNERATION POLICY The remuneration policy of Genesis Minerals Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Group's financial results. The Board of Genesis Minerals Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group. The Board's policy for determining the nature and amount of remuneration for board members and senior executives of the Group is as follows: The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the Board. All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation. The Board reviews executive packages annually by reference to the Group's performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The Board may exercise discretion in relation to approving incentives, bonuses, options and performance rights. The policy is designed to attract the highest calibre of executives and reward them for results in long-term growth in shareholder wealth. Executives are also entitled to participate in employee incentive schemes. The executive directors and executives receive a superannuation guarantee contribution required by the government, which for the year ended 30 June 2021 was 9.5% (unless otherwise stated), and do not receive any other retirement benefits. The superannuation guarantee contribution increased to 10% effective 1 July 2021. All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Options are valued using the Black-Scholes methodology. Performance rights are valued by using the Company’s 5 day volume weighted average share 20 Genesis Minerals Limited and controlled entities Directors' Report price prior to the grant date. For each performance hurdle a probability factor is assigned based on the Company’s estimate of the performance hurdle being met. For the performance hurdles that have a market-based performance hurdle, the probability factor is determined by using a Monte Carlo Simulation technique. The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting (currently $500,000). Fees for non-executive directors are not linked to the performance of the Group. However, to align directors' interests with shareholder interests, the directors are encouraged to hold shares in the Group and are able to participate in employee incentive schemes. PERFORMANCE BASED REMUNERATION Executive directors and executives have been issued with performance rights under the Group’s Performance Rights Plan. The performance rights will only vest into fully paid ordinary shares if performance hurdles are met. Performance hurdles set include milestones for remaining employed with the Group, growth in Mineral Resources, project development and increases in the Company’s share price. GROUP PERFORMANCE, SHAREHOLDER WEALTH AND DIRECTORS' AND EXECUTIVES' REMUNERATION The remuneration policy has been tailored to increase the direct positive relationship between shareholders' investment objectives and directors and executive's performance. The Group facilitates this process by executive directors and executives participating in incentive scheme issues to encourage the alignment of personal and shareholder interests. The Group believes this policy will be effective in increasing shareholder wealth. Over the past 5 years, the Group’s activities have primarily been involved with mineral exploration and pre-development activities, with a small-scale mining campaign completed during the 2017 financial year. Shareholder wealth is dependent upon exploration success and has fluctuated accordingly in addition to being influenced by broader market factors. The table below sets out the performance of the Group and the movement in the share price: 2021 $ 2020 $ 2019 $ 2018 $ Net Loss Share Price at Start of Year Share Price at End of Year (16,349,740) $0.052 $0.068 (5,851,124) $0.023 $0.052 (7,036,589) $0.043 $0.023 (5,573,467) $0.016 $0.043 2017 $ (718,341) $0.019 $0.016 USE OF REMUNERATION CONSULTANTS The Group did not employ the services of any remuneration consultants during the financial year ended 30 June 2021. VOTING AND COMMENT MADE ON THE GROUP'S 2020 ANNUAL GENERAL MEETING The Company received 99.79% of “yes” votes on its remuneration report for the 2020 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. DETAILS OF REMUNERATION Details of the remuneration of the directors and the key management personnel of the Group are set out in the following table. The key management personnel of the Group comprise the directors. Given the size and nature of operations of the Group, there are no other employees who are required to have their remuneration disclosed in accordance with the Corporations Act 2001. Key management personnel compensation Short-term benefits Post-employment benefits Share-based payments 2021 $ 433,309 33,258 194,326 660,893 2020 $ 402,702 33,391 49,753 485,846 21 Genesis Minerals Limited and controlled entities Directors' Report Key management personnel of the Group Short-Term Salary & Fees Post Employment Superannuation Total Share-Based Payments Options and Performance Rights Proportion of Remuneration Represented by Share- Based Payments Proportion of Remuneration Performance Based $ $ $ $ % % Directors Tommy McKeith 2021 2020 Michael Fowler 2021 2020 Craig Bradshaw 2021 2020 Gerry Kaczmarek 2021 2020 Nic Earner 2021 2020 2021 2020 54,342 50,228 275,0001 268,4351 35,688 31,425 32,591 30,000 35,6882 22,6142 433,309 402,702 5,162 4,772 25,000 24,344 - 1,425 3,096 2,850 - - 33,258 33,391 50,050 20,372 85,833 11,469 27,292 3,823 31,151 14,089 - - 194,326 49,753 109,554 75,372 385,833 304,248 62,980 36,673 66,838 46,939 35,688 22,614 660,893 485,846 45.69% 27.03% 22.25% 3.77% 43.33% 10.42% 46.61% 30.02% -% -% -% -% 22.25% -% -% -% -% -% -% -% 1. M Fowler - includes payment of unused leave entitlements of $nil (2020: $16,163). 2. N Earner – appointed as Director on 24 October 2019. Service agreements On appointment to the Board, all non-executive directors enter into a service agreement with the Group in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office of director. Effective from 7 August 2020, the Non-Executive Chairman receives a fee of $54,795 per annum, plus statutory superannuation, and Non-Executive Directors receive a fee of $32,877 per annum, plus statutory superannuation. Mr Fowler has entered into an executive service agreement with the Company. He is engaged to provide services in the capacity of Managing Director and CEO. Mr Fowler is entitled to a minimum notice period of six months from the Company and the Company is entitled to a minimum notice period of three months from Mr Fowler. In the event of a redundancy due to a successful takeover or merger of the Company, Mr Fowler is entitled to a payment equal to 12 months’ salary. Effective from 1 January 2020, Mr Fowler’s salary was set at $275,000 per annum plus superannuation. From 1 July 2021, Mr Fowler receives $27,500 superannuation per annum. Equity instrument disclosures relating to key management personnel Options and performance rights provided as remuneration and shares issued on exercise/conversion of such options and performance rights Options 6,400,000 options were issued during the year (2020: Nil), valued at $169,387 (2020: $nil). 5,200,000 options were exercised during the year (2020: 1,800,000), nil options lapsed during the year (2020: 800,000) and nil options expired (2020: 4,800,000). Shareholder approval was received on 27 November 2020 for the issue of the options under ASX Listing Rule 10.14. Details of the vesting profiles of the options granted as remuneration to key management personnel of the Group are detailed below: 22 Genesis Minerals Limited and controlled entities Directors' Report Directors Number of Options Issued Grant Date Expiry Date Exercise Price Fair Value Per Option at Grant Date Year in Which Grant Vests % Vested During 2021 % Forfeited During 2021 Tommy McKeith Tranche 2 - Tranche 3 - Tranche 1 - Tranche 2 - - Tranche 3 Michael Fowler Tranche 3 - Craig Bradshaw Tranche 1 - Tranche 2 - - Tranche 3 Gerry Kaczmarek - - - - - Tranche 2 Tranche 3 Tranche 1 Tranche 2 Tranche 3 Option holdings 1,500,000 29/11/2018 29/11/2021 1,500,000 29/11/2018 29/11/2022 966,666 10/12/2020 10/12/2022 966,667 10/12/2020 10/12/2023 966,667 10/12/2020 10/12/2024 $0.053 $0.056 $0.106 $0.114 $0.122 $0.0138 $0.0161 $0.0219 $0.0270 $0.0305 2020 2021 2021 2022 2023 -% 100% 100% -% -% 3,600,000 13/12/2017 13/12/2021 $0.045 $0.0152 2020 -% 583,333 10/12/2020 10/12/2022 583,333 10/12/2020 10/12/2023 583,334 10/12/2020 10/12/2024 800,000 29/11/2018 29/11/2021 1,200,000 29/11/2018 29/11/2022 583,333 10/12/2020 10/12/2022 583,333 10/12/2020 10/12/2023 583,334 10/12/2020 10/12/2024 $0.106 $0.114 $0.122 $0.053 $0.056 $0.106 $0.114 $0.122 $0.0219 $0.0270 $0.0305 $0.0138 $0.0161 $0.0219 $0.0270 $0.0305 2021 2022 2023 2020 2021 2021 2022 2023 100% -% -% -% 100% 100% -% -% -% -% -% -% -% -% -% -% -% -% -% -% -% -% The numbers of options over ordinary shares in the Company held during the financial year by each director of Genesis Minerals Limited and other key management personnel of the Group, including their personally related parties, are set out below: 2021 Balance at start of the year Granted as compensation Exercised Other changes Balance at end of the year Vested and exercisable Directors of Genesis Minerals Limited Options Tommy McKeith Michael Fowler Craig Bradshaw Gerry Kaczmarek Nic Earner 3,000,000 6,000,000 2,000,000 2,800,000 - 13,800,000 2,900,000 - 1,750,000 1,750,000 - 6,400,000 - (2,400,000) (2,000,000) (800,000) - (5,200,000) - - - - - - 5,900,000 3,600,000 1,750,000 3,750,000 - 15,000,000 3,966,666 3,600,000 583,333 2,583,333 - 10,733,332 2020 Balance at start of the year Granted as compensation Exercised Other changes Balance at end of the year Vested and exercisable Directors of Genesis Minerals Limited Options Tommy McKeith Michael Fowler Craig Bradshaw Gerry Kaczmarek Nic Earner 4,800,000 8,400,000 2,800,000 2,800,000 - 18,800,000 Performance Rights - - - - - - (1,800,000) - - - - (1,800,000) - (2,400,000) (800,000) - - (3,200,000) 3,000,000 6,000,000 2,000,000 2,800,000 - 13,800,000 1,500,000 6,000,000 2,000,000 1,600,000 - 11,100,000 5,000,000 performance rights were issued during the year (2020: $nil) to the Managing Director, Mr Michael Fowler. The amount expensed during the year to the Statement of Profit or Loss was $85,833 (2020: $nil). Shareholder approval was received on 4 September 2020 for the issue of the performance rights under ASX Listing Rule 10.14. The performance rights were issued on 15 September 2020 and they expire on 31 December 2021. The performance rights will only vest into fully paid ordinary shares if the following relevant performance hurdles are met prior to the expiry date: 23 Genesis Minerals Limited and controlled entities Directors' Report Performance Hurdle These Performance Rights will vest and become exercisable upon the employee remaining employed in the same role 12 months after the shareholder meeting date of 4 September 2020. At the discretion of the Board these Performance Rights will vest and become exercisable upon satisfactory meeting the following hurdles in the period to 31 December 2021: • 1) Release of first JORC 2012 combined Mineral Resource > 2.0Moz Au for the Greater Ulysses Project at a grade that supports reasonable prospects for eventual economic extraction. • 2) Approval of final investment decision by Genesis’ Board on the construction of a standalone mining and processing operation at Ulysses These Performance Rights will vest and become exercisable when the Genesis share price exceeds a 10-day VWAP of 1.5 x the Performance Rights Share Price of 7.6 cents in the period leading up to 31 December 2021. These Performance Rights will vest and become exercisable when the Genesis share price exceeds a 15-day VWAP of 1.75 x the Performance Rights Share Price of 7.6 cents in the period leading up to 31 December 2021. These Performance Rights will vest and become exercisable when the Genesis share price exceeds a 20-day VWAP of 2.0 x the Performance Rights Share Price of 7.6 cents in the period leading up to 31 December 2021. Total Share Price for Performance Rights to Vest Number of Performance Rights 500,000 1,000,000 1,000,000 $0.114 500,000 $0.133 750,000 $0.152 1,250,000 5,000,000 No performance rights vested into fully paid ordinary shares during the year as the vesting conditions have yet to be met. No performance rights have been cancelled during the year. Subsequent to the end of the financial year 500,000 performance rights vested following satisfaction of the performance hurdle to remain employed in the same role 12 months after the shareholder meeting date of 4 September 2020 . These performance rights were exercised and 500,000 shares were issued on 22 September 2021. Performance rights holdings 2021 Balance at start of the year Granted as compensation Exercised Other changes Balance at end of the year Vested and exercisable Directors of Genesis Minerals Limited Performance Rights Michael Fowler Share based compensation - - 5,000,000 5,000,000 - - - - 5,000,000 5,000,000 - - No shares were issued to directors in lieu of fees and salary during the year. 2020: (nil). 24 Genesis Minerals Limited and controlled entities Directors' Report Share holdings The numbers of shares in the Company held during the financial year by each director of Genesis Minerals Limited and other key management personnel of the Group, including their personally related parties, are set out below. 2021 Directors of Genesis Minerals Limited Ordinary Shares Tommy McKeith Michael Fowler Craig Bradshaw Gerry Kaczmarek Nic Earner 2020 Directors of Genesis Minerals Limited Ordinary Shares Tommy McKeith Michael Fowler Craig Bradshaw Gerry Kaczmarek Nic Earner Loans to key management personnel Balance at start of the year Received during the year on the exercise of options Other changes during the year Balance at end of the year 5,300,000 13,004,824 - 233,334 - 18,538,158 Balance at start of the year - 2,400,000 2,000,000 800,000 - 5,200,000 Received during the year on the exercise of options 1,033,908 (443,807) - 147,591 - 737,692 Other changes during the year 6,333,908 14,961,017 2,000,000 1,180,925 - 24,475,850 Balance at end of the year 3,000,000 12,167,230 - 200,000 - 15,367,230 1,800,000 - - - - 1,800,000 500,000 837,594 - 33,334 - 1,370,928 5,300,000 13,004,824 - 233,334 - 18,538,158 There were no loans to key management personnel during the year. 2020: (nil). Other key management personnel transactions with Directors and Director-related entities There were no other transactions with key management personnel during the year. 2020: (nil). END OF REMUNERATION REPORT This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors. Michael Fowler Managing Director Perth, 28 September 2021 25 To the Board of Directors Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 As lead audit partner for the audit of the financial statements Genesis Minerals Limited for the financial year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and • any applicable code of professional conduct in relation to the audit. Yours Faithfully HALL CHADWICK WA AUDIT PTY LTD DOUG BELL CA Partner Dated this 28th day of September 2021 Genesis Minerals Limited and controlled entities Consolidated Statement of Profit or Loss and Other Comprehensive Income YEAR ENDED 30 JUNE 2021 REVENUE EXPENDITURE Exploration expenses Salaries and employee benefits expense Corporate expenses Administration costs Depreciation expense Share based payments expense LOSS BEFORE INCOME TAX INCOME TAX BENEFIT/(EXPENSE) LOSS FOR THE YEAR Notes 2021 $ 2020 $ (RESTATED) 3 2 13 4 79,981 71,385 (14,352,399) (791,581) (571,013) (325,983) (39,512) (349,233) (4,575,934)* (526,800) (408,614) (352,643) (8,765) (49,753) (16,349,740) (5,851,124) - - (16,349,740) (5,851,124) OTHER COMPREHENSIVE LOSS FOR THE YEAR, NET OF TAX - - TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE TO MEMBERS OF GENESIS MINERALS LIMITED (16,349,740) (5,851,124) Basic and diluted loss per share (cents per share) 14 (0.85) (0.45) *Refer to Note 2: Change in Accounting Policy for details of the impact of the change in accounting policy relating to the treatment of exploration and evaluation expenditure. The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the Notes to the Consolidated Financial Statements. 27 Genesis Minerals Limited and controlled entities Consolidated Statement of Financial Position AT 30 JUNE 2021 CURRENT ASSETS Cash and cash equivalents Trade and other receivables Prepayments TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment Exploration and evaluation assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY Notes 2021 $ 2020 $ (RESTATED) 11,145,421 141,268 13,808 11,300,497 17,597 4,451,830* 4,469,427 10,966,166 78,795 24,857 11,069,818 245,193 23,352,807 23,598,000 34,667,818 15,769,924 2,424,923 233,549 2,658,472 8,100,559 8,100,559 524,408 140,573 664,981 - - 10,759,031 664,981 23,908,787 15,104,943 76,970,610 2,058,066 (55,119,889) 52,166,259 1,708,833 (38,770,149) 23,908,787 15,104,943 5 6 7 8 2, 9 10 11 11 12 13 *Refer to Note 2: Change in Accounting Policy for details of the impact of the change in accounting policy relating to the treatment of exploration and evaluation expenditure. The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Consolidated Financial Statements. 28 Genesis Minerals Limited and controlled entities Consolidated Statement of Changes in Equity YEAR ENDED 30 JUNE 2021 Notes Ordinary Share Capital $ Accumulated Losses $ Options Reserve $ Total $ BALANCE AT 1 JULY 2019 33,820,100 (33,639,880) 1,659,080 1,839,300 Impact of change in accounting policy 2 - 720,855 - 720,855 BALANCE AT 1 JULY 2019 (RESTATED) 33,820,100 (32,919,025) 1,659,080 2,560,155 Loss for the year TOTAL COMPREHENSIVE LOSS TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Shares issued during the year Share issue transaction costs Share based payments Sub-total - - (5,851,124) (5,851,124) 12 12 24 19,210,532 (864,373) - - - - - - - - (5,851,124)* (5,851,124) 19,210,532 (864,373) 49,753 49,753 18,346,159 (5,851,124) 49,753 12,544,788 BALANCE AT 30 JUNE 2020 52,166,259 (38,770,149) 1,708,833 15,104,943 BALANCE AT 1 JULY 2020 52,166,259 (43,221,979) 1,708,833 10,653,113 Impact of change in accounting policy 2 - 4,451,830 - 4,451,830 BALANCE AT 1 JULY 2020 (RESTATED) 52,166,259 (38,770,149) 1,708,833 15,104,943 Loss for the year TOTAL COMPREHENSIVE LOSS TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS Shares issued during the year Share issue transaction costs Share based payments Sub-total - - (16,349,740) (16,349,740) 12 12 24 25,641,321 (836,970) - - - - - - - - (16,349,740) (16,349,740) 25,641,321 (836,970) 349,233 349,233 24,804,351 (16,349,740) 349,233 8,803,844 BALANCE AT 30 JUNE 2021 76,970,610 (55,119,889) 2,058,066 23,908,787 *Refer to Note 2: Change in Accounting Policy for details of the impact of the change in accounting policy relating to the treatment of exploration and evaluation expenditure. The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Consolidated Financial Statements. 29 Genesis Minerals Limited and controlled entities Consolidated Statement of Cash Flows YEAR ENDED 30 JUNE 2021 Notes 2021 $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Payments for exploration expenditure Interest received Cash flow boost NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES (1,588,517) (12,472,037) 22,159 37,500 (14,000,895) 23 2020 $ (RESTATED) (1,197,925) (3,550,031)* 9,212 62,500 (4,676,244) CASH FLOWS FROM INVESTING ACTIVITIES Payments for exploration and evaluation assets Payments for plant and equipment NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issues of ordinary shares Payments for share issue costs NET CASH INFLOW FROM FINANCING ACTIVITIES NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at the beginning of the financial year (10,640,989) (267,108) (10,908,097) (3,730,975)* (20,239) (3,751,214) 25,641,321 (911,584) 24,729,737 (179,255) 11,145,421 17,163,834 (200,798) 16,963,036 8,535,578 2,609,843 CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 5 10,966,166 11,145,421 *Refer to Note 2: Change in Accounting Policy for details of the impact of the change in accounting policy relating to the treatment of exploration and evaluation expenditure. The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Consolidated Financial Statements. 30 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group consisting of Genesis Minerals Limited and its subsidiaries (“the Group”). The financial statements are presented in Australian dollars. Genesis Minerals Limited is a company limited by shares, domiciled and incorporated in Australia. The financial statements were authorised for issue by the directors on 28 September 2021. The directors have the power to amend and reissue the financial statements. (a) Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Genesis Minerals Limited is a for-profit entity for the purpose of preparing the financial statements. (i) Compliance with IFRS The consolidated financial statements of the Genesis Minerals Limited Group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). (ii) New and amended standards adopted by the Group None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2020 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods. (iii) Early adoption of standards The Group has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2020. (iv) Historical cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, which have been measured at fair value. (b) Principles of consolidation The financial statements incorporate the assets, liabilities and results of entities controlled by Genesis Minerals Limited at the end of the reporting period. A controlled entity is any entity over which Genesis Minerals Limited has the power to govern the financial and operating policies so as to obtain benefits from its activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered. A list of controlled entities is contained in Note 21 to the financial statements. As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the financial statements as well as their results for the year then ended. In preparing the financial statements, all inter-group balances and transactions between controlled entities in the Group have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity. (c) Business Combinations Business combinations occur where an acquirer obtains control over one or more businesses and results in the consolidation of its assets and liabilities. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The acquisition method requires that for each business combination, one of the combining entities must be identified as the acquirer (i.e. parent entity). The business combination will be accounted for as at the acquisition date, which is the date that control over the acquiree is obtained by the parent entity. At this date, the parent shall recognise, in the consolidated accounts and subject to certain limited exceptions, the fair value of the identifiable assets acquired and liabilities assumed. In addition, contingent liabilities of the acquiree will be recognised where a present obligation has been incurred and its fair value can be reliably measured. The acquisition may result in the recognition of goodwill or a gain from a bargain purchase. The method adopted for the measurement of goodwill will impact on the measurement of any non-controlling interest to be recognised in the acquiree where less than 100% ownership interest is held in the acquiree. 31 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The consideration transferred for a business combination shall form the cost of the investment in the separate financial statements. Such consideration is measured at fair value at acquisition date and consists of the sum of the assets transferred by the acquirer, liabilities incurred by the acquirer to the former owners of the acquiree and the equity interests issued by the acquirer. Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Any obligation incurred relating to contingent consideration is classified as either a financial liability or equity instrument, depending upon the nature of the arrangement. Rights to refunds of consideration previously paid are recognised as a receivable. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value through the statement of comprehensive income, unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to the business combination are expensed to the Statement of Profit or Loss and Other Comprehensive Income. (d) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the full Board of Directors. (e) Foreign currency translation (i) Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is Genesis Minerals Limited's functional and presentation currency. (ii) Transactions and balances Foreign currency transactions are recorded at the spot rate on the date of the transaction. At the end of the reporting period: Foreign currency monetary items are translated using the closing rate; • • Non-monetary items that are measured at historical cost are translated using the exchange rate at the date of the transaction; and • Non-monetary items that are measured at fair value are translated using the rate at the date when fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition or in prior reporting periods are recognised through profit or loss, except where they relate to an item of other comprehensive income or whether they are deferred in equity as qualifying hedges. The financial results and position of foreign operations whose functional currency is different from Genesis Minerals Limited's presentation currency are translated as follows: • • • assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; income and expenses are translated at average exchange rates for the period where the average rate approximates the rate at the date of the transaction; and retained earnings are translated at the exchange rates prevailing at the date of the transaction. Exchange differences arising on translation of foreign operations are transferred directly to Genesis Minerals Limited's foreign currency translation reserve in the consolidated statement of financial position. These differences are recognised in the consolidated statement of profit or loss and other comprehensive income in the period in which the operation is disposed. (f) Revenue and other income The Group recognises revenue as follows: 32 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (i) Revenue from contract with customers Revenue is recognised at an amount that reflects the consideration to which the group is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised. Variable consideration with the transaction price, if any, reflects concessions provided to the customers such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of the variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probably that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability. (ii) Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial assets. (g) Income tax Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. Current assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. (h) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less which are convertible to a known amount of cash and subject to an insignificant risk of change in value, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the consolidated statement of financial position. (i) Financial instruments (i) Classification of financial instruments The Group classifies its financial assets into the following measurement categories: • • those to be measured at fair value (either through other comprehensive income, or through profit or loss); and those to be measured at amortised cost. The classification depends on the Group’s business model for managing financial assets and the contractual terms of the financial assets' cash flows. The Group classifies its financial liabilities at amortised cost unless it has designated liabilities at fair value through profit or loss or is required to measure liabilities at fair value through profit or loss such as derivative liabilities. 33 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (ii) Financial assets measured at amortised cost Debt instruments Investments in debt instruments are measured at amortised cost where they have: • • contractual terms that give rise to cash flows on specified dates, that represent solely payments of principal and interest on the principal amount outstanding; and are held within a business model whose objective is achieved by holding to collect contractual cash flows. These debt instruments are initially recognised at fair value plus directly attributable transaction costs and subsequently measured at amortised cost. The measurement of credit impairment is based on the three-stage expected credit loss model described below in note (c) Impairment of financial assets. (a) Financial assets measured at fair value through other comprehensive income Equity instruments Investment in equity instruments that are neither held for trading nor contingent consideration recognised by the Group in a business combination to which AASB 3 "Business Combination" applies, are measured at fair value through other comprehensive income, where an irrevocable election has been made by management. Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. Dividends on such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. (b) Items at fair value through profit or loss comprise: • • • items held for trading; items specifically designated as fair value through profit or loss on initial recognition; and debt instruments with contractual terms that do not represent solely payments of principal and interest. Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction costs recognised in the income statement as incurred. Subsequently, they are measured at fair value and any gains or losses are recognised in the income statement as they arise. Where a financial asset is measured at fair value, a credit valuation adjustment is included to reflect the credit worthiness of the counterparty, representing the movement in fair value attributable to changes in credit risk. Financial instruments held for trading A financial instrument is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing in the near term, or forms part of a portfolio of financial instruments that are managed together and for which there is evidence of short-term profit taking, or it is a derivative not in a qualifying hedge relationship. Financial instruments designated as measured at fair value through profit or loss Upon initial recognition, financial instruments may be designated as measured at fair value through profit or loss. A financial asset may only be designated at fair value through profit or loss if doing so eliminates or significantly reduces measurement or recognition inconsistencies (i.e. eliminates an accounting mismatch) that would otherwise arise from measuring financial assets or liabilities on a different basis. A financial liability may be designated at fair value through profit or loss if it eliminates or significantly reduces an accounting mismatch or: • • if a host contract contains one or more embedded derivatives; or if financial assets and liabilities are both managed and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy. Where a financial liability is designated at fair value through profit or loss, the movement in fair value attributable to changes in the Group’s own credit quality is calculated by determining the changes in credit spreads above observable market interest rates and is presented separately in other comprehensive income. (c) Impairment of financial assets The Group applies a three-stage approach to measuring expected credit losses (ECLs) for the following categories of financial assets that are not measured at fair value through profit or loss: 34 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) • • • debt instruments measured at amortised cost and fair value through other comprehensive income; loan commitments; and financial guarantee contracts. No ECL is recognised on equity investments. Determining the stage for impairment At each reporting date, the Group assesses whether there has been a significant increase in credit risk for exposures since initial recognition by comparing the risk of default occurring over the remaining expected life from the reporting date and the date of initial recognition. The Group considers reasonable and supportable information that is relevant and available without undue cost or effort for this purpose. This includes quantitative and qualitative information and also, forward-looking analysis. An exposure will migrate through the ECL stages as asset quality deteriorates. If, in a subsequent period, asset quality improves and also reverses any previously assessed significant increase in credit risk since origination, then the provision for doubtful debts reverts from lifetime ECL to 12-months ECL. Exposures that have not deteriorated significantly since origination are considered to have a low credit risk. The provision for doubtful debts for these financial assets is based on a 12-months ECL. When an asset is uncollectible, it is written off against the related provision. Such assets are written off after all the necessary procedures have been completed and the amount of the loss has been determined. Subsequent recoveries of amounts previously written off reduce the amount of the expense in the income statement. The Group assesses whether the credit risk on an exposure has increased significantly on an individual or collective basis. For the purposes of a collective evaluation of impairment, financial instruments are grouped on the basis of shared credit risk characteristics, taking into account instrument type, credit risk ratings, date of initial recognition, remaining term to maturity, industry, geographical location of the borrower and other relevant factors. (d) Recognition and derecognition of financial instruments A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party to the contractual provisions of the instrument, which is generally on trade date. Loans and receivables are recognised when cash is advanced (or settled) to the borrowers. Financial assets at fair value through profit or loss are recognised initially at fair value. All other financial assets are recognised initially at fair value plus directly attributable transaction costs. The Group derecognises a financial asset when the contractual cash flows from the asset expire or it transfers its rights to receive contractual cash flows from the financial asset in a transaction in which substantially all the risks and rewards of ownership are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. A financial liability is derecognised from the balance sheet when the Group has discharged its obligation or the contract is cancelled or expires. (e) Offsetting Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the Group has a legal right to offset the amounts and intends to settle on a net basis or to realise the asset and settle the liability simultaneously. (j) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects. (k) Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. (i) Plant and equipment Plant and equipment are measured at cost. Cost includes expenditure that is directly attributable to the asset. The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. 35 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (ii) Depreciation The depreciable amount of all fixed assets including buildings and capitalised leased assets, but excluding freehold land, is depreciated on a straight-line basis over the asset's useful life to the Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Land is not depreciated. (iii) Class of fixed asset useful life (years) The estimated useful lives used for each class of depreciable assets are: Plant and Equipment: 2 to 5 years The assets' residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. (l) Exploration and development expenditure During the current reporting period the Group made a voluntary change to its accounting policy relating to the treatment of exploration and evaluation expenditure. Refer to Note 2 for details. (m) Trade and other payables Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the Group during the reporting period which remain unpaid. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. (n) Rehabilitation provisions The Group records the present value of estimated costs of legal and constructive obligations required to restore and rehabilitate operating locations in the period in which the obligation is incurred. The nature of the restoration activities includes restoring ground to its natural state and re-vegetating the disturbed area. When this provision gives access to future economic benefits, an asset is recognised and then subsequently depreciated in line with the life of the underlying asset, otherwise the costs are charged to the income statement. The obligation arises when the ground/environment is disturbed or an asset is installed at the production location. The liability is initially recognised at the estimated costs, and where it is to be settled in more than 12 months it is discounted to present value. The periodic unwinding of the discount is recognised in the income statement as a finance cost. (o) Employee benefit provisions Provision is made for the Group's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits have been measured at the amounts expected to be paid when the liability is settled. (p) Equity-settled compensation The Group operates equity-settled share-based payment share, performance right and option schemes. The fair value of the equity to which personnel become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is determined by an internal valuation using a Black Scholes option pricing model. The valuation relies on the use of certain assumptions. If the assumptions were to change, there may by an impact on the amounts reported. For ordinary shares which are traded on the stock exchange, the fair value is determined by reference to the closing price of the security on the measurement date. The fair value of performance rights, the fair value is measured using the Company’s 5 day volume weighted average share price prior to grant date. For each performance hurdle a probability factor is assigned based on the Company’s estimate of the performance hurdle being met. For performance hurdles that have a market-based performance hurdle, the probability factor is determined by using a Monte Carlo Simulation technique which relies on certain assumptions. If the assumptions were to change, there may by an impact on the amounts reported. The value of the performance rights is allocated to the Statement of Profit or Loss over the vesting period. Non-market vesting conditions are taken into account when considering the number of performance rights and options expected to vest. At the end of each reporting period, the Group revises its estimate of the number of performance rights or options which are expected to vest based on the non-market vesting conditions. Revisions to the prior period estimate are recognised in profit or loss and equity. 36 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (q) Earnings per share Genesis Minerals Limited presents basic and diluted earnings per share information for its ordinary shares. Basic earnings per share is calculated by dividing the profit attributable to owners of the company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share adjusts the basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. (r) Goods and services tax (GST) Revenues and expenses are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of the acquisition of the asset or as part of an item of the expense. Receivables and payables in the consolidated statement of financial position 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. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group. (i) Fair Value of Assets and Liabilities The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard. Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date. As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs). For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use. The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements. (ii) Valuation techniques In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation techniques to measure the fair value of the asset or liability. The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the following valuation approaches: • Market approach: valuation techniques that use prices and other relevant information generated by market • transactions for identical or similar assets or liabilities; Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value; and 37 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) • Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity. Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable. (iii) Fair value hierarchy AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows: Level 1 Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 Measurements based on unobservable inputs for the asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3. The Group would change the categorisation within the fair value hierarchy only in the following circumstances: (i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or (ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice versa. When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances occurred. (iv) Key estimate - share based payments The Group measures the cost of equity settled transactions by reference to the fair value of the equity instrument at the date at which they are granted (for employees) or their measurement date (for other service providers). For Options, the fair value is determined by an internal valuation using a Black Scholes option pricing model. The valuation relies on the use of certain assumptions. If the assumptions were to change, there may by an impact on the amounts reported. For ordinary shares which are traded on the stock exchange, the fair value is determined by reference to the closing price of the security on the measurement date. For Performance Rights, the fair value is measured using the Company’s 5 day volume weighted average share price prior to grant date. For each performance hurdle a probability factor is assigned based on the Company’s estimate of the performance hurdle being met. For performance hurdles that have a market-based performance hurdle, the probability factor is determined by using a Monte Carlo Simulation technique which relies on certain assumptions. If the assumptions were to change, there may by an impact on the amounts reported. The value of the performance rights is allocated to the Statement of Profit or Loss over the vesting period. (v) Key estimate – taxation Balances disclosed in the consolidated financial statements and the notes thereto, related to taxation, are based on the best estimates of directors. These estimates take into account both the financial performance and position of the Group as they pertain to current income taxation legislation, and the directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents the directors’ best estimate, pending an assessment by the Australian Taxation Office. 38 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (vi) Key estimate – rehabilitation provision Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Rehabilitation costs include the dismantling and removal of mining plant, equipment and building structures, waste removal and rehabilitation of the site in accordance with the requirements of the mining permits. Such costs are determined using estimates of future costs, current legal requirements and technology. Rehabilitation costs are recognised in full at present value as a liability. Amounts that are payable within 12 months are recognised as a current liability. Amounts that are payable not within 12 months are recognised as a non-current liability. An equivalent amount is capitalised as part of the cost of the asset when an obligation arises to decommission or restore a site to a certain condition after abandonment as a result of bringing the assets to its present location. The capitalised cost is amortised over the life of the project and the provision is accreted periodically as the discounting of the liability unwinds. Any changes in the estimates for the costs or other assumptions against the cost of relevant assets are accounted for on a prospective basis. In determining the costs of site restoration there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation. The Group assesses its mine rehabilitation provision annually. Significant judgement is required in determining the provision for mine rehabilitation and closure as there are many factors that will affect the ultimate liability payable to rehabilitate the mine sites, including future disturbances caused by further development, changes in technology, changes in regulations, price increases, changes in timing of cash flows which are based on life of mine plans and changes in discount rates. When these factors change or become known in the future, such differences will impact the mine rehabilitation provision in the period in which the change becomes known. (vii) Key judgement – environmental issues Balances disclosed in the consolidated financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation, and the directors understanding thereof. At the current stage of the Group’s development and its current environmental impact, the directors believe such treatment is reasonable and appropriate. (viii) Key judgement – comparative figures When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. When the Group applies an accounting policy retrospectively, it makes a retrospective restatement or reclassifies items in its consolidated financial statements. A consolidated statement of financial position as at the beginning of the earliest comparative period will be disclosed. ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS New, revised or amending Accounting Standards and Interpretations adopted The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Group during the financial year. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 2. CHANGE IN ACCOUNTING POLICY Exploration and Evaluation During the current reporting period the Group has made a voluntary change to its accounting policy relating to the treatment of exploration and evaluation expenditure. Exploration and evaluation expenditure, including acquisition costs, was previously expensed as incurred. The Group has now elected to expense exploration and evaluation expenditure as incurred, with costs of acquiring mineral tenements to be recognised as an asset to the extent allowable under AASB 6 Exploration for and Evaluation of Mineral Resources. 39 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 2. CHANGE IN ACCOUNTING POLICY (continued) This change has been implemented as the Board of Directors are of the opinion that the change is both in line with Australian Accounting Standards and provides users with reliable and more relevant information about the effects of transactions, other events or conditions on the Group’s financial position, financial performance or cash flows. The new policy is detailed below and has been applied retrospectively in accordance with the requirements of AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors. Exploration and evaluation costs, including feasibility study expenditure, are expensed in the year they are incurred apart from acquisition costs to acquire mineral tenements which are capitalised on an area of interest basis. Acquisition costs include the associated transaction costs and the estimated rehabilitation liability recognised upon the acquisition of mineral tenements. Exploration and evaluation assets are only recognised if the right of tenure of the area of interest is current, and they are expected to be recouped through successful development and exploitation of the area of interest or alternatively by its sale, or, where exploration and evaluation activities in the area of interest have not reached a stage that 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. Once a development decision has been made all past exploration and evaluation expenditure in respect of an area of interest that has been capitalised is transferred to mine properties where it is amortised over the life of the area of interest to which it relates on a unit-of-production basis. No amortisation is charged during the exploration and evaluation phase. Exploration and evaluation assets are assessed for impairment when an indicator of impairment exists, and capitalised assets are written off where required. Where an area of interest is abandoned, or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. The aggregate effect of the change in accounting policy on the financial statements for the year ending 30 June 2021 is as follows: Previous policy $ Effect of the change in the accounting policy for exploration and evaluation $ Revised policy $ Consolidated Statement of Profit or Loss and Other Comprehensive Income – year ending 30 June 2021 Exploration and evaluation expenses Loss before income tax Income tax expense Basic and diluted loss per share (cents) Consolidated Statement of Financial Position – as at 30 June 2021 Exploration and evaluation assets Accumulated losses (18,900,977) (18,900,977) - (0.98) 33,253,376 35,250,717 - 1.83 23,352,807 (23,352,807) - 78,472,696 14,352,399 16,349,740 - 0.85 23,352,807 55,119,889 Previous policy $ Effect of the change in the accounting policy for exploration and evaluation $ Revised policy $ Consolidated Statement of Profit or Loss and Other Comprehensive Income – year ending 30 June 2020 Exploration and evaluation expenses Loss before income tax Income tax expense Basic and diluted loss per share (cents) Consolidated Statement of Financial Position – as at 30 June 2020 Exploration and evaluation assets Accumulated losses (3,730,975) (3,730,975) - (0.29) 8,306,909 9,582,099 - 0.74 4,451,830 (4,451,830) - 43,221,979 4,575,934 5,851,124 - 0.45 4,451,830 38,770,149 40 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 3. REVENUE Interest revenue Cash flow boost Fuel tax credit 4. INCOME TAX EXPENSE Statement of Profit or Loss and Other Comprehensive Income Current income tax Deferred tax (a) The prima facie tax on profit/(loss) from ordinary activities before income tax is reconciled to the income tax expense as follows: Loss from continuing operations before income tax expense Australian tax rate Prima facie tax benefit at the Australian tax rate Add tax effect of: Share-based payments Non-deductible exploration costs Non-deductible other expenses Non-assessable income Movements in unrecognised temporary differences Tax effect of current year tax losses for which no deferred tax asset has been recognised Income tax expense (b) Tax Losses Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 26% (2020: 27.5%) Unused capital losses for which no deferred tax asset has been recognised Potential tax benefit @ 26% (2020: 27.5%) 2021 $ 22,159 37,500 20,322 79,981 - - - 2021 $ (16,349,740) 26% (4,250,932) 90,801 - 88,251 (9,750) 222,742 (3,858,889) 3,858,889 - 2020 $ 8,885 62,500 - 71,385 - - - 2020 $ (5,851,124) 27.5% (1,609,059) 13,682 944,947 49,010 (17,188) (94,025) (712,633) 712,633 - 29,426,837 7,650,978 25,567,948 7,031,186 487,085 126,642 487,085 133,948 The benefit for tax losses will only be obtained if: (a) The company and consolidated entity derive future assessable income of a nature and an amount sufficient to enable the benefit from the deductions for the losses to be realised; (b) The company and the consolidated entity continue to comply with the conditions for deductibility imposed by law; and (c) No changes in tax legislation adversely affect the ability of the Company and consolidated entity to realise these benefits. 5. CASH AND CASH EQUIVALENTS The following table details the components of cash and cash equivalents as reported in the statement of financial position. Cash at bank and in hand Short-term deposits Cash and cash equivalents 2021 $ 10,946,166 20,000 10,966,166 2020 $ 11,125,421 20,000 11,145,421 Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. 41 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 6. TRADE AND OTHER RECEIVABLES Trade debtors – GST and fuel tax credit receivable 2021 $ 78,795 78,795 2020 $ 141,268 141,268 The Group expects the above trade and other receivables to be recovered within 12 months of 30 June 2021 and therefore considers the amounts shown above at cost to be a close approximation of fair value. Trade and other receivables expose Genesis Minerals Limited to credit risk as potential for financial loss arises should a debtor fail to repay their debt in a timely manner. Disclosure on credit risk can be found at Note 16(A). 7. PREPAYMENTS Prepaid expenditure 8. PLANT AND EQUIPMENT Plant and equipment Cost Accumulated depreciation Net book amount Plant and equipment Opening net book amount Additions / (Disposals) Depreciation charge Closing net book amount 2021 $ 24,857 24,857 2021 $ 301,204 (56,011) 245,193 17,597 267,108 (39,512) 245,193 2020 $ 13,808 13,808 2020 $ 34,096 (16,499) 17,597 6,123 20,239 (8,765) 17,597 9. EXPLORATION AND EVALUATION ASSETS Opening balance Additions – acquisition of mineral tenements* Closing balance 4,451,830 18,900,977 23,352,807 720,855 3,730,975 4,451,830 *On 24 June 2020, the Company announced that it had entered into a binding agreement to acquire 100% of the Kookynie tenements (Project), located immediately south-east of its 100%-owned Ulysses Gold Project. The Company had entered into an option agreement with A&C Mining Investment Pty Ltd (A&C) and Ms Yijun Zhu (the Vendors) pursuant to which its wholly owned subsidiary, Ulysses Mining Pty Ltd, had been granted the right to acquire the Project (Option Agreement). As at 30 June 2020 the Company had incurred costs totalling $3,558,951 towards the acquisition of the Project including amounts paid to the Vendors under the Option Agreement, a cash payment and shares issued to resolve proceedings and settle plaints against the Vendors and amounts incurred for associated transaction costs. On 21 December 2020, the Company announced it had exercised its option to acquire 100% of the Project. The acquisition was completed on 12 January 2021 with further costs incurred of $11,444,569 to settle amounts due to the Vendors under the Option Agreement, payments made to resolve proceedings and settle plaints against the Vendors, amounts incurred for associated transaction costs and the estimated stamp duty liability. As at 30 June 2021, the capitalised acquisition costs for the Project also included $7,142,883 for the estimated rehabilitation liability recognised on acquisition, with subsequent changes to the estimate being expensed through profit or loss. In September 2021 the Company paid the initial stamp duty assessment for the Project acquisition to enable the tenement transfers to take place The Company granted the Vendors a 1% net smelter return on future gold production from the Project, capped at A$5 million. Details of all royalties pertaining to the Project are set out in Note 19. 42 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 10. TRADE AND OTHER PAYABLES Trade payables Other payables and accruals 11. PROVISIONS CURRENT LIABILITY Employee entitlements Rehabilitation NON-CURRENT LIABILITY Rehabilitation* 2021 $ 1,088,784 1,336,139 2,424,923 183,549 50,000 233,549 8,100,559 8,100,559 2020 $ 413,569 110,839 524,408 90,573 50,000 140,573 - - *The rehabilitation liability has been estimated using a discounted cash flow model based on the net present value of expected cash flows. The discount rate used was determined as the 10 year Australian Government bond yield and an annual escalation rate using current inflationary expectations has been used. The rehabilitation liability includes the estimated liability arising from the acquisition of the Kookynie tenements. 12. ISSUED CAPITAL 2,126,337,840 (30 June 2020: 1,357,954,186) Ordinary shares Value of conversion rights - Convertible Notes Share issue costs written off against issued capital MOVEMENT IN ORDINARY SHARES Balance at 1 July 2019 Placement at $0.032 per share – 5 August 2019 Rights Issue at $0.032 per share – 4 September 2019 Placement at $0.032 per share – 25 September 2019 Shares issued as part of the transaction to acquire the Kookynie Gold Project at $0.054 per share – 25 June 2020 Exercise of options at $0.049 per share – 26 June 2020 Placement at $0.042 per share1 Less share issue costs Balance at 30 June 2020 Balance at 1 July 2020 Placement at $0.042 per share – 1 July 20201 Exercise of options at $0.048 per share – 10 July 2020 Rights Issue at $0.042 per share – 20 July 2020 Placement at $0.042 per share – 8 September 2020 Exercise of options at $0.049 per share – 29 October 2020 Exercise of options at $0.042 per share – 11 December 2020 Exercise of options at $0.045 per share – 11 December 2020 Placement at $0.06 per share – 30 April 2021 Share Purchase Plan at $0.06 per share – 19 May 2021 Placement at $0.06 per share – 10 June 2021 Less share issue costs Balance at 30 June 2021 2021 $ 80,285,983 25,633 (3,341,006) 76,970,610 2020 $ 54,644,662 25,633 (2,504,036) 52,166,259 No. $ 1,089,365,941 44,327,199 188,949,343 6,915,958 26,595,745 1,800,000 - - 1,357,954,186 1,357,954,186 238,095,238 10,000,000 226,326,261 104,628,958 800,000 4,000,000 1,200,000 130,295,994 16,666,530 36,370,673 - 2,126,337,840 33,820,100 1,418,471 6,046,380 221,311 1,436,170 88,200 10,000,000 (864,373) 52,166,259 52,166,259 - 480,000 9,505,704 4,394,417 39,200 168,000 54,000 7,817,760 1,000,000 2,182,240 (836,970) 76,970,610 1 Funds were received on 30 June 2020 for the share placement. 238,095,238 shares were issued on 1 July 2020. 43 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 12. ISSUED CAPITAL (continued) Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. OPTIONS (a) Options on issue Exercisable at 3.9 cents, on or before 13 December 2019 Exercisable at 4.8 cents, on or before 31 July 2020 Exercisable at 4.9 cents, on or before 29 November 2020 Exercisable at 4.2 cents, on or before 13 December 2020 Exercisable at 5.3 cents, on or before 29 November 2021 Exercisable at 4.5 cents, on or before 13 December 2021 Exercisable at 5.6 cents, on or before 29 November 2022 Exercisable at 10.6 cents, on or before 10 December 2022 Exercisable at 11.4 cents, on or before 10 December 2023 Exercisable at 12.2 cents, on or before 10 December 2024 (b) Movements in options on issue Beginning of the financial year Expired, exercisable at 3.9 cents Lapsed, exercisable at 4.2 cents Exercised June 2020 at 4.9 cents Exercised July 2020 at 4.8 cents Exercised October 2020 at 4.9 cents Exercised December 2020 at 4.2 cents Exercised December 2020 at 4.5 cents Issued: Exercisable at 10.6 cents, on or before 10 December 2022 Exercisable at 11.4 cents, on or before 10 December 2023 Exercisable at 12.2 cents, on or before 10 December 2024 End of the financial year 2021 No. - - - - 2,300,000 4,800,000 2,700,000 2,133,332 2,133,333 2,133,335 16,200,000 25,800,000 - - - (10,000,000) (800,000) (4,000,000) (1,200,000) 2,133,332 2,133,333 2,133,335 16,200,000 2020 No. - 10,000,000 800,000 4,000,000 2,300,000 6,000,000 2,700,000 - - - 25,800,000 33,200,000 (4,800,000) (800,000) (1,800,000) - - - - - - - 25,800,000 Each option entitles the holder to subscribe for one fully paid ordinary share in Genesis Minerals Limited, subject to their terms of issue. PERFORMANCE RIGHTS (a) Performance rights on issue Issued 15 September 2020, expiring 31 December 2021 (b) Movements in performance rights on issue Beginning of the financial year Issued 15 September 2020, expiring 31 December 2021 End of the financial year 2021 No. 13,500,000 13,500,000 - 13,500,000 13,500,000 2020 No. - - - - - Each performance right is a right to receive one fully paid ordinary share in Genesis Minerals Limited, subject to meeting performance conditions prior to their expiry date and subject to their terms of issue. 44 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 12. ISSUED CAPITAL (continued) CAPITAL MANAGEMENT The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders. Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital position against the requirements of the Group to meet exploration programmes and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the Group at 30 June 2021 is $8,411,346 (2020: $10,635,516). 13. RESERVES AND ACCUMULATED LOSSES Nature and purpose of reserves (i) Share-based payments reserve The share-based payments reserve is used to recognise the fair value of options and performance rights issued. The movement in the reserve is reconciled as follows: Balance at the beginning of the financial year Recognition of share-based payments for options and performance rights Balance at the end of the financial year 14. LOSS PER SHARE (a) Reconciliation of earnings used in calculating loss per share Loss attributable to the owners of the Company used in calculating basic and diluted loss per share (b) Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share Basic and diluted EPS (cents per share) 2021 $ 1,708,833 349,233 2,058,066 2021 $ 2020 $ 1,659,080 49,753 1,708,833 2020 $ (16,349,740) (5,851,124) 2021 Number of shares 2020 Number of shares 1,932,695,645 1,290,413,912 (0.85) (0.45) 15. COMMITMENTS Exploration commitments The Group has certain commitments to meet minimum expenditure requirements on the mineral exploration assets it has an interest in. Outstanding exploration commitments are as follows: Within one year Greater than one year but less than five years 2021 $ 1,831,600 9,428,697 11,260,297 2020 $ 1,802,807 7,977,090 9,779,897 The above exploration commitments includes the Group’s interests in farm-in and joint venture agreements (refer note 26). 16. FINANCIAL RISK MANAGEMENT The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects and ensure that net cash flows are sufficient to support the delivery of the Company's financial targets whilst protecting future financial security. The Group continually monitors and tests its forecasted financial position against these objectives. The main risks Genesis Minerals Limited is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk, currency risk and commodity price risk. 45 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 16. FINANCIAL RISK MANAGEMENT (continued) The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payables and loans to subsidiaries. The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are as follows: Financial Assets Cash and cash equivalents Trade and other receivables Total financial assets Financial Liabilities Trade and other payables Total financial liabilities 2021 $ 2020 $ 10,966,166 78,795 11,044,961 11,145,421 141,268 11,286,689 2,424,923 2,424,923 524,408 524,408 FINANCIAL RISK MANAGEMENT POLICIES The Board of Directors has overall responsibility for the establishment of Genesis Minerals Limited’s financial risk management framework. This includes the development of policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk and the use of derivatives. Mitigation strategies for specific risks faced are described below. The main risks Genesis Minerals Limited is exposed to through its financial instruments are credit risk, liquidity risk and market risk relating to interest rate risk, currency risk and commodity price risk. (A) CREDIT RISK Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to Genesis Minerals Limited and arises principally from holding cash and cash equivalents and receivables. The Group’s maximum exposure to credit risk at the reporting date in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the statement of financial position. The Group's policy for reducing credit risk from holding cash is to ensure cash is only invested with counterparties with Standard & Poor’s rating of at least AA-. The credit rating of the Group’s bank is AA-. The Group did not have any significant revenue sources during the 2020 or 2021 financial year. The Group does not have any receivables that are past due or impaired at the reporting date. (B) LIQUIDITY RISK Liquidity risk arises from the possibility that Genesis Minerals Limited might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms: • preparing forward-looking cash flow analysis in relation to its operational, investing and financial activities which are monitored on a monthly basis; • monitoring the state of equity markets in conjunction with the Group's current and future funding requirements, with a view to appropriate capital raisings as required; • managing credit risk related to financial assets; • • only investing surplus cash with major financial institutions; and comparing the maturity profile of current financial liabilities with the realisation profile of current financial assets. (C) MARKET RISK Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. (i) Commodity price risk The Group is exposed to commodity price volatility on the sale of gold, which is based on the spot price as quoted by the Perth Mint. The Group had no gold sales during the 2021 financial year. 46 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 16. FINANCIAL RISK MANAGEMENT (continued) (ii) Foreign exchange risk The Group is exposed to the Australian dollar currency risk on gold sales, which are denominated in US dollars. No hedging arrangements have been put in place to manage the currency risk as there were no gold sales during the year. (iii) Interest rate risk Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period, whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments. Interest rate risk is managed by maintaining cash in interest bearing accounts and having no interest bearing liabilities. Interest Rate Sensitivity analysis The following sensitivity analysis is based on the interest rate risk exposures in existence at the end of the reporting period. This analysis assumes that all other variables are held constant. 2021 2020 PROFIT EQUITY 100 Basis Points Increase 100 Basis Points Decrease 100 Basis Points Increase 100 Basis Points Decrease $109,662 $111,454 ($109,662) ($111,454) $109,662 $111,454 ($109,662) ($111,454) The net exposure at the end of the reporting period is representative of what Genesis Minerals Limited was and is expecting to be exposed to at the end of the next twelve months. (D) FAIR VALUE ESTIMATION The fair values of financial assets and financial liabilities can be compared to their carrying values as presented in the consolidated statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. There are no financial assets or liabilities which are required to be revalued on a recurring basis. 17. KEY MANAGEMENT PERSONNEL DISCLOSURES Key management personnel compensation Short-term benefits Post-employment benefits Share-based payments 18. REMUNERATION OF AUDITORS During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms: Audit services Hall Chadwick (formerly Bentleys) - audit and review of financial reports Total remuneration for audit services 2021 $ 433,309 33,258 194,326 660,893 2021 $ 2020 $ 402,702 33,391 49,753 485,846 2020 $ 37,148 37,148 30,558 30,558 47 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 19. CONTINGENCIES The Group has the following deferred consideration and royalty arrangements covering its mineral tenement holdings: Deferred Consideration and Royalty Details As part of the terms of the acquisition of the Ulysses Gold Project, Genesis agreed to the following deferred consideration payments to the project vendors covering the tenements: • Deferred consideration of $10.00 per dry metric tonne (DMT) of ore product from the tenements which is treated through a toll treatment plant for the first 200,000 DMT of ore processed, to a maximum of $2,000,000. 52,653 DMT of ore product from the Ulysses Gold Project has been processed to date; and 1.2% of the Net Smelter Return generated from the sale of any product from the tenement area, after 200,000 of DMT of ore product from the tenements has been treated through a toll treatment plant. • Tenements Affected M40/166, E40/295 and E40/312 An effective Net Smelter Return royalty rate of 0.90% from the sale of all naturally occurring substances is payable to International Royalty Corporation. Net Smelter Return royalty of 1.2% from the sale of any gold from the tenement area is payable to the former tenement holder, capped at a maximum amount payable of $500,000 (Ulysses Gold Project). M40/166 E40/371 As part of the terms of the acquisition of the Kookynie tenements, the following royalties apply: 1% Net Smelter Return on all gold extracted is payable to the project vendors, capped at a maximum amount of $5,000,000. E40/229, E40/263, E40/291, E40/306, E40/346, E40/347, E40/402, M40/3, M40/20, M40/94, M40/101, M40/107, M40/110, M40/120, M40/136, M40/137, M40/148, M40/151, M40/163, M40/164, M40/174, M40/196, M40/209, M40/288, M40/289, M40/290, M40/291, M40/292, M40/293, M40/339, M40/340, M40/343, M40/345, P40/1272, P40/1427, P40/1433, P40/1434, P40/1435, P40/1436, P40/1439, P40/1440, P40/1441, P40/1445, and P40/1454; M40/136 M40/174 M40/288 M40/343 L40/7, L40/15, L40/19, L40/20 and M40/136 M40/163 and M40/164 2.5% by weight (equivalent to NSR) of all minerals produced and credited to Ulysses’ metals account (at a refinery selected by Ulysses) is payable to the metals accounts of two former tenement owners. $1.00 per tonne of ore milled is payable to a former tenement owner. $1.00 per tonne of ore mined and milled is payable to a former tenement owner. 2.5% of the Quarterly Gross Value of Sales. This is calculated by reference to the gross revenue per quarter actually received by Ulysses from sales of metals, minerals or mineral bearing substance mined or removed from within the tenement, and is payable to a former tenement owner. The following royalty is payable to Vox Royalty: • • For each Ore Reserve with a gold grade of at or less than 5 grams per DMT, $1.00 per DMT, or For each Ore Reserve at a gold grade of more than 5 grams per DMT then a formula applies as per the Royalty Deed; or • Gold bearing ore mined and treated which does not form any part of any ‘Calculation of Ore Reserve’ paid or to be paid, the calculation is the same as above, using the number of DMT of ore mined and treated and the grade or ore mined and treated in the calculation as if it were an ‘Ore Reserve’. Royalty not payable for first 100,000 DMT (in aggregate) of all gold Ore Reserves or gold bearing ore mined and treated. $1.00 per DMT of ore mined and treated from the tenements in excess of 650,000 DMT is payable to Vox Royalty. Historical production is 498,700t @ 2g/t for 32,070oz of gold produced in 1996-97. In regards to the Desdemona South JV Gold Project which is the subject of a Farm-in and Joint Venture agreement with Kin Mining NL, a royalty of 2% of the Gross Revenue multiplied by the Seller’s interest in the tenements applies. E37/1326 (5 graticules), E40/283, E40/285, E40/369, E40/366, P40/1464, P40/1283 and M40/346. 48 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 19. CONTINGENCIES (continued) In regards to the acquisition of the Kookynie tenements, the Group is working through the stamp duty assessment process with the West Australian Office of State Revenue (“OSR”). OSR have issued an interim stamp duty assessment (which has been accrued for as at balance date) based on the submissions made to date and certificates of duty have been issued enabling registration of the tenement transfers to take place. Depending on the outcome of finalising the stamp duty assessment process, further liabilities may arise. In regards to the tenement transfer process for the Kookynie tenements, a number of tenements have encumbrances including caveats and mortgages. The Company is working through the process to obtain the necessary consents or to have the encumbrances removed to allow the tenement transfers to be registered. The Company has received the required Ministerial Consent to transfer the tenements. There are no other contingent liabilities or contingent assets of the Group at balance date. 20. RELATED PARTY TRANSACTIONS (a) Parent entity The ultimate parent entity within the Group is Genesis Minerals Limited. (b) Subsidiaries Interests in subsidiaries are set out in note 21. (c) Appointment and Resignation of Directors No movement during the year. (d) Key management personnel Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity are considered key management personnel. For details of remuneration disclosures relating to key management personnel, refer to note 17: Key Management Personnel Disclosures (KMP) and the Remuneration Report in the Directors' Report. There were no other related party transactions during the year. 21. CONTROLLED ENTITIES The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(b): Name Country of Incorporation Class of Shares Equity Holding(1) Ulysses Mining Pty Ltd Metallo Resources Pty Ltd Australia Australia Ordinary Ordinary (1) The proportion of ownership interest is equal to the proportion of voting power held. 2021 % 100 100 2020 % 100 100 22. EVENTS AFTER THE BALANCE SHEET DATE On 22 September 2021, Genesis announced a strategic funding and Board restructure initiative led by Raleigh Finlayson, which will see him appointed as Managing Director and become a significant shareholder. Mr Finlayson is the former Managing Director of Saracen Mineral Holdings (ASX: SAR) and Northern Star Resources (ASX: NST). Under the proposal, which is subject to shareholder approval, Genesis will raise $16 million via a share Placement at 6c a share. Mr Finlayson will subscribe for $7 million of shares in the Placement and Northern Star will subscribe for $3 million of shares. The remainder of the Placement will be offered to existing and new institutional and sophisticated investors, including current and proposed Directors. Existing Genesis shareholders will have the opportunity to participate in a 1-for-30 non renounceable Entitlement Offer at 6c per share raising up to an additional $4.8 million. Placement shares will qualify for the Entitlement Offer. Shares acquired via the Placement and the Entitlement Offer will come with a free one-for-two attaching two-year unlisted option exercisable at 10c. Placement options will not be able to be exercised to participate in the Entitlement Offer. 49 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 22. EVENTS AFTER THE BALANCE SHEET DATE (continued) Mr Finlayson has entered into a part-time consulting agreement with Genesis and he has the right to be issued 245 million unlisted options with a 10.5c strike price. Mr Finlayson will be appointed Managing Director of Genesis by no later than 31 March 2022. Mr Finlayson has the right (subject to shareholder approval), upon appointment as Managing Director, to be issued 30 million performance rights under the Genesis Incentive Performance Rights Plan, which will have vesting hurdles tied to a 2.5Moz JORC Resource, a 1.0Moz JORC Reserve and Genesis becoming a gold producer (Performance Rights). Former FMG Managing Director and CEO Neville Power and highly experienced corporate lawyer Michael Bowen will be invited to join the Board as Non-Executive Directors following conclusion of the Placement. Each will be issued with 15 million options at an exercise price of 10.5c with a four-year expiry (Director Options). Tommy McKeith will continue as Non-Executive Chairman and Gerry Kaczmarek will continue as Non-Executive Director. Under the transition plan, Michael Fowler will remain Genesis Managing Director until Mr Finlayson's appointment becomes effective. At that time, Mr Fowler will retire from the Board. Current Non-Executive Director Craig Bradshaw will retire from the Genesis Board at the upcoming Genesis AGM. Non-Executive Director and Alkane Resources Limited (“Alkane”) representative Nic Earner will retire from the Board at the upcoming Genesis AGM, assuming all necessary shareholder approvals for the Placement and Board restructure are obtained. Alkane has also agreed to subscribe for any shortfall under the Entitlement Offer subject to scale back to ensure Alkane’s voting power in Genesis does not exceed 20%. In addition, the 2019 Subscription Agreement between Alkane and Genesis, under which Alkane was provided with Board representation and certain other rights, will be terminated with effect from completion of the Entitlement Offer. Shareholder approvals for the Placement, Alkane Subscription, Consultant Options, Performance Rights, Board appointments and Director Options will be sought at the forthcoming AGM. Refer to the ASX announcement dated 22 September 2021 for full details of the strategic funding and Board restructure. Subsequent to the end of the financial year 1,450,000 performance rights vested on 4 September 2021 following satisfaction of performance hurdles. Apart from the above, no matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 23. CASH FLOW INFORMATION (a) Reconciliation of net loss after income tax to net cash inflow/(outflow) from operating activities Net loss for the year Non-Cash Items Depreciation of non-current assets Share based payments expense Shares issued as part of the transaction to acquire the Kookynie Gold Project Change in operating assets and liabilities, net of effects from purchase of controlled entities Decrease/(increase) in trade and other receivables Decrease/(increase) in prepayments (Decrease)/increase in trade and other payables (Decrease)/increase in provisions Net cash inflow/(outflow) from operating activities (b) Non-cash investing and financing activities There were no non-cash investing and financing activities during the current year. 2021 $ 2020 $ (16,349,740) (5,851,124) 39,512 349,233 - 8,765 49,753 1,436,170 62,473 (11,049) 1,815,700 92,976 (14,000,895) (104,839) 14,085 (246,875) 17,821 (4,676,244) 50 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 24. SHARE BASED PAYMENTS Share-based payments including performance rights and options are granted at the discretion of the Board to align the interests of directors, executives and employees with those of shareholders. Each performance right or option issued converts into one ordinary share of Genesis Minerals Limited on exercise. No amounts are paid or payable by the recipient on receipt of the performance right or option. Performance rights and options neither carry rights to dividends nor voting rights. Performance rights may be exercised at any time once the relative performance hurdle has been satisfied prior to expiry date. Options may be exercised at any time from the date of vesting to the date of their expiry by paying the exercise price. 6,400,000 options were issued during the year (2020: Nil), valued at $169,387 (2020: $nil). 16,000,000 options were exercised during the year (2020: 1,800,000), nil options lapsed during the year (2020: 800,000) and nil options expired (2020: 4,800,000). 13,500,000 performance rights were issued during the year (2020: nil). The amount expensed during the year to the Statement of Profit or Loss was $240,739 (2020: $nil). An amount of $349,233 was expensed to share based payments for options and performance rights issued to directors and employees (2020: $49,753). Details of the options on issue during the current and previous year are set out below: Grant Date Expiry Date Fair Value at Valuation Date (cents) Exercise Price (cents) Number 30 June 2020 13/12/17 13/12/19 20/04/18 31/07/20 13/12/17 13/12/20 13/12/17 13/12/21 29/11/18 29/11/20 29/11/18 29/11/21 29/11/18 29/11/22 10/12/20 10/12/22 10/12/20 10/12/23 10/12/20 10/12/24 Total 1.09 1.34 1.33 1.52 1.10 1.38 1.61 2.19 2.70 3.05 3.9 4.8 4.2 4.5 4.9 5.3 5.6 10.6 11.4 12.2 Number Vested and Exercisable at 30 June 2020 - - 10,000,000 10,000,000 4,000,000 4,000,000 Number 30 June 2021 Number Vested and Exercisable at 30 June 2021 - - - - - - 6,000,000 6,000,000 4,800,000 4,800,000 800,000 800,000 - - 2,300,000 2,300,000 2,300,000 2,300,000 2,700,000 - - - - - - - 2,700,000 2,700,000 2,133,332 2,133,332 2,133,333 2,133,335 - - 25,800,000 23,100,000 16,200,000 11,933,332 The movement in options on issue during the current and previous year is reconciled as follows: Options outstanding at 30 June 2019 33,200,000 Number of Options Weighted Average Exercise Price (cents) 4.64 Weighted Average Contractual Life (days) 586 Issued during the year Exercised during the year Expired during the year Lapsed during the year Options outstanding at 30 June 2020 Issued during the year Exercised during the year Expired during the year Lapsed during the year - (1,800,000) (4,800,000) (800,000) 25,800,000 6,400,000 (16,000,000) - - - 4.90 3.90 4.20 4.77 11.40 4.63 - - 304 Options outstanding at 30 June 2021 16,200,000 7.52 510 51 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 24. SHARE BASED PAYMENTS (continued) The options that were issued during the year had their valuation calculated by using a Black-Scholes option pricing model applying the following inputs: Valuation date Valuation date fair value Valuation date share price Exercise price Expected volatility Option life Expiry date Risk-free interest rate 27/11/20(1) $0.0219 27/11/20(1) $0.0270 27/11/20(1) $0.0305 $0.078 $0.106 68.70% 2 years 10/12/22 0.085% $0.078 $0.114 68.70% 3 years 10/12/23 0.105% $0.078 $0.122 67.50% 4 years 10/12/24 0.290% (1) The date of shareholder approval has been used as the valuation date. Details of the performance rights on issue during the current and previous year are set out below. The performance rights were issued on 15 September 2020 and they expire on 31 December 2021. The performance rights will only vest into fully paid ordinary shares if the following relevant performance hurdles are met prior to the expiry date: Performance Hurdle These Performance Rights will vest and become exercisable upon the employee remaining employed in the same role 12 months after the shareholder meeting date of 4 September 2020. At the discretion of the Board these Performance Rights will vest and become exercisable upon satisfactory meeting the following hurdles in the period to 31 December 2021: • 1) Release of first JORC 2012 combined Mineral Resource > 2.0Moz Au for the Greater Ulysses Project at a grade that supports reasonable prospects for eventual economic extraction. • 2) Approval of final investment decision by Genesis’ Board on the construction of a standalone mining and processing operation at Ulysses These Performance Rights will vest and become exercisable when the Genesis share price exceeds a 10-day VWAP of 1.5 x the Performance Rights Share Price of 7.6 cents in the period leading up to 31 December 2021. These Performance Rights will vest and become exercisable when the Genesis share price exceeds a 15-day VWAP of 1.75 x the Performance Rights Share Price of 7.6 cents in the period leading up to 31 December 2021. These Performance Rights will vest and become exercisable when the Genesis share price exceeds a 20-day VWAP of 2.0 x the Performance Rights Share Price of 7.6 cents in the period leading up to 31 December 2021. Total Share Price for Performance Rights to Vest Number of Performance Rights 1,450,000 2,850,000 2,700,000 $0.114 1,300,000 $0.133 1,950,000 $0.152 3,250,000 13,500,000 No performance rights vested into fully paid ordinary shares during the year as the vesting conditions have yet to be met. No performance rights have been cancelled during the year. The performance rights that were issued during the year had their valuation measured by using the Company’s 5 day volume weighted average share price as at the shareholder meeting date of 4 September 2020 of $0.076 per right. For each performance hurdle a probability factor was assigned based on the Company’s estimate of the performance hurdle being met. For the performance hurdles that have a market-based performance hurdle, the probability factor was determined by using a Monte Carlo Simulation technique. The value of the performance rights is allocated to the Statement of Profit or Loss over the vesting period. 52 Genesis Minerals Limited and controlled entities Notes to the Consolidated Financial Statements 30 JUNE 2021 25. PARENT ENTITY INFORMATION 2021 $ 2020 $ The following information relates to the parent entity, Genesis Minerals Limited. The information presented here has been prepared using accounting policies consistent with those presented in Note 1. Current assets Non-current assets Total assets Current liabilities Total liabilities Net assets Issued capital Reserves Accumulated losses Total equity Loss for the year Total comprehensive loss for the year 11,069,818 15,447,441 26,517,259 (2,608,472) (2,608,472) 11,300,497 5,430 11,305,927 (614,980) (614,980) 23,908,787 10,690,947 76,970,610 2,058,066 (55,119,889) 23,908,787 52,166,259 1,708,833 (43,184,145) 10,690,947 (16,387,574) (16,387,574) (9,594,265) (9,594,265) The parent entity did not have any contingent liabilities, or any contractual commitments for the acquisition of property, plant and equipment, as at 30 June 2021 or 30 June 2020. 26. FARM-IN AND JOINT VENTURE COMMITMENTS The Group has the following interests in Farm-In and Joint Ventures: Barimaia Joint Venture Gold Project The Barimaia Joint Venture Gold Project is subject to a Joint Venture Agreement (Mt Magnet Joint Venture) formed on 29 November 2019 under which the Group’s 100% owned subsidiary, Metallo Resources Pty Ltd (Metallo) has earned an initial 65% interest in the Project. The Project is located in the Murchison District of Western Australia, 10km south-east of the Mt Magnet Gold Mine, operated by ASX-listed Ramelius Resources Limited. The joint venturers have agreed to conduct exploration to continue development of the Project by way of two separate joint ventures. Metallo has been appointed the manager of the two joint ventures comprising the Mt Magnet Joint Venture. Desdemona South JV Gold Project On 10 December 2019, Genesis announced that it had entered into a Farm-in and Joint Venture agreement with Kin Mining NL (ASX: KIN) over the Desdemona South JV Gold Project, located south of Leonora in Western Australia. The initial Farm-In terms are as follows: • Stage 1 Expenditure: Genesis must incur expenditure of not less than $250,000 (Minimum Expenditure) on the JV Area within 18 months of Commencement. This stage has been met. • Stage 2 Expenditure: Genesis may earn a 60% interest in the JV Area by incurring a further $750,000 expenditure (total spend of $1,000,000) on the JV Area within 36 months of Commencement. Once Genesis earns a 60% interest, Kin may elect to form a Joint Venture with participating interests of 60% Genesis and 40% Kin or grant Genesis the right to elect to sole contribute or form a JV. Once Genesis earns a 70% interest (if Kin does not elect to from a JV at 60%), Kin may elect to form a Joint Venture with participating interests of 70% Genesis and 30% Kin or grant Genesis the right to elect to sole contribute or form a JV to move to 80%. Genesis would need to spend $2.6 million in total to earn an 80% interest in the JV. 53 Genesis Minerals Limited and controlled entities Directors' Declaration In the directors’ opinion: (a) the financial statements and notes set out on pages 27 to 53 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the financial year ended on that date; (ii) (b) (c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable; and a statement that the attached financial statements are in compliance with International Financial Reporting Standards has been included in the notes to the financial statements. The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors. Michael Fowler Managing Director Perth, 28 September 2021 54 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GENESIS MINERALS LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of Genesis Minerals Limited (“the Company”) and its subsidiaries (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion: a. the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. b. the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(a)(i). Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How our audit addressed the Key Audit Matter Exploration and Evaluation Assets At balance date, the carrying amount of exploration and evaluation assets was $23,352,807 (2020: $4,451,830). As disclosed in note 2 to the financial report during the year the Group changed its accounting policy from expensing exploration expenditure as incurred, to related transaction costs. The Consolidated Entity continues to expense ongoing acquisition costs incurred as allowable under AASB 6 as Exploration for and Evaluation of Mineral Assets (“AASB 6”). capitalising acquisition and The recognition and recoverability of exploration and evaluation assets was considered a key audit matter due to: • The carrying value of the assets represents a significant asset of the Group, we considered it necessary to assess and circumstances existed to suggest the carrying amount of this asset may exceed the recoverable amount; and whether facts • Determining whether impairment involves significant indicators exist judgement by management. Our audit procedures included but were not limited to: • Assessing management’s determination of its areas of interest for consistency with the definition in AASB 6 Exploration and Evaluation of Mineral Resources (“AASB 6”); • Assessing the Group’s rights to tenure for a sample of permits and licenses; • Testing additions the Group’s to capitalised exploration costs for the year by evaluating a sample of recorded expenditure for consistency to underlying records, the capitalisation requirements of the Group’s accounting policy and the requirements of AASB 6; • By testing the status of the Group’s tenure and planned future activities, reading board minutes and discussions with management we assessed each area of interest for one or more of the following circumstances indicate impairment of the capitalised exploration costs: that may o The licenses for the rights to explore expiring in the near future or are not expected to be renewed; o Substantive expenditure for further exploration in the area of interest is not budgeted or planned; o Decision or intent by the Group to discontinue activities the specific area of interest due to lack in of commercially viable quantities of resources; and o Data indicating that, although a development in the specific area is likely to proceed, the carrying amount of the exploration asset is unlikely to be recorded in full from successful development or sale; and • Assessing the appropriateness of the related disclosures in the financial statements. Our audit procedures included but were not limited to: • Assessing with reference to the external evaluation of the rehabilitation liability conducted; and • Assessing the accuracy of the calculations used rehabilitation provision including the discount rate and inflation rates applied. to determine the Provision for Rehabilitation As at 30 June 2021 the Group recorded a provision for rehabilitation of $8,100,559 with respect to its Kookynie and Ulyssees Gold Projects. Accounting for the provision for rehabilitation constituted a key audit matter due to: • The size and scope of the balance; • The complexities inherent in such a transaction; and • The judgement required in determining for the provision the value of rehabilitation Other Information The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1(a)(i), the directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report complies with International Financial Reporting Standards. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2021. The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with s 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s Opinion In our opinion, the Remuneration Report of the Company, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. HALL CHADWICK WA AUDIT PTY LTD DOUG BELL CA Partner Dated this 28th day of September 2021 Genesis Minerals Limited and controlled entities ASX Additional Information Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 24 September 2021. (a) Distribution of equity securities Analysis of numbers of equity security holders by size of holding: 1 1,001 5,001 10,001 100,001 - 1,000 - 5,000 - 10,000 - 100,000 and over Unlisted Options Unlisted Performance Rights Ordinary Shares Number of holders Number of options Number of holders Number of rights Number of holders Number of shares - - - - 5 5 - - - - 13,200,000 13,200,000 - - - - 5 5 - - - - 12,050,000 12,050,000 60 62 173 988 866 7,304 195,610 1,443,220 43,276,276 2,085,865,430 2,149 2,130,787,840 The number of shareholders holding less than a marketable parcel of shares are: 99 (b) Twenty largest shareholders The names of the twenty largest holders of quoted ordinary shares are: Rank Name Units % of Units 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 ALKANE RESOURCES LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED BOTSIS HOLDINGS PTY LTD STEFEAD INVESTMENTS PTY LTDCITICORP NOMINEES PTY LIMITED FINCLEAR SERVICES NOMINEES PTY LIMITED THANKS HOLDINGS PTY LTD NERO RESOURCE FUND PTY LTD ZYGMUND WOLSKI HOP VALLEY HOLDINGS PTY LTD NATIONAL NOMINEES LIMITED EQUITY TRUSTEES LIMITED HANKS HOLDINGS PTY LTD UBS NOMINEES PTY LTD 3RD WAVE INVESTORS PTY LTD CIG (WA) PTY LTD TREASURY SERVICES GROUP PTY LTD MARFORD GROUP PTY LTD J P MORGAN NOMINEES AUSTRALIA PTY LIMITED BNP PARIBAS NOMINEES PTY LTD 421,834,597 306,257,715 98,400,000 82,896,422 64,924,645 47,333,245 37,021,984 36,742,857 31,028,370 29,790,605 27,852,814 27,097,265 26,004,464 25,635,294 25,000,000 24,419,227 21,314,210 19,125,000 18,966,793 17,796,966 Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total) Total Remaining Holders Balance 1,389,442,473 741,345,367 19.80 14.37 4.62 3.89 3.05 2.22 1.74 1.72 1.46 1.40 1.31 1.27 1.22 1.20 1.17 1.15 1.00 0.90 0.89 0.84 57.12 42.88 (c) Substantial shareholders The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001 are: ALKANE RESOURCES LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED (PARADICE INVESTMENT MGT PTY LTD) (d) Voting rights All ordinary shares (whether fully paid or not) carry one vote per share without restriction. (e) There is no current on-market buy-back 61 Number of Shares 421,834,597 162,176,348 Genesis Minerals Limited and controlled entities ASX Additional Information (f) Tenements held Project Location Tenement ID Interest (%) Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Ulysses Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Western Australia E40/295 Western Australia E40/312 Western Australia E40/333 Western Australia E40/359 Western Australia E40/371 Western Australia L40/30 Western Australia L40/31 Western Australia L40/32 Western Australia L40/33 Western Australia L40/34 Western Australia M40/166 Western Australia P37/9140 Western Australia P37/9141 Western Australia P37/9142 Western Australia P40/1342 Western Australia P40/1343 Western Australia P40/1396 Western Australia P40/1449 Western Australia P40/1457 Western Australia E40/229 Western Australia E40/263 Western Australia E40/281 Western Australia E40/291 Western Australia E40/292 Western Australia E40/306 Western Australia E40/316 Western Australia E40/346 Western Australia E40/347 Western Australia E40/368 Western Australia E40/375 Western Australia Western Australia Western Australia Western Australia G40/4 G40/5 G40/6 G40/7 Western Australia L40/7 Western Australia L40/10 Western Australia L40/11 Western Australia L40/12 Western Australia L40/15 Western Australia L40/17 Western Australia L40/18 62 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Genesis Minerals Limited and controlled entities ASX Additional Information Project Location Tenement ID Interest (%) Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Western Australia L40/19 Western Australia L40/20 Western Australia L40/21 Western Australia L40/22 Western Australia Western Australia Western Australia M40/2 M40/3 M40/8 Western Australia M40/20 Western Australia M40/26 Western Australia M40/56 Western Australia M40/94 Western Australia M40/101 Western Australia M40/107 Western Australia M40/110 Western Australia M40/117 Western Australia M40/120 Western Australia M40/136 Western Australia M40/137 Western Australia M40/148 Western Australia M40/151 Western Australia M40/163 Western Australia M40/164 Western Australia M40/174 Western Australia M40/192 Western Australia M40/196 Western Australia M40/209 Western Australia M40/288 Western Australia M40/289 Western Australia M40/290 Western Australia M40/291 Western Australia M40/292 Western Australia M40/293 Western Australia M40/339 Western Australia M40/340 Western Australia M40/342 Western Australia M40/343 Western Australia M40/344 Western Australia M40/345 Western Australia P40/1427 Western Australia P40/1428 Western Australia P40/1433 Western Australia P40/1434 Western Australia P40/1435 63 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Genesis Minerals Limited and controlled entities ASX Additional Information Project Location Tenement ID Interest (%) Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Kookynie Western Australia P40/1436 Western Australia P40/1437 Western Australia P40/1438 Western Australia P40/1439 Western Australia P40/1440 Western Australia P40/1441 Western Australia P40/1442 Western Australia P40/1444 Western Australia P40/1445 Western Australia P40/1446 Western Australia P40/1447 Western Australia P40/1454 Desdemona South Western Australia E37/1326 Desdemona South Western Australia E40/283 Desdemona South Western Australia E40/323 Desdemona South Western Australia E40/366 Desdemona South Western Australia E40/369 Desdemona South Western Australia M40/346 Desdemona South Western Australia P40/1464 Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Barimaia Western Australia M58/361 Western Australia P58/1654 Western Australia P58/1655 Western Australia P58/1687 Western Australia P58/1688 Western Australia P58/1689 Western Australia P58/1690 Western Australia P58/1691 Western Australia P58/1692 Western Australia P58/1751 Western Australia P58/1752 Western Australia P58/1762 Western Australia P58/1763 Western Australia P58/1764 Western Australia P58/1765 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Notes: 1: 2: 3: The Company has an interest in the Kookynie Gold Project tenements pursuant to a binding option agreement to acquire a 100% interest. Refer to the Company’s ASX announcement dated 24 June 2020 titled “Transformational Acquisition of the Kookynie Gold Project” for full details of the acquisition. The Company holds the right to earn-in to an initial 60 per cent interest in the Desdemona South JV Gold Project, with the potential to earn up to a maximum 80 per cent stake. The Company has earned a 65 per cent interest in the Barimaia Gold Project (the Mt Magnet JV). 64 Genesis Minerals Limited and controlled entities Mineral Resources Information MINERAL RESOURCES ANNUAL STATEMENT AND REVIEW The Company carries out an annual review of its Mineral Resources as required by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) 2012 edition and the ASX Listing Rules. The review was carried out as at 30 June 2021. Ulysses Gold Project During the year Genesis reported an updated Mineral Resource Estimate with a 26 per cent increase in contained ounces to 1,608,000oz of gold. The updated Mineral Resource incorporated the results of the highly successful drilling programs completed at the Ulysses Project over the second half of 2020. The updated Measured, Indicated and Inferred Mineral Resource now totals 27.3Mt @ 1.8g/t gold for 1,608,000 ounces of contained gold (refer to Table 1 below), which represents an increase of 327,000 ounces over the previous June 2020 Mineral Resource. Importantly, the higher-confidence Measured and Indicated component has increased by 237,000 ounces (32%) to 984,000 ounces, with this component of the Resource available for conversion to Ore Reserves following the completion of mining studies. Refer to the ASX announcement dated 29 March 2021 for full details of the updated Mineral Resource Estimate. • Admiral-Butterfly-Clark Group The total combined Mineral Resource for the Admiral-Butterfly-Clark Group deposits increased by 87% (213,000 ounces) to 10.3Mt @ 1.4g/t Au for 459,000 ounces. Details of the individual Resources are tabulated in Table 1. The 2020 drill program was successful in confirming historical drilling data and the continuity of mineralisation, as well as upgrading parts of the Inferred Resources for the Admiral, Butterfly and Clark deposits. Drilling also extended the limits of those deposits. The combined Admiral, Butterfly and Clark Resource increased from 245,000 to 339,000 ounces, a 39% increase in contained ounces. Importantly the Measured and Indicated categories increased by 59,000 ounces from 137,000 ounces to 196,000 ounces for these three deposits, with the grade remaining steady. Initial Resources were estimated for the King, Danluce and Butterfly North deposits (see Table 1) and have been included in the combined shallow Resource. The inclusion of the King, Danluce and Butterfly North Resources has added 121,000 ounces to the total Mineral Resource. All Resources remain open, and drilling programs will continue throughout the remainder of 2021 targeting extensions to all Resources as well as new near-mine discoveries. • Orient Well Group The combined Mineral Resource for the Orient Well Group of deposits has increased by 305% (186,000 ounces) to 7.3Mt @ 1.1g/t Au for 247,000 ounces. Details of the individual Resources are tabulated in Table 1. The Orient Well Resource has increased by 210% (128,000 ounces) to 5.43Mt @ 1.1g/t Au for 189,000 ounces. The 2020 drill program was successful in confirming historical drilling data at Orient Well, confirming the continuity of mineralisation and upgrading parts of the Inferred Resources for the Orient Well deposit. Drilling also significantly extended the limits of the Orient Well deposit. Initial Resource estimates were completed for the Orient Well East and Orient Well NW deposits. The inclusion of the Orient Well East and NW deposits has added an additional 42,000 ounces to the total Mineral Resource. The Orient Well, Orient Well East and Orient Well NW deposits remain open and extensions to all of these Resources will continue to be targeted. • Ulysses The Ulysses Mineral Resource was reduced by 29,000 ounces to 838,000 ounces as a result of adjusting the portion of the Resource model that is above 0.5g/t Au and constraining the model to a depth of <~130m below surface (previously ~200mbs) to reflect potential development by open pit mining. The Ulysses Resource stands at 7.74Mt @ 3.4g/t Au for 838,000 ounces. Drilling in 2020 to upgrade part of the high-grade portion of the Mineral Resource and to define the margins of the Ulysses West shoot, reported at a cut off of 2g/t gold, resulted in a slight increase in the Mineral Resource from 695,000 ounces to 705,000 ounces (refer to Table 1) which will form part of the mining evaluation for the Feasibility Study. 65 Genesis Minerals Limited and controlled entities Mineral Resources Information TABLE 1: MINERAL RESOURCE ESTIMATE – ULYSSES GOLD PROJECT March 2021 Resource Estimate 0.5g/t Cut off above 280mRL 2g/t Below 280mRL C O G g/t Deposit Ulysses Measured Indicated Inferred Total Tonnes Au Au Tonnes Au Au Tonnes Au Au Tonnes Au Au T g/t Ounces T g/t Ounces T g/t Ounces T g/t Ounces High Grade 2.0 658,000 6.1 129,000 908,000 6.3 184,000 188,000 8.2 50,000 1,754,000 Shear 137,000 1.3 6,000 2,911,000 2.4 221,000 1,765,000 3.2 183,000 4,813,000 522,000 1.8 29,000 653,000 1.7 36,000 1,175,000 6.4 2.6 1.7 363,000 410,000 65,000 Ulysses East Sub Total ABC Admiral Clark Butterfly 0.5 0.5 0.5 Butterfly North 0.5 0.5 0.5 0.5 0.3 0.5 0.5 0.3 0.5 King Danluce Historic Stockpiles Sub Total Orient Well Orient Well OW Laterites Orient Well East Orient Well NW Double J Sub Total Kookynie Puzzle Historic Stockpile Sub Total 795,000 5.3 135,000 4,341,000 3.1 434,000 2,607,000 3.2 269,000 7,743,000 3.4 838,000 1,783,000 2.0 112,000 1,671,000 757,000 857,000 1.2 2.0 30,000 946,000 55,000 779,000 1,305,000 1.0 42,000 591,000 623,000 958,000 1.4 1.2 1.4 1.4 1.0 0.9 73,000 3,453,000 35,000 1,703,000 35,000 1,636,000 28,000 623,000 20,000 1,896,000 28,000 958,000 80,000 1.1 3,000 80,000 1.7 1.2 1.7 1.4 1.0 0.9 1.1 185,000 65,000 89,000 28,000 62,000 28,000 3,000 4,702,000 1.6 238,000 5,649,000 1.2 221,000 10,351,000 1.4 459,000 3,605,000 1.1 123,000 1,833,000 142,000 0.6 3,000 177,000 457,000 603,000 434,000 0.7 10,000 25,000 1.1 0.7 1.3 1.2 0.5 66,000 5,438,000 4,000 319,000 19,000 457,000 23,000 603,000 400 459,000 1.1 0.7 1.3 1.2 0.7 189,000 7,000 19,000 23,000 10,000 4,180,000 1.0 136,000 3,094,000 1.1 112,000 7,274,000 1.1 247,000 1,002,000 1.1 36,000 725,000 1.0 23,000 1,727,000 1.1 59,000 175,000 0.7 4,000 175,000 0.7 4,000 1,177,000 1.1 40,000 725,000 1.0 23,000 1,902,000 1.0 63,000 Project Total 795,000 5.3 135,000 14,400,000 1.8 849,000 12,075,000 1.6 625,000 27,270,000 1.8 1,608,000 NB. Rounding discrepancies may occur Full details of the Ulysses Mineral Resource estimate are provided in the Company’s ASX announcement dated 29 March 2021 titled “Ulysses Mineral Resource Increases to 1.6 Million Ounces Following Continued Drilling Success”. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements dated 29 March 2021 and the Company confirms that all material assumptions and technical parameters underpinning the mineral resource estimates in the market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons’ findings are presented have not materially changed from the original market announcements. 66 Genesis Minerals Limited and controlled entities Mineral Resources Information ESTIMATION GOVERNANCE STATEMENT The Company ensures that all Mineral Resource calculations are subject to appropriate levels of governance and internal controls. Exploration Results are collected and managed by competent qualified geologists and overseen by the Company’s Managing Director. All data collection activities are conducted to industry standards based on a framework of quality assurance and quality control protocols covering all aspects of sample collection, topographical and geophysical surveys, drilling, sample preparation, physical and chemical analysis and data and sample management. Mineral Resource estimates are prepared by qualified independent Competent Persons and further verified by the Company’s Managing Director. If there is a material change in the estimate of a Mineral Resource, or reporting an inaugural Mineral Resource, the estimate and supporting documentation in question is reviewed by a suitably qualified independent Competent Person. APPROVAL OF MINERAL RESOURCES STATEMENT The Company reports its Mineral Resources on an annual basis in accordance with the JORC Code 2012 Edition. The Mineral Resources Statement is based on and fairly represents information and supporting documentation prepared by competent and qualified independent external professionals and reviewed by the Company’s Managing Director. The Mineral Resources Statement has been approved by Michael Fowler, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Fowler is the Managing Director of Genesis Minerals Limited. Mr Fowler has consented to the inclusion of the Statement in the form and context in which it appears in this report. COMPETENT PERSON’S STATEMENT The Information in this report that relates to Mineral Resources is based on information compiled by Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Payne is a full-time employee of Payne Geological Services Pty Ltd and is a shareholder of Genesis Minerals Limited. Mr Payne has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Payne consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 67