Gran Tierra Energy
Annual Report 2021

Plain-text annual report

GREAT WESTERN EXPLORATION LIMITED AND CONTROLLED ENTITIES ABN 53 123 631 470 ANNUAL REPORT 30 JUNE 2021 GREAT WESTERN EXPLORATION LIMITED ABN 53 123 631 470 CORPORATE DIRECTORY Directors Auditor Kevin Clarence Somes (Chairman) Tom Ridges (Managing Director) Grey Egerton-Warburton (Director) Ross Williams (Director) Company Secretary Anthony Walsh Principal Office Level 2, 160 ST Georges Terrace Perth Western Australia 6005 Telephone (08) 6311 2852 Share Registry Computershare Investor Services Pty Limited Level 11 172 St Georges Terrace Perth Western Australia 6000 Telephone: 1300 787 272 Facsimile: (08) 9323 2033 Website: www.greatwesternexploration.com.au Hall Chadwick (Formerly called Bentleys) 283 Rokeby Road Subiaco WA 6008 Solicitors Steinepreis Paganin 16 Milligan Street Perth Western Australia 6000 Stock Exchange The Company’s shares are listed by the Australian Securities Exchange Limited The home exchange is Perth ASX Code - Fully paid shares GTE GREAT WESTERN EXPLORATION LIMITED CONTENTS Review of Operating and Corporate Activities Sustainability Directors’ Report Corporate Governance Statement 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 Auditors Independence Declaration Independent Auditors Report Additional Information 1 15 16 28 30 31 32 33 34 63 64 65 70 Great Western Exploration Limited Review of Operating and Corporate Activities Executive Summary Great Western Exploration Limited (ASX: GTE) (“the Company”, “Great Western”) is pleased to provide a review of its operating and corporate activities for the year ended 30 June 2021. Summary • In July 2020, the Company completed the recapitalisation of the Company following the 1 for 60 consolidation of share capital completed in June 2020. • During the September 2020 Quarter, the Company completed a Capital Raising which raised $2.52 million (before costs) by way of a placement. In February 2021, Great Western completed a $5 million placement to professional and sophisticated investors, issuing 20,000,000 ordinary shares at an issue price of $0.25 per share. The placement monies were raised to be applied to exploration and working capital • Corporate overheads have been rationalised significantly and all non-executive Directors have been working at no cost • In the 2020/2021 financial year and subsequent to year end, extensive work has been undertaken through the Company’s strategic and methodical approach to grassroots exploration across Great Western’s extensive under-explored tenure. A number of ongoing work programmes are anticipated to continue to build an inventory of consequential targets, which Great Western is well funded to assail • Subsequent to the end of the year, the Company provided updates in relation to its 100% owned Lake Way Potash Project, Thunder copper-gold Target, Copper Ridge Project and Firebird Gold Project (ASX Releases 1st and 8th July 2021, 28th July 2021, 18th August 2021 and 23rd August 2021) Great Western looks forward to continuing to update shareholders, in what will be a period of high intensity exploration activity. Operating Activities Thunder (100% Great Western) Great Western Exploration Limited (ASX: GTE, “Great Western”) advises that a moving loop electromagnetic (MLEM) survey has defined a large, conspicuous, discrete EM anomaly at its 100% owned Thunder copper-gold target1, 112kms from Sandfire’s (ASX:SFR) DeGrussa copper-gold operation (see Figure 1). Designed by Great Western’s geophysical consultants Newexco, the MLEM has defined an EM anomaly that is some 800 metres in length, from a depth of only 100 metres, with a shallow dip to the west. The Thunder copper-gold target was identified by Great Western’s grassroots fieldwork programme of regional Ultrafine + soil sampling in May this year, the results of which identified two large areas (~4 km2) of anomalous copper and gold (refer Great Western announcement of 18 May 2021). Significantly, the anomaly is directly adjacent to a 1.7km strike length copper-gold soil anomaly (with a core zone >160ppm Cu and > 8ppb Au) (see Figure 2). The anomalous area is interpreted by Great Western to sit in proximity to a number of dolerite dykes intruding the Yerrida Proterozoic rocks which consist of siltstones and shales of the Maraloou formation, and adjacent to the intersection of two large faults (interpreted). The base of the Maraloou Formation is also interpreted to be intercalated with basalts which is the ideal setting for DeGrussa-style VMS mineralisation. Thunder is interpreted to be an analogue to the Degrussa copper-gold deposit located 112km to the northwest, being a VMS model of mafic volcanics intruding Proterozoic sediments along large faults. 1 Great Western Exploration Limited Thunder is located in the southern portion of the Yerrida Basin which is currently being actively explored by Sandfire Resources on their 100% owned tenure, and on SFR-GTE Yerrida North Joint Venture ground, and also by DGO Gold (ASX:DGO) (see Figure 1). Drilling is planned for late October/early November 2021. Figure 1. Location of Thunder copper-gold target 2 Great Western Exploration Limited Figure 2. Copper anomalies across the Thunder copper-gold target 3 Great Western Exploration Limited The Golden Corridor Project (100% Great Western) The Golden Corridor Project comprises some 60km strike of the Agnew-Wiluna greenstone belt, located in the northwest of the Kalgoorlie Terrane and along strike to the north of the Wiluna Mining Centre. The Kalgoorlie Terrane or “Golden Corridor” extends from as far south as Kambalda, through Kalgoorlie to as far north as Plutonic (see Figure 3 below) and is host to many of the largest gold deposits in Australia and the majority of Western Australia’s past and present gold production. While the vast majority of the Golden Corridor’s greenstone belts have been extensively drill tested, Great Western’s 60km strike length of interpreted greenstone belt, including granted leases and leases under application, is practically untested. The prospectivity of the region north of Wiluna where Great Western’s Golden Corridor Project was also identified by pmd*CRC research into the 3D architecture of the Yilgarn Craton2 that noted, “The architecture of the Golden Corridor may partly explain why the Kalgoorlie Terrane is so well endowed. The unifying theme appears to be the relationship between major faults and regional anticlinoria, with periodic undulations or perturbations resulting in elongate domes. The Golden Corridor stretches from Kambalda possibly to Plutonic, with locations under thin cover providing new opportunities for exploration (i.e. north of Wiluna).” During the June 2021 Quarter, the Company received the assay results from RC drilling that was completed at its Finlayson Gold Target which sits 70km North of Wiluna, at the northern end of the Golden Corridor Project. The drilling intersected a sequence of dolerite and ultramafic with wide zones of shearing and strong alteration that includes sulphides. This greenstone package of rocks was intersected under shallow cover. While gold was intersected at only immaterial gold grade, the broad zones of favourable host rock and alteration indicate that these structures are large and are prospective for gold along strike. Since the end of the March 2021 Quarter, a number of tenements at the Golden Corridor Project have been granted. A regional exploration programme is planned to begin across the Golden Corridor Project in the September 2021 Quarter. 4 Great Western Exploration Limited Figure 3. The Golden Corridor Project is located within the Kalgoorlie Terrane (“Golden Corridor”), Australia’s most prolific gold belt 5 Great Western Exploration Limited The Firebird Gold Project (GTE/Jindalee Resources Limited (JRL) JV) The Firebird Gold Project (“Firebird”) is located 4kms west from Western Gold’s (ASX:WGR) Gold Duke Project and 30kms south-west of Wiluna in WA (see Figure 5). Within Firebird is a large strong gold-in-soil anomaly located in a prospective geological setting with a strike over 2.1km and up to 350m wide3. The anomaly comprises several higher-grade zones (Au >6 ppb with peak Au of 20ppb) that are interpreted to be co-incident with underlying NNW-SSE trending structures (see Figure 4). The eastern zones also display an association with arsenic which is a common feature of Archaean lode gold deposits in general and gold deposits in the Wiluna district in particular. In addition, a number of highly prospective structural targets have been identified within the Project area along strike to the north and south from the gold in soil anomaly. Derived from aeromagnetic data, these targets are interpreted as ultramafic/BIF sequences similar to those observed at the Gold Duke Project. These targets will be prioritised in the upcoming surface sampling programme. Recognised by Great Western following a review of historical mapping and magnetic data, the anomalous gold in soils is interpreted as being associated with a series of splay faults on the western edge of the Joyners Find Greenstone sequence under shallow laterite cover. A gold-in-soil anomaly within such a geological setting is a compelling target. The large untested soil anomaly was identified to sit on the boundary of 100% GTE owned tenure. Great Western then set about securing the additional tenure to the east covered by the untested soil anomaly. With the neighbouring tenure to the east still in the application stage, Great Western approached Jindalee Resources Limited (ASX.JRL) and has now agreed on a joint venture. Firebird is now made up of three granted tenements, E53/1894 (100% GTE), E53/2027 (100% GTE) and E53/2129 (GTE earning 80%) (see Figure 5). Great Western plans to commence field work at the Firebird Gold Project and the broader Project area in October 2021. The initial field work programme will include infill and extensional soil sampling, mapping and follow up drilling targeting geochemical anomalies and the highly prospective structural targets. 6 Great Western Exploration Limited Figure 4. Au contours derived from historical soil geochemistry compliment regional structural interpretations 7 Great Western Exploration Limited Figure 5. Firebird Gold Project in relation to the WGR’s Gold Duke Project and GTE’s Yerrida South, Golden Corridor & Sandfire JV projects. 8 Great Western Exploration Limited Lake Way Potash Project (100% Great Western) Great Western’s 100% owned Lake Way Potash Project includes the directly adjoining downstream continuation of the main basal channel that Salt Lake Potash Limited (ASX: SO4) is currently developing (see Figure 6 below). During the June 2021 Quarter Great Western was granted a 26D license by the Department of Water for ‘Construction of a Bore’ across the Company’s Lake Way Potash Project area. This license permits the Company to construct a network of up to 40 exploratory bores, 20 monitoring bores and 10 production bores across the Project footprint. Great Western has been working with highly regarded industry veteran hydrogeologist Mr Kevin Morgan of KH Morgan and Associates to assist the Company in preparing work programmes to advance the Project. In early July 2021, a passive seismic survey commenced on the Lake Way Potash Project (see ASX announcement dated 8 July 2021). The Company looks forward to updating the market on progress of the technical review of the work programme on the Lake Way Potash Project. Figure 6. Interpreted continuation of the Lake Way high grade potassium brine paleochannel into GTE’s Lake Way Potash Project 9 Great Western Exploration Limited Copper Ridge Project (100% Great Western) The copper-gold targets, Copperhead and Taipan that form part of the Company’s 100% owned Copper Ridge Project, are within a mineralised zone including a number of Cu-Au + Mo anomalies over some 4.7km strike length (east – west) and 1.5km width (north – south). Assay results have been received from Great Western’s RC drilling programme undertaken at the Copper Ridge Project in June 2021. The Copper Ridge Project is located within the southern portion of the Yerrida Basin and is approximately 40km west of Wiluna (see Figure 7). The geology intercepted at Copper Ridge comprised of a mix of weathered and fresh shales, sandstones and siltstones with broad zones of disseminated sulphides (believed to be mainly pyrite). While the drilling did not intersect ore grade material, it did intercept a broad area of anomalous copper and silver (refer Great Western announcement of 18 August 2021) at shallow depths (<30m) associated with a sequence of pale and black shales4. Due to the association with anomalous copper and silver grades, hosted in the appropriate rock types within a continental margin (Yerrida Basin) tectonic setting, the Company believes the results indicate that the geological processes for the formation of sedimentary hosted stratiform copper deposits are occurring within the southern portion of the Yerrida Basin. The Company will now commence planning follow up regional work which will likely include regional airborne and ground geophysical surveys (planned in conjunction with Newexco) followed by a regional shallow aircore drill programme. Figure 7. Drill holes completed at the Copper Ridge copper-gold Project 10 Great Western Exploration Limited Atley Gold Project (100% Great Western) The Atley Gold Project is located in the Youanmi district of Western Australia, 30km south west of Sandstone. The Project areas were accumulated by application between June 2019 and August 2020 (see Figure 8). Figure 8. Location of the Atley Gold Project within the Youanmi District, WA The Golden Bullock gold target is a large gold surface geochemical anomaly with a strike length of 2.5km and width of 1.5km that sits within the Company’s Atley North Gold Project (Figure 7). Assay results from the first round of RC drilling to test the western side of the large gold-in-soil geochemical anomaly at the Golden Bullock target were received during the June 2021 Quarter. This drilling tested the western side of the gold target where surface geochemical sampling was completed during the phase 1 sampling programme of sufficient density to proceed with drilling. The drilling intersected granodiorite that is strongly foliated in places. The majority of the low-level anomalous gold encountered (up to 0.77g/t in GBRC001) was within the laterite profile that is overlying the granodiorite. During the June 2021 Quarter, the Company received positive results of an infill soil sampling programme on the eastern side of Golden Bullock, that have identified seven new drill targets with a max Au of 409.7ppb (Figure7)5. The structures and low-level anomalous gold intersected in the current drilling provides encouragement to test these seven newly defined drill targets on the eastern side of Golden Bullock. 11 Great Western Exploration Limited Figure 9. Drill holes completed at the Golden Bullock Gold Target 12 Great Western Exploration Limited Yerrida North JV (Sandfire earning 70%) During the June 2021 Quarter, Sandfire Resources Limited (ASX: SFR) (“Sandfire”) collected a total of 461 lag samples within the Yerrida North JV tenements. The samples consisted of 97 non-magnetic lag and 364 magnetic lag samples (see Figure 10 below). These samples are part of a 1,000m x 1,000m grid pattern aimed at providing a wide-scale, first-pass overview of regolith geochemistry overlying the historically underexplored Killara Volcanics of the Yerrida Basin Sample collection will be completed during the September Quarter 2021. Once all assays have been received, a program of closer-spaced soil sampling will be designed to follow-up any anomalies identified. As previously advised, Sandfire reached its minimum expenditure commitment during the December 2019 Quarter, by spending $1.7 million over three years. Great Western looks forward to the continued exploration being undertaken by Sandfire under the JV, where field works continue prior to potential drill testing. Under the terms of the JV, Sandfire can earn a 70% interest by sole funding exploration to define a mineral resource of at least 50,000 tonnes of contained copper or copper equivalent under the JORC 2012 code. Great Western is free carried until that time. Sandfire can then choose to earn a further 10% by sole funding the completion of a Feasibility Study (as that term is defined in the JORC Code 2012 Edition) sufficient to justify a decision to mine. Figure 10. Lag samples collected within the Yerrida North JV tenure during June Quarter 2021 (Sandfire earning 70%) 13 Great Western Exploration Limited Corporate Appointment of New Managing Director During the September 2020 Quarter Great Western was delighted to appoint Mr Tom Ridges as Managing Director, with Mr Ridges commencing work post Quarter’s end on 12 October. Mr Ridges is a geologist with over 14 years’ experience and a proven track record in gold and base metals exploration. Tom joined Great Western from Mineral Resources Limited (ASX:MIN) where he led the Mineral Resources’ team conducting all exploration, new project evaluation, resource modelling and mine geology. Prior to joining Mineral Resources, Mr Ridges spent more than 12 years with Regis Resources (ASX:RRL) where he was a key member of the geological team that drove outstanding growth in shareholder value. At Regis, Mr Ridges held senior geology and mine management roles including Geology Superintendent and Mine Manager at Garden Well and Technical Manager, NSW. Fund raisings In July 2020, the Company completed the recapitalisation of the Company following the 1 for 60 consolidation of share capital completed in June 2020. In August 2020, the Company completed a capital raising which raised $2.52 million (before costs) by way of a placement. This placement comprised of the issue of 14,000,000 shares to certain professional and sophisticated investors at an issue price of $0.18. At the Annual General Meeting in October 2020, shareholders ratified the issue of shares under this placement. In February 2021, Great Western completed a $5 million placement to professional and sophisticated investors, issuing 20,000,000 ordinary shares at an issue price of $0.25 per share The placement monies were raised to be applied to exploration and working capital. At a General Meeting on 30 March 2021, shareholders ratified the issue of shares under the Placement. References 1 3D Geological models of the Eastern Yilgarn Craton, Project Y2. Predictive Mineral Discovery Cooperative Research Centre (“pmd*CRC”) 2004 (A collaborative research initiative involving CSIRO, Geoscience Australia, AMIRA and Universities) 2 Large, Strong EM Anomaly Enhances Prospectivity of Thunder – ASX Announcement – 28/07/2021 3 Large Strong Gold Anomaly at Firebird Gold Project – ASX Announcement – 23/08/2021 4 Copper Ridge Assays Enhance Regional Prospectivity at Yerrida South – ASX Announcement - GTE.ASX – 18/08/2021 5 Golden Bullock Assays Received, New Drill Targets Identified – ASX Announcement – GTE.ASX – 17/04/2021 Competent Person Statement The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr. Thomas Ridges who is a member of the Australian Institute of Mining and Metallurgy. Mr. Thomas Ridges is an employee of Great Western Exploration Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Ridges consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 14 Great Western Exploration Limited Sustainability Great Western Exploration Limited and the Board are dedicated to being a leading and sustainable Australian exploration company built on exploration and corporate success for the benefit of all of its stakeholders. During the year, the Company has reviewed and updated its Sustainability policies. These policies apply to all our personnel and implementation of these policies and their supporting standards and procedures are required across all the Company exploration operations. The Company’s www.greatwesternexploration.com.au sustainability policies Environment can be viewed on the Company’s website, The Company aspires to being effective environmental guardians and managing our impacts, whilst both achieving operational excellence and fulfilling our corporate social responsibilities. The Company is committed to positive environmental management outcomes to maintain and enhance performance. The Company acknowledges the threat posed by climate change and will work to decarbonise our business in a measured, proportionate and sustainable manner. Community The Company seeks to create enduring value for our local communities and limiting our negative impacts, whilst both achieving operational excellence and fulfilling our corporate social responsibilities. Health & Safety The Company seeks to minimise the harm caused by workplace hazards whilst both achieving operational excellence and fulfilling our corporate social responsibilities. The Company is committed to leadership in health and safety through the use of responsible and reliable management systems to maintain and enhance performance. Governance Great Western Exploration Limited and the Board are committed to achieving and demonstrating the highest standards of corporate governance. Great Western Exploration has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council. The 2021 Corporate Governance Statement was approved by the Board on 16 September 2021 and is current as at 16 September 2021. A description of the Group’s current corporate governance practices is set out in the Group’s Corporate Governance Statement which along with the 2021 Appendix 4G can be viewed on the Company’s website, www.greatwesternexploration.com.au. 15 Great Western Exploration Limited DIRECTORS’ REPORT The Directors present the annual report of the Consolidated Group (“the Group) for the year ended 30 June 2021. DIRECTORS The names of the Directors in office during the year and until the date of this report are as below. Directors were in office for the entire period unless otherwise stated. Thomas Ridges Kevin Clarence Somes Managing Director (Appointed 12 October 2020) Chairman Grey Egerton-Warburton Non-executive Director Ross Williams Non-executive Director Mr Thomas Ridges Managing Director Tom Ridges is a geologist with over 15 years’ experience and a proven track record in gold and base metals exploration, project development and mining. Mr Ridges holds a Bachelor of Science (Geology and Environmental) and Master of Science (Mineral Economics). Prior to joining the Company, Mr Ridges held the role of Exploration Manager at Mineral Resources Limited (ASX:MIN) where he led the Mineral Resources’ team conducting all exploration, new project evaluation, resource modelling and mine geology. Mr Ridges spent more than 12 years with Regis Resources (ASX:RRL) where he was a key member of the geological team that drove outstanding growth in shareholder value. He is a member of the Australasian Institute of Mining and Metallurgy. Prior to joining Mineral Resources, Other current directorships None. Former directorships in last three years None. Share and Option holding in the Company Zero Ordinary Shares 5,000,000 zero exercise priced options which expire on 12/10/2025, (subject to Mr Ridges remaining in employment during the relevant vesting period) and vesting on certain conditions Mr Kevin Clarence Somes FCA Non-executive Chairman Experience and expertise Mr Somes is a fellow of the Institute of Chartered Accountants and was a partner of Somes & Cooke Chartered Accountants for over 25 years. Mr Somes has extensive experience in the management of exploration companies, with Somes & Cooke being the auditors of a number of ASX listed mining companies during his tenure. Other current directorships None. Former directorships in last three years None. Share and Option holding in the Company 4,267,233 Ordinary Shares 16 Great Western Exploration Limited Directors’ Report (continued) Mr Grey Egerton Warburton Non-executive Director Grey Egerton-Warburton has a strong background in corporate finance, with extensive experience in equity capital markets, acquisitions, divestments and domestic and international change of control transactions. Grey has led a substantial number of capital raisings and led many successful takeovers and mergers for ASX listed companies, across many sectors. Prior to his career in corporate finance Mr Egerton-Warburton practiced as a corporate solicitor at a tier one national law firm. Other current directorships None. Former directorships in last three years S2 Resources Limited until 3 April 2020 Share and Option holding in the Company 20,000,000 Ordinary Shares Mr Ross Williams Non-executive Director Mr Ross Williams is a highly experienced Company Director and businessman, having co-founded a Mining Services business from start up through to ASX listing and a market capitalisation over $400m with revenues in excess of $500m. Ross held the role of Finance Director for 12 years and during this time was responsible for capital management, finance, financial reporting, corporate strategy and investor relations before retiring to a Non-Executive role. Mr Williams started his career in Banking and Finance and his listed company roles have also included Non-Executive Director of a successful Mining Company and Chairman of a listed investment Company. Other current directorships None Former directorships in last three years Emerald Resources NL until 12 June 2020 Share and Option holding in the Company 20,030,360 Ordinary Shares COMPANY SECRETARY The Company Secretary is Mr Anthony Walsh. Mr Walsh was appointed company secretary on 4 June 2020. Mr Walsh has over 30 years’ experience in dealing with listed companies, ASX, ASIC and corporate transactions including 14 years with the ASX in Perth where he acted as ASX liaison with the JORC committee, four years as Chairman of an ASX listed mining explorer and as a director of a London AIM listed explorer. Mr Walsh is also currently Company Secretary of Battery Minerals Mining Ltd, Magmatic Resources Limited and Legend Mining Limited, and was a Director of XCD Energy Limited until 22 July 2020. Mr Walsh is a member of the Australian Institute of Company Directors, a Fellow of the Governance Institute of Australia, the Institute of Chartered Secretaries and the Institute of Chartered Accountants in Australia. He is currently a non-executive director of the not-for-profit Women’s and Infants Research Foundation. 17 Great Western Exploration Limited Directors’ Report (continued) NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES The principal activities during the period of the entities within the consolidated entity were exploration for gold and base metals deposits in Australia. RESULTS OF OPERATIONS The loss of the consolidated entity for the year after tax was $2,263,093 (2020: $1,807,673 loss). FINANCIAL POSITION At the end of the financial year the Group had cash reserves of $5,224,475 (2020: $133,000) and incurred expenditure on exploration and evaluation of $1,707,481 (2020: $909,569) before write offs during the year. RISKS AND RISK MANAGEMENT The Company attempts to mitigate risks that may affect its future performance through a systematic process of identifying, assessing, reporting and managing risks of corporate significance. Key operational risks and their management are recurring items for discussion at Board meetings. The following discusses the Company’s most significant business risks. a) Exploration Whilst considered highly prospective, the Company’s tenements are early stage exploration tenements with limited exploration undertaken on them to date. Exploration is a high risk undertaking. The Company’s joint venture projects for copper, nickel and gold prospects in Australia are in the preliminary stages of exploration and no assurance is given that exploration of its current projects or any future projects will result in the delineation or discovery of a significant mineral resource. Even if a significant mineral resource is identified, there can be no guarantee that it can be economically exploited. b) Commodity prices As an explorer for copper, gold, nickel and potentially other minerals, any successes of the Company are expected to be closely related to the price of those and other commodities. Fluctuating prices in those commodities make market prices for securities in the Company more volatile than for other investments. Commodities prices are affected by numerous factors beyond the control of the Company. These factors include worldwide and regional supply and demand for commodities, general world economic conditions and the outlook for interest rates, inflation and other economic factors on both a regional and global basis. These factors may have a positive or negative effect on the Company’s exploration, project development and production plans and activities, together with the ability to fund those plans and activities. 18 Great Western Exploration Limited Directors’ Report (continued) c) Environmental The Company’s projects are subject to rules and regulations regarding environmental matters and the discharge of hazardous wastes and materials. As with all mineral projects, the Company’s projects are expected to have a variety of environmental impacts should development proceed. Development of any of the Company’s projects will be dependent on the Company satisfying environmental guidelines and, where required, being approved by government authorities. The Company intends to conduct its activities in an environmentally responsible manner and in accordance with all applicable laws, but may still be subject to accidents or other unforeseen events which may compromise its environmental performance and which may have adverse financial implications. d) Future capital needs. The Company’s ability to raise further capital (equity or debt) within an acceptable time of a sufficient amount and on terms acceptable to the Company will vary according to a number of factors, including prospectivity of projects (existing and future), the results of exploration, subsequent feasibility studies, development and mining, stock market and industry conditions and the price of relevant commodities and exchange rates. No assurance can be given that future funding will be available to the Company on favourable terms (or at all). If adequate funds are not available on acceptable terms, the Company may not be able to further develop its projects and it may impact on the Company’s ability to continue as a going concern. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There has been no significant change in the state of affairs of the Company during the financial year. DIVIDENDS No dividends have been recommended by the Directors. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR No matters or circumstances have arisen since the end of the year to the date of this report which have significantly affected, or may significantly affect, the operations of the Company, the results of those operations or the state of affairs of the Company, other than: • On 8 July 2021, the Company announced they had commenced on the passive seismic survey at the Lake Way Potash Project; On 28 July 2021, the Company announced that a large, discrete, conspicuous EM anomaly has been identified by a moving loop electromagnetic survey at Thunder coper-gold target; On 18 August, the Company announced assay results had been received for the maiden drill programme at the Copper Ridge Project; On 23 August 2021, the Company reports a large, strong gold in soil anomaly at the Firebird Gold Project. • • • 19 Great Western Exploration Limited Directors’ Report (continued) LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Directors are not aware of any developments that might have a significant effect on the operations of the Company in subsequent financial years not already disclosed in this report. ENVIRONMENTAL REGULATIONS Great Western Exploration Limited conducts its exploration activities in an environmentally sensitive manner, and believes it has adequate systems in place for the management of environmental requirements. The Company is not aware of any breach of statutory conditions or obligations. The Directors have considered the enacted 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 the 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 Company for the current, nor subsequent, financial year. The Directors will reassess this position as and when the need arises. DIRECTORS’ MEETINGS The Directors attended the following director meetings during the year and up to the date of this report: Thomas Ridges Kevin Somes Grey Egerton-Warburton Ross Williams Meetings Eligible to Attend 6 7 7 7 Meetings Attended 6 7 7 7 DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY The particulars of Directors’ interest in shares and options are as at the date of this report. Ordinary Shares Options Thomas Ridges Kevin Somes Grey Egerton-Warburton Ross Williams - 4,267,233 20,000,000 20,030,360 5,000,000 -- - DIRECTORS AND OFFICERS INSURANCE The Company has made an agreement to indemnify all the Directors and Officers against all indemnifiable losses or liabilities incurred by each Director and Officer in their capacities as Directors and Officers of the Company to the extent permitted by the Corporations Act 2001. The Company has taken out an insurance policy at a premium of $22,853 in relation to Directors and Officers indemnity. 20 Great Western Exploration Limited Directors’ Report (continued) OUTSTANDING OPTIONS AT DATE OF REPORT The following series of options were outstanding at the date of this report: Grant Date No of Options Grant Date Fair Value Exercise Price Expiry Date Vesting Date 12/10/2020 1,500,000 12/10/2020 1,500,000 12/10/2020 2,000,000 $0.26 $0.26 $0.26 29/12/2020 1,200,000 $0.0124 6/4/2021 2,750,000 $0.0645 6/4/2021 1,250,000 $0.0442 14/12/2018 266,667 $0.00216 $0.00 $0.00 $0.00 $0.31 $0.37 $0.52 $1.20 12/10/2025 12/10/2021 12/10/2025 12/10/2022 12/10/2025 12/10/2023 29/12/2023 29/12/2020 31/3/2024 6/4/2021 31/3/2024 6/4/2021 31/12/2021 14/12/2019 PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings. The company was not a party to any such proceedings during the year. NON-AUDIT SERVICES Hall Chadwick did not provide any non-audit services during the year ended 30 June 2021. Details of the amounts paid or payable to the auditor for audit during the year are set out in Note 22. 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 64. 21 Great Western Exploration Limited REMUNERATION REPORT (AUDITED) Remuneration Policy This Remuneration Report outlines the director and executive remuneration arrangements of the Company in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report Key Management Personnel (KMP) of the Company are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company. For the purposes of this report, the term “executive” encompasses the Chief Executive and senior executives. i) Directors Thomas Ridges Managing Director (Appointed 12 October 2020) Kevin Somes Chairman (Non-executive) Grey Egerton-Warburton Non-executive Director Ross Williams Non-executive Director There were no other changes of key management personnel after reporting date and before the financial report was authorised for issue. Since the current Board was formed on 4 June 2020 with the appointment of Messrs Williams and Egerton- Warburton, directors’ fees have not been paid to any directors other than the Managing Director, Mr Thomas Ridges. The Company has established a Remuneration Committee, assumed by the Board, as a whole, which is responsible for determining and reviewing the remuneration arrangements of the directors and executives. The Board assesses the appropriateness of the nature and amount of emoluments of such Directors and executives on an annual basis by reference to market and industry conditions. In order for the Company to prosper, thereby creating shareholder value, the Company must be able to attract and retain the highest calibre executives. Executive and non-executive directors, other key management personnel and other senior employees have been granted options over ordinary shares under the Company’s Employee Share Option Plan. The recipients of options are responsible for growing the Company and increasing shareholder value. If they achieve this goal the value of the options granted to them will also increase. Therefore the options provide an incentive to the recipients to remain with the Company and to continue to work to enhance the Company’s value. Due to the nature of the Company’s operations the current remuneration policy is not linked to the performance of the Company. Non-executive Directors remuneration The Board seeks to set remuneration levels that provide the Company with the ability to attract and retain the highest calibre professionals. Fees and payments to non-executive Directors reflect the demands that are made on and the responsibilities of the Directors from time to time. Directors’ fees are determined by the Board within the aggregate Directors fee limit approved by shareholders. The maximum currently approved by the Constitution stands at $250,000. 22 Great Western Exploration Limited REMUNERATION REPORT (AUDITED) Remuneration Policy (continued) Remuneration in the form of share options issued under the Company’s Employee Share Option Plan is designed to reward Directors and executives in a manner aligned to the creation of shareholder wealth. Subject to shareholders’ approval non-executive directors may participate in the Company’s Employee Share Option Plan. The Board considers the grant of options to be reasonable given the necessity to attract and retain the highest calibre professionals to the Company. Non-executive Directors receive superannuation benefits in accordance with the Superannuation Guarantee Legislation. Non-executive directors are permitted to salary sacrifice all or part of their fees. Due to the nature of the Company’s operation i.e. mineral exploration and development, the remuneration of directors and executives, at present, does not include performance-based incentives. Executive Remuneration (including executive directors) The Board aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities to align the interests of executives with those of shareholders and to ensure that remuneration is market competitive. Remuneration consists of: • Fixed Remuneration. Being base salary, non-monetary benefits and superannuation. Fixed remuneration is reviewed annually. • Variable remuneration – Long term incentives. Being share options issued under the Company’s Employee Share Option Plan. The options do not have any vesting conditions other than service conditions. Remuneration issued in the form of share options issued under the Company’s Employee Share Option Plan is designed to reward directors and executives in a manner aligned to the creation of shareholder wealth. Due to the nature of the Company’s operation i.e. mineral exploration and development, the remuneration of directors and executives, at present, does not include performance-based incentives. The Company has entered into standard contracts with Directors, the details of which are set out below. 23 Great Western Exploration Limited REMUNERATION REPORT (AUDITED) (continued) Remuneration of Key Management Personnel 2021 Name of Director Executive director Thomas Ridges(1) Non-executive director Kevin Somes(2) Ross Williams Grey Egerton-Warburton Totals 2020 Name of Director Executive director Jordan Luckett(3) Kevin Somes(2) Non-executive director Grey Egerton-Warburton(4) Ross Williams(5) Terry Grammer(6) Rimas Kairaitis(7) Justin Barton(8) Totals Short term benefits Salary & Wages Other long term employee benefits Superannuation Remuneration/ entitlements forgiven Total Performance related % $193,537 542,260 $18,386 - $754,183 0.0% - - - - - - - - - - - - - - - - - - $193,537 $542,260 $18,386 - $754,183 Short term benefits Salary & Wages Other long term employee benefits Superannuation Remuneration/ entitlements forgiven Total Performance related % $185,331 $32,083 $7,831 - - - $20,417 $12,500 4,333 $254,664 - - - - - $7,831 $17,607 $3,048 - - 1,940 $1,187 412 $24,195 (167,027) (10,038) $43,744 $25,093 - - (15,699) - - (192,764) - - $6,658 $13,687 4,745 $93,928 0.0% 0.0% - - 0.0% 0.0% 0.0% (1)Thomas Ridges was appointed on 10 October 2020 with a salary of $273,973 per annum plus superannuation at 9.5% and a notice period of 3 months by either the Company or Mr Ridges . (2)Kevin Somes appointed Executive Chairman on 14 February 2020 and ceased being an Executive on 12 October 2020. (3)Jordan Luckett resigned on 4 June 2020. (4)Grey Egerton-Warburton was appointed a Director on 4 June 2020. (5)Ross Williams was appointed a Director on 4 June 2020. (6)Terry Grammer ceased being a Director on 20 May 2020. (7)Rimas Kiaraitis resigned on 29 November 2019. (8)Justin Barton was appointed an interim Director on 20 May 2020 and resigned on 4 June 2020. 24 Great Western Exploration Limited REMUNERATION REPORT (AUDITED) (continued) Options granted as part of remuneration The following options were issued to directors during the year ended 30 June 2021. Grant Date No Options of Exercise price Vesting Date Expiry Date Value of Options Granted Thomas Ridges 12 October 2020 1,500,000 $0.00 12 October 2021 12 October 2025 $390,000 Thomas Ridges 12 October 2020 1,500,000 $0.00 12 October 2022 12 October 2025 $390,000 Thomas Ridges 12 October 2020 2,000,000 $0.00 12 October 2023 12 October 2025 $520,000 No options were granted to Directors during the year ended 2020. For details on the valuation of options, including models and assumptions used, refer to Note 17. There were no alterations to the terms and conditions of options granted as remuneration since their grant date. Option Holding of Key Management Personnel 30 June 2021 Directors Thomas Ridges Kevin Somes Grey Egerton- Warburton(1) Ross Williams(2) 30 June 2020 Directors Kevin Somes Grey Egerton- Warburton(1) Ross Williams(2) Jordan Luckett(3) Terry Grammer(4) Rimas Kairaitis(5) Balance at 1 July 2020 Granted Expired Other Balance at 30 June 2021 Vested - 211,234 - 5,000,000 - - 211,234 - - - - 211,234 5,000,000 211,234 5,000,000 - - - 5,000,000 - - - - Nil n/a n/a n/a Balance at 1 July 2019 Granted Expired Other Balance at 30 June 2020 Vested 12,150,297 - - 6,681,500 2,400,000 2,600,000 23,831,797 - - - - - - - (2,000,000) - (9,939,063) (7) - - (2,000,000) (2,000,000) (2,000,000) (8,000,000) - (4,603,475) (7) (393,333) (7) (590,000) (7) (15,525,871) 211,234 - - 78,025 6,667 10,000 305,926 100% n/a n/a 100% 100% 100% 25 Great Western Exploration Limited REMUNERATION REPORT (AUDITED) (continued) Shareholdings of Key Management Personnel 30 June 2021 Directors Thomas Ridges(1) Kevin Somes(2) Grey Egerton-Warburton Ross Williams 30 June 2020 Directors Kevin Somes Grey Egerton-Warburton(4) Ross Williams(5) Jordan Luckett(3) Terry Grammer(6) Rimas Kairaitis(7) Balance 1 July 2020 Granted as Remuneration On exercise of Options Net Change Other Balance 30 June 2021 - 1,267,395 8,000,000 8,012,104 17,279,499 - - - - - - - - - - - 2,999,838 12,000,000 12,018,156 27,017,994 - 4,267,233 20,000,000 20,030,260 44,297,493 Balance 1 July 2019 Granted as Remuneration On exercise of Options Net Change Other Balance 30 June 2020 76,043,595 - - 36,427,333 2,400,000 3,600,000 118,470,928 - - - - - - - - - - - (74,776,200) (7) 8,000,000 8,012,104 (35,820,211) (7) (2,360,000) (7) (3,540,000) (7) (100,484,307) 1,267,395 8,000,000 8,012,104 607,122 40,000 60,000 17,986,621 (1)Thomas Ridges was appointed on 10 October 2020. (2)Kevin Somes appointed Executive Chairman on 14 February 2020 and ceased being an Executive on 12 October 2020. (3)Jordan Luckett resigned on 4 June 2020. (4)Grey Egerton-Warburton was appointed a Director on 4 June 2020. (5)Ross Williams was appointed a Director on 4 June 2020. (6)Terry Grammer ceased being a Director on 20 May 2020. (7)Rimas Kiaraitis resigned on 29 November 2019. Transactions with Key Management Personnel There were no transactions with Key Management Personnel during the year (2020: Nil). END OF REMUNERATION REPORT (AUDITED) 26 Great Western Exploration Limited Directors’ Report (continued) This Report of Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of the Directors. Dated this17th day of September 2021 Thomas Ridges Managing Director 27 Great Western Exploration Limited ABN 53 123 631 470 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021 Interest revenue Other income Other income – Government Grant Employee benefits expense Administration costs Directors’ fees Depreciation Right of use asset depreciation Compliance and regulatory Share based payments Mineral exploration written off Loss before income tax Income tax expense Loss for the period Note Consolidated Consolidated 30.06.2021 30.06.2020 $ $ 713 - 80,284 (73,879) (343,279) (145,905) (6,532) - (85,556) (1,009,418) 1,077 891 17,394 (108,123) (194,971) (132,056) (2,785) (14,835) (87,188) - (679,520) (1,287,077) (2,263,093) (1,807,673) - - (2,263,093) (1,807,673) 17 11 Other comprehensive income - - Total comprehensive income for the period attributable to members (2,263,093) (1,807,673) Earnings per share From continuing operations: Basic earnings per share (cents) 6 (2.81) (8.11) The accompanying notes form part of this consolidated half-year financial report. 28 Great Western Exploration Limited ABN 53 123 631 470 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Plant and equipment Mineral exploration expenditure TOTAL NON-CURRENT ASSSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY Consolidated Consolidated Note 30.06.2021 30.06.2020 $ $ 7 8 9 10 11 12 13 13 5,224,475 212,544 400 5,437,418 133,000 84,770 400 218,170 27,225 10,518,845 10,546,070 11,528 9,490,884 9,502,412 15,983,488 9,720,582 194,894 28,330 223,224 294,910 - 294,910 223,224 294,910 15,760,264 9,425,672 38,168,373 30,580,106 1,908,284 898,866 (24,316,393) (22,053,300) 15,760,264 9,425,672 The accompanying notes form part of this consolidated financial report. 29 Great Western Exploration Limited ABN 53 123 631 470 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021 Issued Capital Option Reserves Accumulated Losses $ $ Total $ Consolidated Balance at 1.7.2020 30,580,106 898,866 (22,053,300) 9,425,672 Loss for the period Other comprehensive income for the period Total comprehensive Income for the period Share issue Options issued Issue costs 13 13 - - - - - - (2,263,093) (2,263,093) - - (2,263,093) (2,263,093) 7,966,904 (378,637) - - 1,009,418 - - - - 7,699,904 1,009,418 (378,637) Balance at 30.06.2021 38,168,373 1,908,284 (24,316,393) 15,760,264 Consolidated Balance at 1.7.2019 30,452,910 898,866 (20,245,627) 11,106,149 Loss for the period Other comprehensive income for the period Total comprehensive Income for the period - - - Sale of unmarketable securities Shares issued Acquisition of tenements 879 200,000 (73,683) - - - - - - (1,807,673) (1,807,673) - - (1,807,673) (1,807,673) - - - 879 200,000 (73,683) Balance at 30.06.2020 30,580,106 898,866 (22,053,300) 9,425,672 The accompanying notes form part of this consolidated financial report. 30 Great Western Exploration Limited ABN 53 123 631 470 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 Consolidated Consolidated 30.06.2021 30.06.2020 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (687,443) (531,452) Government grant received Termination of lease paid Interest received 80,284 - 713 17,394 (17,267) 1,077 Net cash used in operating activities 14 (606,446) (530,248) CASH FLOWS FROM INVESTING ACTIVITIES Deposits paid on exploration tenements Refund on withdrawal of applications Receipt on maturity/(investment) in term deposit Purchase of property, plant and equipment Payments for mineral exploration expenditure Net cash (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares and options Securities issue costs Repayment of lease liability Net cash provided by financing activities Net increase (decrease) in cash held Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period The accompanying notes form part of this consolidated financial report. (176,772) - - (22,228) (1,691,347) (1,890,347) (41,962) 265,385 199,962 (6,488) (879,526) (462,629) 7,966,904 (378,636) - 7,588,268 200,879 (73,683) (15,761) 111,435 5,091,475 (881,442) 133,000 1,014,442 5,224,475 133,000 31 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 These financial statements and notes represent those of Great Western Exploration Limited (‘the Company’) and its controlled entities (‘the Group’). The financial statements were authorised for issue on 17 September 2021 by the Directors of the Company. NOTE 1: BASIS OF PREPARATION The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. a) Going Concern The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity, and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Group incurred a loss for the year of $2,263,093 (2020: $1,807,673). The Group has a working capital surplus of $5,214,194 at 30 June 2021 (working capital deficit at 30 June 2020: $76,741). The Group has ongoing expenditures in respect of administration costs and exploration and evaluation expenditure on its Australian exploration projects. The Directors believe that at the date of signing of the financial statements that the Group has sufficient funds to meet its obligations as and when they fall due and continue to proceed with the Group’s objectives beyond the currently committed expenditure for the 12-month period from the date of signing this financial report. The financials do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary, should the Group not continue as a going concern and meet its debts as and when they fall due. b) Principles of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Great Western Exploration Limited at the end of the reporting period. A controlled entity is any entity over which Great Western Exploration Limited has the ability and right to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Where controlled entities have entered or left the Group during the year, the financial performance of those entities is included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 19 to the financial statements. 32 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) In preparing the consolidated financial statements, all intragroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation. Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date. Business combinations Business combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions). When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. 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 liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to business combinations are expensed to the Statement of Profit or Loss and Other Comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. Goodwill (i) (ii) (iii) The consideration transferred; Any non-controlling interest, and The acquisition date fair value of any previously held equity interest over the acquisition date fair value of net identifiable assets acquired. The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss. The amount of goodwill recognised on acquisition of each subsidiary in which the Company holds less than a 100% interest will depend on the method adopted in measuring the non-controlling interest. The Company can elect in most circumstances to measure the non-controlling interest in the acquire either at fair value (full goodwill method) or at the non-controlling interest’s proportionate share of the subsidiary’s identifiable net assets (proportionate interest method). In such circumstances, the Company determines which method to adopt for each acquisition and this is stated in the respective notes to these financial statements disclosing the business combination. Under the full goodwill method, the fair value of the non-controlling interests is determined using valuation techniques which make the maximum use of market information where available. Under this method, goodwill attributable to the non-controlling interests is recognised in the consolidated financial statements. 33 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested for impairment annually and is allocated to the Company’s cash-generating units or groups of cash-generating units, representing the lowest level at which goodwill is monitored not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed of. c) Application of New and Revised Accounting Standards Accounting Standards that are mandatorily effective for the current reporting year The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 January 2020. New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include: AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business • • AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material • AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia. • • The Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and, therefore, no material change is necessary to Group accounting policies d) Cash and Cash Equivalents Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short- term deposits with an original maturity of six months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. e) Trade and Other Receivables Trade receivables, which generally have 30 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less an allowance for impairment. Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An impairment provision is recognised when there is objective evidence that the Company will not be able to collect the receivable. f) Financial Instruments (i) Classification of financial instruments The Group classifies its financial assets into the following measurement categories: 34 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) • 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. (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 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. 35 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) 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: • 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. 36 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) (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. g) Property, Plant and Equipment Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows: Plant and Equipment – over 6 to 15 years Motor Vehicles – over 4 years Computer Equipment – over 3 years The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised. h) Exploration and Evaluation Expenditure Exploration and evaluation costs are capitalised as exploration and evaluation assets on a project by project basis pending determination of the technical feasibility and commercial viability of the project. The capitalised costs are presented as either tangible or intangible exploration and evaluation assets according to the nature of the assets acquired. 37 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) When a licence is relinquished or a project abandoned, the related costs are recognised in the Statement of Comprehensive Income immediately. Exploration and evaluation assets shall be assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. When facts and circumstances suggest that the carrying amount exceeds the recoverable amount an impairment loss is recognised in the Statement of Comprehensive Income. i) Interests in Joint Ventures The Company’s shares of the assets, liabilities, revenue and expenses of jointly controlled operations have been included in the appropriate line items of the consolidated financial statements. j) Impairment of Assets Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount exceeds its recoverable amount. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds it recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are Group at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or Group of assets (cash –generating units). Non-financial assets other than goodwill that suffered an impairment are tested for possible reversal of the impairment whenever events or changes in circumstances indicate that the impairment may have reversed. k) Trade and other Payables Trade and other payables are carried at amortised cost; due to their short term nature they are not discounted. They represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. l) Provisions and Employee Leave Benefits Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of the provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the Statement of Comprehensive Income net of any reimbursement. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs. 38 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) Employee Leave Benefits (i) Wages, salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Expenses for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. (ii) Long service leave The liability for long service leave is recognised and measured as the present level of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. m) Share Based Payment Transactions (i) Equity settled transaction: The Company provides benefits to its employees (including key management personnel) in the form of share- based payments, whereby employees render services in exchange for shares or rights over shares (equity- settled transactions). The Company has in place the Great Western Exploration Limited Employee Share Option Plan to provide benefits to directors and senior executives. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a binomial model. In valuing equity-settled transactions, no account is taken of any vesting conditions other than conditions linked to price of the shares of the Company (market conditions) if applicable. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date). At each subsequent reporting date until vesting the cumulative charge to the Statement of Comprehensive Income is the produce of: (i) the grant date fair value of the award; (ii) the current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of employee turnover during the vesting period and the likelihood of non-market performance conditions being met; and (iii) the expired portion of the vesting period. The charge to the Statement of Comprehensive Income for the year is the cumulative amount as calculated above less the amounts already charged in previous years. There is a corresponding credit to equity. Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than were originally anticipated to do so. Any award subject to a market condition is considered to vest irrespective of whether or not that market condition is fulfilled, provided that all other conditions are satisfied. 39 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. An additional expense is recognised for any modification that increases the total fair value of the share based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. n) Issued Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. o) Revenue Recognition Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised. (i) Interest Income 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 year 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 asset. p) Income Tax and other Taxes Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities based on the current year’s taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except: o When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in the transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or o when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. 40 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: o when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not o a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or o when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Other Taxes Revenues, expenses and assets are recognised net of the amount of GST except: • when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • receivables and payables, which are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position. Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified as part of operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. q) Earnings per share Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. 41 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (continued) Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:   costs of servicing equity (other than dividends); the after tax effect of dividends and interest associated with dilutive potential ordinary shares; and  other non-discretionary changes in revenues or expenses during the year that would result from the dilution of potential ordinary shares; Divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. r) Fair Value of Assets and Liabilities The Company 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 Company 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. Valuation techniques In the absence of an active market for an identical asset or liability, the Company selects and uses one or more valuation techniques to measure the fair value of the asset or liability, The Company 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 Company 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. 42 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1. BASIS OF PREPARATION (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 Company 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. 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. 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 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 Company 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 Company 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. 43 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 2. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Equally, the Company continually employs judgement in the application of its accounting policies. Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions. Those which may materially affect the carrying amounts of assets and liabilities reported in future years are discussed below. (a) Significant accounting estimates and judgements (i) Impairment of non-financial assets The Company assesses impairment on all assets at each reporting date by evaluating conditions specific to the Company and to the particular asset that may lead to impairment. These include technology and economic environments. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves value-in-use calculations, which incorporate a number of key estimates and assumptions. (ii) Share-based payment transactions The Company measures the cost of equity settled transactions with directors and employees by reference to the fair value of the equity instruments at the date at which they are granted. Equity settled transactions comprise only options. Their fair value is determined using the Binomial Options Pricing model. The accounting estimates and assumptions relating to equity settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting year but may impact expenses and equity. (iii) Estimation of useful lives of assets The estimation of useful lives of assets has been based on historical experience. Adjustments to useful lives are made when considered necessary. Depreciation and amortisation charges as well as estimated useful lives are included in Note 1(g). (iv) Exploration and evaluation costs Acquisition, exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are carried forward in respect of an area that has not at balance sheet date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in or relating to, the area of interest are continuing. (v) Environmental issues Balances disclosed in the 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 Company’s development and its current environmental impact, the Directors believe such treatment is reasonable and appropriate. (vi) Taxation Balances disclosed in the financial statements and the notes thereto, related to taxation, and are based on the best estimates of Directors. These estimates take into account both the financial performance and position of the Company as they pertain to current income taxation legislation, and the Directors understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents that Directors best estimate, pending an assessment by the Australian Taxation Office. The Company’s financial instruments consist mainly of deposits with banks, accounts receivable and payable. 44 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 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 Receivables Financial assets Financial Liabilities Trade and payables Provisions Note 30.06.2021 $ 30.06.2020 $ 7 8 9 12 5,224,475 212,544 400 133,000 84,770 400 5,437,418 218,170 194,894 28,330 223,224 294,911 - 294,911 Financial Risk Management Policies The Company attempts to mitigate risks that may affect its future performance through a systematic process of identifying, assessing, reporting and managing risks of corporate significance. The management and the Board discuss the principal risks of our businesses, particularly during the strategic planning and budgeting processes. The board sets policies for the implementation of systems to manage and monitor identifiable risks. The Board Risk Committee is responsible for the oversight of risk management. The Company’s principal financial instruments comprise cash and short term deposits. The Company has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main purpose of these financial assets and liabilities is to raise finance for the Company’s operations. It is, and has been throughout the entire year under review, the Company’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group’s financial instruments are cash flow interest rate risk. Other minor risks are either summarised below or disclosed in Note 8 in the case of credit risk and Note 13 in the case of capital risk management. The Board reviews and agrees policies for managing each of these risks. (a) Credit Risk The Company minimises credit risk by undertaking a review of its potential customers’ financial position and the viability of the underlying project prior to entering into material contracts. Financial instruments other than receivables that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. The Company places its cash deposits with high credit- quality financial institutions, being in Australia only the major Australian (big four) banks. The Company’s cash deposits all mature within twelve months and attract a rate of interest at normal short- term money market rates. 45 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) The maximum amount of credit risk the Company considers it would be exposed to would be $5,224,475 (2020: $133,000) being the total of its cash and cash equivalents and financial assets. (b) Cash Flow Interest Rate Risk The Company’s exposure to the risks of changes in market interest rates relates primarily to the Company’s short term deposits with a floating interest rate. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Company does not engage in any hedging or derivative transactions to manage interest rate risk. The following table sets out the Company’s exposure to interest rate risk and the effective weighted average interest rate for each class of these financial instruments. Floating Interest Rate Non-Interest Bearing Note 2021 $ 2020 $ 2021 $ 2020 $ Total Carrying Amount 2021 2020 Financial Assets Cash and cash equivalents Trade and other Receivables Other Financial assets Weighted average interest rate 7 8 9 5,208,362 - - - - - 0.01 0.75 16,112 133,000 5,224,475 133,000 212,544 84,770 212,544 84,770 400 400 400 400 The effect on profit and equity, after tax, if interest rates at that date had been 10% higher or 10% lower with all other variables held constant as a sensitivity analysis would be a +/- change to profit and equity of nil (2019: $2,000). A sensitivity of 10% has been selected as this is considered by management to be reasonable in the current environment. The Company constantly analyses its interest rate exposure to ensure the appropriate mix of fixed and variable rates. The Company has not entered into any hedging activities to cover interest rate risk. In regard to its interest rate risk, the Company continuously analyses its exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative investments and the mix of fixed and variable interest rates. (c) Price Risk The Company is not exposed to equity securities price risk. There is no active market for available for sale investments. Liquidity Risk (d) The Company’s objective is to match the terms of its funding sources to the terms of the assets or operations being financed. The Company uses a combination of trade payables and operating leases to provide its necessary debt funding. 46 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) The Company aims to hold sufficient reserves of cash or cash equivalents to help manage the fluctuations in working capital requirements and provide the flexibility for investment into long-term assets without the need to raise debt. Contracted maturities of payables at balance date Payable - Less than 6 months - 6 to 12 months - 1 to 5 years 30.06.2021 $ 30.06.2020 $ 194,894 294,911 - - - - 194,894 294,911 Commodity Price Risk (e) Due to the early stage of the Company’s operations its exposure is considered minimal. Risk arises as its operations are involved in exploration and development of mineral commodities, changes in the price of commodities for which the Group is exploring and developing may result in changes to the Company’s market price. The Company entity does not hedge any of its exposures. (f) Foreign currency exchange rate A risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency other than the Company’s functional currency. At present, the Company is not considered to be exposed to any significant foreign currency risk. Net fair values (g) The Company has no financial assets or liabilities where the carrying value amount exceeds fair value at balance date. The directors consider that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair value. The Company’s financial assets at fair value through profit or loss are listed investments (Note 9) and are categorised as Level 1, meaning fair value is determined from quoted prices in active markets for identical assets. 47 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 4: OPERATING SEGMENTS Segment Information Identification of reportable segments The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group’s principal activities are mineral exploration. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics. Types of products and services by segment The Group’s exploration projects consist of: • Mineral exploration • Finance and administration Basis of accounting for purposes of reporting by operating segments Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group. Segment assets Segment assets are clearly identifiable on the basis of their nature and physical location. Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible assets have not been allocated to operating segments. Segment liabilities Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Segment liabilities include trade and other payables and certain direct borrowings. Unallocated items Items of revenue, expense, assets and liabilities are not allocated to operating segments if they are not considered part of the core operations of any segment. 48 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 4: OPERATING SEGMENTS (Continued) (i) Segment performance 30.06.2021 Interest received Other income – Government Grant Other income Total segment revenue Employee benefit expense Administration expenses Directors fees Depreciation Compliance and regulatory expenses Share based payments Mineral exploration written-off Net profit/ (loss) before tax from operations Mineral Exploration ($) - - - Finance and Administration ($) 713 80,344 - 80,977 Total ($) 713 80,344 - 80,977 - - - - - - (679,520) (73,879) (343,279) (145,905) (6,532) (85,556) (1,009,418) - (73,879) (343,279) (145,905) (6,532) (85,556) (1,009,418) (679,520) (679,520) (1,583,579) (2,263,093) 30.06.2020 Interest received Other income – Government Grant Other income Total segment revenue Employee benefit expense Administration expenses Directors fees Depreciation Right of use asset Compliance and regulatory expenses Share based payments Mineral exploration written-off Net profit/ (loss) before tax from operations Mineral Exploration ($) - - - - Finance and Administration ($) 1,077 17,394 891 19,362 - - - - - - - (1,287,077) (108,123) (194,971) (132,056) (2,785) (14,835) (87,188) - - Total ($) 1,077 17,394 891 19,362 (108,123) (194,971) (132,056) (2,785) (14,835) (87,188) - (1,287,077) (1,287,077) (520,596) (1,807,673) 49 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 4: OPERATING SEGMENTS (Continued) (ii) Segment assets 30.06.2021 Current assets Cash and cash equivalents Trade and other receivables Other Non-current assets Exploration and evaluation expenditure Plant & Equipment Total assets from operations 30.06.2020 Current assets Cash and cash equivalents Trade and other receivables Other Non-current assets Exploration and evaluation expenditure Plant & Equipment Total assets from operations Mineral Exploration ($) Finance and Administration ($) - 183,631 - 5,224,475 28,913 400 Total ($) 5,224,475 212,544 400 10,518,845 7,357 10,709,833 - 19,868 10,518,845 27,225 5,273,655 15,983,488 Mineral Exploration ($) Finance and Administration ($) - 61,850 - 9,490,884 11,384 9,564,118 133,000 22,920 400 - 144 156,464 (iii) Segment liabilities 30.06.2021 Current liabilities Trade and other payables Provisions Total liabilities from operations Mineral Exploration ($) Finance and Administration ($) 128,346 - 128,346 66,548 28,330 94,878 30.06.2020 Current liabilities Trade and other payables Total liabilities from operations Mineral Exploration ($) Finance and Administration ($) 100,392 100,392 194,518 194,518 Total ($) 133,000 84,770 400 9,490,884 11,528 9,720,582 Total ($) 194,894 28,330 223,224 Total ($) 294,910 294,910 50 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 5: INCOME TAX 30.06.2021 $ 30.06.2020 $ a) The prima facie tax on profit/(loss) from ordinary activities before income tax is reconciled to the income tax expense as follows: Accounting loss before income tax (2,263,093) (1,807,673) Income tax benefit at the statutory income tax rate of 26% (2020: 27.5%) (588,404) (497,110) Expenditure not allowable for income tax purposes 446,213 359,866 Capitalised mineral exploration expenditure (443,945) (250,489) Other deductible expenditure/non-assessable income (15,638) (14,187) Capital raising costs Under/over from prior year (98,445) (20,263) 27,190 - Benefit of tax losses not brought to account as an asset 673,030 422,182 Income Tax expense reported in the Statement of Profit or Loss and Other Comprehensive Income - - b) As at 30 June 2021, the Company has estimated tax losses of approximately $28,181,172 (2020: $25,697,172), which may be available to be offset against deferred tax liabilities and taxable income in future years. The availability of these losses is subject to satisfying Australian taxation legislative requirements. The deferred tax asset attributable to tax losses has not been brought to account in these financial statements as the Directors believe it is not presently appropriate to regard realisation of the future income tax benefits as probable. c) Deferred Tax Liability With regard to Mineral Exploration Expenditure of $10,518,845 (2020: $9,492,184) the tax liability in respect of the book value has not been brought to account as it is offset by the tax losses set out in 5(b) above. NOTE 6: EARNINGS PER SHARE Loss used in the calculation of basic EPS 30.06.2021 $ 30.06.2020 $ (2,263,093) (1,807,673) Weighted average number of ordinary shares used in calculation of basic earnings per share 80,519,854 22,299,089 51 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 7: CASH AND CASH EQUIVALENTS Cash at bank Cash on deposit 30.06.2021 $ 30.06.2020 $ 16,112 133,000 5,208,362 5,224,475 - 133,000 The effective interest rate on short term bank deposits on average was 0.01% (2020: 0.75%), with an average maturity of 6 months. NOTE 8: TRADE AND OTHER RECEIVABLES Current Tenement applications and deposits GST receivable Other receivables Prepayments 30.06.2021 $ 30.06.2020 $ 156,330 54,602 - 1,612 212,544 41,962 23,226 16,551 3,031 84,770 Allowance for impairment loss Trade and other receivables do not contain impaired assets and are not past due. It is expected that these other balances will be received when due. Fair value and credit risk Due to the short term nature of the receivables, their carrying value is assumed to approximate their fair value. Given the nature of the receivables the Company’s exposure to risk is not considered material. NOTE 9: OTHER FINANCIAL ASSETS Financial assets Other Changes in fair value are included in the statement of comprehensive income. 30.06.2021 $ 30.06.2020 $ 400 400 400 400 52 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 10: PROPERTY, PLANT AND EQUIPMENT Plant and Equipment – at cost Less: accumulated depreciation 30.06.2021 $ 41,235 (14,010) 27,225 30.06.2020 $ 111,870 (100,342) 11,528 Reconciliation of the carrying amount of property, plant and equipment 30.06.2021 $ 30.062020 $ Carrying amount at beginning of year Additions Disposals Depreciation for the year Carrying amount at end of financial year 11,528 22,229 - (6,532) 27,225 7,825 6,488 - (2,785) 11,528 NOTE 11: MINERAL EXPLORATION EXPENDITURE Balance at beginning of the year Acquisition of tenements Deferred exploration expenditure Mineral expenditure written off1 Balance at end of financial year 30.06.2021 $ 30.06.2020 $ 9,490,884 9,868,392 - - 1,707,481 909,569 (679,520) (1,287,077) 10,518,845 9,490,884 1This relates to expenditure on tenements relinquished during the year or not yet granted. The value of the Company’s interest in exploration expenditure is dependent upon: the continuance of the Company’s rights to tenure of the areas of interest; the results of future exploration; and • • • The recoupment of costs through successful development and exploitation of the areas of interest or, alternatively, by their sale. 53 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 12: TRADE AND OTHER PAYABLES Current Trade payables Sundry payables and accruals PAYG Withholding 30.06.2021 $ 30.06.2020 $ 93,352 33,969 67,573 194,894 227,315 30,499 37,096 294,911 Due to the short-term nature of these payables, their carrying value is assumed to approximate fair value. Trade payables are non-interest bearing and are generally settled within 30 days. NOTE 13: ISSUED CAPITAL ISSUED CAPITAL Ordinary shares on issue Movements in Ordinary Shares Balance at the beginning of the year 1/7/20 Issued during the year Issue costs Balance at year end 30/06/21 Options Reserve Unlisted Balance at the beginning of the year 1/7/20 Options issued during the year Expired during the year Balance at the end of the period 30/06/21 Listed Balance at the beginning of the year 1/7/20 Expired or exercised(1) during the year Balance at the end of the period 30/06/21 (1) 56 options were exercised on the expiry of the quoted options in June 2021 30.06.2021 No. on issue $ 136,198,117 38,168,373 No. on issue $ 40,879,063 95,319,054 - 136,198,117 30,580,106 7,966,904 (378,637) 38,168,373 516,667 10,200,000 (250,000) 10,466,667 4,791,789 (4,791,789) - 898,866 1,009,418 - 1,908,284 - - - 54 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 13: ISSUED CAPITAL (Continued) ISSUED CAPITAL Ordinary shares on issue Movements in Ordinary Shares Balance at the beginning of the year 1/7/19 Share consolidation 60:1(1) Issued during the year Issue costs Balance at year end 30/06/20 Options Reserve Unlisted 30.06.2020 No. on issue $ 40,879,063 30,580,106 No. on issue $ 1,252,699,442 (1,231,820,379) 20,000,000 - 30,452,910 879 200,000 (73,683) 40,879,063 30,580,106 Balance at the beginning of the year 1/7/19 72,000,000 898,866 Options issued during the year Expired during the year Option consolidation 60:1(1) Balance at the end of the period 30/06/20 Listed Balance at the beginning of the year 1/7/19 Option consolidation 60:1(1) Balance at the end of the period 30/06//20 - (41,000,000) (30,483,333) 516,667 - - - - - 898,866 - - - (1)On 4 June 2020, the Company undertook a shareholder approved share consolidation of 1 share for every 60 held. The Company at 30 June 2021 has issued share capital amounting to 136,198,117 (2020: 40,879,063) ordinary shares with no par value. 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. 55 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 14: CASH FLOW STATEMENT RECONCILIATION Reconciliation of net loss after tax to net cash flows from operations Loss for the year Depreciation Right of use depreciation Share based payments Interest on lease liabilities – Right of use asset Other income – gain on disposal of termination of lease Director’s and employee remuneration – released on deed and resignation 30.06.2021 $ 30.06.2020 $ (2,263,093) (1,807,673) 6,532 - 1,009,418 - - - 2,785 14,835 - 1,817 (891) (172,245) Mineral exploration expenditure written off 679,520 1,287,077 Changes in assets and liabilities (Increase)/Decrease in trade and other receivables and prepayments Increase/(Decrease) in trade and other payables Increase /(Decrease) in provisions (127,774) 117,281 (28,330) 35,362 108,685 - (606,446) (530,248) NOTE 15: RELATED PARTY DISCLOSURE There were no related party transactions with Directors and Directors related entities during the year ended 30 June 2021 or 30 June 2020. NOTE 16: KEY MANAGEMENT PERSONNEL (a) Compensation for Key Management Personnel Short term employee benefits Post employment benefits Share based payments 30.06.2021 $ 30.06.2020 $ 193,537 18,386 542,260 754,183 250,331 4,235 - 254,566 56 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 17: SHARE BASED PAYMENTS (a) Recognised share based payment The share based payment expense recognised for employee services, consultants and tenement acquisition received during the year is shown in the table below: Expense arising from equity share-based payment transactions settled via options Expense arising from equity share-based payment transactions settled via Shares Total expense arising from share-based payment transactions 30.06.2021 $ 30.06.2020 $ 1,009,418 - 1,009,418 - - - The share-based payment plans are described below. There have been no cancellations or modifications to any of the plans during 2021 and 2020. b) Types of Share based payment plans Great Western Exploration Limited, Employee Share Option Plan Share options are granted to senior executives and designed to provide executives an incentive and participate along with shareholders by increasing the value of the Company’s shares. The options are issued by the Board having regard, in each case to: (i) (ii) the contribution to the Company which has been made by the Participant; the period of employment of the Participant with the Company, including (but not limited to) the years of service by that Participant; the potential contribution of the Participant to the Company; and (iii) any other matters which the Board considers in its absolute discretion, to be relevant. The options are issued to participants at a price the Board considers appropriate, but in any event, no more than nominal consideration. Details of options expiry date and exercise price are set out in Note 17 (c) below. 57 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 17: SHARE BASED PAYMENTS (Continued) c) Summary of Options on issue Outstanding at beginning of financial year(1) Granted during the year - unlisted options expiring 12 Oct 2025 - unlisted options expiring 12 Oct 2025 - unlisted options expiring 12 Oct 2025 - unlisted options expiring 29 Dec 2023 - unlisted options expiring 31 Mar 2024 Expired during the year(1) Exercised during the year Option consolidation 60:1 30.06.2021 30.06.2020 No. Exercise Price No. Exercise Price 5,308,456 359,500,132 1,500,000 1,500,000 2,000,000 1,200,000 4,000,000 (5,041,733) (56) - - - - - - - - - - - - - (41,000,000) - (313,191,916) 5,308,456 - - - - - - - Outstanding at end of financial year 10,466,667 (1)Includes listed options that expired on 30 June 2021. The following share-based payment arrangements were in existence during the current and prior reporting periods: Grant Date No of Options Grant Date Fair Value Exercise Price Expiry Date Vesting Date Value recognized during the year Value recognized in future years 30.06.2021 12/10/2020 1,500,000 12/10/2020 1,500,000 12/10/2020 2,000,000 $0.26 $0.26 $0.26 $0.00 12/10/2025 12/10/2021 $278,877 $111,123 $0.00 12/10/2025 12/10/2022 $139,438 $250,562 $0.00 12/10/2025 12/10/2023 $123,673 $396,055 29/12/2020 1,200,000 $0.0124 $0.31 29/12/2023 29/12/2020 $148,807 - 6/4/2021 2,750,000 $0.0645 $0.37 31/3/2024 6/4/2021 $265,997 $166,909 6/4/2021 1,250,000 $0.0442 $0.52 31/3/2024 6/4/2021 $52,355 $126,238 14/12/2018 266,667 $0.00216 $1.20 31/12/2021 14/12/2019 - 30.06.2020 29/11/2016 200,000 $0.00805 $0.06 31/12/2019 29/11/2016 24/3/2017 416,667 $0.01280 $1.20 30/6/2020 24/3/2017 3/10/2017 33,333 $0.005333 $0.06 31/12/2019 3/10/2017 12/10/2017 250,000 $0.008761 $1.32 12/10/2020 12/10/2017 14/12/2018 266,667 $0.00216 $1.20 31/12/2021 14/12/2019 - - - - - - - - - - - 58 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 17: SHARE BASED PAYMENTS (Continued) d) Option pricing model Equity-settled transactions The fair value of the equity-settled share options granted under the Employee Share Option Plan is estimated as at the date of the grant using a Monte Carlo Pricing Model as part of the term of the issued options, the options will vest immediately when the Share Price Equals or exceeds the Exercise Price of the respective shares after the date of issues of the options. Monte Carlo Price Model Grant Date Dividend yield (%) Expected volatility (%) Risk free interest rate (%) Expected life of options (yrs) Option exercise price ($) Grant Date Share Price 29/11/16 0 131 1.91 3.1 0.06 0.015 Binomial Model Pricing Model and Black and Scholes Model taking into account the terms and conditions upon which the options were granted options included in relation to acquisition of tenements and corporate advisory services during the period. Binomial Model Pricing Model Grant Date Dividend yield (%) Expected volatility (%) Risk free interest rate (%) Expected life of options (yrs) Option exercise price ($) Weighted average share price at measurement date ($) BlackScholes Model Grant Date Dividend yield (%) Expected volatility (%) Risk free interest rate (%) Expected life of options (yrs) Option exercise price ($) Grant Date Share Price 24/3/17 14/12/18 12/10/20 - 132 1.74 3.3 0.02 - 109 1.98 3.1 0.02 - 54 0.08 5.0 0.00 0.017 0.006 0.26 06/04/2021 06/04/2021 29/12/20 - 117 0.08 3.0 0.37 0.25 - 117 0.08 3.0 0.52 0.25 - 117 0.08 3.0 0.31 0.2 e) Share issued in lieu of services No shares were issued in lieu of services during the years ended 30 June 2021 or 30 June 2020. 59 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 18: PARENT INFORMATION 30.06.2021 $ 30.06.2020 $ The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards. STATEMENT OF FINANCIAL POSITION ASSETS Current Assets Non-current assets TOTAL ASSETS LIABILITIES Current liabilities Non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY 5,436,650 10,550,901 15,987,551 217,402 9,508,544 9,725,946 217,619 - 217,619 289,307 - 289,307 15,769,932 9,436,639 37,883,207 1,908,285 (24,021,560) 30,294,940 898,867 (21,757,168) 15,769,932 9,436,639 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Total loss (2,264,392) (1,523,925) Total comprehensive income (2,264,392) (1,523,925) Guarantees Great Western Exploration Limited has not entered into any guarantees, in the current or previous financial year, in relation to the debts of its subsidiaries. Contingent Liabilities At 30 June 2021, there were no contingent liabilities in relation to the subsidiaries. Contractual commitments At 30 June 2021, Great Western Exploration Limited had not entered into any contractual commitments for the acquisition of property, plant and equipment (2020: Nil). 60 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 19: CONTROLLED ENTITIES Interests are held in the following: Name Principal Activity Country of Incorporation Shares Ownership Interest 30.06.2021 30.06.2020 Vanguard Exploration Limited Mineral Exploration Australia Ordinary 100% 100% NOTE 20: COMMITMENTS AND CONTINGENCIES COMMITMENTS a) Exploration Tenement Leases 30.06.2021 $ 30.06.2020 $ In order to maintain current rights of tenure to exploration tenements, the Group is required to outlay lease rentals and to meet the minimum expenditure requirements of the Western Australian Department of Mines & Petroleum. Within one year 1,337,500 1,077,500 CONTINGENCIES There were no contingencies at the end of the financial year. NOTE 21: EVENTS AFTER BALANCE DATE The Directors are not aware of any matter or circumstance that has arisen since 30 June 2021 which has 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, other than: • On 8 July 2021, the Company announced they had commenced on the passive seismic survey at the Lake Way Potash Project; On 28 July 2021, the Company announced that a large, discrete, conspicuous EM anomaly has been identified by a moving loop electromagnetic survey at Thunder coper-gold target; On 18 August, the Company announced assay results had been received for the maiden drill programme at the Copper Ridge Project; On 23 August 2021, the Company reports a large, strong gold in soil anomaly at the Firebird Gold Project. • • • 61 Great Western Exploration Limited ABN 53 123 631 470 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 22: AUDITORS REMUNERATION The Auditor of Great Western Exploration Limited is Hall Chadwick (previously known as Bentleys). Amounts received or due and receivable for • an audit or review of the financial report of the Group • other services in relation to the Group – other services 30.06.2021 $ 30.06.2020 $ 35,283 33,632 - - 35,283 33,632 62 GREAT WESTERN EXPLORATION LIMITED ABN 53 123 631 470 Directors’ Declaration In accordance with a resolution of the directors of Great Western Exploration Limited, the Directors of the Company declare that: 1. the financial statements and notes, as set out on pages 32 to 62, are in accordance with the Corporations Act 2001 and: a. b. comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements, constitutes compliance with International Financial Reporting Standards (IFRS); and give a true and fair view of the financial position as at 30 June 2021 and of the performance for the year ended on that date of the Company; 2. 3. in the Directors’ opinion, subject to the matters mentioned in Note 1(a) to the financial statements, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and the Directors have been given the declarations required by s 295A of the Corporations Act 2001 for the financial year ended 30 June 2021. Dated this 17th day of September 2021 Thomas Ridges Managing Director 63 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 of Great Western Exploration 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 MARK DELAURENTIS CA Partner Dated at Perth this 17th day of September 2021 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GREAT WESTERN EXPLORATION LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of Great Western Exploration Limited (“the Company”) and its subsidiaries (“the Consolidated Entity”), 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 Consolidated Entity is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Consolidated Entity’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. 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 Consolidated Entity 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 Mineral $10,518,845 Exploration Expenditure Our audit procedures included but were not limited to: (Refer to note 11) Mineral exploration expenditure is a key audit matter due to: • The significance of the balance to the Consolidated Entity’s financial position; • The level of in evaluating management’s application of judgement required the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources (“AASB 6”). AASB 6 is an industry specific accounting application of significant standard requiring the judgements, estimates and industry knowledge. This for includes requirements specific expenditure to be capitalised as an asset and subsequent requirements which must capitalised be complied with for expenditure to continue to be carried as an asset; and • The assessment of impairment of mineral exploration expenditure being inherently difficult. • Assessing management’s determination of its areas of the definition in AASB 6 Exploration and Evaluation for consistency with interest of Mineral Resources (“AASB 6”); • Assessing the Consolidated Entity’s rights to tenure for a sample of tenements; • Testing the Consolidated Entity’s additions to mineral exploration expenditure for the year by evaluating a sample of recorded expenditure for the consistency capitalisation requirements of the Consolidated underlying records, to Entity’s accounting policy and the requirements of AASB 6; • By testing the status of the Consolidated Entity’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 that may indicate impairment of the mineral exploration expenditure: • The licenses for the rights to explore expiring in the near future or are not expected to be renewed; • Substantive further expenditure exploration in the area of interest is not for budgeted or planned; • Decision or intent by the Consolidated Entity Key audit matter How our audit addressed the key audit matter to discontinue activities in the specific area of interest due to lack of commercially viable quantities of resources; and • 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. Accounting for share based payments As disclosed in note 17 to the financial statements, during the year ended 30 June 2021 the Consolidated Entity incurred share based payments expense of $1,009,418. Share based payments are considered to be a key audit matter due to Our procedures amongst others included: • Analysing agreements to identify the key terms and conditions of share based payments issued and relevant vesting conditions in accordance with AASB 2 Share Based Payments; • Evaluating management’s Black-Scholes Valuation the value of the transactions; Models and assessing the assumptions and inputs used; • Assessing the amount recognised during the year in accordance with the vesting conditions of the agreements; and • Assessing the adequacy of the disclosures included in Note 17 to the financial statements. - - - the complexities involved in the recognition and measurement of these instruments; and the judgement involved in determining the inputs used in the valuations. Management used the Black-Scholes option valuation model to determine the fair value of the options granted. This process involved significant estimation and judgement required to determine the fair value of the equity instruments granted. Other Information The directors are responsible for the other information. The other information comprises the information included in the Consolidated Entity’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, 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 Consolidated Entity’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 Consolidated Entity 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 Consolidated Entity’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 Consolidated Entity’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 Consolidated Entity 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 Consolidated Entity to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Consolidated Entity 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 MARK DELAURENTIS CA Partner Dated at Perth this 17th day of September 2021 GREAT WESTERN EXPLORATION LIMITED ABN 53 123 631 470 ADDITIONAL INFORMATION 1. SHAREHOLDER INFORMATION 1.1 VOTING RIGHTS Every member has one vote for every fully paid ordinary share held. 1.2 SUBSTANTIAL SHAREHOLDERS AS AT 26 August 2021 Shareholder Seascape Capital Pty Ltd Budworth Capital Pty Ltd Westgate Capital Pty Ltd No of Shares 20,011,320 20,000,000 7,033,334 1.3 DISTRIBUTION OF HOLDERS AS AT 26 August 2021 1 – 1000 1001 – 5,000 5001 – 10,000 10,001 – 100,000 100,001 – and over `Total number of holders 1.4 TOP TWENTY HOLDERS: Fully Paid Ordinary Shares 793 317 132 314 150 1,706 Ordinary Shares fully paid: The names of the twenty largest shareholders as at 26 August 2021 are as follows: Name % No. of Shares 1 SEASCAPE CAPITAL PTY LTD 2 BUDWORTH CAPITAL PTY 3 WESTGATE CAPITAL PTY LTD 4 SIMON LEE 5 NINAN PTY LTD 6 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 7 WOMBAT SUPER INVESTMENTS PTY LTD 8 P & L CAPITAL INVESTMENTS PTY LTD 9 COVENTINA HOLDINGS PTY LTD 10 MR JORDAN LUCKETT 11 MRS JANE ELIZABETH SOMES + MS AMY JANE SOMES 12 MRS GEORGINA MUNRO 13 SUNDEN PTY LTD 14 ESM LIMITED 15 SAYERS INVESTMENTS (ACT) PTY LIMITED 70 14.69 14.68 5.16 3.06 2.72 2.04 1.62 1.56 1.48 1.37 1.09 1.04 1.03 0.92 0.92 20,011,320 20,000,000 7,033,334 4,166,667 3,700,000 2,783,153 2,211,250 2,120,000 2,012,145 1,864,087 1,491,120 1,409,713 1,408,335 1,250,000 1,250,000 GREAT WESTERN EXPLORATION LIMITED ABN 53 123 631 470 16 MR GEOFF BARNES 17 KCS SUPERANNUATION PTY LTD 18 MR PETER ARISTIDE PYNES + MRS LARA OLIMPIA PYNES 19 MR IAN KERR 20 BAM NR 1 PTY LTD 0.84 0.81 0.78 0.77 0.75 57.34 1,150,000 1,098,745 1,061,455 1,050,000 1,022,912 78,094,236 At 30 June 2021, the Company’s 4,791,733 quoted options (GTEOA) exercisable at A$0.60 lapsed unexercised and 56 options were exercised by one option holder in consideration for $33.60. 1.5 Unlisted option holders: Class of Unlisted Option No. of unlisted options on issue No of holders Exercisable at $1.20 and expiring 31 December 2021 Exercisable at $0.31 and expiring 29 December 2023 Zero Exercise price expiring 12-Oct 2025 s.t. milestones Exercisable at $0.37 and expiring 31 March 2024 Exercisable at $0.52 and expiring 31 March 2024 266,667 1,200,000 5,000,000 2,750,000 1,250,000 26 1 1 4 3 71 GREAT WESTERN EXPLORATION LIMITED ABN 53 123 631 470 2. SCHEDULE OF MINERAL TENEMENTS Tenement Schedule at 30 June 2021 Project Tenement Status Holder Ownership Comments Atley Atley Atley Atley Atley Atley Atley Atley Atley E 57/1130 E 57/1131 E 57/1160 E 57/1161 Live Live Live Live Great Western Exploration Limited 100% Great Western Exploration Limited 100% Great Western Exploration Limited Great Western Exploration Limited E 57/1162 Pending Great Western Exploration Limited E 57/1164 Pending Great Western Exploration Limited E 57/1165 Live Great Western Exploration Limited E 57/1166 Pending Great Western Exploration Limited E 57/1167 Pending Great Western Exploration Limited 100% 100% 100% 100% 100% 100% 100% Fairbairn E 69/3443 Live Vanguard Exploration Ltd 100% 100% Owned Subsidiary Fairbairn E 69/3810 Pending Great Western Exploration Limited 100% Fairbairn E 69/3899 Pending Great Western Exploration Limited 100% Fairbairn E 69/3903 Pending Great Western Exploration Limited 100% Fairbairn E 69/3906 Pending Great Western Exploration Limited 100% Forrestania South E 74/603 Live Western Areas Ltd 10% Free Carried To PFS Golden Corridor E 51/1855 Live Great Western Exploration Limited 100% Golden Corridor E 51/2033 Pending Great Western Exploration Limited 100% Golden Corridor E 51/2046 Pending Great Western Exploration Limited 100% Golden Corridor E 53/1983 Live Great Western Exploration Limited 100% Golden Corridor E 53/2124 Pending Great Western Exploration Limited 100% Golden Corridor E 53/2138 Pending Great Western Exploration Limited 100% Golden Corridor E 53/2139 Pending Great Western Exploration Limited 100% Golden Corridor E 53/2141 Live Great Western Exploration Limited 100% Golden Corridor E 53/2142 Pending Great Western Exploration Limited 100% Lake Way Potash E 53/1949 Lake Way Potash E 53/2017 Lake Way Potash E 53/2026 Lake Way Potash E 53/2146 Live Live Live Live Great Western Exploration Limited 100% Great Western Exploration Limited 100% Great Western Exploration Limited 100% Great Western Exploration Limited 100% 72 GREAT WESTERN EXPLORATION LIMITED ABN 53 123 631 470 Project Tenement Status Holder Ownership Comments Yandal West E 53/1369 Yandal West E 53/1612 Live Live Diversified Asset Holdings Pty Ltd 80% Vanguard Exploration Ltd 100% 100% Owned Subsidiary Yandal West E 53/1816 Live Diversified Asset Holdings Pty Ltd 80% Diversified Free Carried To BFS Diversified Free Carried To BFS Copper Ridge E 51/1727 Copper Ridge E 51/1734 Copper Ridge E 51/1856 Copper Ridge E 53/1894 Copper Ridge E 53/1917 Live Live Live Live Live Great Western Exploration Limited 100% Great Western Exploration Limited 100% Great Western Exploration Limited 100% Great Western Exploration Limited 100% Great Western Exploration Limited 100% Voluntary Surrender Actioned 1st July 2021 Copper Ridge E53/2156 Pending Great Western Exploration Limited 100% Yerrida South E 51/1732 Yerrida South E 51/1733 Yerrida South E 51/1993 Yerrida South E 53/2027 Yerrida South E 53/2077 Live Live Live Live Live Great Western Exploration Limited 100% Great Western Exploration Limited 100% Great Western Exploration Limited 100 Great Western Exploration Limited 100% Great Western Exploration Limited 100% Joint Venture with Sandfire Resources Limited (1) Yerrida North JV E 51/1324 Live Great Western Exploration Limited 100% Sandfire Earning 70% Yerrida North JV E 51/1330 Live (2) Great Western Exploration Limited 100% Sandfire Earning 70% Yerrida North JV E 51/1560 Yerrida North JV E 51/1712 Yerrida North JV E 51/1723 Yerrida North JV E 51/1724 Yerrida North JV E 51/1728 Yerrida North JV E 51/1746 Yerrida North JV E 51/1747 Yerrida North JV E 51/1819 Yerrida North JV E 51/1827 Live (2) Live (2) Live (2) Live (2) Live (2) Live (2) Live (2) Live Live Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Great Western Exploration Limited 100% Sandfire Earning 70% Notes (1) Pursuant to clause 3 (e) of the Farm-in Letter Agreement between Sandfire and the Company dated 10 April 2017, Sandfire’s earn-in is subject to it maintaining the joint venture tenements in good standing and it meeting all statutory expenditure conditions relating to the joint venture tenements. (2) These eight tenements are the subject of a plaint application by a third party in the Warden’s Court. The outcome of this plaint application is unknown at the date of this report. The Company, with the support of Sandfire, intends to seek orders in the Warden’s court for the dismissal of the plaint applications. 73 

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