Great Panther Mining
Annual Report 2023

Plain-text annual report

FOR THE YEAR ENDED 31 DECEMBER 2023 CONTENTS CORPORATE DIRECTORY CHAIRMAN’S REPORT REVIEW OF OPERATIONS MINERAL RESOURCES DIRECTORS’ REPORT REMUNERATION REPORT AUDITOR’S INDEPENDENCE DECLARATION INDEPENDENT AUDITOR’S REPORT DIRECTORS’ DECLARATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION TENEMENT DETAILS 1 2 3 12 13 21 37 38 43 44 45 46 47 48 95 98 CORPORATE DIRECTORY Geopacific Resources Limited Public listed Company incorporated in New South Wales in 1986 (ASX: GPR) Australian Business Number (ABN) 57 003 208 393 Directors & Secretary in Office Graham Ascough Non-Executive Chairman Hamish Bohannan Non-Executive Director Non-Executive Director Michael Brook Rowan Johnston Non-Executive Director Hansjoerg Plaggemars Non-Executive Director Matthew Smith Chief Financial Officer & Company Secretary Registered Office Level 1 278 Stirling Highway Claremont WA 6010 Auditor Ernst & Young The Ernst & Young Building 11 Mounts Bay Road Perth WA 6000 Share Registry Boardroom Pty Ltd Level 8, 210 George Street Sydney NSW 2000 Woodlark Registered Office Level 6, PwC Haus Harbour City, Port Moresby, NCD Papua New Guinea Postal Address PO Box 439 Claremont WA 6910 Banker Sumitomo Mitsui Banking Corporation - Sydney Branch Level 40, 2 Chifley Square Sydney NSW 2000 Stock Exchange ASX Limited Level 4, Central Park 152-158 St Georges Terrace Perth WA 6000 2023 ANNUAL REPORT 1 CHAIRMAN’S REPORT Dear Shareholders, On behalf of the Board of Directors, it is my pleasure to present the 2023 Annual Report for Geopacific Resources Limited (‘Geopacific’ or ‘Company’). The focus of the Company continues to be our Woodlark Gold Project (the Project) located on Woodlark Island in Papua New Guinea (PNG). The Project has a current Mineral Resource Estimate (MRE) of 1.56 million ounces of gold with significant exploration potential across the Company’s 580km² tenement holding on the Island. Key Project permits are in place and Geopacific can leverage off the extensive previous investment in drilling, development studies, assets and infrastructure in an improving gold market to deliver shareholder value. In December 2022, after completing an update of the Woodlark MRE, the Company prepared and implemented a work program with the aim of advancing and further de- risking the Project in a cost-effective manner. The geological aspects of this work program resulted in an updated MRE for the Kulumadau deposit that was underpinned by an improved understanding of the geological and structural controls and supported by an expanded geological and drillhole database. The 2023 MRE provides better definition of the high-grade distribution, resulting in a 17% increase in Resource grade, a 12% reduction in tonnes and a 6% increase in contained gold1. The project engineering elements of the 2023 Work Program were informed by lessons learned from previous construction activities and aimed to reduce the overall Project footprint, environmental impact, execution risk and simplify infrastructure locations for future development. The revised infrastructure design as detailed later in this report, improves Project constructability by optimising for wet-climate construction and reduces the overall project footprint, significantly de-risking the future development plans for the project. The engineering studies completed support an ongoing review of capital and operating cost estimates for a range of project options in a strong gold price environment. These studies, whilst requiring further refinement, are significantly advanced and will be incorporated in an updated financial model to assist with guiding the appropriate Project strategy. Our community driven relocation construction program provides a community employment opportunity and focusses on bettering the living standards and community facilities on Woodlark Island. We are very proud of this program and to date it has delivered 167 new buildings including a school, 2 churches and 9 trade stores. Before closing, I would like to take this opportunity to express my thanks to my fellow directors, management and staff for their dedication and hard work during the past 12 months. We are committed to growing the Company and safely and expeditiously progressing the development of our flagship Woodlark Project for the benefit of all shareholders. I also take this opportunity to thank all shareholders for your continued support of Geopacific and I look forward to providing further updates as our activities move forward in 2024. Graham Ascough Chairman 1 Refer to ASX announcement on 14 September 2023 titled “Woodlark Mineral Resource Update – Grade Boost at Kulumadau”. 2 2023 ANNUAL REPORTREVIEW OF OPERATIONS The Woodlark Gold Project (the Project) is an advanced gold development project, located on Woodlark Island in Papua New Guinea (PNG). The Project has a current endowment of 1.56 million ounces of gold in Mineral Resources1 with significant exploration potential across the Company’s over 580 km² tenement holding on the highly prospective Woodlark Island. Key Project permits are in place and Geopacific Resources Limited (Geopacific or the Company) is positioned to leverage off extensive previous investment in drilling, development studies, assets and infrastructure. Woodlark’s regional setting – the “Pacific Ring of Fire” 2023 WORK PROGRAM Following completion of the Mineral Resource Estimate in December 20222, the Company prepared the 2023 Work Program3 with the aim of advancing and continuing to de-risk the Project in a cost-effective manner. The 2023 Work Program commenced after successful completion of a $6 million, fully underwritten, non-renounceable entitlement offer (Entitlement Offer)4 and included the following key elements: Geological Review Geological and exploration targeting review, including capture of historical paper-based data into electronic formats. Assessment of potential alternative process plant and project infrastructure locations. Project Engineering Geotechnical site investigation works to de-risk future development activities. Generation of updated Project capital and operating cost estimates. Community Relocation Progression of the community relocation project on a low cost, self-perform basis. 1 Refer to ASX announcement on 14 September 2023 titled “Woodlark Mineral Resource Update – Grade Boost at Kulumadau”. 2 Refer ASX announcement on 23 December 2022 titled “Woodlark Project Mineral Resource Update”. 3 Refer to ASX announcement on 30 March 2023 titled “Prospectus”. 4 Refer to ASX announcement on 24 April 2023 titled “Successful Completion of Entitlement Offer”. 3 2023 ANNUAL REPORTREVIEW OF OPERATIONS 2023 Work Program – Geological Components Woodlark Geological Database and Kulumadau Mineral Resource Update Over the course of the 2022 calendar year, Geopacific conducted a 23km drilling program which improved definition of near surface high-grade zones in the Kulumadau and Busai deposits and increased the geological understanding of the mineralised systems on Woodlark. A key aspect of the 2023 Work Program involved updating the Woodlark geological database to incorporate all drilling from the 2022 program and a substantial amount of legacy data from multiple phases of exploration activity on Woodlark Island since 1962. In addition to the inclusion of all drilling from the 2022 program, a priority was to locate and validate legacy data in relation to the Kulumadau deposit, to build the understanding of high-grade continuity and distribution. The geological aspects of the 2023 Work Program resulted in the release of an updated 2023 Mineral Resource Estimate for the Kulumadau deposit5. The 2023 Mineral Resource Estimate for the Kulumadau Deposit was underpinned by an improved understanding of the geological and structural controls and supported by the expanded database. This provided better definition of the high-grade distribution, resulting in a 17% increase in Resource grade, a 12% reduction in tonnes and a 6% increase in contained gold6: Category (>0.4g/t lower cut) Measured Indicated Inferred Total 2023 Kulumadau Mineral Resource Tonnes (Million) 0.54 17.00 0.33 17.87 Grade (g/t Au) 5.5 1.1 1.44 1.24 Ounces (Thousand) 95 601 15 711 The 2023 Woodlark Global Mineral Resource Estimate is now 45.56Mt at 1.07g/t Au for 1.56Moz of gold7: Category  (>0.4g/t lower cut)  Measured Indicated Inferred Total 2023 Woodlark Global Mineral Resource  Tonnes  (Million)  2.25  39.44  3.77  45.56  Grade  (g/t Au)  3.00  0.98  0.84  1.07  Ounces  (Thousand)  217  1,241  102  1,560  5 Refer to ASX announcement on 14 September 2023 titled “Woodlark Mineral Resource Update – Grade Boost and Kulumadau”. 6 Refer to ASX announcement on 23 December 2022 titled “Woodlark Project Mineral Resource Update”. The changes noted relate to the 2022 Kulumadau Mineral Resource estimate. 7 No new Resource Estimates were undertaken for the remaining Deposits (Busai, Woodlark King and Munasi). 4 2023 ANNUAL REPORT REVIEW OF OPERATIONS Woodlark Exploration Review The Company has a strategic and dominant exploration ground position on Woodlark Island covering over 580 km².  A comprehensive Exploration Review was completed during the reporting period which identified targets with the potential for resource expansion within and proximal to the known Mineral Resources, along with regional targets with the potential to deliver significant resource growth. Exploration targeting has been materially improved with a substantially expanded integrated geological database, defining priority targets with the potential to host significant gold mineralisation. The exploration team is focussed on capturing new, and digitising historic data, to expand the various exploration vectors. include prospective These geology, magnetics, structure, geochemistry, and historic drilling to support the key elements of the targeting process. This work identified priority targets areas, each with the potential to host significant gold mineralisation. Each exploration target area contains several prospects with existing high-grade drilling intercepts, including: • 18m @ 4.40g/t Au from 22m (92HKG062) Great Northern; • 26m @ 1.92g/t Au from 24m (92HKB052) Boscalo; • 11m @ 3.04g/t Au from 49m (TARC22008) Talpos; • 5m @ 16.69g/t Au from 14m (00MWMR001) west of Wayai Creek; and • 21m @ 3.47g/t Au from 102m (10WWT095) Little McKenzie. These new target areas are all outside the current Mineral Resources, and the known mineralisation in each remains open and largely untested. In addition to these areas, a large-scale untested mineralised corridor immediately north of the main Kulumadau West high-grade zone provides upside to extend near surface resources. 2023 Work Program – Project Engineering Components The project engineering elements of the 2023 Work Program were informed by lessons learned from previous construction activities and aimed to reduce the overall Project footprint, environmental impact, execution risk and simplify infrastructure locations for future development. The 2023 Work Program findings were announced in November 2023, noting the following key highlights8: • New proposed process plant site selected with improved geotechnical and drainage conditions; • New proposed wharf location which utilises the same infrastructure corridor as the tailings line, reducing the Project footprint and eliminating approximately 7 km of road construction; • Improved surface water management strategy to eliminate the previously designed seawater return line for process water; and • Operating and capital cost estimates completed for a range of process plant throughput options with financial analysis of these options well advanced. 8 Refer to ASX announcement on 8 November 2023 titled “Work Program Advances and De-risks Woodlark Project”. 5 2023 ANNUAL REPORTREVIEW OF OPERATIONS Optimisation of Key Infrastructure input from infrastructure design, with The revised Knight Piesold and Orange Mining, improves Project constructability by optimising for wet-climate construction, with: • Placement of key infrastructure on self-draining locations to reduce water management costs and provide better conditions under foot during construction; • Relocation of the process plant site away from karst limestone material, reducing geotechnical risk and removing the need for major ground improvement works; and • Loading and direct placement of excavated material from the plant site for road construction, increasing compaction, improving water run-off and trafficability. Project Layout A revised Project layout incorporating the proposed infrastructure configuration improvements reduces the overall footprint significantly. The alignment of the wharf within an existing infrastructure corridor eliminates the requirement for approximately 7 km of new roads, reducing upfront establishment costs and future maintenance requirements. The Company is in the process of making applications to amend conditions of various licences to encompass the proposed changes. Process Plant Site Proposed multi-purpose infrastructure corridor (white dashed box) Previous attempts to construct the process plant foundations encountered significant technical challenges primarily due to the karst nature of the ground, which resulted in schedule delays and cost escalation. The 2023 Work Program evaluated the cost and actions required to remediate the 2021 process plant location and assessed alternative locations with superior geotechnical conditions and lower implementation risk. An alternative process plant site, informed by previous technical work, was identified approximately 5.6 km south-east of the 2021 site on a hill composed of materially competent substrata. This new proposed location is free draining and is expected to minimise the requirements for piling underneath major processing infrastructure. As an added benefit the new site is also expected to provide competent material that can be used in road construction. This delivers earthworks savings and a reduction in environmental impact by minimising the requirement for borrow pits. 6 2023 ANNUAL REPORTREVIEW OF OPERATIONS Wharf Location The previously selected site at Bonagai required the development of a causeway through challenging tidal mangrove terrain. The 2023 Work Program identified a preferred location for the wharf facility at Buyuasi Bay, adjacent to the tailings line on the north-eastern side of Woodlark Island. The revised wharf location reduces the challenges associated with construction through the Bonagai mangroves and eliminates the requirement for a dedicated road out to the marine facility. Preliminary assessments of wave and bathymetry data support suitability of the wharf at Buyuasi Bay. Old and proposed new wharf locations Water Management Improved understanding and application of ground and surface water data has allowed for better definition of roads, culvert sizes and locations. Modelling of pit dewatering to better inform the operational water balance has identified the opportunity to remove the previously proposed sea water pipeline and pumping infrastructure. Operating and Capital Cost Estimates The engineering studies completed support an ongoing review of capital and operating cost estimates for a range of project options. These studies, whilst requiring further refinement, are significantly advanced and will be incorporated in an updated financial model to assist with guiding the appropriate Project strategy. 7 2023 ANNUAL REPORTREVIEW OF OPERATIONS Community Relocation Program The community relocation construction program provides a Community Employment opportunity and focusses on bettering the living standards and community facilities on Woodlark Island. Construction activities recommenced during the reporting period which saw the work program transition to a low-cost ‘self-performed’ approach, carried out by a predominantly local Woodlark Island workforce. A focused program was established, with a target to complete the construction and handover of an additional 98 buildings identified as being at an advanced stage of construction prior to the cessation of the previous contractor works program. This initial 98-building program was completed in October 2023, 7-months ahead of schedule. In November 2023, works commenced on the next phase of the community relocation program which comprises a further 16 buildings. At the end of the reporting period, the construction of 167 buildings had been completed including a school, 2 churches and 9 trade stores. Building Classification Community Housing Other Community Buildings Total Opening 1-Jan-23 Completed during reporting period Closing 31-Dec-23 Percentage Complete 89 14 103 56 8 64 145 22 167 65% 85% 67% The revised ‘self-perform’ approach has delivered cost reductions, improvements in workforce productivity, high quality construction outcomes and a sustained level of commitment from the local workforce. 8 2023 ANNUAL REPORTREVIEW OF OPERATIONS SUSTAINABILITY Occupational Health and Safety During the 2023 reporting period, there were no lost time injuries (LTIs) recorded. As at 31 December 2023 the Company was 39 months, or 1,179 days LTI free. The Company works closely with the local community and Provincial Health Authority to provide broader health awareness education and support, and vaccinations when required. Community and Social Responsibility The Company continues to provide support to its local communities through the provision of ongoing medical assistance, including education facilities, health care services, and employment and training opportunities. The Company was pleased that the quality of its social programs was recognised by key PNG government stakeholders, including the MRA, which is the government agency responsible for key elements of ongoing project tenure. In January 2023 the Managing Director of the MRA conducted a site visit to inspect the progress of the community relocation. The visit was well received, resulting in favourable PNG press coverage and the Company receiving a letter of commendation from the MRA. CORPORATE Leadership Renewal Highly experienced mining executives were appointed to the GPR board as part of its leadership renewal, with Graham Ascough as Non-Executive Chairman, and Rowan Johnston and Hamish Bohannan as Non-Executive Directors. Existing directors Hansjoerg Plaggemars and Michael Brook remained on the board, with Andrew Bantock and Richard Clayton stepping down. In addition to the Board renewal, James Fox was appointed in November 2023 as the Company’s new Chief Executive Officer. Craig Wilson was also engaged in December 2023 to provide Mining, Infrastructure and Project Management support. These changes ensure the board and management composition and skills are aligned with the strategic direction of the Company, with a focus on driving growth and value at Woodlark. During the 2023 reporting period, Timothy Richards resigned as Chief Executive Officer effective 1 January 2023 and Richard Clayton performed the role of Interim CEO until 14 April 2023, when he reverted to his previous role as a Non- Executive Director. Following this, the Company’s Chief Financial Officer and Company Secretary, Matthew Smith, performed the role of Interim CEO, assisted by Michael Brook, who assumed a part time Executive role to provide support with the ongoing technical work programs until James Fox was appointed on 16 November 2023. Funding Entitlement Offer Geopacific announced the successful completion of the Entitlement Offer9 in April 2023, which raised $6 million before costs. Proceeds from the Entitlement Offer were used to fund the 2023 Work Program, progress the community relocation project, general working capital and Offer costs. The Entitlement Offer was fully underwritten by major shareholder Deutsche Balaton AG (Delphi) and Petra Capital acted as Lead Manager. 9 Refer to ASX announcements on 3 April 2023 titled “Successful Completion, Institutional Component of Entitlement Offer” and 24 April 2023 titled “Successful Completion of Entitlement Offer”. 9 2023 ANNUAL REPORT REVIEW OF OPERATIONS Bond Subscription Agreement – Deutsche Balaton In October 2023, the Company entered into a Bond Subscription Agreement with its major shareholder, Deutsche Balaton AG, to provide $3.5 million of short-term, unsecured funding to the Company10 on the following key terms: Funding instruments Bearer Bonds Issue price $3.38 million being 96.5% of the aggregate face value of the bearer bonds Interest rate 7.5% per annum Drawdown date 23 October 2023 Original maturity date 29 December 2023 Security Unsecured Bonds issued at 31-Dec-23 $3.5 million In December 2023, terms were agreed to extend the maturity date from 29 December 2023, to on or before 29 March 2024, in exchange for a 4% prolongation fee11. Subsequent to balance date, in March 2024 terms were agreed to a further extension of the maturity date to 30 September 2024 in exchange for a 4% prolongation fee payable at maturity. All other terms in relation to the bearer bonds remain unchanged. Bond Subscription Agreement – 2Invest AG In December 2023, the Company entered into a Bond Subscription Agreement with 2Invest AG, a member of the Deutsche Balaton Group, to provide the Company with access to further short-term, unsecured funding12. Total funds available of $1.73 million (net of costs) allow the Company to further advance the exploration program at Woodlark, whilst continuing to work on the recapitalisation of Geopacific. The key terms are outlined below: Funding instruments Bearer Bonds Issue Price $1.73 million being 96% of the aggregate face value of the bearer bonds Interest rate 7.5% per annum from the date of issue Drawdown date 4 bearer bonds for issue at the election of Geopacific at any time before the Maturity Date Original maturity date 29 March 2024 Security Unsecured Bonds issued at 31-Dec-23 Nil ($1.8 million still available to issue) Subsequent to balance date, in March 2024 terms were agreed to an extension of the maturity date to 30 September 2024 in exchange for a 4% prolongation fee payable at maturity. All other terms in relation to the bearer bonds remain unchanged. 10 Refer to ASX announcement on 19 October 2023 titled “$3.5M Short-term Unsecured Funding from Bond Issue”. 11 Refer to ASX announcement on 27 December 2023 titled “Bond Repayment Deferred to 29 March 2024”. 12 Refer to ASX announcement on 2 January 2024 titled “Further $1.8M of Short-term Unsecured Funding Available”. 10 2023 ANNUAL REPORT REVIEW OF OPERATIONS NON-CORE PROJECT ACTIVITIES Kou Sa Project, Cambodia The Company is in negotiation with the vendors of the Kou Sa Copper Gold Project to finalise disposal of its interest in the Kou Sa Copper Gold Project. This is expected to be completed in 2024. Fijian Gold Projects, Fiji All licences have been relinquished. FINANCIAL REVIEW 2019 $ 2020 $ 2021 $ 2022 $ 2023 $ Net Loss After Tax (7,337,714) (4,567,311) (61,318,686) (71,954,925) (10,853,295) Loss Per Share (Cents) (6.43) (2.59) (12.67) (13.85) (1.49) Cash and Cash Equivalents 37,505,067 34,639,855 67,470,477 5,738,772 2,145,015 Exploration and Evaluation Asset - Additions (excluding transfers) Mine Properties Under Development Expenditure - Additions (excluding transfers) 442,022 65,098 36,097 3,722,221 283,437 860,265 11,688,121 23,230,220 17,586,089 2,350,742 Total Assets Net Assets 80,518,692 85,690,886 176,265,685 85,162,416 76,713,265 70,478,375 78,500,958 141,367,250 78,505,482 69,101,797 The Group recorded a net loss after tax for the year ended 31 December 2023 of $10,853,295 (2022: $71,954,925). At 31 December 2023, the Group’s total assets were $76,713,265 (2022: $85,162,416) and net assets were $69,101,797 (2022: $78,505,482). The decrease in the Group’s total assets relates primarily to lower cash balance held and foreign exchange translation loss on the Group’s non-current assets denominated in PNG Kina, which has weakened against the Australian dollar during the year. At reporting date, the Group held cash and cash equivalents of $2,145,015 (2022: $5,738,772). 11 2023 ANNUAL REPORTMINERAL RESOURCES MINERAL RESOURCES Woodlark Global Mineral Resources In September 2023, a Mineral Resource Update was released by the Company. Refer to the Company’s ASX Announcement dated 14 September 2023 titled ‘Woodlark Mineral Resource Update – Grade Boost at Kulumadau’ for details. At 31 December 2023, the Woodlark Mineral Resource is 45.56Mt @ 1.07g/t Au for 1.56Moz of gold. Category (>0.4g/t lower cut) Measured Indicated Inferred Total Tonnes (Mt) 2.25 39.44 3.77 45.56 Grade (g/t Au) 3.00 0.98 0.84 1.07 Ounces (Koz) 217 1,241 102 1,560 Competent Person’s Statement The information in this report that relates to exploration results is based on information compiled by or under the supervision of Michael Woodbury, a Competent Person who is a Fellow, and Chartered Professional (CP) of The Australasian Institute of Mining and Metallurgy, and Member of Australian Institute of Geoscientists. Mr Woodbury has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and the activity 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 Woodbury consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to Woodlark Mineral Resources is based on information compiled and reviewed by Mr Chris De-Vitry, a Competent Person who is a Member of the Australian Institute of Geoscientists and a full-time employee of Manna Hill Geoconsulting Pty Ltd. Mr De-Vitry has sufficient experience which is relevant to the style of mineralization and type of deposits under consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the JORC Code 2012 and is a qualified person for the purposes of NI43-101. Mr De-Vitry has no economic, financial or pecuniary interest in the company and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Forward Looking Statements All statements other than statements of historical fact included in this announcement including, without limitation, statements regarding future plans and objectives of Geopacific are forward-looking statements. When used in this announcement, forward-looking statements can be identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’, ‘expects’ or ‘intends’ and other similar words that involve risks and uncertainties. These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that, as at the date of this announcement, are expected to take place. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the company, its directors and management of Geopacific that could cause Geopacific’s actual results to differ materially from the results expressed or anticipated in these statements. Geopacific cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward- looking statements contained in this report will actually occur and investors are cautioned not to place undue reliance on these forward- looking statements. Geopacific does not undertake to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this report, except where required by applicable law and stock exchange listing requirements. The Woodlark Gold Project is permitted by the Papua New Guinea Government, subject to meeting the conditions of the licence. 12 2023 ANNUAL REPORTDIRECTORS’ REPORT DIRECTORS’ REPORT The Directors present their report together with the financial report of the Geopacific Group, being Geopacific Resources Limited (Geopacific or the Company) and its controlled entities (the Group or consolidated entity) for the financial year ended 31 December 2023, and the auditor’s report thereon. 1. DIRECTORS AND COMPANY SECRETARY The names of the Company’s Directors and Company Secretary in office during the financial year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated. Position Held & Qualification Experience, Special Responsibilities & Other Directorships Graham Ascough Non-Executive Chairman Appointed: 7 November 2023 B. Sc PGeo Mr Ascough is a senior resources executive and geophysicist with a strong track record of discovery and more than 30 years of industry experience. He has held various senior management positions and directorships, taking a leading role in setting the strategic direction to develop and finance exploration projects and junior mining companies. Member of the AusIMM Mr Ascough is currently the Executive Chairman of PNX Metals Limited and Non-Executive Chairman of Sunstone Metals Ltd and Black Canyon Limited. Hamish Bohannan Non-Executive Director Appointed: 7 November 2023 B. Sc (Engineering) M. Sc (Engineering) MBA During the past three years, Mr Ascough also served as Chairman of Musgrave Minerals Ltd acquired by Ramelius Resources in 2023 (resigned 29 September 2023). Mr Ascough held no interest in shares in the Company as at the date of this report. Mr Bohannan is a mining engineer with extensive corporate and operational experience in public companies both in Australia and overseas. Mr Bohannan has built a career developing exciting projects around the world and has a reputation for maintaining high standards in community liaison and environmental excellence and developing a strong safety culture. Mr Bohannan is currently the Managing Director and CEO of Gulf Manganese Corporation Limited, having previously worked with Bathurst, Iluka, WMC, Cyprus and Mount Isa Mines. Mr Bohannan did not hold any other directorships in listed companies in the past three years. Mr Bohannan held no interest in shares in the Company as at the date of this report. 13 2023 ANNUAL REPORTDIRECTORS’ REPORT Position Held & Qualification Experience, Special Responsibilities & Other Directorships Michael Brook Non-Executive Director Appointed: 7 July 2022 B. Sc (Hons) Member of the AusIMM Rowan Johnston Non-Executive Director Appointed: 7 November 2023 B. Sc (Mining Engineering) Mr Brook has over 40 years of experience in the technical and commercial review and assessment of mining and minerals processing projects and companies from an investment perspective, across multiple jurisdictions and commodities, from early-stage exploration through to production. Mr Brook was previously Chairman / Manager of 3 successful African focused resources investment funds; African Lion closed end mining funds (AFL1, AFL2 & AFL3) where over a period of 16 years he was responsible for investment selection methodology and management and served on multiple public and private company boards. Prior to his time in mining investment management Mr Brook spent 8 years with JB Were as a mining equities analyst, focussing on ASX listed junior miners, as well as larger capitalization companies in the industrial minerals and diamonds sectors. Mr Brook is not currently a director of any other public company and did not hold any other directorships in the past three years. Mr Brook held no interest in shares in the Company as at the date of this report. Mr Johnston is an experienced corporate executive with track record of adding value from discovery to production and working with challenging assets. Mr Johnston is a qualified mining engineer from Western Australian School of Mines and holds a first-class ticket Mine Manager’s Certificate with international experience including in France, Africa, Indonesia and Australia. Mr Johnston has previously held executive and Board positions at Integra Mining Limited, Mutiny Gold Limited, Excelsior Gold Limited and Bardoc Gold Limited. Mr Johnston is currently the Executive Chairman of KIN Mining NL, Non- Executive Chairman of Spartan Resources Limited (formerly Gascoyne Resources Limited) and Non-Executive Director of PNX Metals Limited and Wiluna Mining Corporation Limited (in Administration). Mr Johnston did not hold any other directorships in listed companies in the past three years. Mr Johnston held no interest in shares in the Company as at the date of this report. 14 2023 ANNUAL REPORTDIRECTORS’ REPORT Position Held & Qualification Experience, Special Responsibilities & Other Directorships Hansjoerg Plaggemars Non-Executive Director Appointed: 7 July 2022 Diplom-Kaufmann (Business graduate) Matthew Smith Chief Financial Officer & Company Secretary Appointed: 1 December 2016 B. Com (Accounting) Member of the Australia & New Zealand Institute of Chartered Accountants (CA) Mr Plaggemars is an experienced company director with over 25 years of experience in corporate finance, corporate strategy and governance. Having previously operated as a senior Mergers and Acquisitions advisor at a global professional services firm, Mr Plaggemars moved into commerce where he has served on the Board of Directors of many listed and unlisted companies in a variety of industries including mining, agriculture, shipping, construction, e-commerce, software and investments. Mr Plaggemars is currently a Non-Executive Director of Azure Minerals Limited, Altech Chemicals Limited, PNX Metals Limited, Spartan Resources Limited (formerly Gascoyne Resources Limited), KIN Mining NL, Wiluna Mining Corporation Limited (in Administration) and AIM-listed entity, 4basebio UK Societas and a Management Board member of Altech Advanced Minerals AG, MARNA Beteiligungen AG, 2Invest AG and Delphi Unternehmenberatung (Delphi), as well as a supervisory board member of Neon Equity AG, companies listed on the German regulated market. During the past three years, Mr Plaggemars also served as a Non-Executive Director of South Harz Potash Limited (resigned 31 December 2022). Mr Plaggemars is a representative of major shareholder Deutsche Balaton/ Delphi/Sparta Group and has an indirect interest in 171,056,722 ordinary shares in the Company as at the date of this report. Mr Smith has over 20 years of experience in the resource industry across a broad range of commodities including precious metals, industrials and bulk commodities. Mr Smith has worked for a range of companies operating in the Asia Pacific region and most recently held the role of Chief Financial Officer at ASX listed Kingsrose Mining Limited, with gold operations in Indonesia. Mr Smith is a Chartered Accountant with relevant industry experience being involved in a number of project funding transactions across debt and equity markets. Mr Smith also brings specialist knowledge in the areas of international taxation, corporate structuring, accounting and corporate governance. Mr Smith has previously held the role of Company Secretary at Straits Resources Limited. Mr Smith is not currently a director of any other public company and did not hold any other directorships in the past three years. Mr Smith held a direct interest in 920,789 ordinary shares in the Company as at the date of this report. 15 2023 ANNUAL REPORTDIRECTORS’ REPORT Position Held & Qualification Experience, Special Responsibilities & Other Directorships Andrew Bantock Non-Executive Chairman Appointed: 13 January 2022 Resigned: 7 November 2023 B. Com Fellow of the Australia & New Zealand Institute of Chartered Accountants (FCA) Richard Clayton Director Appointed: 7 July 2022 Resigned: 7 November 2023 B. Sc (Hons) M. Sc Fellow of the Geological Society of London Member of the AusIMM Mr Bantock has over 30 years of experience in corporate finance and commercial leadership. After qualifying as a Chartered Accountant with leading global firm Arthur Andersen, working in Australia and the UK, Mr Bantock commenced his commercial career with ASX/NZSE listed GRD Group, owner of New Zealand’s largest gold producer, Macraes Mining (later Oceana Gold), and world renown resource project design and construction engineer, GRD Minproc. Mr Bantock later become Finance Director of GRD, also serving six years as a Non-Executive Director of Western Australia’s water utility, Water Corporation, where he chaired the Audit and Compliance Committee. Mr Bantock subsequently helped to establish and co-lead an ASX listed exploration group, in various roles, including as founding Executive Chairman of Chalice Gold Mines Ltd and founding Managing Director of Liontown Resources Ltd, before being recruited back to a senior finance role, as CFO of Glencore’s Australian nickel business. At the date of his resignation, Mr Bantock was the Senior Managing Director of FTI Consulting, an independent global business advisory firm. During the past three years and prior to his resignation, Mr Bantock was the Non-Executive Chairman of Elevate Uranium Limited. Mr Bantock held no interest in shares in the Company at the date of his resignation. Mr Clayton has over 20 years of mining sector experience covering technical, advisory, and financial services roles. Mr Clayton was previously Global Head of Technical (Resources) at Investec Bank plc, with leadership responsibility as Head of the Australia desk within the Global Resources team, and also ultimate responsibility for all technical due diligence assessments across the resources sector for Investec. Prior to Investec, Mr Clayton was a Principal Consultant at SRK Consulting specialising in Mineral Resource Estimation and Project Evaluation. He headed up the Sydney Geology team and was a member of the Practice Leadership Group at the firm. In this role Mr Clayton managed multi- disciplinary due diligence and valuation teams delivering resource estimation and reviews to a range of clients internationally, including Competent Person sign-off. During the past three years and prior to his resignation, Mr Clayton was not a director of any other public company. Mr Clayton held no interest in shares in the Company at the date of his resignation. 16 2023 ANNUAL REPORTDIRECTORS’ REPORT 2. PRINCIPAL ACTIVITY The Group is principally engaged in the development and exploration of the Woodlark Gold Project in Papua New Guinea. There were no significant changes in the nature of this activity of the Group during the financial year other than those set out in the Review of Operations. 3. OPERATING AND FINANCIAL REVIEW A review of the operations and financial position of the Group during the year ended 31 December 2023, including details of the results of operations, changes to the state of affairs, and likely developments in the operation of the Group in subsequent financial years is set out in the Review of Operations. 4. DIVIDENDS No dividends were paid or declared during the financial year (2022: nil). 5. STATE OF AFFAIRS There have not been any significant changes in the state of affairs of the Group during the financial year, other than those noted in the financial report. 6. EVENTS SUBSEQUENT TO REPORTING DATE The financial statements have been prepared based upon conditions existing at 31 December 2023 and due consideration has been given to events that have occurred subsequent to 31 December 2023 that provide evidence of conditions that existed at the end of the reporting period. In March 2024, the Company extended the maturity date of the short-term bearer bonds on issue with Deutsche Balaton AG and 2Invest AG, in exchange for a 4% prolongation fee payable at maturity. The extension results in a deferral of the bearer bond repayment date from 29 March 2024, to on or before 30 September 2024. All other terms in relation to the bearer bonds remain unchanged. Other than the matter discussed above, no other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 17 2023 ANNUAL REPORTDIRECTORS’ REPORT 7. DIRECTORS’ INTERESTS AND BENEFITS The relevant interest of each Director in the share capital as notified by the Directors to the Australian Securities Exchange in accordance with section 205G(1) of the Corporations Act 2001, at the date of this report is as follows: Name G Ascough H Bohannan M Brook R Johnston H Plaggemars Direct Indirect Shares Options Rights Shares Options Rights - - - - - - - - - - - - - - - - - - - 171,056,7221 - - - - - - - - - - 1 125,662,487 and 44,793,536 shares were held indirectly through Delphi and 2Invest AG respectively where H Plaggemars is a Managing Director with sole signatory rights but not the beneficial owner, and 600,699 shares were held indirectly through KiCo Invest GmbH where H Plaggemars is the Managing Director and 50% beneficial owner. 8. DIRECTORS’ MEETINGS The number of Directors’ meetings and the number of meetings attended by each of the Directors of the Company during the financial year are set out below: Name G Ascough H Bohannan M Brook R Johnston H Plaggemars A Bantock R Clayton Directors Meetings Attended* Eligible to Attend 1 1 6 1 7 6 6 1 1 7 1 7 6 6 * Either in person, or by electronic means. On 2 March 2022, in line with the organisational downsizing, the Board assumed the role of the following Board sub-committees: • Audit and Risk committee; • Remuneration and Nomination committee; and • Project Oversight committee. The Board of Directors take the ultimate responsibility for corporate governance. This includes the establishment of compensation arrangements for the Company’s Executive Directors and senior executives. It also includes the appointment and retirement of Non-Executive Directors, appointment of Auditors, monitoring key areas of business risk and maintenance of ethical standards. The Board seeks independent professional advice as necessary in carrying out its duties and responsibilities. 9. LIKELY DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES The Group will continue to advance its development and exploration portfolio and seek to increase its tenement holdings by acquiring further projects. 18 2023 ANNUAL REPORTDIRECTORS’ REPORT 10. ENVIRONMENTAL REGULATIONS Entities in the Group are subject to normal environmental regulations in areas of operations in PNG, Cambodia and Fiji. There were no breaches of these regulations during the financial year, or in the period subsequent to the end of the financial year and up to the date of this report. 11. SHARE OPTIONS There were 3,118,874 Options over unissued shares unexercised at 31 December 2023 (2022: 5,845,226). During the 2023 reporting period, the Company did not issue any Options and issued 853,762 shares on the exercise of unlisted Options. Since the end of the 2023 reporting period and up to the date of this report, no unlisted Options have been cancelled or exercised. Details of unlisted Options over unissued shares in the Company as at the date of this report are presented in the following table: Options on Issue Exercise Price Expiry Date 32,000 8,000 376,546 2,702,328 $62.50 $125.00 $0.93 $0.32 Not later than 5-years after defining a JORC compliant ore reserve of over 200,000oz Au on the Faddy’s Gold Deposit Not later than 10-years after defining a JORC compliant ore reserve of over 1,000,000oz Au on the Faddy’s Gold Deposit 21 August 2024 29 September 2026 Option holders do not have any rights to participate in any issues of shares or other interest in the Company or any other entity. 12. SHARE APPRECIATION RIGHTS There were 407,016 Share Appreciation Rights over unissued shares unexercised at 31 December 2023 (2022: 1,536,117). During the 2023 reporting period, the Company did not issue any share appreciation rights or shares on the exercise of unlisted share appreciation rights. Since the end of the 2023 reporting period and up to the date of this report, no unlisted share appreciation rights have been cancelled or exercised. Details of unlisted Share Appreciation Rights over unissued shares in the Company as at the date of this report are presented in the following table: Share Appreciation Rights on Issue Theoretical Exercise Price 407,016 $0.59 Expiry Date 21 August 2024 13. SHARE PERFORMANCE RIGHTS There were 53,512,442 Share Performance Rights over unissued shares unexercised at 31 December 2023 (2022: 3,112,442). During the 2023 reporting period, the Company issued 50,400,000 share performance rights and did not issue any shares on the exercise of share performance rights. In addition, the Company agreed to issue 42,000,000 share performance rights to Directors during the reporting period, the issue of which is subject to shareholder approval. Since the end of the 2023 reporting period and up to the date of this report, no unlisted share performance rights have been cancelled or exercised. Details of unlisted Share Performance Rights over unissued shares in the Company as at the date of this report are presented in the following table: Share Performance Rights on Issue Exercise Price 3,112,442 50,400,000 $0.00 $0.00 Expiry Date 31 March 2024 16 November 2027 19 2023 ANNUAL REPORTDIRECTORS’ REPORT 14. INSURANCE OF OFFICERS The Company has paid an insurance premium to cover the Directors, Company Secretary and Executives of the Group in respect of certain legal liabilities, including costs and expenses in successfully defending legal proceedings, whilst they remain as Directors or Officers and for seven years thereafter. The insurance contract prohibits the disclosure of the total amount of the premiums and a summary of the nature of the liabilities insured. 15. PROCEEDINGS ON BEHALF OF COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001. 16. AUDITOR’S INDEPENDENCE DECLARATION The auditor’s independence declaration for the year ended 31 December 2023 is set out on page 37. 17. AUDITOR The Company’s auditor is Ernst & Young. The Company has agreed with Ernst & Young, as part of its terms of engagement, to indemnify Ernst & Young against certain liabilities to third parties arising from the audit engagement. The indemnity does not extend to any liability resulting from a negligent, wrongful or wilful act or omission by Ernst & Young. During the financial year the Company has not paid any premium in respect to any insurance for Ernst & Young or a body corporate related to Ernst & Young. During the year, the following fees were paid or payable to the auditors of the Company for services provided by the auditor of the Company and its subsidiaries, its related practices and nonrelated audit firms: Audit Services Ernst & Young Audit and review of the financial report for Geopacific and its controlled subsidiaries and other audit work under the Corporations Act 2001 Total 18. NON-AUDIT SERVICES Consolidated 2023 $ 2022 $ 182,425 176,500 182,425 176,500 There were no non-audit services provided by the auditor during the period of this report. 20 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED This report outlines the remuneration arrangements of the Group pursuant to the requirements of the Corporations Act 2001 and its regulations. This information has been audited as required under section 308(3)(c) of the Corporations Act 2001. This report details the remuneration arrangements of the Group’s key management personnel (KMP), who are defined as those persons who have the authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director of Geopacific. Details of the KMP of the Group during the reporting period are set out in the table below: Name Position Non-Executive Directors Change Date of Change Graham Ascough Non-Executive Chairman Hamish Bohannan Non-Executive Director Appointed 7 November 2023 Appointed 7 November 2023 Michael Brook(i) Non-Executive Director - - Rowan Johnston Non-Executive Director Appointed 7 November 2023 Hansjoerg Plaggemars Non-Executive Director Andrew Bantock Non-Executive Chairman Richard Clayton(ii) Non-Executive Director - Ceased Ceased - 7 November 2023 7 November 2023 Executives James Fox Chief Executive Officer Appointed 16 November 2023 Matthew Smith(iii) Chief Financial Officer & Company Secretary - - Timothy Richards Chief Executive Officer Ceased 1 January 2023 (i) M Brook worked in an executive capacity from 17 April to 15 November 2023, providing technical support to M Smith while he acted in the Interim CEO role. (ii) R Clayton acted as the Interim CEO and Director from 5 December 2022 to 14 April 2023. (iii) M Smith acted as the Interim CEO from 17 April to 15 November 2023 (in addition to his normal duties as CFO and Company Secretary). There were no changes to KMP after the reporting date and before the date the financial report was authorised for issue. Remuneration Governance On 2 March 2022, in line with the organisational downsizing, the Board assumed the role of the Remuneration and Nomination Committee. As a result, remuneration related matters previously handled by the Remuneration and Nomination Committee are addressed by the full Board. To manage any potential conflicts, individual Directors excluded from discussions as required. The Board will continue to assess the Company’s circumstances and consider reinstatement of the Remuneration and Nomination Committee when deemed appropriate. The Board is responsible for reviewing and recommending the remuneration arrangements of KMP and ensuring that the Group’s remuneration structures are aligned with the interests of the Company and its Shareholders. This includes an annual remuneration review of base salary (including superannuation), short-term incentives (STI) and long-term incentives (LTI), including the appropriateness of performance hurdles. 21 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Remuneration Consultants During the 2023 and 2022 reporting periods, the Company did not employ the services of a remuneration consultant to provide recommendations as defined in section 9B of the Corporations Act 2001. Remuneration Overview and Strategy The objective of the Group’s remuneration framework is to support the delivery of sustained shareholder value and to reward employees in line with general market conditions. The strategy is designed to attract, motivate and retain high calibre individuals through the provision of remuneration packages that incorporates a balance of fixed and variable remuneration. In accordance with sound corporate governance practices, the structure of non-executive and executive remuneration is separate and distinct. The remuneration strategy and practices are influenced by mining industry peer companies in Australia and PNG (as applicable to the relevant roles) with which it competes for talent. These peer companies are predominantly ASX and PNGX listed gold companies, with a similar or larger market capitalisation. Geopacific is committed to gender pay equity and has established human resource systems, policies and procedures to ensure that all remuneration review processes are conducted fairly and free of any bias. The approach encompasses the complete employee lifecycle including appointment, salary review, performance reviews and bonus reviews. The following table shows the Group’s performance over the reporting period and the previous four financial years and against overall remuneration for these years: Measure 2019 2020 2021 2022 2023 Loss Per Share (cents) Year-end share price ($) Market capitalisation ($ million) 6.43 0.50 87.3 2.59 0.43 94.1 12.67 0.21(i) 109.0 13.85 0.035 18.2 1.49 0.02 16.4 Total KMP remuneration ($) 2,127,902 3,012,188 2,543,732 1,618,011 1,122,710 (i) Share price at 14 December 2021 prior to voluntary suspension on ASX. 22 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Executive Remuneration Framework The Board’s objective is to reward Executives with a quantum and mix of remuneration commensurate with their position and responsibilities and that is competitive within the marketplace. The Company remunerates its Executives with a mix of fixed, and at-risk (or variable) remuneration. The mix of fixed and at-risk remuneration varies according to the role of each Executive, with the highest level of at-risk remuneration applied to those roles that have the greatest potential to influence and deliver Company outcomes and drive shareholder value. Variable remuneration, or performance linked remuneration, includes a combination of short, and long term incentives designed to provide an “at-risk” reward in a manner which aligns with the creation of sustained shareholder value. The short and long term incentives are integral to a competitive market based remuneration package and should not be mistaken for constituting a bonus for performing the role. All Executives are eligible to receive short and long term incentives which can be issued in accordance with the Company’s Securities Incentive Plan (Incentive Plan) that was approved by shareholders at the AGM held on 31 May 2022. A high-level summary of the Company’s remuneration framework is set out in the table below: Remuneration Element Fixed Remuneration linked to market rate of the role. Variable Short Term Incentive (STI) At risk remuneration for delivering against key performance indicators. Designed to drive personal and Company performance. Long Term Incentive (LTI) At risk remuneration for the creation of value for shareholders. Directly linked to outcomes that will drive shareholder returns. Status in the 2023 Reporting Period Normal Not operational No STI paid Recommenced On hiring of new CEO Total Fixed Remuneration Total Fixed Remuneration (TFR) incorporates base salary plus superannuation paid to employees. All Geopacific roles are benchmarked against matching roles from industry benchmarking data. Short Term Incentive Plan (STI Plan) The Company’s STI Plan is structured to remunerate senior employees for achieving annual Company targets, as well as their own individual performance targets designed to favourably impact the business. The STI Plan did not operate over the course of the 2022 and 2023 financial years. When operational, the STI Plan is linked to the achievement of specific personal and Company objectives over the financial year and performance against the STI Plan objectives is assessed following the end of the financial year, with the amount determined to be achieved paid in cash or shares. For Executive KMP, the Board is responsible for setting and assessing the key performance indicators (KPI) against which the annual STI is measured. The weightings to corporate and individual based targets are outlined in the table below: Group Executive KMP Other Participants Corporate Based Targets Individual Targets 70% 50% 30% 50% Corporate and individual targets are established by reference to the Company’s strategy. For each KPI, there are defined “threshold”, “target” and “stretch” measures which are capable of objective assessment. The proportion of the STI earned is calculated by adding the average result of the Company targets with the average result of an individual’s performance targets. The Board maintains discretion on whether to pay the STI in any given year, irrespective of whether the Company and personal STI targets are achieved. During the 2023 reporting period, whilst the STI Plan was not operational, M Smith was awarded a bonus, details of which appear in the remuneration table in this Directors’ Report. 23 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Securities Incentive Plan - Long Term Incentive The Company’s Long Term Incentive Plan (LTI Plan) is designed to provide at risk remuneration aligned with the creation of value for shareholders, directly linked to outcomes that are expected to drive shareholder returns. The LTI Plan is linked to the achievement of milestones that are set each calendar year by the Board. The Board selects milestones that are intended to drive sustained returns for Shareholders over a three-year period and which are considered consistent with peer group companies. The LTI Plan involves the granting of Performance Rights which vest upon achievement of performance measures over a three-year period. The Performance Rights carry no dividend or voting rights. On vesting, each Performance Right is convertible into one ordinary share. The Board retains overall discretion on whether an LTI should be granted, or the amount varied, each performance year. On cessation of employment, all unvested Performance Rights are forfeited and lapse, unless otherwise determined by the Board. If the Board forms the opinion that an employee has committed an act of fraud, defalcation or gross misconduct, the individual will forfeit all unvested Performance Rights. The Company may also recover damages from vested Performance Rights held by or for the benefit of the individual. Operation of the LTI Plan recommenced during the reporting period following the recruitment of the Company’s new CEO and Performance Rights with the following conditions were issued: Class Performance Conditions Class A a) a change of control of Geopacific occurring achieving a share price of at least A$0.025 per share. A change of control shall be deemed to have occurred when a person acquires a relevant interest in 50% of the Company or a 50% interest in the Project via Woodlark Mining Ltd (PNG)(i); or b) completion of the required service period and the Company achieving a traded share price of at least A$0.025 per share for a period of 30 consecutive trading days during the first 36 months from the Grant Date. Class B a) a change of control of Geopacific occurring achieving a share price of at least A$0.05 per share. A change of control shall be deemed to have occurred when a person acquires a relevant interest in 50% of the Company or a 50% interest in the Project via Woodlark Mining Ltd (PNG)(i); or b) completion of the required service period and the Company achieving a traded share price of at least A$0.05 per share for a period of 30 consecutive trading days during the first 36 months from the Grant Date. Class C An announcement by the Company of a total combined Mineral Resource Estimate (JORC compliant) that is 50% greater (in terms of contained gold, or gold equivalent ounces at consensus metals prices and using metallurgical recoveries (if required) agreed with the Competent Person at the time) than the Woodlark Mineral Resource Update announced to the ASX on 14 September 2023 of 1.56 million ounces of gold(i). Class D Receipt of all required Government approvals to implement the revised infrastructure design resulting from the 2023 Work Program(i). (i) The relevant LTI Plan participant must still be employed prior to the change of control event. 24 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Non-Executive Directors Fees and payments to Non-Executive Directors reflect the demands, which are made on, and the responsibilities of the Directors. A review of Non-Executive Directors’ fees is conducted annually. The Board may from time to time seek the advice of independent remuneration consultants to ensure Non-Executive Directors’ fees and payments are appropriate in the market setting. The Chairman’s fees are determined independently to the fees of Non-Executive Directors based on comparative roles in market. The Chairman is not present at any discussions relating to determination of his own remuneration. Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. The pool limit currently stands at $600,000 per year in aggregate as agreed at the 2021 AGM (2022: $600,000). A Director may also be paid fees or other amounts if special duties are performed outside the scope of their normal duties. During the 2023 reporting period, fees of this nature were paid to the following Directors: Director Fee Type Basis Total Additional Fees Paid Andrew Bantock Consulting Fee Via agreement with FTI Consulting. Special Exertion Fees (over and above what is expected for the non-executive chair role) charged at a rate of $3,500 per day. Michael Brook Richard Clayton Executive Director Fee Additional fees paid whilst working in an executive capacity from 17 April to 15 November 2023. Executive Director Fee Additional fees paid whilst carrying out the function as Interim CEO from 5 December 2022 to 14 April 2023. $19,573 $94,800 $95,634 A Director may also be reimbursed for out-of-pocket expenses incurred as a result of their directorship or any special duties. Directors are eligible to participate in the long-term incentive schemes offered by the Company, subject to shareholder approval. During the 2023 Reporting Period, Performance Rights with the following conditions were agreed to be issued to Directors subject to shareholder approval: Class Performance Conditions Class A a) a change of control of Geopacific occurring achieving a share price of at least A$0.025 per share. A change of control shall be deemed to have occurred when a person acquires a relevant interest in 50% of the Company or a 50% interest in the Project via Woodlark Mining Ltd (PNG)(i); or b) completion of the required service period and the Company achieving a traded share price of at least A$0.025 per share for a period of 30 consecutive trading days during the first 36 months from the Grant Date. Class B a) a change of control of Geopacific occurring achieving a share price of at least A$0.05 per share. A change of control shall be deemed to have occurred when a person acquires a relevant interest in 50% of the Company or a 50% interest in the Project via Woodlark Mining Ltd (PNG)(i); or b) completion of the required service period and the Company achieving a traded share price of at least A$0.05 per share for a period of 30 consecutive trading days during the first 36 months from the Grant Date. (i) The relevant LTI Plan participant must still be employed prior to the change of control event. 25 2023 ANNUAL REPORTDIRECTORS’ REPORT e c n a m r o f r e P d e t a l e R % 9 3 3 4 2 1 3 4 3 1 - - - - 9 - 6 2 l a t o T $ 8 2 0 , 4 2 0 8 5 , 7 1 6 4 5 , 4 6 0 8 5 , 7 1 4 0 0 , 9 5 7 6 2 , 9 9 8 1 2 , 7 4 3 2 2 , 9 2 3 0 0 8 , 4 9 4 3 6 , 5 9 4 3 4 , 0 9 1 - 6 5 2 , 5 7 7 9 7 , 7 2 5 s t fi e n e B s t n e m y a P s t fi e n e B g n o L m r e T - e r a h S d e s a B t s o P t n e m y o l p m E g n o L e c i v r e S e v a e L $ & s n o i t p O s t h g R i - r e p u S n o i t a u n n a $ $ g n i t l u s n o C s e e F $ s t fi e n e B m r e T t r o h S - n o N y r a t e n o M s t fi e n e B $ s u n o B $ l a u n n A e v a e L s e i r a l a S s e e F & $ $ - - - - - - - - - - - - - 7 7 4 , 8 ) i i i v ( 1 6 3 , 9 ) i i i v ( 9 8 4 , 7 ) i i i v ( 9 8 4 , 7 ) i i i v ( 9 8 4 , 7 ) i i i v ( 9 8 4 , 7 - - 7 1 3 , 9 3 - - - - 6 8 4 , 9 1 7 9 9 , 7 4 - 0 0 0 , 1 2 4 5 , 5 0 0 0 , 1 - - 4 0 6 , 4 6 4 1 , 2 1 0 0 3 , 9 0 0 7 , 8 0 0 0 , 8 1 - 8 3 4 , 3 0 5 2 , 6 2 - - - - - - 3 7 5 , 9 1 3 7 5 , 9 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 5 0 , 1 0 0 0 , 0 5 8 8 0 , 8 1 1 3 9 , 5 7 3 8 3 7 , 3 4 9 5 , 8 4 P M K r e h t O ) i v ( h t i m S M ) v ( x o F J ) i i v ( s d r a h c i R T - - - - - - - - - 8 4 0 , 5 8 4 0 , 5 1 9 0 , 9 7 6 6 , 4 1 1 9 0 , 9 5 1 5 , 1 5 5 1 5 , 1 5 4 9 6 , 9 7 4 1 6 , 2 4 7 8 1 , 8 5 2 l a t o T b u S s r o t c e r i D e v i t u c e x E - n o N 0 0 5 , 5 8 6 8 8 , 1 8 6 8 3 , 7 6 1 l a t o T b u S s r o t c e r i D e v i t u c e x E s r o t c e r i D e v i t u c e x E ) i i i ( k o o r B M ) v i ( n o t y a l C R s r o t c e r i D e v i t u c e x E - n o N 3 2 0 2 ) i ( n a n n a h o B H ) i ( h g u o c s A G k o o r B M s r a m e g g a l P H ) i ( n o t s n h o J R ) i i ( k c o t n a B A ) i i ( n o t y a l C R r e d l o h e r a h s o t t c e j b u s s n i a m e r s t n e m u r t s n i g n i y l r e d n u e h t f o e u s s i e h T . d e u s s i n e e b t o n e v a h h c i h w s t h g i r e c n a m r o f r e p o t s e t a l e r s r o t c e r i D e v i t u c e x E - n o N e h t o t d e t u b i r t t a e u l a v s t n e m y a p d e s a b - e r a h s e h T e h t h t i w e c n a d r o c c a n i d e h s i l b a t s e s i e t a d t n a r g e h t e c n o d e s i v e r e b l l i w d n a 3 2 0 2 r e b m e c e D 1 3 f o e t a d n o i t a u l a v l a n i m o n a n o d e s a b d e t a m i t s e s a w s t h g i r e c n a m r o f r e p e r a h s e h t f o e u l a v r i a f e h T . l a v o r p p a . s t n e m y a P d e s a B - e r a h S 2 B S A A f o s t n e m e r i u q e r . 3 2 0 2 l i r p A 4 1 o t 2 2 0 2 r e b m e c e D 5 m o r f r o t c e r i D d n a O E C m i r e t n I s a d e t c a n o t y a l C R . 3 2 0 2 r e b m e v o N 5 1 o t l i r p A 7 1 m o r f y t i c a p a c e v i t u c e x e n a n i d e k r o w k o o r B M . 3 2 0 2 r e b m e v o N 7 n o d e t n i o p p a e r e w n o t s n h o J R d n a n a n n a h o B H , h g u o c s A G . 3 2 0 2 r e b m e v o N 7 n o d e n g i s e r n o t y a l C R d n a k c o t n a B A . 3 2 0 2 r e b m e v o N 5 1 o t l i r p A 7 1 m o r f O E C m i r e t n I e h t s a d e t c a h t i m S M . 3 2 0 2 r e b m e v o N 6 1 n o d e t n i o p p a s a w x o F J . 3 2 0 2 y r a u n a J 1 n o d e n g i s e r s d r a h c i R T ) i ( ) i i ( ) i i i ( ) v i ( ) v ( ) i v ( ) i i v ( ) i i i v ( 0 1 7 , 2 2 1 , 1 7 7 4 , 8 0 0 8 , 6 0 1 4 3 8 , 9 5 3 7 5 , 9 1 4 5 0 , 1 0 0 0 , 0 5 4 7 8 , 6 2 8 9 0 , 0 5 8 L A T O T 3 5 0 , 3 0 6 7 7 4 , 8 3 8 4 , 7 6 8 8 6 , 9 2 4 5 0 , 1 0 0 0 , 0 5 6 2 8 , 1 2 5 2 5 , 4 2 4 l a t o T b u S P M K r e h t O . 1 0 0 2 t c A s n o i t a r o p r o C e h t f o ) C 3 ( 8 0 3 n o i t c e S y b d e r i u q e r s a , P M K s ’ p u o r G e h t f o n o i t a r e n u m e r e h t f o s l i a t e d e h t f o t e s w o l e b s e l b a t e h T ) D E U N I T N O C ( D E T I D U A - T R O P E R N O I T A R E N U M E R . 9 1 26 n o i t a r e n u m e R f o s l i a t e D 2023 ANNUAL REPORT DIRECTORS’ REPORT e c n a m r o f r e P d e t a l e R s t fi e n e B s t n e m y a P s t fi e n e B g n o L m r e T - e r a h S d e s a B t s o P t n e m y o l p m E s t fi e n e B m r e T t r o h S ) D E U N I T N O C ( D E T I D U A - T R O P E R N O I T A R E N U M E R . 9 1 g n o L e c i v r e S e v a e L $ & s n o i t p O s t h g R i - r e p u S n o i t a u n n a $ $ g n i t l u s n o C y r a t e n o M - n o N s e e F $ s t fi e n e B s u n o B $ $ l a u n n A e v a e L $ s e i r a l a S s e e F & $ % - - - - - - - - - 0 1 5 2 l a t o T $ 5 8 3 , 3 2 3 7 0 9 , 6 3 3 1 6 , 8 2 6 0 2 , 4 2 3 0 0 , 2 2 5 6 4 , 4 3 5 6 4 , 4 3 4 4 0 , 4 0 5 0 9 8 , 9 1 0 0 1 , 2 2 0 9 9 , 1 4 - - - - - - - - - - - - - - - - - - - - - - 9 5 1 , 9 0 5 8 1 8 , 2 6 5 7 7 9 , 1 7 0 , 1 ) 0 7 3 , 2 ( 4 3 9 , 9 4 8 7 0 , 9 8 0 7 , 6 4 5 9 , 9 3 1 8 8 8 , 9 8 1 - 2 4 5 , 2 2 4 5 , 2 - - 5 7 2 , 3 5 7 2 , 3 - - - - - 5 8 3 , 9 1 2 9 5 1 , 0 1 - - - - - - 5 6 8 , 1 4 3 6 , 1 1 4 4 5 , 9 2 2 5 6 8 , 1 0 9 8 , 1 0 0 1 , 2 0 9 9 , 3 0 0 0 , 5 2 0 0 0 , 5 2 0 0 0 , 0 5 - - - - - - - - - - 3 0 9 3 0 9 - - - - - - - - - - - - - - - - - - - - - - - 0 0 0 , 4 0 1 6 0 2 , 4 2 6 0 2 , 4 2 6 0 2 , 4 2 3 0 0 , 2 2 0 9 1 , 1 3 0 9 1 , 1 3 s r o t c e r i D e v i t u c e x E - n o N 2 2 0 2 ) i i ( s r a m e g g a l P H ) i ( k c o t n a B A ) i i i ( n o t y a l C R ) i i ( k o o r B M ) v i ( i n a p e L C ) v ( n a g i l l i G C ) v ( y a r r u M I 1 0 0 , 1 6 2 l a t o T b u S s r o t c e r i D e v i t u c e x E - n o N 0 0 0 , 8 1 0 0 0 , 0 2 0 0 0 , 8 3 l a t o T b u S s r o t c e r i D e v i t u c e x E s r o t c e r i D e v i t u c e x E ) i i i ( n o t y a l C R ) i v ( e n y l C I 0 0 0 , 0 5 8 4 3 , 8 5 3 5 , 9 2 3 ) 5 5 6 , 5 1 ( 0 5 2 , 2 5 4 0 0 0 , 0 5 ) 7 0 3 , 7 ( 5 8 7 , 1 8 7 l a t o T b u S P M K r e h t O P M K r e h t O s d r a h c i R T h t i m S M 1 1 0 , 8 1 6 , 1 8 0 7 , 6 8 8 8 , 9 8 1 4 2 6 , 5 6 4 4 5 , 9 2 2 8 6 7 , 2 0 0 0 , 0 5 ) 7 0 3 , 7 ( 6 8 7 , 0 8 0 , 1 L A T O T 4 1 n o t n e m t n i o p p a s i h f o e m i t e h t t a t n e m e c n u o n n a X S A e h t n i d e s o l c s i d e r e w h c i h w f o s l i a t e d e h t , g n i t l u s n o C I T F h t i w t n e m e e r g a n a a i v e r e w d i a p s e e f g n i t l u s n o C . 2 2 0 2 y r a u n a J 3 1 n o d e t n i o p p a s a w k c o t n a B A . 2 2 0 2 r e b m e c e D 5 m o r f r o t c e r i D d n a O E C m i r e t n I s a d e t c a d n a 2 2 0 2 y l u J 7 n o r o t c e r i D e v i t u c e x E - n o N d e t n i o p p a s a w n o t y a l C R . 2 2 0 2 y l u J 7 n o d e t n i o p p a e r e w s r a m e g g a l P H d n a k o o r B M . 2 2 0 2 y r a u n a J . e t a d n o i t a n g i s e r s i h o t h g u o r h t 2 2 0 2 y r a u n a J 1 m o r f y t i c a p a c e v i t u c e x e n a n i d e k r o w e H . 2 2 0 2 y r a u n a J 3 1 n o d e n g i s e r e n y l C I . 2 2 0 2 y l u J 7 n o d e n g i s e r y a r r u M I d n a n a g i l l i G C . 2 2 0 2 y a M 2 n o d e n g i s e r i n a p e L C r i S ) i ( ) i i ( ) i i i ( ) v i ( ) v ( ) i v ( 27 2023 ANNUAL REPORT DIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Service Agreements A summary of the key terms of the Director contracts with the Company are set out below: Director Role Remuneration Notice Period Graham Ascough Non-Executive Chairman Appointed 7 November 2023 Directors fee of $88,800 per annum. No notice period Hamish Bohannan Non-Executive Director Appointed 7 November 2023 Directors fee of $60,000 per annum. Statutory superannuation contributions. Michael Brook Non-Executive Director Executive Director 17 April 2023 to 15 November 2023 Directors fee of $60,000 per annum (increased from $50,000 per annum on 7 November 2023 to align with incoming Directors). Statutory superannuation contributions. Additional Directors fee charged at a rate of $1,500 per day while working in an executive capacity. Statutory superannuation contributions. Rowan Johnston Non-Executive Director Appointed 7 November 2023 Directors fee of $60,000 per annum. Statutory superannuation contributions. Hansjoerg Plaggemars Non-Executive Director Andrew Bantock Non-Executive Chairman - resigned 7 November 2023 Directors fee of $60,000 per annum (increased from $50,000 per annum on 7 November 2023 to align with incoming Directors). Services of A Bantock as director were provided under a consultancy agreement with FTI Consulting. Directors Fees of $104,000 per annum. Special Exertion Fees (over and above what is expected for the non-executive chair role) of $3,500 per day. Richard Clayton Non-Executive Director - resigned 7 November 2023 Directors fee of $50,000 per annum. Statutory superannuation contributions. Interim CEO - initial contract term from 5 December 2022 to 31 March 2023, which was extended to 14 April 2023 Additional base salary of $4,500 per week while acting in the Interim CEO role until 14 April 2023. Statutory superannuation contributions. No notice period No notice period No notice period No notice period 14 days’ notice period No notice period 1 month during the interim period, and 1 week during the extension period In addition to the above key terms, all Directors are also eligible to participate in the long-term incentive schemes offered by the Company, subject to shareholder approval. A summary of the key terms of the other KMP contracts with the Company are set out below: Other KMP Role Remuneration James Fox Chief Executive Officer Appointed 16 November 2023 Base salary of $375,000 per annum. Statutory superannuation contributions. Matthew Smith Chief Financial Officer & Company Secretary Base salary of $350,000 per annum. Statutory superannuation contributions. Life insurance policy. Notice Period 6 months 2 months Interim CEO 17 April 2023 to 15 November 2023 Remuneration loading of $25,000 per annum while assuming the role of Interim CEO. No notice period Timothy Richards Chief Executive Officer Ceased 1 January 2023 Total fixed remuneration of $482,023. 3 months In addition to the above key terms, all other KMP are also eligible to participate in the STI and LTI plans offered by the Company. 28 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Short Term Incentives During the 2023 reporting period, whilst the STI Plan was not operational Matthew Smith received a bonus, details of which appear in the remuneration table in this Directors’ Report. Long Term Incentives – Share Based Compensation Options No Options were granted during the 2023 reporting period to the Directors of the Company and other KMP of the Group. The following table outlines the Options vested or lapsed during the 2023 reporting period to the Directors of the Company and other KMP of the Group. Instru- ment Year 2023 Other KMP T Richards(i) ZEPO 2020 M Smith ZEPO 2020 M Smith PEPO 2019 M Smith PEPO 2018 Options granted during the year - - - - Grant date 8-Jul- 20 11-Aug- 20 12-Jul- 19 3-Jul- 18 (i) T Richards resigned on 1 January 2023. Fair value per option at grant date Value of option at grant date ($) Vesting date Exercise price Expiry date Options vested/ (lapsed) during the year Value of option exercised during the year ($) $0.445 145,738 $0.625 105,600 $0.225 45,730 $0.400 49,920 1-Jan- 23 11-Aug- 23 19-Jul- 23 3-Jul- 22 $0.00 $0.00 $0.58 $1.02 1-Jan- 23 21-Aug- 23 19-Jul- 23 10-Jul- 23 327,500 12,118 168,960 3,210 (203,246) (124,800) - - The following table outlines the Options granted, vested or lapsed during the 2022 reporting period to the Directors of the Company and other KMP of the Group. Instru- ment Year 2022 Other KMP T Richards ZEPO 2020 M Smith ZEPO 2019 M Smith PEPO 2018 Options granted during the year - - - Grant date 8-Jul- 20 12-Jul- 19 3-Jul- 18 Fair value per option at grant date Value of option at grant date ($) Vesting date Exercise price Expiry date Options vested/ (lapsed) during the year Value of option exercised during the year ($) $0.445 142,400 $0.400 101,376 $0.400 49,920 1-Jan- 22 19-Jul- 22 3-Jul- 22 $0.00 $0.00 $1.02 1-Jan- 22 19-Jul- 22 10-Jul- 23 320,000 67,200 253,440 19,008 124,800 - 29 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Share Appreciation Rights No Share Appreciation Rights were granted during the 2023 reporting period to the Directors of the Company and other KMP of the Group. The following table outlines the Share Appreciation Rights vested or lapsed during the 2023 reporting period to the Directors of the Company and other KMP of the Group. Rights granted during the year Grant date Fair value per right at grant date Value of right at grant date ($) Vesting date Exercise price Expiry date Rights vested/ (lapsed) during the year 2023 Instru- ment Year Other KMP M Smith SAR 2019 - 12-Jul-19 $0.250 56,160 19-Jul-23 $0.400 19-Jul-23 (224,640) The following table outlines the Options granted, vested or lapsed during the 2022 reporting period to the Directors of the Company and other KMP of the Group. Rights granted during the year Grant date Fair value per right at grant date Value of right at grant date ($) Vesting date Exercise price Expiry date Rights vested/ (lapsed) during the year Instru- ment Year 2022 Other KMP M Smith SAR 2018 - 3-Jul-18 $0.450 64,183 3-Jul-22 $0.710 10-Jul-22 (142,629) 30 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Share Performance Rights Share Performance Rights over ordinary shares in the Company were granted as remuneration to KMP during the 2023 reporting period as per the Securities Incentive Plan. The following table outlines the Share Performance Rights granted, vested or lapsed during the 2023 reporting period to the Directors of the Company and other KMP of the Group. Rights granted during the year Grant date Fair value per right at grant date Value of right at grant date ($) Vesting date Exercise price Expiry date Rights vested/ (lapsed) during the year 2023 Directors Instrument Year G Ascough(i) SPR-Class A 2023 5,000,000 7-Nov-23 $0.020 100,000 7-Nov-26 $0.000 7-Nov-27 SPR-Class B 2023 5,000,000 7-Nov-23 $0.018 90,000 7-Nov-26 $0.000 7-Nov-27 H Bohannan(i) SPR-Class A 2023 4,000,000 7-Nov-23 $0.020 80,000 7-Nov-26 $0.000 7-Nov-27 SPR-Class B 2023 4,000,000 7-Nov-23 $0.018 72,000 7-Nov-26 $0.000 7-Nov-27 M Brook(i) SPR-Class A 2023 4,000,000 7-Nov-23 $0.020 80,000 7-Nov-26 $0.000 7-Nov-27 SPR-Class B 2023 4,000,000 7-Nov-23 $0.018 72,000 7-Nov-26 $0.000 7-Nov-27 R Johnston(i) SPR-Class A 2023 4,000,000 7-Nov-23 $0.020 80,000 7-Nov-26 $0.000 7-Nov-27 SPR-Class B 2023 4,000,000 7-Nov-23 $0.018 72,000 7-Nov-26 $0.000 7-Nov-27 H Plaggemars(i) SPR-Class A 2023 4,000,000 7-Nov-23 $0.020 80,000 7-Nov-26 $0.000 7-Nov-27 SPR-Class B 2023 4,000,000 7-Nov-23 $0.018 72,000 7-Nov-26 $0.000 7-Nov-27 Other KMP J Fox SPR-Class A 2023 8,400,000 16-Nov-23 $0.018 151,200 16-Nov-26 $0.000 16-Nov-27 SPR-Class B 2023 8,400,000 16-Nov-23 $0.016 134,400 16-Nov-26 $0.000 16-Nov-27 SPR-Class C 2023 8,400,000 16-Nov-23 $0.018 151,200 16-Nov-26 $0.000 16-Nov-27 SPR-Class D 2023 2,800,000 16-Nov-23 $0.018 50,400 16-Nov-27 $0.000 16-Nov-27 M Smith SPR-Class A 2023 6,720,000 16-Nov-23 $0.018 120,960 16-Nov-26 $0.000 16-Nov-27 SPR-Class B 2023 6,720,000 16-Nov-23 $0.016 107,520 16-Nov-26 $0.000 16-Nov-27 SPR-Class C 2023 6,720,000 16-Nov-23 $0.018 120,960 16-Nov-26 $0.000 16-Nov-27 SPR-Class D 2023 2,240,000 16-Nov-23 $0.018 40,320 16-Nov-27 $0.000 16-Nov-27 - - - - - - - - - - - - - - - - - - (i) The share performance rights agreed to be granted to the Non-Executive Directors have not been issued at 31 December 2023. The issue of the underlying instruments remains subject to shareholder approval. The fair value of the share performance rights is estimated based on a nominal valuation date of 31 December 2023 and will be revised once the grant date is established in accordance with the requirements of AASB 2 Share-Based Payments. The fair value of the Share Performance Rights is measured at grant date and allocated equally over the period from grant date to vesting date. If participants resign during the vesting period, the Share Performance Rights are forfeited unless the Board at its discretion decides otherwise. If Share Performance Rights are retained by the participants upon resignation or termination, the fair value of the Share Performance Rights is expensed immediately. This allocation is reflected in the Share-Based Payments column of the remuneration tables above. The fair value at grant date was determined independently by a third party. No Share Performance Rights were granted, vested or lapsed during the 2022 reporting period to the Directors of the Company and other KMP of the Group. 31 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Equity Instrument Disclosures Relating to KMP Options Options over Ordinary Shares in the Company held during the financial year by Directors of the Company and other KMP of the Group. Opening Balance 1-Jan-23 Granted During the Year Exercised During the Year Lapsed/ Cancelled During the Year Held at Resignation Closing Balance 31-Dec-23 Options Exercisable 31-Dec-23 - - - - - - - - - 613,527 327,500 941,027 941,027 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (168,960) (328,046) (327,500) - (496,460) (328,046) (496,460) (328,046) - - - - - - - - - - - - - - - - - - - - - - 116,521 - 116,521 116,521 - - - - - - - - - - - - - 2023 Directors G Ascough H Bohannan M Brook R Johnston H Plaggemars A Bantock R Clayton Sub total Other KMP J Fox M Smith T Richards(i) Sub total TOTAL (i) T Richards resigned on 1 January 2023. Opening Balance 1-Jan-22 Granted During the Year Exercised During the Year Lapsed/ Cancelled During the Year Held at Resignation Closing Balance 31-Dec-22 Options Exercisable 31-Dec-22 - - - - - - - - - 647,500 866,967 1,514,467 1,514,467 - - - - - - - - - - - - - - - - - - - - - - (320,000) (253,440) (573,440) (573,440) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 327,500 613,527 941,027 941,027 - - - - - - - - - - - - - 2022 Directors A Bantock R Clayton M Brook H Plaggemars I Clyne C Lepani C Gilligan I Murray Sub total Other KMP T Richards M Smith Sub total TOTAL 32 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Equity Instrument Disclosures Relating to KMP (Continued) Share Appreciation Rights Share Appreciation Rights over Ordinary Shares in the Company held during the financial year by Directors of the Company and other KMP of the Group. 2023 Directors G Ascough H Bohannan M Brook R Johnston H Plaggemars A Bantock R Clayton Sub total Other KMP J Fox M Smith T Richards Sub total TOTAL 2022 Directors A Bantock R Clayton M Brook H Plaggemars I Clyne C Lepani C Gilligan I Murray Sub total Other KMP T Richards M Smith Sub total TOTAL Opening Balance 1-Jan-23 Granted During the Year Exercised During the Year Lapsed/ Cancelled During the Year Held at Resignation Closing Balance 31-Dec-23 Rights Exercisable 31-Dec-23 - - - - - - - - - 359,256 - 359,256 359,256 - - - - - - - - - - - - - - - - - - - - - - - - - - Opening Balance 1-Jan-22 Granted During the Year Exercised During the Year - - - - - - - - - - 501,885 501,885 501,885 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (224,640) - (224,640) (224,640) Lapsed/ Cancelled During the Year - - - - - - - - - - (142,629) (142,629) (142,629) - - - - - - - - - - - - - - - - - - - - - - 134,616 - 134,616 134,616 - - - - - - - - - - - - - Held at Resignation Closing Balance 31-Dec-22 Rights Exercisable 31-Dec-22 - - - - - - - - - - - - - - - - - - - - - - - 359,256 359,256 359,256 - - - - - - - - - - - - - 33 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Equity Instrument Disclosures Relating to KMP (Continued) Share Performance Rights Share Performance Rights over Ordinary Shares in the Company held during the financial year by Directors of the Company and other KMP of the Group. Opening Balance 1-Jan-23 Granted During the Year Exercised During the Year Net Change Other Held at Resignation Closing Balance 31-Dec-23 Rights Exercisable 31-Dec-23 2023 Directors G Ascough H Bohannan M Brook R Johnston H Plaggemars A Bantock R Clayton Sub total Other KMP J Fox M Smith - - - - - - - - - 10,000,000(ii) 8,000,000(ii) 8,000,000(ii) 8,000,000(ii) 8,000,000(ii) - - 42,000,000 28,000,000 600,000 22,400,000 T Richards(i) 1,079,545 - Sub total TOTAL 1,679,545 50,400,000 1,679,545 92,400,000 - - - - - - - - - - - - - - - - - - - - - - - (1,079,545) (1,079,545) (1,079,545) - - - - - - - - - - - - - 10,000,000 8,000,000 8,000,000 8,000,000 8,000,000 - - 42,000,000 28,000,000 23,000,000 - 51,000,000 93,000,000 - - - - - - - - - - - - - (i) T Richards resigned on 1 January 2023. The share performance rights were forfeited upon his departure. (ii) The share performance rights agreed to be granted to the Non-Executive Directors have not been issued at 31 December 2023. The issue of the underlying instruments remains subject to shareholder approval. 2022 Directors A Bantock R Clayton M Brook H Plaggemars I Clyne C Lepani C Gilligan I Murray Sub total Other KMP T Richards M Smith G Rapley G Zamudio Sub total TOTAL Opening Balance 1-Jan-22 Granted During the Year Exercised During the Year Net Change Other Held at Resignation Closing Balance 31-Dec-22 Rights Exercisable 31-Dec-22 - - - - - - - - - 1,079,545 600,000 - - 1,679,545 1,679,545 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,079,545 600,000 - - 1,679,545 1,679,545 - - - - - - - - - - - - - - - 34 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Equity Instrument Disclosures Relating to KMP (Continued) Ordinary Shares The number of Ordinary Shares in the Company held during the financial year by each Director of the Company and other KMP of the Group, including their personally related parties, was as follows: Opening Balance 1-Jan-23 Issued on Vesting of Options Shares Acquired on Market Net Change Other Held at Resignation Closing Balance 31-Dec-23 2023 Directors G Ascough H Bohannan M Brook R Johnston - - - - - - - - - - - - - 168,960 - 168,960 168,960 - - - - - - - - 310,000 155,944,400 - - - - 310,000 155,944,400 - - - - - - - - - - - - - - - - - - (505,048) (505,048) - - - - 171,056,722 - - 171,056,722 - 920,789 - 920,789 310,000 155,944,400 (505,048) 171,977,511 H Plaggemars(i) 14,802,322 A Bantock R Clayton Sub total Other KMP J Fox M Smith T Richards(ii) Sub total TOTAL - - 14,802,322 - 751,829 505,048 1,256,877 16,059,199 (i) At 31 December 2023, 125,662,487 and 44,793,536 shares were held indirectly through Delphi and 2Invest AG respectively where H Plaggemars is a Managing Director with sole signatory rights but not the beneficial owner, and 600,699 shares were held indirectly through KiCo Invest GmbH where H Plaggemars is the Managing Director and 50% beneficial owner. Movement during the year included 310,000 shares acquired on market by KiCo Invest GmbH, 30,281,913 shares subscribed under the Entitlement Offer in April 2023 by these entities and 125,662,487 shares held by Delphi on the date H Plaggemars became Managing Director with sole signatory rights of this entity (refer to ASX announcement dated 27 December 2023 titled “Change of Director’s Interest Notice – Hansjoerg Plaggemars”). (ii) T Richards resigned on 1 January 2023. 2022 Directors A Bantock R Clayton M Brook H Plaggemars I Clyne(i) C Lepani C Gilligan(ii) I Murray(ii) Sub total Other KMP T Richards M Smith Sub total TOTAL Opening Balance 1-Jan-22 Issued on Vesting of Options Shares Acquired on Market Net Change Other Held at Resignation Closing Balance 31-Dec-22 - - - - 1,289,498 - 119,048 238,095 1,646,641 185,048 498,389 683,437 2,330,078 - - - - - - - - - 320,000 253,440 573,440 573,440 - - - - - - - - - - - - - - - - 14,802,322(iii) - - - - - - - 14,802,322 - - - - (1,289,498) - (119,048) (238,095) - - - - 14,802,322 (1,646,641) 14,802,322 - - - - - - 505,048 751,829 1,256,877 14,802,322 (1,646,641) 16,059,199 I Clyne resigned on 13 January 2022. (i) (i) C Gilligan and I Murray resigned on 7 July 2022. (ii) Shares held at date of appointment. 14,617,822 shares were held indirectly through 2Invest AG where H Plaggemars is a Managing Director with sole signatory rights but not the beneficial owner, and 184,500 shares were held indirectly through KiCo Invest GmbH where H Plaggemars is the Managing Director and 50% beneficial owner. 35 2023 ANNUAL REPORTDIRECTORS’ REPORT 19. REMUNERATION REPORT - AUDITED (CONTINUED) Other Transactions with KMP and their related parties PNX Metals Limited PNX Metals Limited, an entity related to G Ascough, R Johnston and H Plaggemars, provided office lease, software lease and the services of a Mining, Infrastructure & Project consultant totalling $37,230 during the year (2022: nil). These fees are payable at arms-length commercial rates. At 31 December 2023, a total of $37,230 was owing to PNX Metals Limited. FTI Consulting The Company incurred $99,267 in relation to the Non-Executive Chairman services provided by FTI Consulting, an entity related to A Bantock (former Non-Executive Chairman) during the year. The fees payable for the Non-Executive Chairman services were based on a fixed remuneration of $104,000 per annum and special exertion fees (over and above what is expected for the non-executive chair role) at $3,500 per day. Refer to the Company’s ASX announcement dated 14 January 2022 titled “Appointment of New Chairman” for further details of the appointment of FTI Consulting. At 31 December 2023, no amount was owing to FTI Consulting. Amounts Recognised at Balance Date The amounts recognised at the balance date in relation to other transactions with KMP and their personally related parties are: Liabilities Current Liabilities Non-Current Liabilities Total Liabilities Expenses Administration Expense Consultancy Expense Employee Benefits Expense Total Expenses 2023 37,230 - 37,230 1,560 35,670 99,267 136,497 END OF REMUNERATION REPORT The Directors Report, including the Remuneration Report, is signed in accordance with a resolution of the Directors: Graham Ascough Non-Executive Chairman 28 March 2024 36 2023 ANNUAL REPORT AUDITOR’S INDEPENDENCE DECLARATION 37 2023 ANNUAL REPORTINDEPENDENT AUDITOR’S REPORT Ernst & Young 11 Mounts Bay Road Perth WA 6000 Australia GPO Box M939 Perth WA 6843 Tel: +61 8 9429 2222 Fax: +61 8 9429 2436 ey.com/au Independent auditor’s report to the members of Geopacific Resources Limited Report on the audit of the financial report Opinion We have audited the financial report of Geopacific Resources Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 31 December 2023, the consolidated statement of profit or loss and other comprehensi ve income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of material accounting policy information, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 31 December 2023 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainty related to going concern We draw attention to Note 1 in the financial report, which describes the events or conditions that raise doubt about the Group’s ability to continue as a going concern. These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 38 2023 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined that the matter described below to be a key audit matter to be communicated in our report. For the matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit proc edures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. Impairment of Woodlark cash generating unit (CGU) Why significant How our audit addressed the key audit matter At the end of each reporting period, the Group exercises judgment in determining whether there is any indication of impairment of an asset or CGU. If any such indicators exist, the Group estimates the recoverable amount of the applicable asset or CGU. The Group concluded that indicators of impairment were present at 31 December 2023 for the Woodlark CGU. The Group performed an impairment assessment to determine the estimated recoverable amount of this CGU. The estimated recoverable value supported the carrying value, resulting in no impairment for the current year. Key assumptions, judgments and estimates, used in the formulation of the Group’s impairment testing of non-current assets are disclosed in Note 14. We considered this to be a key audit matter because of the significant judgement involved in determining: ► Whether indicators of impairment were present. ► The estimates and assumptions involved in determining the estimated recoverable amount of the non-current assets in the Woodlark CGU, including whether this estimated recoverable amount fell within a reasonable range of values determined based on identified market transactions and other valuation methodologies. We evaluated the Group’s internal and external sources of information in assessing whether indicators of impairment existed. Our audit procedures included the following: ► Inquired of management and the board of directors regarding the current status of the proposed development activities and mine plan ► Compared the Group’s consolidated net assets to its market capitalisation at 31 December 2023. As indicators of impairment were identified, impairment testing was conducted by the Group. We evaluated the reasonableness of the Group’s impairment assessment process. Our audit procedures included the following: ► Assessed that the Group's impairment testing methodology and calculations were in accordance with the requirements of Australian Accounting Standards. ► Evaluated, with involvement from our valuation specialists, the Group’s determination of the estimated recoverable amount for the Woodlark CGU. This included assessing the reasonableness of management’s use of market transactions and resource multiples of the estimated recoverable amount for the Woodlark CGU. ► Assessed the independence, qualifications and objectivity of the Group's experts used to determine the Group’s published resources used in certain components of the estimated recoverable amount calculation. ► Evaluated the adequacy of the Group's disclosures included in Note 14 of the financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 39 2023 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2023 annual report, 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, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information 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 financi al 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, whet her due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 40 2023 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, includ ing the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 41 2023 ANNUAL REPORT INDEPENDENT AUDITOR’S REPORT 42 2023 ANNUAL REPORTGEOPACIFIC RESOURCES LIMITED and Controlled Entities DIRECTORS’ DECLARATION DIRECTORS’ DECLARATION In accordance with a resolution of the Directors of Geopacific Resources Limited, I declare that: 1. In the opinion of the Directors: (a) the financial statements and notes, of Geopacific Resources Limited for the financial year ended 31 December 2023 are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards and Corporations Regulations 2001. (b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1. (c) subject to the matters set out in Note 1 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. 2. This declaration has been made after receiving the declarations required to be made to the Directors by the Chief Executive Officer and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 31 December 2023. On behalf of the Board Graham Ascough Non-Executive Chairman 28 March 2024 49 | P a g e 43 2023 ANNUAL REPORTCONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2023 Consolidated Note 2023 $ 2022 $ Continuing Operations Interest income Administration expense Consultancy expense Employee benefits expense Site related expense Finance costs Impairment and other write downs Depreciation expense Net onerous contract provision (recognised)/written back Share-based payments expense Net foreign currency gain/(loss) Net other income/(expense) Loss before income tax 11 & 12 5(a) 5(b) 13 & 15 17(i) 27 15,107 10,109 (586,712) (888,244) (1,456,228) (6,193,708) (356,933) (1,034,326) (562,045) (322,242) (108,742) 22,772 618,006 (10,853,295) (912,030) (2,664,686) (2,251,197) (645,482) (856,715) (66,012,928) (288,468) 703,740 (199,304) (224,555) 1,386,591 (71,954,925) Income tax benefit Net loss for the year 6 - - (10,853,295) (71,954,925) Other comprehensive income Items of other comprehensive income to be reclassified to profit or loss in subsequent periods (net of tax) Exchange differences on translating foreign controlled entities Other comprehensive income for the year, net of tax (4,336,685) (4,336,685) 8,748,853 8,748,853 Total comprehensive loss for the year (15,189,980) (63,206,072) Loss per share (cents) for loss attributable to the ordinary equity holders of the company: Basic loss per share Diluted loss per share 28 28 (1.49) (1.49) (13.85) (13.85) The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 44 50 | P a g e 2023 ANNUAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2023 Current Assets Cash and cash equivalents Trade and other receivables Prepayments Inventories Total Current Assets Non-Current Assets Trade and other receivables Exploration and evaluation assets Mine properties under development Property, plant and equipment Right-of-use asset Total Non-Current Assets TOTAL ASSETS Current Liabilities Trade and other payables Interest-bearing liabilities Other financial liabilities Provisions Total Current Liabilities Non-Current Liabilities Other financial liabilities Provisions Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS Note 7 8 9 10 8 11 12 13 15(a) 16 18 15(b) & 19 17 15(b) & 19 17 Consolidated 2023 $ 2022 $ 2,145,015 1,460,683 250,036 555,948 4,411,682 4,320,843 5,843,059 37,194,192 24,751,629 191,860 72,301,583 5,738,772 914,034 454,259 617,095 7,724,160 6,417,501 5,926,632 37,190,454 27,850,262 53,407 77,438,256 76,713,265 85,162,416 2,213,546 3,500,000 69,997 669,816 6,453,359 121,011 1,037,098 1,158,109 4,722,123 - 53,946 812,837 5,588,906 - 1,068,028 1,068,028 7,611,468 6,656,934 69,101,797 78,505,482 Equity Issued capital Reserves Accumulated losses Total Equity attributable to equity holders 20 21 290,668,871 10,465,052 (232,032,126) 69,101,797 284,991,318 14,692,995 (221,178,831) 78,505,482 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 51 | P a g e 45 2023 ANNUAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023 e g a P | 2 5 . s e t o n g n i y n a p m o c c a e h t h t i w n o i t c n u n o c n j i l d a e r e b d u o h s y t i u q e n i s e g n a h c f o t n e m e t a t s d e t a d i l o s n o c e v o b a e h T 2 8 4 , 5 0 5 , 8 7 ) 5 8 6 , 6 3 3 , 4 ( ) 5 9 2 , 3 5 8 , 0 1 ( , ) 5 8 6 6 3 3 4 ( , , ) 5 9 2 3 5 8 0 1 ( , 0 0 0 , 0 0 0 , 6 ) 7 4 4 , 2 2 3 ( 2 4 7 , 8 0 1 , 0 0 0 0 0 0 6 , , 2 4 7 8 0 1 ) 7 4 4 2 2 3 ( , ) 0 8 9 , 9 8 1 , 5 1 ( ) 0 8 9 , 9 8 1 5 1 ( , - - - - , ) 5 9 2 3 5 8 0 1 ( , , ) 5 9 2 3 5 8 0 1 ( , , 2 8 4 5 0 5 8 7 , , ) 1 3 8 8 7 1 1 2 2 ( , - - - - - - , ) 7 1 3 0 7 3 1 ( , - - - - , 1 3 4 8 3 8 0 1 , , ) 5 8 6 6 3 3 4 ( , , ) 5 8 6 6 3 3 4 ( , - - - - - - 0 4 8 0 0 3 , 2 4 7 8 0 1 , - - - - - - , 1 4 0 4 2 9 4 , - - - 8 1 3 , 1 9 9 4 8 2 , , 0 0 0 0 0 0 6 , ) 7 4 4 2 2 3 ( , 7 9 7 , 1 0 1 , 9 6 7 9 7 , 1 0 1 , 9 6 ) 6 2 1 , 2 3 0 , 2 3 2 ( ) 7 1 3 , 0 7 3 , 1 ( 6 4 7 , 1 0 5 , 6 0 4 8 , 0 0 3 3 8 7 , 2 3 0 , 5 1 7 8 , 8 6 6 , 0 9 2 , ) 5 2 9 4 5 9 1 7 ( , , ) 5 2 9 4 5 9 1 7 ( , , ) 5 2 9 4 5 9 1 7 ( , 0 0 0 5 4 1 , , 4 0 3 9 9 1 0 0 0 5 4 1 , 4 0 3 9 9 1 , - - , 3 5 8 8 4 7 8 , , 3 5 8 8 4 7 8 , - , ) 2 7 0 6 0 2 3 6 ( , , ) 2 7 0 6 0 2 3 6 ( , , ) 5 2 9 4 5 9 1 7 ( , 0 5 2 , 7 6 3 1 4 1 , 0 5 2 , 7 6 3 1 4 1 , , ) 6 0 9 3 2 2 9 4 1 ( , - - - - - , ) 7 1 3 0 7 3 1 ( , , 2 8 4 5 0 5 8 7 , , 2 8 4 5 0 5 8 7 , , ) 1 3 8 8 7 1 1 2 2 ( , , ) 7 1 3 0 7 3 1 ( , - , 8 7 5 9 8 0 2 , , 3 5 8 8 4 7 8 , , 3 5 8 8 4 7 8 , - - , 1 3 4 8 3 8 0 1 , - - - - - 0 4 8 0 0 3 , 0 4 8 0 0 3 , , 7 3 7 4 2 7 4 , - - - - 4 0 3 9 9 1 , , 1 4 0 4 2 9 4 , - - - 8 1 3 , 6 4 8 4 8 2 , 0 0 0 5 4 1 , - 8 1 3 , 1 9 9 4 8 2 , s n o i t a r e p o n g e r o f i f o n o i t a l s n a r t n o e c n e r e f f i d e g n a h c x E s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T r a e y e h t r o f ) s s o l ( / e m o c n i e v i s n e h e r p m o c l a t o T 3 2 0 2 y r a u n a J 1 t A r a e y e h t r o f s s o L s t n e m y a p d e s a b - e r a h S 3 2 0 2 r e b m e c e D 1 3 t A s t s o c e u s s i e r a h S d e u s s i s e r a h S 2 2 0 2 y r a u n a J 1 t A r a e y e h t r o f s s o L s n o i t a r e p o n g e r o f i f o n o i t a l s n a r t n o e c n e r e f f i d e g n a h c x E s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T r a e y e h t r o f ) s s o l ( / e m o c n i e v i s n e h e r p m o c l a t o T t n e m j t s u d a s t s o c e u s s i e r a h S s t n e m y a p d e s a b - e r a h S 2 2 0 2 r e b m e c e D 1 3 t A D E T I M I L S E C R U O S E R C I F I C A P O E G s e i t i t n E d e l l o r t n o C d n a Y T I U Q E N I S E G N A H C F O T N E M E T A T S D E T A D I L O S N O C 3 2 0 2 R E B M E C E D 1 3 D E D N E R A E Y E H T R O F l a t o T l e b a t u b i r t t A l a t o T y t i u q E $ f o s r e n w O o t l d e t a u m u c c A t n e r a P $ s e s s o L $ y t i u q E r e h t O n o i t a l s n a r T e v r e s e R ) 1 2 e t o N ( $ e v r e s e R ) 1 2 e t o N ( $ n o i t p O e v r e s e R ) 1 2 e t o N ( $ n g i e r o F y c n e r r u C - e r a h S d e s a B s t n e m y a P e v r e s e R ) 1 2 e t o N ( $ d e u s s I l a t i p a C ) 0 2 e t o N ( $ d e t a d i l o s n o C 46 2023 ANNUAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS GEOPACIFIC RESOURCES LIMITED FOR THE YEAR ENDED 31 DECEMBER 2023 and Controlled Entities CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023 CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received Interest and other finance costs paid Net Cash Used In Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant and equipment Proceeds from sale of plant and equipment Exploration expenditure Mine development expenditure Net Cash Used In Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from shares issued (net of costs) Proceeds from borrowings (net of costs) Payment of costs relating to termination of loan facilities Payment of principal portion of lease liability Net Cash From/(Used In) Financing Activities Consolidated Note 2023 $ 2022 $ (8,700,511) 13,008 - (8,687,503) (12,400,872) 10,109 (813,663) (13,204,426) 31(b) (393,041) 326,074 (283,436) (3,360,974) (3,711,377) (17,563,274) - (3,722,221) (18,264,961) (39,550,456) 5,677,553 3,237,500 - (70,211) 8,844,842 - - (8,605,219) (214,651) (8,819,870) NET DECREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of the year Effect of exchange rates on cash held in foreign currencies CASH AND CASH EQUIVALENTS AT END OF THE YEAR 7 (3,554,038) 5,738,772 (39,719) 2,145,015 (61,574,752) 67,470,477 (156,953) 5,738,772 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 53 | P a g e 47 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Geopacific Resources Limited (the Company or Geopacific) is an Australian Securities Exchange listed public company domiciled in Australia. The consolidated financial report of the Company for the financial year ended 31 December 2023 comprises the Company and its controlled entities (together referred to as the ‘Group’). The registered office is located at 278 Stirling Highway, Claremont, WA, 6010. The Group is principally engaged in the development of the Woodlark Gold Project in Papua New Guinea. The financial report was authorised for issue by the directors on 28 March 2024. Basis of preparation The financial report is a general-purpose financial report that has been prepared in accordance with Australian Accounting Standards, 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. Compliance with Australian Accounting Standards ensures that the financial statements and the notes thereto also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. The financial report has been prepared on a historical cost basis. Going Concern This financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business. During the year ended 31 December 2023, the Group incurred a net loss after tax of $10,853,295 (2022: $71,954,925) and had operating and investing cash outflows of $8,687,503 (2022: $13,204,426) and $3,711,377 (2022: $39,550,456) respectively. At 31 December 2023 the Group had cash on hand of $2,145,015 (2022: $5,738,772) and had net current liabilities of $2,041,667 (2022: $2,135,254 net current assets). Subsequent to balance date, the Company received net cash inflows of $1.7 million from the issue of Bonds to 2Invest AG and a further $1.2 million from the receipt of PNG GST refunds. Cash on hand at 27 March 2024 had increased to $2.6 million. The Group has also deferred the settlement date of the Bonds on issue to Deutsche Balaton and 2Invest AG (the Bonds) from 29 March 2024 to 30 September 2024. The Directors, in their consideration of the appropriateness of the going concern basis for the preparation of the financial report, have prepared a cash flow forecast for the next 12 months from date of signing. The cash flow forecast reflects that further funding will be required, including the Group being able to secure additional funding by 31 May 2024, in order to meet the Group’s ongoing working and investing capital requirements. At the date of signing this report, the Directors have reasonable grounds to believe that the Group will be able to achieve the matters above and that it is appropriate to prepare the financial report on the going concern basis: Going Concern (continued) (cid:120) (cid:120) (cid:120) The Group’s successful deferral of the maturity dates of the Bonds from 29 March 2024 to 30 September 2024 as the Group continues to work on a recapitalisation plan incorporating settlement of the Bonds. Other than repayment on the current terms, this may involve a combination of further deferral to the maturity dates and repayment via participation in future capital raisings; The Group’s ability to raise funds from external sources to meet ongoing working and investing capital requirements, as demonstrated by the successful completion of the $6 million Entitlement Offer in April 2023; and The Group’s ability to reduce expenditure on non-essential activities and manage the timing of cash flows to meet the committed obligations of the business as and when they fall due. Should the Group be unsuccessful in achieving the matters set out above, a material uncertainty exists that may cast significant doubt about the Group’s ability to continue as a going concern and, therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the financial report. This financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts, nor to the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern. New and amended Accounting Standards and Interpretations adopted during the year The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2023. The Group did not make any significant changes to its accounting policies and did not make retrospective adjustments as a result of adopting these amended standards. These amendments did not materially impact the accounting policies or amounts disclosed in the consolidated financial statements of the Group. Accounting Standards and Interpretations issued but not yet effective A number of new standards, amendment of standards and interpretation that have recently been issued but not yet effective have not been adopted by the Group as at the financial reporting date. The Group has reviewed these standards and interpretations and has determined that none of the new or amended standards will significantly affect the Group’s accounting policies, financial position or performance. 48 54 | P a g e 55 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Going Concern (continued) (cid:120) (cid:120) (cid:120) The Group’s successful deferral of the maturity dates of the Bonds from 29 March 2024 to 30 September 2024 as the Group continues to work on a recapitalisation plan incorporating settlement of the Bonds. Other than repayment on the current terms, this may involve a combination of further deferral to the maturity dates and repayment via participation in future capital raisings; The Group’s ability to raise funds from external sources to meet ongoing working and investing capital requirements, as demonstrated by the successful completion of the $6 million Entitlement Offer in April 2023; and The Group’s ability to reduce expenditure on non-essential activities and manage the timing of cash flows to meet the committed obligations of the business as and when they fall due. Should the Group be unsuccessful in achieving the matters set out above, a material uncertainty exists that may cast significant doubt about the Group’s ability to continue as a going concern and, therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the financial report. This financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts, nor to the amounts or classification of liabilities that might be necessary should the Group not be able to continue as a going concern. New and amended Accounting Standards and Interpretations adopted during the year The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2023. The Group did not make any significant changes to its accounting policies and did not make retrospective adjustments as a result of adopting these amended standards. These amendments did not materially impact the accounting policies or amounts disclosed in the consolidated financial statements of the Group. Accounting Standards and Interpretations issued but not yet effective A number of new standards, amendment of standards and interpretation that have recently been issued but not yet effective have not been adopted by the Group as at the financial reporting date. The Group has reviewed these standards and interpretations and has determined that none of the new or amended standards will significantly affect the Group’s accounting policies, financial position or performance. 55 | P a g e 49 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Significant accounting policies The following is a summary of the material accounting policies adopted by the Group in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. (a) Cash and cash equivalents Cash and short-term deposits in the consolidated statement of financial position comprise cash at bank and on hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above. (b) Share 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 from the proceeds. (c) Employee benefits Wages, salaries and annual leave Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be wholly settled within 12 months of the reporting date are recognised in provisions in respect of employees’ services up to the reporting date. The liabilities are measured at the amounts expected to be paid when they are settled. All other amounts are considered other long-term benefits for measurement purposes and are measured at the present value of expected future payments to be made in respect to services provided by employees. Long service leave The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made, in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Superannuation The Group makes contributions on behalf of its employees to complying superannuation funds in accordance with the rates outlined by the statutory regulations. 50 56 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Employee benefits (continued) Share-based payments The fair value of options and rights granted to Directors and employees is recognised as a share-based payments expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options or rights. The fair value at grant date is determined by a combination of internal and external sources using a Black- Scholes option pricing model and independent third party valuations that take into account the exercise price, the term of the right or option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the right or option. The fair value of the options and rights granted is adjusted to reflect market vesting conditions, but excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options and rights that are expected to become exercisable. At each year end, the Company revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. Upon the exercise of options or rights, the proceeds received, net of any directly attributable transaction costs, are credited to share capital. (d) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial liabilities Initial recognition and measurement Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest method. No gain or loss is recognised in profit or loss upon conversion or expiration of the conversion option. Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognised directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortised over the lives of the convertible notes using the effective interest method. 57 | P a g e 51 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Financial instruments (continued) Initial recognition and measurement (continued) The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognised in equity will be transferred to issued capital. Where the conversion option remains unexercised at the maturity date of the convertible note, the balance recognised in equity will be transferred to accumulated losses within equity. Financial liabilities at fair value through profit or loss (FVTPL) Financial liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the consolidated statement of comprehensive loss. Gains and losses arising from changes in the fair value of the financial liabilities held at FVTPL are included in the profit and loss in the period in which they arise. Where management has opted to recognise a financial liability at FVTPL, any changes associated with the Company’s own credit risk will be recognised in other comprehensive income or loss. Financial instruments – derivatives Derivatives are classified as FVTPL and initially recognised at their fair value on the date the derivative contract is entered into and transaction costs are expensed. Derivatives are subsequently re-measured at their fair value at each statement of financial position date with changes in fair value recognised through profit and loss. Fair values for derivative instruments are determined using valuation techniques, with assumptions based on market conditions existing at the statement of financial position date or settlement date of the derivative. Derivatives embedded in debt instruments or non-financial host contracts are treated as separate derivatives when their risks and characteristics are not closely related to their host contracts. Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. (e) Foreign currency transactions and balances Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Australian dollars, which is Geopacific’s functional and presentation currency. 58 | P a g e 52 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Foreign currency transactions and balances (continued) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit or loss and other comprehensive income. Group companies The financial results and position of foreign operations, whose functional currency is different from the Group’s presentation currency, are translated as follows: (cid:120) assets and liabilities are translated at year-end exchange rates prevailing at reporting date; and (cid:120) income and expenses are translated at average exchange rates for the period. Exchange differences arising on translation of foreign operations are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is reclassified to profit or loss in the period. (f) Goods and Services Tax (GST) and Value Added Tax (VAT) Revenues, expenses and assets are recognised net of the amount of associated GST or VAT, unless the GST or VAT incurred is not recoverable from the taxation authority. In this case, the GST or VAT is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST or VAT receivable or payable. The net amount of GST or VAT recoverable from, or payable to, the taxation authority is included with other receivables or payables in the consolidated statement of financial position. Cash flows are presented on a gross basis. The GST or VAT components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. (g) Impairment of non-financial assets Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. 59 | P a g e 53 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Income tax The income tax expense or revenue for the year is the tax payable on the current year’s taxable income based on the national income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on the laws that have been enacted or substantively enacted by the reporting date. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. No deferred tax asset or liability is recognised in relation to temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. 54 60 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Loss per share Basic loss per share Basic loss per share is calculated by dividing the result attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. Diluted loss per share Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into account the after-tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. (j) Mineral tenements and deferred mineral exploration expenditure Exploration and evaluation expenditure is carried forward as an asset when rights to tenure are current and: (cid:120) such costs are expected to be recouped through the successful development and exploitation of the area of interest, or by its sale; or (cid:120) exploration activities in the area of interest have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active or significant operations in, or in relation to, the area of interest are continuing. Site related expenditure is capitalised to the extent it is incurred in the direct support of underlying exploration activities. In periods where no such activities are undertaken, site related expenditure is expensed to the consolidated statement of profit or loss and other comprehensive income. In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of reduced value, accumulated costs carried forward are written off or impaired in the year in which that assessment is made. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Immediate restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are treated as exploration and evaluation expenditure. Exploration activities resulting in future obligations in respect of restoration costs result in a provision to be made by capitalising the estimated costs, on a discounted basis, of restoration. The unwinding of the effect of the discounting on the provision is recorded as a finance cost in the statement of profit or loss. When a decision is made to proceed with the development of particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then transferred to mine properties under development. 61 | P a g e 55 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Mine properties under development Once technical feasibility and commercial viability of extraction of mineral resources in a particular area of interest becomes demonstrable, the exploration and evaluation assets attributable to that area of interest are reclassified as mine properties under development. Mine properties under development represents the direct and indirect costs incurred in preparing mines for production and includes site upgrades, clearing, stripping and waste removal costs incurred before production commences. These costs also include borrowing costs incurred during the development stage. These costs are capitalised to the extent that they are expected to be recouped through the successful exploitation of the related mining leases. Site related expenditure is capitalised to the extent it is incurred in the direct support of underlying mine development activities. In periods where no such activities are undertaken, site related expenditure is expensed to the consolidated statement of profit or loss and other comprehensive income. Once production commences, these costs will be amortised using the units of production method based on the estimated economically recoverable reserves to which they relate or are written off if the mine property is abandoned. Mine properties under development are assessed for impairment if an impairment trigger is identified. For the purposes of impairment testing, capitalised mine properties are allocated to the cash generating unit (CGU) to which the properties relate. (l) Plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the consolidated statement of profit or loss and other comprehensive income during the financial year in which they are incurred. Depreciation is calculated using the straight-line or diminishing value method to allocate cost, net of residual values, over the estimated useful live of the assets, as follows: (cid:120) Plant and equipment (cid:120) Computer software (cid:120) Furniture and fittings 5% - 50% 25% - 100% 4% - 15% The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount. 62 | P a g e 56 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Plant and equipment (continued) An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected to arise from the continued use of the asset. Any gain or loss on derecognition of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) are included in the consolidated statement of profit or loss and other comprehensive income in the period the item is derecognised. (m) Inventory Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first-in-first out (FIFO) basis. Any provision for obsolescence or damage is determined by reference to specific stock items identified. The carrying value of obsolete or damaged items is written down to net realisable value. (n) Principles of consolidation The consolidated financial statements comprise the financial statements of Geopacific and its controlled entities, referred to collectively throughout these financial statements as the “Group”. Controlled entities are consolidated from the date on which control commences until the date that control ceases. Control is achieved when the Group is exposed, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has: (cid:120) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); (cid:120) Exposure, or rights, to variable returns from its involvement with the investee; and (cid:120) The ability to use its power over the investee to affect its returns. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: (cid:120) The contractual arrangement(s) with the other vote holders of the investee; (cid:120) Rights arising from other contractual arrangements; and (cid:120) The Group’s voting rights and potential voting rights. The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. 63 | P a g e 57 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (n) Principles of consolidation (continued) The financial statements of the controlled entities are prepared for the same reporting period as the parent company using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. The balances and effects of transactions between controlled entities included in the consolidated financial statements have been fully eliminated. (o) Lease liability and right-of-use assets At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts expected to be paid under residual value guarantees. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term or a change in the in-substance fixed lease payments. Short-term leases and leases of low-value assets The Group applies the short-term and lease of low-value assets recognition exemptions to leases that are considered short-term or of low value (i.e. those leases that have a lease term of less than 12 months or where the value of the leased asset when new is below $10,000). Lease payments on short-term leases and leases of low-value assets are expensed over the lease term. 58 64 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) Lease liability and right-of-use assets (continued) Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised assets are depreciated on a straight-line basis over the shorter of its estimated useful life and lease term. Right-of-use assets are assessed for impairment. (p) Interest income Interest income is recognised as the interest accrues using the effective interest method. (q) Comparative figures When required by Accounting Standards or in order to enhance comparability, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (r) Provisions Provisions are recognised when the Group has legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period. Onerous contracts If the Group has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Group recognises any impairment loss that has occurred on assets dedicated to that contract. An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Group cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The cost of fulfilling a contract comprises the costs that relate directly to contract activities. 65 | P a g e 59 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (s) Business combinations The acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre- existing equity interest in the subsidiary. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by- acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree’s net identifiable assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in statement of profit or loss. 60 66 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 2 FINANCIAL RISK MANAGEMENT The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents information about the Group’s exposure to the specific risks, and the policies and processes for measuring and managing those risks. Further quantitative disclosures are included throughout this financial report. The Board of Directors have the overall responsibility for the risk management framework. (a) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from transactions with customers and investments. The carrying amount of financial assets included in the consolidated statement of financial position represents the Group’s maximum exposure to credit risk in relation to those assets. The Group does not hold any credit derivatives to offset its credit exposure. The Group trades only with recognised, credit worthy third parties and as such collateral is not requested nor is it the Group’s policy to securitise its trade and other receivables. Receivable balances are monitored on an ongoing basis with the result that the Group does not have a significant exposure to bad debts. The Group has the following concentrations of credit risk: Receivables The Group has no listed investments and the current nature of the business activity does not result in trading receivables. The receivables are through the normal course of business. Non-current receivables are expected to be recovered by the Group notwithstanding extended timing of receipt. The risk of non- recovery of receivables from this source is considered to be negligible. Cash deposits The Group’s primary banker is Sumitomo Mitsui Banking Corporation. The Moody’s credit rating of Sumitomo Mitsui Banking Corporation is A1. (b) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is cognisant of the future demands for resources to finance the Group’s current and future operations, and consideration is given to the liquid assets available to the Group before commitment is made for future expenditure or investment. 67 | P a g e 61 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 2 FINANCIAL RISK MANAGEMENT (CONTINUED) (b) Liquidity risk (continued) The following table reflects the liquidity risk arising from the financial liabilities held by the Group at balance date. The contractual maturity of the trade and other payables and lease liability reflect the undiscounted gross amounts. The contractual maturity of the bonds reflects the face value of the bonds and the expected interest and other costs due at maturity. Consolidated 2023 Carrying amount $ Contractual cash flows $ 6 months or less $ 6-12 months $ 1-5 years $ Financial Liabilities - Due for Payment Trade and other payables Bonds Lease liability Total expected outflows 2,213,546 3,500,000 191,008 5,904,554 2,213,546 3,627,055 217,387 6,057,988 2,213,546 3,627,055 36,784 5,877,385 - - 37,274 37,274 - - 143,329 143,329 Consolidated 2022 Carrying amount $ Contractual cash flows $ 6 months or less $ 6-12 months $ 1-5 years $ Financial Liabilities - Due for Payment Trade and other payables Lease liability Total expected outflows 4,722,123 53,946 4,776,069 4,722,123 57,953 4,780,076 4,722,123 34,772 4,756,895 - 23,181 23,181 - - - 62 68 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 2 FINANCIAL RISK MANAGEMENT (CONTINUED) (c) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising any return. Foreign exchange risk The Group operates in Australia and PNG and is exposed to foreign exchange risks arising from the fluctuation of the exchange rates of the Australian dollar (AUD) and the United States dollar (USD). The PNG Kina (PGK) currency is only utilised within the PNG entity, and is therefore not exposed to foreign exchange risk. The Group has no further material foreign currency dealings other than the above. Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the functional currency of the Group entity in question. The Group does not have a formal foreign currency risk management policy however, it monitors its foreign currency expenditure in light of exchange rate movements. Foreign currency sensitivity The following table demonstrates the sensitivity of the Group’s foreign bank account balances and trade creditors to a reasonably possible change in AUD and USD exchange rates, with all other variables held constant. The impact on the Group’s profit and loss is due to changes in the fair value of monetary assets and liabilities. The Group’s exposure to foreign currency changes for all other currencies is not material. Profit and Loss Equity 500bp increase $ 500bp decrease $ 500bp increase $ 500bp decrease $ 2023 - AUD foreign currency sensitivity 2022 - AUD foreign currency sensitivity 2023 - USD foreign currency sensitivity 2022 - USD foreign currency sensitivity (4,431) 8,042 (31,796) (17,998) 4,431 (8,042) 35,142 19,893 - - - - - - - - Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s cash and cash equivalents. 69 | P a g e 63 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 2 FINANCIAL RISK MANAGEMENT (CONTINUED) (c) Market risk (continued) Interest rate risk (continued) The Group’s income and operating cash flows are not materially exposed to changes in market interest rates. The assets are cash and cash equivalents and other short-term interest-bearing deposits. No financial instruments have been used to mitigate risk. The interest profile of the Group’s interest-bearing financial instruments at the reporting date are outlined in the table below: Variable rate instruments: Cash and cash equivalents Total Consolidated 2023 $ 2022 $ 2,145,015 2,145,015 5,738,772 5,738,772 The following table demonstrates the sensitivity of the Group’s cash and cash equivalent holdings at the reporting date subject to variable interest rates to a reasonably possible change in interest rates. The analysis assumes that all other variables remain constant. Profit and Loss Equity 100bp increase $ 100bp decrease $ 100bp increase $ 100bp decrease $ 2023 - Variable rate instruments 2022 - Variable rate instruments 21,450 57,388 (21,450) (57,388) - - - - (d) Capital management The Board’s policy is to maintain a sound capital base, defined as equity, so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors capital expenditure and cash flows as mentioned in (b) above. The objective when managing capital is to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base sufficient to continue the development and exploration of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets. The Group’s focus has been to raise sufficient funds through a mix of equity and debt to fund development and exploration activities. There were no changes in the Group’s approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting. 64 70 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 2 FINANCIAL RISK MANAGEMENT (CONTINUED) (e) Impairment Losses and Other Write Downs During the 2023 reporting period, $5,197 was written off in relation to the Group’s financial assets (2022: nil). (f) Fair values versus carrying amounts The carrying amounts of financial assets and liabilities as described in the consolidated statement of financial position approximate their estimated net fair value. 3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. Key judgements Exploration and evaluation expenditure The Group’s policy in relation to the accounting for exploration and evaluation expenditure is stated in Note 1(j). There is judgement involved in determining the treatment of exploration and evaluation expenditure, including, determining whether it should be carried forward as capitalised exploration, transferred to mine properties under development, or written off to the consolidated statement of profit or loss and comprehensive income. The Board and management give due consideration to the areas of interest relating to the exploration and evaluation expenditure on a regular basis and are confident that decisions to either transfer, write off or carry forward such expenditure fairly reflects the prevailing situation. During the years ended 31 December 2023 and 31 December 2022, no previously capitalised exploration and evaluation expenditure was transferred to mine properties under development, written off or impaired. Mine properties under development The Group’s policy in relation to the accounting for mine properties under development is stated in Note 1(k). There is judgement involved in determining the treatment of mine properties under development, including, determining whether it should be carried forward as capitalised mine properties under development, transferred to property, plant and equipment or written off to the consolidated statement of profit or loss and other comprehensive income. The Board and management give due consideration to the areas of interest relating to mine properties under development on a regular basis and are confident that decisions to either transfer, write off or carry forward such expenditure fairly reflects the prevailing situation. During the years ended 31 December 2023 and 31 December 2022, no balance relating to mine properties under development was transferred. However, an impairment charge was recognised during the 2022 reporting period. Refer to Note 14 for further information. 71 | P a g e 65 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 3 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED) Key judgements (continued) Leases - Estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating). The weighted average incremental borrowing rate applied to the leases is 8% (2022: 8%). Key estimates Share-based payments The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by a combination of internal and external sources using a Black-Scholes option pricing model and independent third-party valuations. Refer to Note 27 for details of estimates and assumptions used. Impairment of non-financial assets The recoverable amount of a CGU is determined as the higher of value in use and fair value less costs of disposal. The future recoverability of the CGU is dependent on a number of factors, including the level of measured, indicated and inferred Mineral Resources, future legal changes and changes to commodity prices, operating and development costs. To the extent that the carrying value of the CGU is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made. Refer to Note 14 for impairment testing of the Group’s CGU at 31 December 2023. Onerous contracts The Group provided for onerous contracts in relation to several major contracts that were terminating as a result of suspending key development programs at the Project. The onerous contracts provision assessment required the Board and management to make certain estimates regarding the unavoidable costs and the expected economic benefits from the contracts. These estimates required significant management judgement and were subject to risk and uncertainty. Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results. 66 72 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 4 PARENT COMPANY INFORMATION The following information has been extracted from the books and records of the parent entity, Geopacific, and has been prepared in accordance with Accounting Standards. STATEMENT OF FINANCIAL POSITION Assets Current assets Non-current assets Total Assets Liabilities Current liabilities Non-current liabilities Total Liabilities Equity Issued capital Reserves Accumulated losses Total Equity STATEMENT OF COMPREHENSIVE INCOME Net loss for the year TOTAL COMPREHENSIVE LOSS Guarantees Parent 2023 $ 2022 $ 2,176,349 71,125,770 73,302,119 5,192,395 74,250,292 79,442,687 4,200,322 - 4,200,322 937,205 - 937,205 290,668,871 3,165,436 (224,732,510) 69,101,797 284,991,318 3,056,691 (209,542,527) 78,505,482 (15,189,983) (15,189,983) (63,113,309) (63,113,309) The Company has term deposits of $185,691 (2022: $252,282) over the lease of its office premises and credit card facilities. This has been classified as trade and other receivables in current assets. Contingent liabilities At 31 December 2023, Geopacific had no contingent liabilities (2022: nil). Contractual commitments At 31 December 2023, Geopacific had not entered into any contractual commitments for the acquisition of property, plant and equipment (2022: nil). 73 | P a g e 67 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 5 INCOME AND EXPENSES (a) Finance Costs Interest on bonds Borrowing costs Interest expense on lease liability Unwinding of discount on rehabilitation provision Total (b) Impairment and Other Write Downs Consolidated 2023 $ 2022 $ (55,936) (262,500) (2,851) (35,646) (356,933) - (813,663) (20,774) (22,278) (856,715) Consolidated 2023 $ 2022 $ Impairment loss on mine properties under development (Note 12) Impairment loss on property, plant and equipment (Note 13) Plant and equipment written down Inventories written down Other receivables written down Total - - (964,142) (64,250) (5,934) (1,034,326) (35,429,173) (26,492,530) (3,987,044) (104,181) - (66,012,928) 68 74 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 6 INCOME TAX (a) The components of the income tax benefit comprise: Current tax Deferred tax Total tax benefit (b) Reconciliation of income tax to prima facie tax benefit: Net loss before tax Prima facie tax benefit at 30% (2022: 30%) Adjusted for the tax effect of: Effect of different tax rate of foreign subsidiary Non-deductible share-based payments Other non-deductible expenses Tax losses not recognised Prior period adjustment Total tax benefit Consolidated 2023 $ 2022 $ - - - - - - Consolidated 2023 $ 2022 $ (10,853,295) (3,255,988) (71,954,925) (21,586,478) 96 32,623 439,196 1,925,475 858,598 - 30,971 59,791 1,030,836 11,139,688 9,325,192 - 75 | P a g e 69 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 6 INCOME TAX (CONTINUED) (c) Deferred tax: Deferred tax assets: Property, plant and equipment Provisions Tax losses Total before offset Offset by deferred tax liabilities Total deferred tax assets after offset Deferred tax liabilities: Exploration and evaluation expenditure Mine properties under development Property, plant and equipment Total before offset Offset by deferred tax assets Total deferred tax liabilities after offset (d) Deferred tax assets not recognised: Deferred tax assets not recognised Tax losses not brought to account Business related costs Other Total deferred tax assets not recognised Movement of tax losses not brought to account Total tax losses - beginning of the year Current year tax losses Under/(over) Foreign exchange fluctuation Total tax losses – end of the year Tax losses – recognised to the extent of the deferred tax liability Tax losses not brought to account – end of the year Consolidated 2023 $ 2022 $ - 456,189 19,871,924 20,328,113 (20,328,113) - 12,222,732 547,468 164,927 12,935,127 (12,935,127) - 1,752,919 11,158,257 7,416,937 20,328,113 (20,328,113) - 1,777,991 11,157,136 - 12,935,127 (12,935,127) - Consolidated 2023 $ 2022 $ 82,162,233 59,784 17,484 82,239,501 101,688,397 54,937 67,299 101,810,633 101,853,324 1,925,475 3,521,563 (5,266,205) 102,034,157 (19,871,924) 82,162,233 66,661,026 11,139,688 20,238,912 3,813,698 101,853,324 (164,927) 101,688,397 Deferred tax assets relating to tax losses have only been recognised in PNG to the extent of the deferred tax liabilities balance. The deferred tax assets relating to the remainder of the Group have not been recognised in the current reporting period as the Directors do not believe the realisation is probable at this point in time. 76 | P a g e 70 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 7 CASH AND CASH EQUIVALENTS Current Cash at bank and on hand Total 8 TRADE AND OTHER RECEIVABLES Current Security deposits Sundry debtors GST receivable Total Non-current Security deposits Sundry debtors GST receivable Total Consolidated 2023 $ 2022 $ 2,145,015 2,145,015 5,738,772 5,738,772 Consolidated 2023 $ 2022 $ 185,691 401 1,274,591 1,460,683 11,139 31,313 4,278,391 4,320,843 252,282 645,072 16,680 914,034 10,946 33,268 6,373,287 6,417,501 Write down During the year ended 31 December 2023, a write down of $5,197 was recorded in respect of sundry debtors (2022: nil). 77 | P a g e 71 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 9 PREPAYMENTS Current Insurance Other Total 10 INVENTORIES Current Community relocation materials Fuel and other consumables Kitchen stocks Cleaning stocks Medical stocks Protective clothing Total Consolidated 2023 $ 2022 $ 189,963 60,073 250,036 446,823 7,436 454,259 Consolidated 2023 $ 2022 $ 74,350 352,331 82,326 21,274 10,611 15,056 555,948 - 509,811 30,331 21,003 36,388 19,562 617,095 Write down During the year ended 31 December 2023, stocks which had expired or were damaged totalling $64,250 were written off from inventory (2022: $104,181). This is recognised in impairment and other write downs in the consolidated statement of profit or loss and other comprehensive income. 72 78 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 11 EXPLORATION AND EVALUATION ASSETS Non-current Movement during the year Carrying value - beginning of the year Additions Transfers from property, plant and equipment (Note 13) Foreign exchange fluctuation Carrying value - end of the year Consolidated 2023 $ 2022 $ 5,843,059 5,926,632 5,926,632 283,437 - (367,010) 5,843,059 2,005,023 3,722,221 154,677 44,711 5,926,632 Impairment At 31 December 2023, the Group conducted an assessment to determine whether there were any indicators of impairment in relation to the carrying value of its capitalised exploration and evaluation expenditure. No indicators of impairment were present and therefore the Group did not impair any capitalised expenditure (2022: nil). Site costs not directly relating to the advancement of the Group’s exploration and mine development activities were expensed in the consolidated statement of profit or loss and other comprehensive income. For the year ended 31 December 2023 these costs amounted to $6,193,708 (2022: $645,482). 12 MINE PROPERTIES UNDER DEVELOPMENT Consolidated 2023 $ 2022 $ Non-current 37,194,192 37,190,454 Movement during the year Carrying value - beginning of the year Additions Transfers from property, plant and equipment (Note 13) Change in rehabilitation provision Impairment (Note 14) Foreign exchange fluctuation Carrying value - end of the year 37,190,454 2,350,742 - 6,367 - (2,353,371) 37,194,192 50,895,186 17,586,089 554,284 483,959 (35,429,173) 3,100,109 37,190,454 Site costs not directly relating to the advancement of the Group’s exploration and mine development activities were expensed in the consolidated statement of profit or loss and other comprehensive income. For the year ended 31 December 2023 these costs amounted to $6,193,708 (2022: $645,482). 79 | P a g e 73 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 13 PROPERTY, PLANT AND EQUIPMENT 2023 Balance Gross carrying amount – at cost Less: accumulated depreciation and impairment Net carrying value Movement Balance at 1 January 2023 Additions Disposals/Write Down Depreciation Foreign exchange fluctuation Balance at 31 December 2023 2022 Balance Gross carrying amount – at cost Less: accumulated depreciation and impairment Net carrying value Movement Balance at 1 January 2022 Additions Disposals/Write Down Transfer between categories Transfers to mine properties under development Transfers to exploration and evaluation assets Depreciation Impairment (Note 14) Foreign exchange fluctuation Balance at 31 December 2022 Work under construction $ Plant & Equipment $ Consolidated Computer Software $ Furniture & Fittings $ Total $ 55,987,394 11,244,248 98,737 1,689,228 69,019,607 (34,283,670) 21,703,724 (8,440,709) 2,803,539 (98,737) - (1,444,862) 244,366 (44,267,978) 24,751,629 23,938,865 - (828,671) - (1,406,470) 21,703,724 3,599,236 105,217 (285,887) (439,719) (175,308) 2,803,539 - - - - - - 312,161 - - (56,357) (11,438) 244,366 27,850,262 105,217 (1,114,558) (496,076) (1,593,216) 24,751,629 60,362,520 13,188,372 98,737 1,790,775 75,440,404 (36,423,655) 23,938,865 (9,589,136) 3,599,236 (98,737) - (1,478,614) 312,161 (47,590,142) 27,850,262 43,106,478 6,351,116 (4,411,354) 39,046 5,520,985 959,769 (3,127) 45,650 - (474,209) - - (23,916,735) 2,770,314 23,938,865 (154,677) (84,248) (2,561,989) 351,082 3,599,236 - - - - - - - - - - 477,351 - (2,909) (84,696) 49,104,814 7,310,885 (4,417,390) - (80,075) (554,284) - (11,929) (13,806) 28,225 312,161 (154,677) (96,177) (26,492,530) 3,149,621 27,850,262 74 80 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 14 IMPAIRMENT TESTING OF NON-CURRENT ASSETS Non-current assets are reviewed at each reporting period to determine whether there is an indication of impairment. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made. The Group has identified one CGU, the Woodlark Gold Project on Woodlark Island in PNG. The Woodlark Gold Project CGU comprises mine properties under development, associated property, plant and equipment and working capital. 31 December 2023 assessment For the year ended 31 December 2023, the Group assessed whether there were any indicators of impairment in relation to the Woodlark Gold Project CGU. Upon identification of impairment indicators relating to the Company’s market capitalisation relative to the Group’s net assets, management performed an impairment assessment on the CGU, applying the fair value less costs of disposal basis using a range of valuation methodologies including gold market transaction and trading multiples of selected gold projects of similar scale and those carrying similar jurisdictional risk as PNG (level 3 in the fair value hierarchy). In order to make its assessment, the Company obtained a range of gold market transaction and trading multiples covering a number of comparable jurisdictions. The available market transaction and trading multiples were assessed on mineral resource related metrics with the selection narrowed to only include projects of a similar scale to the Woodlark Gold Project. In applying this methodology, a value per mineral resource ounce was established using the relevant market transaction and trading multiple implied enterprise value divided by total mineral resource ounces. For each of the relevant transaction and trading multiples, the implied mineral resource value per ounce was multiplied by the updated Woodlark Mineral Resource of 1,560,000 gold ounces to provide a valuation estimate. This process provided a wide valuation range. Having considered the risk profile specific to the asset, a fair value was selected and applied as the best estimate of the recoverable amount of the Woodlark Project CGU. The assessment of the recoverable amount of the Woodlark Gold Project CGU has determined that no impairment is required at 31 December 2023. Under the current valuation methodology, a change in relevant market transactions and trading multiples could impact the project’s estimated recoverable value in future reporting periods. This change could arise from new comparable transactions or changes in the enterprise values of comparable trading companies. In addition, any changes in the Mineral Resources of the Woodlark Gold Project could similarly affect its recoverable value. 31 December 2022 assessment For the year ended 31 December 2022, the Group assessed whether there were any indicators of impairment in relation to the Woodlark Gold Project CGU. Upon identification of impairment indicators relating to the Company’s market capitalisation relative to the Group’s net assets and withdrawal of the Ore Reserve in December 2023 following the release of Mineral Resource Update, management performed an impairment assessment on the CGU, applying the fair value less costs of disposal basis using a range of valuation methodologies including gold market transaction and trading multiples of selected gold projects of similar scale and those carrying similar jurisdictional risk as PNG (level 3 in the fair value hierarchy). In order to make its assessment, the Company obtained a range of gold market transaction and trading multiples covering a number of comparable jurisdictions. The available market transaction and trading multiples were assessed on mineral resource related metrics with the selection narrowed to only include projects of a similar scale to the Woodlark Gold Project. In applying this methodology, a value per mineral resource ounce was established using the relevant market transaction and trading multiple implied enterprise value divided by total mineral resource ounces. For each of the relevant transaction and trading multiples, the implied mineral resource value per ounce was multiplied by 81 | P a g e 75 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 14 IMPAIRMENT TESTING OF NON-CURRENT ASSETS (CONTINUED) the updated Woodlark Mineral Resource of 1,541,000 gold ounces to provide a valuation estimate. This process provided a wide valuation range. There was a significant reduction in the high end of the valuation range at 31 December 2022 as the assessment made in the current reporting period excluded ore reserve related metrics given the withdrawal of the Woodlark Ore Reserve in December 2022. Having considered the risk profile specific to the asset, a fair value was selected and applied as the best estimate of the recoverable amount of the Woodlark Project CGU. The impairment assessment resulted in an impairment charge of $61,921,703, allocated on a pro-rata basis across the CGU assets Mine Properties under Development ($35,429,173) and Property, Plant and Equipment ($26,492,530), based on a recoverable amount of $65 million for the CGU. 15 RIGHT-OF-USE ASSET AND LEASE LIABILITY (a) Right-of-use asset Non-current Gross carrying amount - office leases Less: accumulated depreciation Total Movement during the year Balance at 1 January Additions Disposals (i) Depreciation expense Balance at 31 December (b) Lease liability Current Non-current Movement during the year Balance at 1 January Additions Derecognition (i) Interest expense Payments Balance at 31 December Consolidated 2023 $ 2022 $ 257,829 (65,969) 191,860 53,407 204,422 - (65,969) 191,860 69,997 121,011 191,008 53,946 204,422 - 2,851 (70,211) 191,008 117,495 (64,088) 53,407 619,619 - (373,921) (192,291) 53,407 53,946 - 53,946 613,988 - (366,165) 20,774 (214,651) 53,946 (i) During the previous year ended 31 December 2022, the Company surrendered the lease in relation to the Brisbane office. As a result of the surrender, the related right-of-use asset and lease liability balances were derecognised. 82 | P a g e 76 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 16 TRADE AND OTHER PAYABLES Current Trade creditors and accrued expenses Total Consolidated 2023 $ 2022 $ 2,213,546 2,213,546 4,722,123 4,722,123 The decrease in trade and other payables at 31 December 2023 was in line with the reduction in activities at the Woodlark Gold Project during the year. 17 PROVISIONS Current Employee entitlements Onerous contracts (i) Total Non-current Employee entitlements Rehabilitation (ii) Total (i) Onerous contracts provision movement during the year Balance at 1 January Net provision recognised/(written back) during the year Provision utilised on contracts closed out Foreign exchange fluctuation Balance at 31 December Refer to Note 3 for further information. Consolidated 2023 $ 2022 $ 308,019 361,797 669,816 252,061 560,776 812,837 21,778 1,015,320 1,037,098 32,726 1,035,302 1,068,028 560,776 322,242 (467,830) (53,391) 361,797 6,703,000 (703,740) (5,500,000) 61,516 560,776 83 | P a g e 77 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 17 PROVISIONS (CONTINUED) (ii) Rehabilitation provision movement during the year Balance at 1 January Provision recognised Unwinding of discount Foreign exchange fluctuation Balance at 31 December Consolidated 2023 $ 2022 $ 1,035,302 6,367 35,646 (61,995) 1,015,320 496,688 483,959 22,278 32,377 1,035,302 The rehabilitation provision represents the present value of rehabilitation costs relating to the Project site, which are expected to be incurred at the end of mine life. The timing of the rehabilitation expenditure is based on the forecast timing for which the underlying rehabilitation activities will be undertaken which may vary in future. 18 INTEREST-BEARING LIABILITIES Current Bonds - unsecured Total Consolidated 2023 $ 2022 $ 3,500,000 3,500,000 - - On 23 October 2023, the Company issued 7 unlisted unsecured short-term bearer bonds to Deutsche Balaton AG, a major shareholder of the Company. The short-term bearer bonds have a face value of $3.5 million and coupon interest rate of 7.5% with redemption at maturity date of 29 December 2023. On 20 December 2023, agreement was reached with the bond holder, Deutsche Balaton AG, to defer the maturity date in respect of the $3.5 million short-term bearer bonds on issue from 29 December 2023 to 29 March 2024, in exchange for a prolongation fee of $140,000. During the same month, the Company also entered into a new Bond Subscription Agreement with 2Invest AG, a member of the Deutsche Balaton Group, to provide a further $1.8 million of short-term, unsecured funding to the Company. These new Bonds can be issued at the election of the Company before the maturity date of 29 March 2024. No Bonds were issued under this new Bond Subscription Agreement at 31 December 2023, however all Bonds have been issued in Q1 2024. Subsequent to balance date, in March 2024 the Company agreed to terms with the Bondholders to defer the maturity date of the Bonds from 29 March 2024 to 30 September 2024 in exchange for a 4% prolongation fee payable at maturity. 84 | P a g e 78 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 19 OTHER FINANCIAL LIABILITIES Current Lease liability (Note 15(b)) Total Non-current Lease liability (Note 15(b)) Total 20 ISSUED CAPITAL Consolidated 2023 $ 2022 $ 69,997 69,997 53,946 53,946 121,011 121,011 - - Consolidated 2023 $ 2022 $ Issued Capital 290,668,871 284,991,318 Reconciliation of movements in Issued Capital during the year Date Shares $ Shares $ 2023 2022 Balance at 1 January Conversion of Zero Exercise Price Options Conversion of Zero Exercise Price Options Shares issued pursuant to an Accelerated Offer (Institutional) Shares issued pursuant to an Accelerated Offer (Retail) Conversion of Zero Exercise Price Options Less: (share issue costs)/adjustment Balance at 31 December 520,863,611 284,991,318 519,246,646 284,846,318 - - - - 1,616,965 - - 327,500 14-Nov-22 10-Jan-23 13-Apr-23 100,525,014 2,010,500 - - 27-Apr-23 199,474,986 526,262 16-Nov-23 - - - 145,000 821,717,373 290,668,871 520,863,611 284,991,318 3,989,500 - (322,447) - - - 85 | P a g e 79 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 21 RESERVES (a) Reserves Share-based payments reserve Option reserve Foreign currency translation reserve Other equity reserve Total (b) Movements during the year Share-based payments reserve Balance at 1 January Share-based payment expense Balance at 31 December Option reserve Balance at 1 January Options issued during the year Balance at 31 December Foreign currency translation reserve Balance at 1 January Exchange gains during the year Balance at 31 December Other equity reserve Balance at 1 January Transfers during the year Balance at 31 December Total reserves Consolidated 2023 $ 2022 $ 5,032,783 300,840 6,501,746 (1,370,317) 10,465,052 4,924,041 300,840 10,838,431 (1,370,317) 14,692,995 4,924,041 108,742 5,032,783 300,840 - 300,840 4,724,737 199,304 4,924,041 300,840 - 300,840 10,838,431 (4,336,685) 6,501,746 2,089,578 8,748,853 10,838,431 (1,370,317) - (1,370,317) (1,370,317) - (1,370,317) 10,465,052 14,692,995 (c) Nature and purpose of reserves Share-based payments reserve The share-based payments reserve records: (cid:120) (cid:120) the value of exercised and unexercised options, share appreciation rights and share performance rights issued or granted to employees and Directors which have been expensed; and the value of options issued on acquisition of Millennium Mining (Fiji) Ltd. Option reserve The option reserve records the value of options issued pursuant to Project Financing in the 2021 reporting period. 86 | P a g e 80 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 21 RESERVES (CONTINUED) (c) Nature and purpose of reserves (continued) Foreign currency translation reserve The foreign currency translation reserve records unrealised exchange gains and losses on translation of the Group’s controlled entities’ results and financial position where their functional currency is different to the Group’s presentation currency. It is also used to record exchange gains or losses on borrowings that form part of the Company’s net investments in foreign operations. Other equity reserve The other equity reserve records transfers of interests to the Group from non-controlling interests. 22 CONTINGENT LIABILITIES The Group did not have any contingent liabilities at the end of the reporting period (2022: nil). 23 COMMITMENTS (a) Tenement Commitments Entities in the Group are required to spend certain amounts to retain their interest in areas over which Special Prospecting Licenses are held. All requirements have been complied with and all reports and lodgements have been made. In the ordinary course of business, the Group is currently waiting on the reissue of certain licences by the Mineral and Resource Authority (MRA) of PNG. The following table provides an outline of the annual expenditure required by tenement: Tenement EL 1172 Location PNG Tenement Renewed to 27-Nov-23 Annual Commitment 2023 $ 120,435 Licence renewal lodged with MRA for an Comments additional two years. Tenure remains while renewal pending. EL 1279 PNG 25-Aug-23 160,580 Licence renewal lodged with MRA for an additional two years. Tenure remains while renewal pending. EL 1465 PNG 21-Dec-24 120,435 N/A. 87 | P a g e 81 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 23 COMMITMENTS (CONTINUED) (b) Operating Commitments The outstanding operating commitments of the Group at 31 December are: Payable within one year Payable after one year but not more than five years Total 24 PARTICULARS RELATING TO CONTROLLED ENTITIES (a) Material Subsidiaries Consolidated 2023 $ 2022 $ 187,230 - 187,230 38,683 449,052 487,735 Worldwide Mining Projects Pty Ltd PT IAR Indonesia Ltd Eastkal Pte Ltd Royal Australia Resources Ltd Golden Resource Development(i) Geopacific Limited Beta Limited Millennium Mining (Fiji) Limited Woodlark Mining Limited Geocanada Resources Limited Country of Incorporation and Carrying on Business Australia Indonesia Singapore Cambodia Cambodia Fiji Fiji Fiji PNG Canada Effective Ownership Percentage Class of Share Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary 2023 % 100 100 100 - - 100 100 100 100 100 2022 % 100 100 100 - - 100 100 100 100 100 (i) The Company derecognised the Kou Sa Project during the year ended 31 December 2020. 82 88 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 25 KEY MANAGEMENT PERSONNEL DISCLOSURES (a) Directors Details of each person holding the position of Director of the Company during the current and prior reporting periods are outlined in the table below: Name Non-Executive Directors Graham Ascough Hamish Bohannan Michael Brook Appointed 7 November 2023 Appointed 7 November 2023 Rowan Johnston Hansjoerg Plaggemars Andrew Bantock Richard Clayton Appointed 7 November 2023 Resigned 7 November 2023 Resigned 7 November 2023 Position Non-Executive Chairman Non-Executive Director Non-Executive Director Worked in an executive capacity from 17 April to 15 November 2023. Non-Executive Director Non-Executive Director Non-Executive Chairman Non-Executive Director Acted as the Interim Chief Executive Officer from 5 December 2022 to 14 April 2023. (b) Other Key Management Personnel (KMP) Details of the other KMP of the Group during the current and prior reporting periods are set out in the table below: Name Executives James Fox Matthew Smith Appointed 16 November 2023 Timothy Richards Ceased 1 January 2023 (c) KMP Compensation Position Chief Executive Officer Chief Financial Officer & Company Secretary Acted as the Interim Chief Executive Officer from 17 April to 15 November 2023. Chief Executive Officer Key Management Personnel Compensation: Short-term benefits Post-employment benefits Share-based payments Long-term benefits Total Consolidated 2023 $ 2022 $ 947,599 59,834 106,800 8,477 1,122,710 1,355,791 65,624 189,888 6,708 1,618,011 89 | P a g e 83 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 26 RELATED PARTY TRANSACTIONS PNX Metals Limited PNX Metals Limited, an entity related to G Ascough, R Johnston and H Plaggemars, provided office lease, software lease and the services of a Mining, Infrastructure & Project consultant totalling $37,230 during the year (2022: nil). These fees are payable at arms-length commercial rates. At 31 December 2023, a total of $37,230 was owing to PNX Metals Limited (2022: nil). FTI Consulting The Company incurred the following fees in relation to the services provided by FTI Consulting, an entity related to A Bantock (former Non-Executive Chairman) during the year, by way of being his employer: • • Non-Executive Chairman fees of $99,267 (2022: $323,385); and Advisory fees of nil (2022: $718,218). The fees payable for the Non-Executive Chairman services were based on a fixed remuneration of $104,000 per annum and special exertion fees (over and above what is expected for the non-executive chair role) at $3,500 per day. Refer to the Company’s ASX announcement dated 14 January 2022 titled “Appointment of New Chairman” for further details of the appointment of FTI Consulting. Work performed by FTI Consulting during the 2022 reporting period included the completion of a detailed diagnostic review, strategy recommendations and assistance with implementation of the steps required to restructure the business, corporate and material commercial arrangements following the suspension of development and construction of the Woodlark Gold Project. The fees for the advisory services were payable at normal commercial terms. At 31 December 2023, no amount was owing to FTI Consulting (2022: $283,659). Kareg Consulting During the 2022 reporting period, the Company was charged $10,159 for consulting fees by Kareg Consulting, an entity related to R Clayton (former Non-Executive Director), for professional services provided to the Group outside his normal Board duties. The fees were paid at normal commercial rates. At 31 December 2022, no amount was owing to Kareg Consulting. 84 90 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 27 SHARE-BASED PAYMENTS (a) Employee Incentive Plan The Company’s Securities Incentive Plan was approved by shareholders at the Annual General Meeting held on 31 May 2022. All employees are eligible to participate in the plan. Instruments granted under the plan are issued for no consideration, carry no dividend or voting rights and when exercised convert into ordinary shares. Included under share-based payments expense in the statement of profit or loss and other comprehensive income is an amount of $108,742 which relates to equity settled share-based payments transactions issued under the plan (2022: $199,304). All options and share performance rights granted to key management personnel are for ordinary shares in Geopacific, which confer a right of one ordinary share for every option held. All share appreciation rights granted to key management personnel are for ordinary shares in Geopacific, which confer an amount of shares equal to the difference between the Company’s share price at the end of the vesting period and the price on grant date. On 1 January 2023, 1,079,545 share performance rights were forfeited upon resignation of former CEO, T Richards. During the reporting period the Company agreed to grant 42,000,000 (subject to shareholder approval) and granted 50,400,000 share performance rights (SPR’s) to Directors and other KMP as follows: • (cid:120) 42,000,000 SPR’s to Directors on 7 November 2023; and 50,400,000 SPR’s to other KMP on 16 November 2023. The grant and issue of SPR’s to Directors is subject to shareholder approval at the next general meeting of the Company. The SPR’s entitle the holder (Holder) to subscribe for one Ordinary Share upon the conversion of each Performance Right (once vested). The SPR’s vest subject to the achievement of either a non-market based performance hurdle or a market- based performance hurdle in relation to the Company’s objectives. The terms and conditions of the SPR’s granted are outlined in the following table. 91 | P a g e 85 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 27 SHARE-BASED PAYMENTS (CONTINUED) (a) Employee Incentive Plan (continued) Class Class A Number of SPR’s Directors 21,000,000 Other KMP 15,120,000 Class B 21,000,000 15,120,000 Class C - 15,120,000 Vesting Condition Divided equally into three tranches to vest upon the following milestone condition and on completion of 12, 24 and 36 months service: a) a change of control of Geopacific occurring achieving a share price of at least A$0.025 per share. A change of control shall be deemed to have occurred when a person acquires a relevant interest in 50% of the Company or a 50% interest in the Project via Woodlark Mining Ltd (PNG)(i); or b) completion of the required service period and the Company achieving a traded share price of at least A$0.025 per share for a period of 30 consecutive trading days during the first 36 months from the Grant Date. Divided equally into three tranches to vest upon the following milestone condition and on completion of 12, 24 and 36 months service: a) a change of control of Geopacific occurring achieving a share price of at least A$0.05 per share. A change of control shall be deemed to have occurred when a person acquires a relevant interest in 50% of the Company or a 50% interest in the Project via Woodlark Mining Ltd (PNG)(i); or b) completion of the required service period and the Company achieving a traded share price of at least A$0.05 per share for a period of 30 consecutive trading days during the first 36 months from the Grant Date. Divided equally into three tranches to vest upon the following milestone condition and on completion of 12, 24 and 36 months service: a) an announcement by the Company of a total combined Mineral Resource Estimate (JORC compliant) that is 50% greater (in terms of contained gold, or gold equivalent ounces at consensus metals prices and using metallurgical recoveries (if required) agreed with the Competent Person at the time) than the Woodlark Mineral Resource Update announced to the ASX on 14 September 2023 of 1.56 million ounces of gold(i). Class D - 5,040,000 Receipt of all required Government approvals to implement the revised infrastructure design resulting from the 2023 Work Program(i). Total 42,000,000 50,400,000 (i) The relevant LTI Plan participant must still be employed prior to the change of control event. 86 92 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 27 SHARE-BASED PAYMENTS (CONTINUED) (a) Employee Incentive Plan (continued) The incentives were valued by an independent third party. The key inputs and valuations of the SPR’s are summarised below: Item Underlying share value Exercise price Valuation date Vesting date Vesting period (years) Expiry date Life of the options (years) Volatility(i) Risk free rate Dividend yield Granted on 7 November 2023(ii) Number of rights Value per right Total Value Granted on 16 November 2023 Number of rights Value per right Total Value Directors Other KMP Class A(ii) Class B(ii) Class A Class B Class C Class D $0.020 $0.020 $0.018 $0.018 $0.018 $0.018 Nil 31-Dec-23 7-Nov-26(iii) 3.00 Nil 16-Nov-23 Nil Nil Nil 16-Nov-23 16-Nov-23 31-Dec-23 7-Nov-26(iii) 16-Nov-26(iv) 16-Nov-26(iv) 16-Nov-26(iv) 16-Nov-27(v) 3.00 Nil 16-Nov-23 3.00 3.00 3.00 3.00 7-Nov-27 4.00 7-Nov-27 4.00 16-Nov-27 4.00 16-Nov-27 4.00 16-Nov-27 4.00 16-Nov-27 4.00 100% 3.65% Nil 100% 3.65% Nil 100% 4.23% Nil 100% 4.23% Nil 100% 4.23% Nil 100% 4.23% Nil 21,000,000 $0.020 $420,000 21,000,000 $0.018 $378,000 - - - - - - - - - - - - - - - - - - 15,120,000 $0.018 $272,160 15,120,000 $0.016 $241,920 15,120,000 $0.018 $272,160 5,040,000 $0.018 $90,720 (i) Volatility of the share price fluctuation was calculated by considering the historical movement of the share price over a period as well factoring market conditions of its competitors to predict the distribution of relative share performance. (ii) The grant of the 42,000,000 share performance rights to the Directors is subject to shareholder approval at the next general meeting of the Company. The fair value of the share performance rights is estimated based on assumption that the share performance rights have been granted at balance sheet date and will be revised once the grant date is established in accordance with the requirements of AASB 2 Share-Based Payment. (iii) The Directors’ Class A and B SPR’s have a range of potential vesting dates between 12, 24 and 36 months from the grant date as outlined in the vesting conditions above. (iv) The other KMP’s Class A, B and C SPR’s have a range of potential vesting dates between 12, 24 and 36 months from the grant date as outlined in the vesting conditions above. (v) The other KMP’s Class D SPR’s have a range of potential vesting dates between 12, 24, 36 and 48 months from the grant date as outlined in the vesting conditions above. 93 | P a g e 87 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 27 SHARE-BASED PAYMENTS (CONTINUED) (a) Employee Incentive Plan (continued) The following table illustrates the number of, and movements in, the incentives during the year. 2023 2022 Number of options or rights Weighted average exercise price ($) Number of options or rights Weighted average exercise price ($) 853,762 - - (853,762) - 2,249,136 - (1,872,590) - 376,546 1,536,117 - (1,129,101) - 407,016 3,112,442 92,400,000(ii) - - 95,512,442 - - - - - 2,470,727 - - (1,616,965) 853,762 0.7980 - 1.0000 - 0.9300 0.4503(i) - 0.4000(i) - 0.5900(i) - - - - - 2,249,136 - - - 2,249,136 2,430,722 - (894,605) - 1,536,117 3,112,442 - - - 3,112,442 - - - - 0.7980 - - - 0.7980 0.5485(i) - 0.5381(i) - 0.4503(i) - - - - - Zero exercise price options Outstanding at beginning of year Granted Expired/lapsed Exercised Outstanding at end of year Premium exercise price options Outstanding at beginning of year Granted Expired/lapsed Exercised Outstanding at end of year Share appreciation rights Outstanding at beginning of year Granted Expired/lapsed Exercised Outstanding at end of year Share performance rights Outstanding at beginning of year Granted Expired/lapsed Exercised Outstanding at end of year (i) The exercise price of the share appreciation rights – represents a theoretical exercise price given the payoff is the difference (ii) between the Company’s share price at the end of the vesting period and the price on grant date. Includes 42,000,000 share performance rights agreed to be granted to the Directors which are subject to shareholder approval at the next general meeting of the Company. 94 | P a g e 88 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 27 SHARE-BASED PAYMENTS (CONTINUED) (a) Employee Incentive Plan (continued) The weighted average remaining contractual life of the incentives outstanding at 31 December 2023 are: Instrument Zero exercise price options Premium exercise price options Share appreciation rights Share performance rights (b) Unlisted Instruments Years - 0.64 0.64 3.75 There were 2,742,328 options over unissued shares unexercised at reporting date (2022: 2,742,328). Since the end of the financial year, no unlisted options have been cancelled or exercised. Details of unlisted options over unissued shares in the Company as at the date of this report are outlined in the tables below: 2023 Issue Date Expiry Date 6-Jun-09 6-Jun-09 29-Jun-21 Note (a) Note (b) 29-Sep-26 Exercise Price $ 62.50 125.00 0.322 Number on Issue 1-Jan-23 32,000 8,000 2,702,328 2,742,328 Movement During the Year Granted Lapsed - - - - Number on Issue 31-Dec-23 32,000 8,000 2,702,328 2,742,328 - - - - (a) Not later than 5 years after defining a JORC compliant ore reserve of over 200,000oz Au on the Faddy’s Gold Deposit (b) Not later than 10 years after defining a JORC compliant ore reserve of over 1,000,000oz Au on the Faddy’s Gold Deposit 2022 Issue Date Expiry Date 6-Jun-09 6-Jun-09 29-Jun-21 Note (a) Note (b) 29-Sep-26 Exercise Price $ 62.50 125.00 0.322 Number on Issue 1-Jan-22 32,000 8,000 2,702,328 2,742,328 Movement During the Year Granted Lapsed - - - - Number on Issue 31-Dec-22 32,000 8,000 2,702,328 2,742,328 - - - - (a) Not later than 5 years after defining a JORC compliant ore reserve of over 200,000oz Au on the Faddy’s Gold Deposit (b) Not later than 10 years after defining a JORC compliant ore reserve of over 1,000,000oz Au on the Faddy’s Gold Deposit (c) Services During the reporting period, the Company did not issue any shares as payment for services (2022: nil). 95 | P a g e 89 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 28 LOSS PER SHARE (a) Basic and Diluted Loss per Share Basic loss per share: From continuing operations attributable to the ordinary equity holders of the company Diluted loss per share: From continuing operations attributable to the ordinary equity holders of the company (b) Reconciliation of Loss Used in Calculating Loss Per Share Basic and Diluted Loss Per Share: Loss attributable to the ordinary equity holders of the Company used in calculating basic and diluted loss per share: From continuing operations (c) Weighted Average Number of Shares Used as the Denominator Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share(i) Consolidated 2023 Cents 2022 Cents (1.49) (13.85) (1.49) (13.85) Consolidated 2023 $ 2022 $ (10,853,295) (10,853,295) (71,954,925) (71,954,925) Consolidated 2023 No. of Shares 2022 No. of Shares 728,938,390 519,454,858 (i) Due to the Group making a loss during the year, the weighted average number of ordinary shares on issue were used to calculate both the basic and diluted loss per share. 90 96 | P a g e 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 29 EVENTS OCCURRING AFTER BALANCE DATE The financial statements have been prepared based upon conditions existing at 31 December 2023 and due consideration has been given to events that have occurred subsequent to 31 December 2023 that provide evidence of conditions that existed at the end of the reporting period. In March 2024, the Company extended the maturity date of the short-term bearer bonds on issue with Deutsche Balaton AG and 2Invest AG, in exchange for a 4% prolongation fee payable at maturity. The extension results in a deferral of the bearer bond repayment date from 29 March 2024, to on or before 30 September 2024. All other terms in relation to the bearer bonds remain unchanged. Other than the matter discussed above, no other matters or circumstances haves arisen since the end of the financial period year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 97 | P a g e 91 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 30 OPERATING SEGMENTS The Group has identified its operating segments based on the internal reports that are reviewed by the Board in assessing performance and determining the appropriate allocation of the Group’s resources. The Group also has had regard to the qualitative thresholds for the determination of operating segments. For management purposes in the 2023 reporting period the Group was organised into three operating segments based on geographical locations, which involve mineral exploration and development in PNG and all other segments, which incorporates the minor activities conducted during the period in Cambodia and Fiji. All other corporate expenses are disclosed as “Corporate” within this segment report. The Group’s principal activities are interrelated and the Group has no revenue from operations. All significant operating decisions are based on analysis of the Group as three segments. The accounting policies applied for internal reporting purposes are consistent with those applied in preparation of the financial statements. 2023 Interest Income Net Profit/(Loss) for the year Segment Assets Segment Liabilities Impairment and Other Write Downs 2022 Interest Income Net Profit/(Loss) for the year Segment Assets Segment Liabilities Impairment and Other Write Downs All Other Segments $ PNG $ Corporate $ Total $ 1 464,945 80,668 92,299 314 (8,304,032) 74,427,684 3,318,848 14,792 (3,014,208) 2,204,913 4,200,321 15,107 (10,853,295) 76,713,265 7,611,468 - 1,034,326 - 1,034,326 All Other Segments $ PNG $ Corporate $ Total $ 1 (103,689) 87,952 689,731 77 (65,252,297) 79,841,351 5,022,664 10,031 (6,598,939) 5,233,113 944,539 10,109 (71,954,925) 85,162,416 6,656,934 - 66,007,902 5,026 66,012,928 92 98 | P a g e 2023 ANNUAL REPORT GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 30 OPERATING SEGMENTS The Group has identified its operating segments based on the internal reports that are reviewed by the Board in assessing performance and determining the appropriate allocation of the Group’s resources. The Group also has had regard to the qualitative thresholds for the determination of operating segments. For management purposes in the 2023 reporting period the Group was organised into three operating segments based on geographical locations, which involve mineral exploration and development in PNG and all other segments, which incorporates the minor activities conducted during the period in Cambodia and Fiji. All other corporate expenses are disclosed as “Corporate” within this segment report. The Group’s principal activities are interrelated and the Group has no revenue from operations. All significant operating decisions are based on analysis of the Group as three segments. The accounting policies applied for internal reporting purposes are consistent with those applied in preparation of the financial statements. 2023 Interest Income Net Profit/(Loss) for the year Segment Assets Segment Liabilities Impairment and Other Write Downs 2022 Interest Income Net Profit/(Loss) for the year Segment Assets Segment Liabilities Impairment and Other Write Downs All Other Segments $ PNG $ Corporate $ Total $ 1 464,945 80,668 92,299 314 (8,304,032) 74,427,684 3,318,848 14,792 (3,014,208) 2,204,913 4,200,321 15,107 (10,853,295) 76,713,265 7,611,468 - 1,034,326 - 1,034,326 All Other Segments $ PNG $ Corporate $ Total $ 1 (103,689) 87,952 689,731 77 (65,252,297) 79,841,351 5,022,664 10,031 (6,598,939) 5,233,113 944,539 10,109 (71,954,925) 85,162,416 6,656,934 - 66,007,902 5,026 66,012,928 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 31 NOTES TO THE STATEMENT OF CASH FLOWS (a) Cash and Cash Equivalents Cash and cash equivalents at the end of the financial year as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of Financial Position as follows: Cash at bank and on hand Total (b) Reconciliation of Cash Flows from Operating Activities Consolidated 2023 $ 2022 $ 2,145,015 2,145,015 5,378,772 5,378,772 Consolidated 2023 $ 2022 $ Net loss after income tax (10,853,295) (71,954,925) Adjustments for: Depreciation expense Share-based payments expense Impairment and other write downs Finance costs Net foreign currency (gain)/loss Other (income)/expense Consultancy expense Changes in Assets & Liabilities Decrease/(Increase) in trade and other receivables Decrease/(Increase) in prepayments (Decrease)/Increase in trade and other payables (Decrease)/Increase in provisions Net Cash Used in Operating Activities 562,045 108,742 1,034,326 38,497 (22,772) - - 288,468 199,304 66,012,928 43,052 224,555 152,232 312,497 903,682 137,375 (507,811) (88,292) (8,687,503) (2,857,446) (165,705) 542,421 (6,001,807) (13,204,426) 98 | P a g e 99 | P a g e 93 2023 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023GEOPACIFIC RESOURCES LIMITED and Controlled Entities NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 31 NOTES TO THE STATEMENT OF CASH FLOWS (CONTINUED) (c) Non-cash Investing and Financing Activities Consolidated 2023 $ 2022 $ Additions to/(Derecognition of) lease liability 204,422 (366,165) 32 REMUNERATION OF AUDITORS The Auditor of Geopacific is Ernst & Young. Amounts received or receivable - Ernst & Young for: - An audit or review of the financial report Total Consolidated 2023 $ 2022 $ 182,425 182,425 176,500 176,000 94 100 | P a g e 2023 ANNUAL REPORT SHAREHOLDER INFORMATION GEOPACIFIC RESOURCES LIMITED and Controlled Entities SHAREHOLDER INFORMATION The shareholder information set out below was applicable as at 11 March 2024. (a) Analysis of numbers of equity security holders by size of holding: Analysis of numbers of equity security holders by size holding: 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Total (b) Equity security holders – ordinary shares Class of Equity Security Ordinary Shares Number Shares 244 443 240 677 311 1,915 106,112 1,186,792 1,838,098 25,979,743 792,606,628 821,717,373 The names of the twenty largest holders of quoted equity securities, ordinary shares, are listed below: J P MORGAN NOMINEES AUSTRALIA PTY LIMITED DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT CITICORP NOMINEES PTY LIMITED NDOVU CAPITAL IV B V DEUTSCHE BALATON AKTIENGESELLSCHAFT DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT SPARTA AG SPARTA AG 2INVEST AG MR RICHARD ALEXANDER CALDWELL 2INVEST AG DEUTSCHE BALATON AKTIENGESELLSCHAFT BNP PARIBAS NOMINEES PTY LTD HENDERSON INTERNATIONAL PTY LIMITED MOORGATE INVESTMENTS PTY LTD BNP PARIBAS NOMS PTY LTD PURPLE MANGGIS PTY LTD IT & BUSINESS CONSULTING LTD MR STEPHEN JOHN RYAN DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT TOP 20 SHAREHOLDERS OTHER SHAREHOLDERS TOTAL ORDINARY SHAREHOLDERS Ordinary Shares Number Held 107,843,751 80,428,012 65,312,276 64,086,030 51,292,434 40,305,999 36,000,966 26,635,143 24,912,896 21,000,000 19,880,640 18,757,143 12,921,462 8,486,772 6,936,785 6,352,652 6,135,917 6,000,000 5,514,600 4,928,476 613,731,954 207,985,419 821,717,373 % of Issued Shares 13.124 9.788 7.948 7.799 6.242 4.905 4.381 3.241 3.032 2.556 2.419 2.283 1.572 1.033 0.844 0.773 0.747 0.730 0.671 0.600 74.689 25.311 100.000 101 | P a g e 95 2023 ANNUAL REPORT SHAREHOLDER INFORMATION GEOPACIFIC RESOURCES LIMITED and Controlled Entities SHAREHOLDER INFORMATION (c) Substantial holders Extracts from substantial shareholder register: DEUTCHE BALATON NDOVU CAPITAL IV B V FRANKLIN RESOURCES, INC. Shareholding Number Held % of Issued Shares 304,717,309 64,086,030 79,865,818 37.110 10.300 9.730 The above holdings are based on the most recent Notice of Change of Interests of Substantial Holder statements lodged by each substantial holder. (d) Voting rights The voting rights attached to each class of equity securities are set out below: Fully paid Ordinary Shares On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Options – listed and unlisted There are no voting rights attached to options. (e) Summary of unlisted options and rights issued Options expiring not later than five years after the defining on Faddy's Gold Deposit of a JORC complaint Ore Reserve of over 200,000 oz of contained Au with an exercise price of $62.50 Option holder with more than 20% of class Exploration Drilling Services (Fiji) Ltd L Anderson Investments Pty Ltd Sheila Anderson Investments Options expiring not later than ten years after the defining on Faddy's Gold Deposit of a JORC compliant Ore Reserve of over 1,000,000 oz of contained Au with an exercise price of $125.00 Option holder with more than 20% of class Exploration Drilling Services (Fiji) Ltd L Anderson Investments Pty Ltd Sheila Anderson Investments 96 Number of Options /Rights Number of Holders Options /Rights Held % of Options /Rights Issued 32,000 5 8,000 5 12,800 8,800 7,200 3,200 2,200 1,800 40.0 27.5 22.5 40.0 27.5 22.5 102 | P a g e 2023 ANNUAL REPORT SHAREHOLDER INFORMATION GEOPACIFIC RESOURCES LIMITED and Controlled Entities SHAREHOLDER INFORMATION (e) Summary of unlisted options and rights issued (continued) Number of Options /Rights Number of Holders Options /Rights Held % of Options /Rights Issued Premium exercise price options expiring four years from the issue date on 21 August 2024 Option holder with more than 20% of class R Heeks M Smith G Zamudio Share appreciation rights expiring four years from the issue date on 21 August 2024 Option holder with more than 20% of class R Heeks M Smith G Zamudio 376,546 3 407,016 3 182,344 116,521 77,681 182,656 134,616 89,744 Share performance rights expiring three years from the issue date on 31 March 2024 Rights holder with more than 20% of class T Richards* * Forfeited upon cessation of employment on 1 January 2023. Cancellation has not been processed at 31 December 2023. 3,112,442 11 1,079,545 48.4 31.0 20.6 44.9 33.1 22.0 34.7 Options expiring on 29 September 2026 with an exercise price of $0.322 Option holder with more than 20% of class Sprott Private Resource Lending II (CO), Inc 2,702,328 Share performance rights expiring four years from the issue date on 16 November 2027 Rights holder with more than 20% of class J Fox M Smith 50,400,000 1 2 2,702,328 100.0 28,000,000 22,400,000 55.6 44.4 103 | P a g e 97 2023 ANNUAL REPORT TENEMENT DETAILS GEOPACIFIC RESOURCES LIMITED and Controlled Entities TENEMENT DETAILS Current interest in tenements held by Geopacific and its subsidiaries, as at 31 December 2023 are listed below: Country Location Tenement Interest PNG PNG PNG PNG PNG PNG PNG PNG PNG PNG PNG PNG 98 Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island Woodlark Island EL 1172 EL 1279 EL 1465 LMP 89 LMP 90 LMP 91 LMP 92 LMP 93 ME 85 ME 105 ME 111 ML 508 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 104 | P a g e 2023 ANNUAL REPORT 

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