Odin Metals Limited
Annual Report 2020

Plain-text annual report

Odin Metals Limited Annual Report 30 June 2020 ABN 32 141 804 104 odinmetals.com.au CONTENTS Corporate Directory Directors’ Report Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors’ Declaration Auditor’s Independence Declaration Independent Auditor’s Report ASX Additional Information Schedule of Tenements and Project Locations PAGE 1 2 25 26 27 28 29 50 51 52 56 58 CORPORATE DIRECTORY Directors and Officers Jason Bontempo (Executive Chairman) Simon Mottram (Managing Director & CEO) Luis Azevedo (Non-Executive Director) Aaron Bertolatti (Company Secretary) Auditors RSM Australia Partners Level 32, Exchange Tower, 2 The Esplanade PERTH WA 6000 Telephone: +61 8 9261 9160 Registered Office & Principal Place of Business Ground floor 35 Richardson Street WEST PERTH WA 6005 Stock Exchange Australian Securities Exchange (Home Exchange: Perth, Western Australia) Share Registry Computershare Investor Services Pty Ltd Level 11 172 St Georges Terrace PERTH WA 6000 ASX Code: ODM Website odinmetals.com.au  Directors’ Report The Directors present their report for Odin Metals Limited (“Odin Metals” or “the Company”) and its subsidiaries (“the Group”) for the year ended 30 June 2020. DIRECTORS The names of the Directors of Odin Metals during the financial year and to the date of this report are: Jason Bontempo (Executive Chairman) ▪ ▪ Simon Mottram (Managing Director) – appointed 9 April 2020 ▪ ▪ Aaron Bertolatti (Director) – resigned 9 April 2020 ▪ Justin Tremain (Non-Executive Director) – resigned 26 June 2020 Luis Azevedo (Non-Executive Director) – appointed 9 April 2020 Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. DIRECTORS’ INFORMATION Jason Bontempo Executive Chairman Mr. Bontempo has 23 years’ experience in public company management, corporate advisory, investment banking and public company accounting, qualifying as a chartered accountant with Ernst & Young. Mr. Bontempo has worked primarily serving on the board and the executive management of minerals and resources public companies focusing on advancing and developing mineral resource assets and business development. Mr. Bontempo also provides corporate advice services and the financing of resource companies across multiple capital markets including resource asset acquisitions and divestments. Simon Mottram Managing Director (appointed 9 April 2020) and Chief Executive Officer Simon Mottram is a geologist with over 25 years’ experience predominantly in base and precious metals. Mr Mottram has held both executive and senior management positions with several successful mining companies both in Australia and overseas and has seen a number of discoveries advanced through to commercial mine development and has been central to several significant exploration successes. Mr Mottram is an expert in the application of modern exploration techniques, economic geology and development, large- scale drill programmes and feasibility studies. Mr Mottram is a graduate of Melbourne RMIT University and a Fellow of the AusIMM. Luis Azevedo Non-Executive Director (appointed 9 April 2020) Luis Azevedo is a Brazilian National with over 35 years’ of international resource experience. Mr. Azevedo qualified as a geologist at the University of Rio de Janeiro in 1985, and subsequent to working as a geologist, he completed a law degree at the University of Candido Mendes in 1992 and obtained his Master of Law from Pontifical Catholic University Rio de Janeiro in 1994. Mr. Azevedo has held senior positions with several major resource companies including Western Mining Corporation, Barrick Gold and Harsco. In 2004, he founded the very successful legal firm FFA Legal based in Rio de Janeiro, which provides specialist legal and technical support to resource companies operating in Brazil. Aaron Bertolatti Director (resigned 9 April 2020) and Company Secretary Aaron Bertolatti is a qualified Chartered Accountant and Company Secretary with over 15 years’ experience in the mining industry and accounting profession. Mr. Bertolatti has both local and international experience and provides assistance to a number of resource companies with financial accounting and stock exchange compliance. Odin Metals Limited 2 2020 Annual Report to Shareholders  Directors’ Report Mr. Bertolatti has significant experience in the administration of ASX listed companies, corporate governance and corporate finance. Mr. Bertolatti was previously Australian Chief Financial Officer of Highfield Resources Ltd (ASX: HFR) and acts as Company Secretary for listed ASX companies, Fin Resources Ltd (ASX: FIN) Red Emperor Resources NL (ASX: RMP) and American Pacific Borates Ltd (ASX: ABR). Justin Tremain Non-Executive Director (resigned 26 June 2020) Justin Tremain graduated from the University of Western Australia with a Bachelor of Commerce degree. Mr. Tremain cofounded ASX listed Renaissance Minerals Limited in June 2010 and served as Managing Director until its takeover by ASX Emerald Resources NL in November 2016. Prior to founding Renaissance Minerals Limited, he had over 10 years’ investment banking experience in the natural resources sector. He has held positions with Investec, NM Rothschild & Sons and Macquarie Bank and has extensive experience in the funding of natural resource projects in the junior to mid-tier resource sector. DIRECTORSHIPS OF OTHER LISTED COMPANIES Directorships of other listed companies held by current directors in the 3 years immediately before the end of the financial year are as follows: Director Company Period of Directorship Jason Bontempo Simon Mottram Red Emperor Resources NL Fin Resources Limited First Cobalt Corporation Avanco Resources Limited Fin resources Limited Medusa Mining Limited Director since January 2011 Director since July 2011 Director from November 2015 to December 2017 Director from February 2012 to June 2018 Director since June 2020 Director since June 2020 INTERESTS IN THE SECURITIES OF THE COMPANY As at the date of this report, the interests of the Directors in the securities of Odin Metals Limited are: Director Ordinary Shares Options1 Options2 Options3 Jason Bontempo Simon Mottram Luis Azevedo 3,333,333 2,500,000 3,500,000 2,000,000 - - 6,000,000 10,000,000 5,500,000 - 5,000,000 - 1 Options are exercisable at $0.001 each on or before 3 April 2022. 2 Options are exercisable at $0.0001 each on or before 1 May 2024. 3 Options are exercisable at $0.001 each on or before 22 February 2022. RESULTS OF OPERATIONS The Company’s net loss after taxation attributable to the members of Odin Metals for the year to 30 June 2020 was $1,851,854 (2019: $833,752). DIVIDENDS No dividends were paid or declared. The directors do not recommend the payment of a dividend. CORPORATE STRUCTURE Odin Metals Limited is a company limited by shares, which is incorporated and domiciled in Australia. Odin Metals Limited 3 2020 Annual Report to Shareholders  Directors’ Report NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES The principal activity of the Company during the financial year was mineral exploration. REVIEW OF OPERATIONS Odin Metals Limited is an Australian based resources company listed on the Australian Securities Exchange (ASX: ODM). The Company’s projects comprise exploration claims covering ground located in Brazil (where the company is exploring for Zinc) and in Ontario, Canada (where the Company is exploring for zinc-copper- lead-silver). The Monte Azul Project is located in the established mining state of Minas Gerais, Brazil in an agriculture-based region in proximity to other operating mines and only 6km off national highway BR122. The project contains the Monte Azul Zinc-Lead deposit, along with ~40km of prospective stratigraphy over the extent of the unexplored belt. The Sturgeon Lake Project is located 60km North of Ignace, Ontario on an all- weather paved highway. The Sturgeon Lake Project properties are strategically located in a proven mining camp with the potential for multiple satellite orebodies. The geology is representative of VMS style mineralization with the eastern extension of the volcanic complex largely underexplored. Monte Azul Project (Brazil) Odin has executed its option to acquire 100% of the Monte Azul1 located in the established mining state of Minas Gerais, Brazil. As per the terms of the acquisition agreement Odin has made the first payment of US$500,000 to Vale S.A. Located in the established mining state of Minas Gerais (Figure 1), close to rail facilities, grid power and water, local suppliers and mining services, with other operating zinc mines and a smelter in the same state. The Project is contained within a single freehold farm with drilling access in place. Figure 1: Location of the Monte Azul Project Odin Metals Limited 4 2020 Annual Report to Shareholders  Directors’ Report The Project reports a Foreign Resource Estimate with significant Resource upside at depth and along strike. Drilling to date comprises of 57 diamond holes and 6 RC holes for 17,300m, over a strike length of approximately 1.4km. The deposit is a relatively new discovery (c.2000) and has never been mined previously or disturbed. In addition to near term potential to grow the existing Foreign Resource Estimate, the Company has expanded its regional land holding to cover the vast majority of the belt through two separate deals, which includes the highly prospective Alto Alegre Zinc prospect to the northeast where zinc mineralisation again outcrops at surface. Monte Azul Acquisition - Key Terms 1. Vale grants Odin an exclusive option to purchase the Project until the later of 30 days from the date of execution of the sale and purchase agreement (“SPA”) and 28 February 2020 2. Within 15 days of Odin notifying Vale that it wishes to exercise its option to purchase the Project, Odin shall pay Vale US$500,000 3. Within 1 year after the payment in point 2 Odin to pay VALE US$1,500,000 and the Project will be transferred to Odin 4. Within 2 years after the payment in point 2 Odin to pay VALE US$2,000,000 5. Within 4 years after the payment in point 2 Odin to pay VALE US$3,000,000 6. Odin to pay Vale 1% NSR on any zinc and lead production over and above the contained zinc metal equivalent of 470,000t as per the Foreign Resource Estimate Historic drilling at the Monte Azul’s deposit is on 160m – 200m spaced centres on 100m and 200m spaced sections, covering three known lenses across a strike length of approximately 1.4km, which remain open in all directions. The majority of contained metal in Monte Azul’s Foreign Resource Estimate resides within the central lens of the deposit, which includes previous drill intercepts of: FD009 13.92m at 10.39% Zn, 2.13% Pb from 262.50m3,4 FD013 10.34m at 6.09% Zn, 0.72% Pb from 328.24m3,4 Resource The Project reports a Foreign Resource Estimate of 7.6Mt at 6.1% Zn Eq4,5,6, including a higher-grade core of 3.6Mt @ 9.0% Zn Eq6 with significant Resource upside at depth and along strike. Drilling to date comprises of 57 diamond holes and 6 RC holes for 17,300m, over a strike length of approximately 1.4km. The deposit is a relatively new discovery (c.2000) and has never been mined previously or disturbed. The deposit is interpreted to comprise of 3 lenses that are located closely within the known strike, with the majority of tonnage and higher grades found in the central lens. All 3 lenses are open at depth/plunge, with the added potential that the lenses may also join to make a single larger lens, since the gaps between the lenses are currently interpreted from only a couple of wide spaced drill holes or no drilling at all. It is anticipated that early work will concentrate on the central lens, which contains the majority of metal tonnes, higher grades and greater thicknesses. The average thickness of the central lens is above the commonly regarded 4m minimum thickness required for full scale mechanised underground mining methods. Odin Metals Limited 5 2020 Annual Report to Shareholders  Directors’ Report Table 1: Foreign Resource Estimate – Grade/Tonnes Sensitivity Resource Grade/Tonnes Sensitivity Cut-Off Zn% Tonnage (x 1,000) 7.0 6.0 5.0 4.0 3.0 2.0 None 2,100 2,800 3,600 4,900 6,000 6,900 7,600 Zn % 9.2% 8.6% 7.9% 7.0% 6.3% 5.8% 5.4% Pb % 1.4% 1.3% 1.2% 1.0% 0.9% 0.8% 0.8% Zn Equivalent % 10.4% 9.8% 9.0% 7.9% 7.1% 6.5% 6.1% Metallurgical and Mineralogical Tests Ore is of a SEDEX style with typical simple SEDEX Zn-Pb metallurgy. A single series of preliminary metallurgical testwork has been carried out in historical work based on a 100kg (see table below) composite sample which had an average grade that is considered typical. Table 2: Initial Metallurgical Testwork Sample (100kg) – Composite Grade of Sample Sample Zn % 6.8 Pb % 1.2 Fe % 7.9 S % 6.2 Initial metallurgical results indicate excellent recoveries with first pass results of >80% recovery, which also produced consistent high-grade concentrates. The Company will complete detailed metallurgical testwork to continue to de-risk the Project. Table 3: Initial Metallurgical Testwork Results (100kg sample size) Test # Sample 5 7 Zn Concentrate Pb Concentrate Zn Concentrate Pb Concentrate Zn 48.6 7.3 57.3 6.2 Grade (%) Recovery (%) Pb 0.54 63.8 0.41 72.9 Fe 8.4 2.2 5.5 1.2 S 33.0 16.5 32.9 16.4 Zn 83.0 1.7 81.1 1.2 Pb 5.1 80.9 3.2 75.3 Table 4: 100kg Initial Metallurgical Testwork Sample – Work Index Results Test Work Index KWh/st Work Index KWh/t 1 2 11.94 11.91 13.13 13.10 Metallurgical testwork shows ore is amenable to both conventional froth flotation producing high-grade concentrates with recoveries exceeding 80% in first pass tests, and pre-concentration where initial testwork by REDWAVE (Austria) showed an average 90% Zn recovery and 87% Pb recovery, to produce a 16.1% Zn, 4.1% Pb pre-concentrate using their XRF ore-sorting technology. Odin Metals Limited 6 2020 Annual Report to Shareholders  Directors’ Report Regional Exploration Odin secured the majority of the ~40km long belt (Figure 2), which includes the highly prospective Alto Alegre prospect to the northeast where zinc mineralisation outcrops at surface. Odin is concurrently progressing low cost exploration to advance and refine priority regional exploration targets at Alto Alegre and along the belt that will be drill tested following the initial drill program at Monte Azul. Regional Exploration Joint Venture and Option Agreement – Key Terms Odin entered into an exploration Joint Venture (“JV”) with IMS Engenharia Mineral Ltda (“IMS”) consisting of 8 granted exploration licences covering an area of approximately 105km2. Key terms included: • the JV was precedent on the Vale agreement becoming effective; • the exploration licences were to be transferred to Odin upfront; • 1,000,000 Odin shares were granted to the quota holders of IMS on 18 June 2020; • Odin can earn 70% by expending AU$2,000,000 in exploration over 3 years; • At Odin’s election it may acquire the remaining 30% by paying A$2,000,000 (half of this amount can be paid through the issuance of Odin shares to the quota holders of IMS, subject to shareholder approval); and • 1% NSR is payable to IMS on production above 120,000t of zinc metal from the acquired license area In addition, Odin entered into a binding letter of intent with GRB Grafite Do Brasil Mineração Ltda (“GRB”), who has been granted the right to 15 exploration licences (12 granted and 3 applications), covering an area of approximately 260km2. Odin completed a 10-day due diligence period, following which, the Company elected to exercise the option to purchase the 15 Exploration Licenses and negotiated a definitive contract that included the following payments to GRB of: • 5,000,000 Odin shares to be granted to GRB or its nominees (issued 22 June 2020); • A 1-year deferred payment of A$150,000 in Odin shares and A$100,000 in cash; and • An underlying 1% NSR is payable on any production from the acquired licenses to Falcon Metais Ltda. Odin Metals Limited 7 2020 Annual Report to Shareholders  Directors’ Report Figure 2: Regional Tenement Position Sturgeon Lake Project (Canada) The Sturgeon Lake Project7 is an Earn-in Option Agreement8 with Glencore Canada Corporation, located 250km NW of the mining town of Thunder Bay, Ontario. It is accessed via the nearby national highway then by paved road to the site. Local infrastructure includes grid power and plentiful water. Sturgeon Lake hosts the highly prospective Mattabi VMS (volcanogenic massive sulphide) belt (>20km strike), which was host to multiple historic Zinc - Copper base metal deposits. Concentrated exploration was mostly carried out in the 1970’s, followed by the mining of 3 shallow open pits and 2 small underground developments in the 1980’s. Historical production totalled 19.8Mt @ 8.5% Zn, 1.06% Cu, 0.91% Pb, and 120g/t Ag (Source : Geology Ontario - Ministry of Energy, Northern Development and Mines). Other than targeted drilling at the Abitibi Zone, the project has lain dormant since. Odin Metals Limited 8 2020 Annual Report to Shareholders  Directors’ Report The Abitibi Zone was targeted by historic drilling from 2011 to 2013, producing consistent excellent results, including high-grade zones. Work to date appears to identify two distinct zones of mineralisation (Upper and Lower Zone), with potential for a third zone that is poorly defined to date. During the year and following on from the 2019 airborne VTEM survey (airborne electromagnetics) at Sturgeon Lake, a diamond drilling programme was completed comprising of 13 holes for 6,165m. Figure 5 shows the location of drilling at Abitibi, while Long Section A-A’ (Figure 6) shows the updated interpretation of the broader Abitibi mineralised envelope (Upper Zone) which extends over approximately 1.5km of strike, and the high-grade core within this. See Table 1 for results of the diamond drilling programme. Figure 3: Abitibi Location and Drill Status Plan Odin Metals Limited 9 2020 Annual Report to Shareholders  Directors’ Report Figure 4: Abitibi Zone Long Section A-A’ At Bell Lake West new and previously unrecognized prospective VMS trend has been found. Ground reconnaissance over three strong VTEM anomalies at has identified outcropping prospective volcanic sediments and geology prospective for VMS mineralisation. Outcrop contains visible sulphides, including visible chalcopyrite9. The Sturgeon Lake management committee (Odin and Glencore) agreed to relinquish the First Quantum Option from the “Odin Properties”. First Quantum were advised as per the Option Agreement. Odin Metals Limited 10 2020 Annual Report to Shareholders  Directors’ Report 1. 2. 3. 4. 5. 6. 7. 8. 9. Mineralisation at the Monte Azul Project is of a Sedimentary Exhalative (SEDEX) type. For Competent Persons Statement, JORC Table 1 material assumptions see ASX Announcement “Odin to Acquire Zinc Deposit from Vale S.A”, 20 February 2020. Grades are uncut. Depths and widths are downhole. Zinc Equivalent “ZnEq”. Zinc Equivalent is calculated based on $1.10/lb Zn and $1.00/lb Pb (assuming 80% recovery for both). Recoveries are based on those recorded in first pass metallurgical testwork shown in Monte Azul Project Highlights – “Initial Metallurgical Testwork Results (100kg sample size)” in ASX Announcement “Odin to Acquire Zinc Deposit from Vale S.A”, 20 February 2020. ZnEq = Zn%+((Pb%*$1.0)/$1.1). ASX Listing Rule 5.12 is contained in Appendix 2 in ASX Announcement “Odin to Acquire Zinc Deposit from Vale S.A”, 20 February 2020. Individual grades for all metals are shown in the table Monte Azul Project Highlights – “Foreign Resource Estimate – Grade/Tonnes Table” in ASX Announcement “Odin to Acquire Zinc Deposit from Vale S.A”, 20 February 2020, along with Competent Person’s consent, material assumptions, and technical parameters concerning the Foreign Resource Estimate and historical drilling at Monte Azul Mineralisation at the Sturgeon Lake Project is volcanogenic massive sulphide (VMS) type. The Earn in Option Agreement consists of 178km2 in which Glencore has 100%, where Odin has a right to acquire 50% plus a further 22km2 in which Odin has 100% (or has the right to acquire 100%), where Glencore has a right to acquire a 50% interest. See ASX Announcement “New VMS Trend at Sturgeon Lake”, 21 October 2019, for further information in regard to the Bell Lake West targets. Competent Persons Statement The information in this report that relates to Exploration results, Metallurgical results and/or Mineral Resources is an accurate representation of the available data and is based on information compiled by Mr Simon Mottram who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Mottram is the Chief Executive Officer of Odin Metals Limited. Mr Mottram has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person (CP) as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Mottram consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Odin Metals Limited 11 2020 Annual Report to Shareholders  Directors’ Report Hole ID UTM-E UTM-N RL (m) F-19-156 642949 5526949 F-19-157 648475 5528240 SL-19-01 650656 5527126 F-19-158 641163 5526610 418 420 425 409 Including And And Including And F-19-159 641303 5526520 F-19-160* 641303 5526520 And F-19-161 641307 5526776 F-19-162 641411 5526646 F-19-163 641416 5526648 F-19-164 641394 5526418 F-19-165 641068 5526451 F-19-166 640905 5526432 409 409 410 409 409 409 410 409 Including Including Table 5: Sturgeon Lake 2019 Drilling Depth (m) Dip Az Status 366.0 -62.0 178.0 Completed 300.0 -65.0 210.0 Completed 354.9 -65.0 240.0 Completed From (m) Downhole Depth To (m) Downhole Depth Width (m) Downhole Depth Zn (%) Cu (%) Pb (%) Au (g/t) Ag (g/t) No Significant Results No Significant Results No Significant Results 673.0 -75.0 148.0 Completed 485.50 494.00 485.50 488.50 500.00 501.00 8.50 3.00 1.00 508.50 521.50 13.00 512.40 520.40 574.00 575.00 8.00 1.00 12.04 0.21 26.90 0.33 8.25 7.81 0.58 0.47 11.64 0.69 0.53 9.66 0.45 1.15 0.01 0.57 0.92 0.01 168.0 -68.0 143.0 Abandone d 696.0 -75.0 143.0 Completed 412.10 415.85 543.00 544.20 774.0 -71.0 136.0 Completed 603.3 603.6 210.0 -78.0 148.0 Abandone d 600.0 -72.0 142.6 Completed 489.65 493.9 348.0 -64.4 167.8 Completed 284.95 285.55 552.0 -72.0 150.0 Completed 467.00 470.00 Hole abandoned due to excessive deviation 3.75 1.20 0.3 27.18 0.37 1.85 4.67 3.45 0.46 0.22 0.03 0.07 Hole abandoned due to excessive deviation 4.25 0.60 3.00 4.40 7.40 0.10 5.42 0.08 0.01 2.47 0.05 0.44 0.37 0.00 0.89 1.56 2.12 621.0 -71.9 149.5 Completed 389.50 418.50 29.00 396.50 405.00 398.00 401.25 8.50 3.25 10.99 0.12 18.09 0.27 0.26 0.66 0.12 0.14 0.22 0.43 0.72 0.08 0.07 0.09 0.08 0.39 0.22 0.43 0.46 99.2 257.5 33.0 86.9 132.3 130.0 442.2 9.08 25.0 54.5 48.0 15.0 87.3 142.1 179.9 F-19-167 643063 5527715 409 504.0 -72.0 173.0 Completed No Significant Results Odin Metals Limited 12 2020 Annual Report to Shareholders  Directors’ Report Australian Projects During the year Moho Resources Limited (“Moho”) completed the final farm-in stage, to earn an additional 19% in M27/263 (Moho’s East Sampson Dam prospect, 50km north of Kalgoorlie), taking its ownership to 70%. Subsequently the Company elected not to participate in a 30%/70% joint Venture, and vended its remaining 30% to Moho for the following consideration: ▪ $120,000 in cash 30 days after signing (received 16 July 2020), ▪ Odin were issued with 4,500,000 fully paid ordinary shares in Moho, becoming a significant shareholder in Moho ▪ Odin retain a net smelter royalty of 0.5% on minerals, mineral products and concentrates, produced and sold from the tenement. Corporate - Other Board Changes ▪ The Board of Odin was strengthened with the appointment of Mr Simon Mottram and Mr Luis Azevedo as Directors on 9 April 2020. Messrs Mottram and Azevedo are former Executive Directors of Brazilian focussed copper producer Avanco Resources Ltd that was acquired by Oz Minerals in 2018 for c.$440m. ▪ Mr Justin Tremain resigned as a Non-Executive Director of the Company on 26 June 2020. Placement and Option Awards The Company completed a placement of A$4.0m at a price of A$0.04 per share for a total of approximately 100m shares. The placement was completed in two tranches. 1. Tranche 1 raised approximately $922,316, excluding costs, through the issue of approximately 23.1 million ordinary shares. Tranche 1 was completed on 27 February 2020; and 2. Tranche 2 raised $3,077,684 through the issue of approximately 76.9 million ordinary shares. Tranche 2 was completed on 21 April 2020. Discovery Capital Partners in their capacity as Lead Manager and Corporate advisor, together with a syndicate of nominated brokers received a total of 10m Advisor / Broker Facilitation Options on the following terms: • 3.50m Options with a strike price of A$0.080 per Option expiring 31 March 2023; • 3.25m Options with a strike price of A$0.100 per Option expiring 31 March 2023; and • 3.25m Options with a strike price of A$0.120 per Option expiring 31 March 2023. On 1 May 2020, the Company issued 30m Performance Options to Directors, Management and Advisors. The Performance Options are valid for 4 years from the date of issue with a strike price of A$0.0001 per Option. The Performance Options are subject to the following vesting conditions: • 7.5m Options (25%) to vest immediately upon shareholder approval (received 9 April 2020); • 7.5m Options (25%) vest upon the announcement of a JORC 2012 Inferred Resource on the Monte Azul Project; and • 15.0m Options (50%) vest 24 months from the date of issue, subject to the 15-day VWAP of Odin exceeding A$0.20. Odin Metals Limited 13 2020 Annual Report to Shareholders  Directors’ Report SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Group during the financial year, other than as set out in this report. SIGNIFICANT EVENTS AFTER THE REPORTING DATE Shortly after the reporting date the first drill programme at Monte Azul commenced. Results were reported for the first 6 hole for 1,351m. Results confirmed the high-grade nature of the Monte Azul central lens of the existing historical resource estimate. Results from the first 5 holes include (See Table 6 for complete results): 3.78m at 8.02% Zn, 1.51% Pb from 235.22m10,11 And 3.95m at 5.14% Zn, 1.05% Pb from 247.90m in MA-DD00410,11 2.51m at 9.82% Zn, 1.83% Pb from 150.89m in MA-DD00210,11 4.00m at 4.06% Zn, 0.54% Pb from 303.40m in MA-DD00510,11 2.32m at 5.10% Zn, 0.59% Pb from 70.00m in MA-DD00110,11 Incl. 1.08m at 10.42% Zn, 1.22% Pb from 70.00m10,11 All 6 holes intersected mineralisation in the central lens in line with expectations, while holes MA-DD001 and MA-DD003 targeting mineralisation closer to surface, intersected oxidised (leached) mineralisation above the base of oxidation, confirming Odin’s interpretation of mineralisation. See Figure 5 for collar locations, and Figure 6 and 7 for example sections. Figure 5: Monte Azul Drill Status Plan Odin Metals Limited 14 2020 Annual Report to Shareholders  Directors’ Report Figure 6: Monte Azul Cross Section 700NE Figure 7: Monte Azul Cross Section 700NE Odin Metals Limited 15 2020 Annual Report to Shareholders  Directors’ Report 10. 11. For Competent Person Statement, JORC Table 1 material assumptions see ASX Announcement “Confirmation of High-Grade Zn at Monte Azul”, 06 August 2020. Grades are uncut. Depths and widths are downhole Competent Persons Statement The information in this report that relates to Exploration results, Metallurgical results and/or Mineral Resources is an accurate representation of the available data and is based on information compiled by Mr Simon Mottram who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Mottram is the Chief Executive Officer of Odin Metals Limited. Mr Mottram has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person (CP) as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Mottram consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Odin Metals Limited 16 2020 Annual Report to Shareholders  Directors’ Report Hole ID UTM-E UTM-N RL (m) Dip Az Depth (m) Status From (m) Downhole Depth To (m) Downhole Depth Table 6: Monte Azul 2020 Drilling Results MA-DD001 696414.996 8254295.016 851.717 338.00 -60.00 109.35 And And Including Complete d 51.60 63.50 70.00 70.00 MA-DD002 696469.987 8254150.000 804.678 338.00 -60.00 196.15 Complete 150.89 And 157.50 MA-DD003 696570.466 8254175.467 791.362 332.00 -55.00 195.60 Complete 164.62 MA-DD004 696555.000 8254090.000 807.153 334.00 -70.00 278.60 Complete 235.22 And MA-DD005 696535.654 8253994.203 784.702 MA-DD006 696274.993 8254104.993 854.513 MA-DD007 696455.000 8254065.000 831.434 338 338 338 -70 -60 -70 247.90 330.75 Complete 303.40 241.05 Complete 56.60 68.00 72.32 71.08 153.40 160.80 165.80 239.00 251.85 307.40 Width (m) Downhole Depth 7.00 (oxide) 4.50 (oxide) 2.32 1.08 2.51 3.30 1.18 3.78 3.95 4.00 Assays Pending In Progress Zn (%) Pb (%) 0.81 0.43 5.10 10.42 9.82 0.75 3.33 8.02 5.14 4.06 0.00 0.01 0.59 1.22 1.83 0.23 0.68 1.51 1.05 0.54 Odin Metals Limited 17 2020 Annual Report to Shareholders  Directors’ Report The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided. There have been no significant events subsequent to the end of the financial year to the date of this report. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Directors have excluded from this report any further information on the likely developments in the operations of the Company and the expected results of those operations in future financial years, as the Directors believe that it would be speculative and prejudicial to the interests of the Company. ENVIRONMENTAL REGULATIONS AND PERFORMANCE The operations of the Group are presently subject to environmental regulation under the laws of both Australia and Canada. The Group is, to the best of its knowledge, at all times in full environmental compliance with the conditions of its licences. SHARE OPTIONS As at the date of this report there were 106,400,000 unissued ordinary shares under options. The details of the options are as follows: Number Exercise Price $ Expiry Date 6,200,000 5,200,000 28,000,000 3,500,000 3,250,000 3,250,000 1,000,000 3,000,000 3,000,000 50,000,000 106,400,000 $0.001 $0.001 $0.0001 $0.08 $0.10 $0.12 $0.08 $0.08 $0.10 $0.40 3 April 2022 26 February 2022 1 May 2024 31 March 2023 31 March 2023 31 March 2023 8 July 2023 8 July 2022 8 July 2022 Exercisable during the period commencing on the Closing Date1 until one year after the Closing Date1. 1 Closing Date: As that term is defined in the Earn-in Option Agreement signed with Glencore Canada Corporation. No option holder has any right under the options to participate in any other share issue of the Company or any other entity. 1,000,000 options lapsed unexercised and 2,000,000 options were forfeited during the financial year. No options were exercised during or since the year ended 30 June 2020. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Company has made an agreement indemnifying all the Directors and officers of the Company against all losses or liabilities incurred by each Director or officer in their capacity as Directors or officers of the Company to the extent permitted by the Corporations Act 2001. The indemnification specifically excludes wilful acts of negligence. Odin Metals Limited 18 2020 Annual Report to Shareholders  Directors’ Report INDEMNIFICATION OF THE AUDITOR The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity. DIRECTORS’ MEETINGS During the financial year, in addition to frequent Board discussions, the Directors met regularly to discuss all matters associated with investment strategy, review of opportunities, and other Company matters on an informal basis. Circular resolutions were passed as necessary to execute formal Board decisions. The number of meetings of Directors held during the year and the number of meetings attended by each Director were as follows: Director Jason Bontempo Simon Mottram Luis Azevedo Aaron Bertolatti Justin Tremain Number of Meetings Eligible to Attend 4 2 2 2 3 Number of Meetings Attended 4 2 2 2 3 1 Mr. Mottram and Mr. Azevedo were appointed as a Director’s on 9 April 2020 2 Mr. Tremain resigned as a Director on 26 June 2020 3 Mr. Bertolatti resigned as a Director on 9 April 2020 PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Odin Metals Limited support and adhere to the principles of sound corporate governance. The Board recognises the recommendations of the Australian Securities Exchange Corporate Governance Council, and considers that Odin Metals complies to the extent possible with those guidelines, which are of importance and add value to the commercial operation of an ASX listed resources company. The Company has established a set of corporate governance policies and procedures and these can be found on the Company’s website: odinmetals.com.au. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES Section 307C of the Corporations Act 2001 requires the Company’s auditors to provide the Directors of Odin Metals with an Independence Declaration in relation to the audit of the financial report. A copy of that declaration is included within the annual report. There were no non-audit services provided by the Company’s auditor. Odin Metals Limited 19 2020 Annual Report to Shareholders  Directors’ Report Officers of the company who are former partners of RSM Australia Partners There are no officers of the company who are former partners of RSM Australia Partners. Auditor RSM Australia Partners continue in office in accordance with section 327 of the Corporations Act 2001. AUDITED REMUNERATION REPORT This report, which forms part of the Directors’ report, outlines the remuneration arrangements in place for the key management personnel of Odin Metals Limited for the financial year ended 30 June 2020. The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001. The remuneration report details the remuneration arrangements for KMP who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group. Details of Directors and Key Management Personnel Jason Bontempo - Executive Chairman ▪ ▪ Simon Mottram - Managing Director (appointed 9 April 2020) and CEO ▪ ▪ Aaron Bertolatti – Director (resigned 9 April 2020) and Company Secretary ▪ Justin Tremain - Non-Executive Director (resigned 26 June 2020) Luis Azevedo - Non-Executive Director (appointed 9 April 2020) Remuneration Policy The Board is responsible for determining and reviewing compensation arrangements for the Directors and Executive Officers. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a yearly basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high-quality board and executive team. The expected outcome of this remuneration structure is to retain and motivate Directors and Executive Officers. As part of its Corporate Governance Policies and Procedures, the board has adopted a formal Remuneration Committee Charter and Remuneration Policy. The Board has elected not to establish a remuneration committee based on the size of the organisation and has instead agreed to meet as deemed necessary and allocate the appropriate time at its board meetings. Fees and payments to non‑executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non‑executive directors’ fees and payments are reviewed annually by the Board. The Chair’s fees are determined independently to the fees of non‑executive directors based on comparative roles in the external market. Non‑executive directors do not receive performance-based pay. Level Executive Chairman Managing Director & CEO Non-Executive Director Company Secretary Cash Remuneration A$180,000 A$300,000 A$36,000 A$60,000 Odin Metals Limited 20 2020 Annual Report to Shareholders  Directors’ Report Additional fees A Director may also be paid fees or other amounts as the Directors determine if a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. A Director may also be reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties. Details of Remuneration Details of the nature and amount of each element of the remuneration of each Director and Executive Officer of the Group for the year ended 30 June 2020 are as follows: 2020 Directors Jason Bontempo Simon Mottram1 Luis Azevedo1 Justin Tremain2 Officers Aaron Bertolatti3 Base Salary $ - 300,000 - - Short term Options Directors Consulting Share-based Fees $ Fees $ Payments $ Post- employment Super Total Option related $ $ % - - 9,000 36,000 135,000 - - - 95,592 269,961 44,247 - - 300,000 - 45,000 65,000 200,000 13,870 423,670 - 29,667 - 3,420 230,592 599,628 53,247 39,420 - 78,870 33,087 1,001,757 - 41.5 45.0 83.1 - 17.6 1 Mr. Mottram and Mr. Azevedo were appointed as a Director’s on 9 April 2020 2 Mr. Tremain resigned as a Director on 26 June 2020 3 Mr. Bertolatti resigned as a Director on 9 April 2020 Jason Bontempo received additional consulting fees totalling $10,000 for transaction related services provided. Aaron Bertolatti received additional consulting fees totalling $5,000 for transaction related services provided There were no other Executive Officers of the Company during the financial year ended 30 June 2020. Details of the nature and amount of each element of the remuneration of each Director and Executive Officer of the Group for the year ended 30 June 2019 are as follows: 2019 Directors Jason Bontempo Justin Tremain Aaron Bertolatti Officers Simon Mottram2 Short term Options Base Salary $ Directors Consulting Share-based Fees $ Fees $ Payments $ Post- employment Super Total Option related $ $ % - - - - 36,000 - 140,0001 - 60,000 27,669 - 5,534 - 167,669 39,420 65,534 3,420 - 106,923 106,923 - 36,000 - 200,000 82,147 115,350 8,991 198,061 12,411 470,684 16.5 - 8.4 41.5 24.5 Odin Metals Limited 21 2020 Annual Report to Shareholders  Directors’ Report 1 Jason Bontempo received additional consulting fees totalling $20,000 for services provided in relation to the transaction with Glencore Canada Corporation. 2 Simon Mottram was appointed 20 February 2019. Shareholdings of Key Management Personnel The number of shares in the Company held during the financial year by Directors and Executive Officers of the Group, including their personally related parties, is set out below. There were no shares granted during the reporting year as compensation. Directors Jason Bontempo Simon Mottram1 Luis Azevedo1 Justin Tremain2 Officers Aaron Bertolatti3 Balance at the start of the year Granted during the year as compensation On exercise of share options Other changes during the year Balance at the end of the year 3,333,333 - - 633,333 - - - - - - - - - - - 2,500,000 3,500,000 - 3,333,333 2,500,000 3,500,000 - - 633,333 1 Mr. Mottram and Mr. Azevedo were appointed as a Director’s on 9 April 2020 2 Mr. Tremain resigned as a Director on 26 June 2020 3 Mr. Bertolatti resigned as a Director on 9 April 2020 All equity transactions with Directors other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Company would have adopted if dealing at arm’s length. Option holdings of Key Management Personnel The numbers of options over ordinary shares in the Company held during the financial year by each Director and Executive Officer of Odin Metals Limited, including their personally related parties, are set out below: Balance at the start of the year Granted during the year as compensation Exercised during the year Other changes during the year Balance at the end of the year Exercisable Un- exercisable Directors Jason Bontempo Simon Mottram1 Luis Azevedo1 Justin Tremain2 Officers Aaron Bertolatti3 6,000,0005 2,000,0004 5,000,0004 10,000,0005 5,500,0005 2,000,0005 - - 400,0004 500,0005 - - - - - - - - (2,000,000) 8,000,000 1,500,000 15,000,000 2,500,000 5,500,000 1,375,000 - - 6,500,000 12,500,000 4,125,000 - - 900,000 125,000 775,000 1 Mr. Mottram and Mr. Azevedo were appointed as a Director’s on 9 April 2020 2 Mr. Tremain resigned as a Director on 26 June 2020 3 Mr. Bertolatti resigned as a Director on 9 April 2020 4 The Options will vest on the earlier of: Odin Metals Limited 22 2020 Annual Report to Shareholders  Directors’ Report a) the Company’s share price being equal to or greater than a volume weighted average price of $0.40 or more for 20 consecutive trading days on the ASX; and b) the occurrence of a Change of Control Event. 5 The Options will vest on the earlier of: a) 25%: No vesting conditions. The options vest immediately upon issue; b) 50%: The volume weighted average price of Company shares is at least $0.08 for 20 consecutive trading days; and c) 50%: At least 24 months after issue of the options and the volume weighted average price of Company shares is at least $0.20 for 20 consecutive trading days. No option holder has any right under the options to participate in any other share issue of the Company or any other entity. Options granted as part of remuneration have been valued using the Black Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share and the risk-free interest rate for the term of the option. Options granted under the plan carry no dividend or voting rights. For details on the valuation of options, including models and assumptions used, please refer to note 18. Options Affecting Remuneration The terms and conditions of options affecting remuneration in the current or future reporting years are as follows: Grant date Number of options granted Expiry date/last exercise date Exercise price per option $ Value of options at grant date1 Number of options vested Vested Max value yet to vest Directors 0.001 2,000,000 03/04/22 Jason Bontempo 28/11/18 6,000,000 01/05/24 0.0001 01/05/20 19/02/19 0.001 5,000,000 26/02/22 01/05/20 10,000,000 01/05/24 0.0001 5,500,000 01/05/24 0.0001 01/05/20 Simon Mottram $ - - 158,000 126,750 1,500,000 25% 567,500 211,250 2,500,000 25% 116,188 1,375,000 25% - - Luis Azevedo Officers Aaron Bertolatti 28/11/18 01/05/20 400,000 03/04/22 0.001 500,000 01/05/24 0.0001 31,600 10,563 - 125,000 25% - 29,400,000 1,221,851 5,500,000 $ 82,879 78,480 313,264 130,801 71,940 16,575 6,540 700,479 1 The value at grant date has been calculated in accordance with AASB 2 Share-based payments. Service Agreements Executive Officers Aaron Bertolatti is engaged under an Executive Agreement dated 25 October 2017. Under the agreement Mr. Bertolatti is paid an annual fee of A$60,000. The Agreement may be terminated by the Company without notice or without cause by giving three months’ notice in writing or payment in lieu of notice. The Agreement may also be terminated by Mr. Bertolatti by providing three months’ notice in writing. Managing Director and CEO Simon Mottram is engaged under an Executive Agreement dated 19 February 2019. Under the agreement Mr. Mottram is paid an annual fee of A$300,000 (exclusive of superannuation). The Agreement may be terminated by the Company without notice or without cause by giving six months’ notice in writing or payment in lieu of notice. Odin Metals Limited 23 2020 Annual Report to Shareholders  Directors’ Report The Agreement may also be terminated by Mr. Mottram by providing three months’ notice in writing. Mr. Mottram also has the opportunity to participate in short term and long-term incentive schemes. Non-Executive Directors On appointment to the Board, all non-executive directors enter into a service agreement with the Group in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the Director. The aggregate remuneration for Non-Executive Directors has been set at an amount not to exceed $250,000 per annum. This amount may only be increased with the approval of Shareholders at a general meeting. Voting and comments made at the company's 2019 Annual General Meeting Odin Metals Limited received 99.0% of "yes" votes on its remuneration report for the 2019 financial year. The Group did not receive specific feedback on its remuneration report at the AGM. Loans to Directors and Executives There were no loans to Directors and key management personnel during the financial year ended 30 June 2020. Additional Information The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below: Revenue Loss after income tax 2020 $ 586,842 1,851,854 2019 $ 2018 $ 2017 $ 2016 $ 73,476 20,236 833,752 1,195,142 10,028 244,113 16,593 323,064 The factors that are considered to affect total shareholders return ('TSR') are summarised below: Share price at financial year end ($) Total dividends declared (cents per share) Basic earnings per share (cents per share) END OF AUDITED REMUNERATION REPORT 2020 $ 0.036 - (1.05) 2019 $ 2018 $ 2017 $ 0.12 - (0.54) 0.21 - (1.01) 0.05 - (0.05) 2016 $ 0.04 - (0.65) Signed on behalf of the Board in accordance with a resolution of the Directors. Jason Bontempo Executive Chairman Perth, Western Australia 29 September 2020 Odin Metals Limited 24 2020 Annual Report to Shareholders Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2020 Odin Metals Limited Continuing Operations Interest received Other income Reversal of prior year impairment Gain on assets held for sale Professional and consulting fees Director and employee costs Other expenses Impairment expense Share based payments expense Loss before income tax Income tax expense Net loss for the year Note 30-Jun-20 30-Jun-19 $ $ 3,741 31,101 470,139 81,861 (542,505) (510,540) (440,323) (306,999) (638,329) 73,476 - - (200,844) (278,236) (117,386) (65,646) (245,116) 6 6 8 18(a) (1,851,854) (833,752) 3 - - (1,851,854) (833,752) Other comprehensive income Items that may be reclassified to profit and loss Other comprehensive income for the year net of tax 5,086 5,086 - - Total comprehensive loss for the year (1,846,768) (833,752) Loss per share Loss per share (cents) 16 (1.05) (0.54) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. Odin Metals Limited 25 2020 Annual Report to Shareholders Consolidated Statement of Financial Position as at 30 June 2020 Odin Metals Limited 30-Jun-20 30-Jun-19 Note $ $ Current Assets Cash and cash equivalents Trade and other receivables Assets held for sale Total Current Assets Non-Current Assets Property, plant and equipment Deferred exploration and evaluation expenditure Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Total Current Liabilities Total Liabilities Net Assets Equity Issued capital Reserves Accumulated losses Total Equity 4 5 6 7 8 9 10 11 12 2,635,783 1,379,172 148,051 552,000 7,952 - 3,335,834 1,387,124 48,131 6,545,741 6,593,872 9,929,706 192,562 192,562 192,562 - 5,721,107 5,721,107 7,108,231 86,080 86,080 86,080 9,737,144 7,022,151 16,417,600 1,608,926 (8,289,382) 9,737,144 12,595,418 864,261 (6,437,528) 7,022,151 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. Odin Metals Limited 26 2020 Annual Report to Shareholders Consolidated Statement of Changes in Equity for the year ended 30 June 2020 Odin Metals Limited Balance at 1 July 2018 Total comprehensive loss for the year Loss for the year Total comprehensive loss for the year Transactions with owners in their capacity as owners Share-based payment Proceeds of issue of options Balance at 30 June 2019 Balance at 1 July 2019 Total comprehensive loss for the year Loss for the year Foreign currency translation Total comprehensive loss for the year Transactions with owners in their capacity as owners Shares issued during the year Cost of issue Share based payment Proceeds of issue of options Balance at 30 June 2020 Issued capital $ Accumulated losses $ 12,595,418 (5,603,776) - - - - (833,752) (833,752) - - 12,595,418 (6,437,528) 12,595,418 (6,437,528) - - - (1,851,854) - (1,851,854) 4,220,000 (397,818) - - - - - - Foreign exchange translation reserve $ - - - - - - - - 5,086 5,086 - - - - Share option reserve $ Total $ 69,105 7,060,747 - - (833,752) (833,752) 795,116 795,116 40 40 864,261 7,022,151 864,261 7,022,151 - - - 100,250 638,329 1,000 (1,851,854) 5,086 (1,846,768) 4,220,000 (297,568) 638,329 1,000 16,417,600 (8,289,382) 5,086 1,603,840 9,737,144 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. Odin Metals Limited 27 2020 Annual Report to Shareholders Consolidated Statement of Cash Flows for the year ended 30 June 2020 Odin Metals Limited Cash flows from operating activities Payments to suppliers and employees Interest received Other receipts Note 30-Jun-20 30-Jun-19 $ $ (1,497,383) (592,646) 3,741 31,101 73,476 51,986 Net cash used in operating activities 4 (1,462,541) (467,184) Cash flows from investing activities Purchase of plant and equipment Payments for exploration expenditure Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Proceeds from issue of options Payments for share issue costs Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effect of exchange rate fluctuations on cash (52,362) - (1,018,283) (2,483,363) (1,070,645) (2,483,363) 3,900,000 1,000 (226,565) 3,674,435 - 40 - 40 1,141,249 (2,950,507) 1,379,172 4,328,619 115,362 1,060 Cash and cash equivalents at the end of the year 4 2,635,783 1,379,172 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. Odin Metals Limited 28 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 1. Corporate Information The financial report of Odin Metals Limited (“Odin Metals” or “the Company”) for the year ended 30 June 2020 was authorised for issue in accordance with a resolution of the Directors on 29 September 2020. Odin Metals is a company limited by shares incorporated in Australia whose shares are traded on the Australian Securities Exchange. The nature of the operations and the principal activities of the Company are described in the Directors’ Report. 2. Summary of Significant Accounting Policies (a) Basis of Preparation The financial statements are general-purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial statements have also been prepared on a historical cost basis. The presentation currency is Australian dollars. Going concern The financial statements have been approved by the Directors on a going concern basis. In determining the appropriateness of the basis of preparation, the Directors have considered the impact of the COVID19 pandemic on the position of the Group at 30 June 2020 and its operations in future periods. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 24. (b) Compliance Statement The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). (c) Basis of Consolidation The consolidated financial statements comprise the financial statements of Odin Metals Limited (‘the Company’) and its subsidiaries as at 30 June each year (‘the Group’). Subsidiaries are those entities over which the Company has the power to govern the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether a Company controls another entity. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-company transactions have been eliminated in full. Unrealised losses are also eliminated unless costs cannot be recovered. Non-controlling interests in the results and equity of subsidiaries are shown separately in the Statement of Profit or Loss and Other Comprehensive Income and Consolidated Statement of Financial Position respectively. (d) Foreign Currency Translation (i)Functional and presentation currency Items included in the financial statements of each of the Company’s controlled entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The functional and presentation currency of Odin Metals Limited is Australian dollars. The functional currency of the Canadian subsidiary is the Canadian Dollar. Odin Metals Limited 29 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (ii) 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 statement of profit or loss and other comprehensive income. (iii) Group entities The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: ▪ ▪ ▪ assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; income and expenses for each statement of profit or loss and other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and all resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of any net investment in foreign entities are taken to shareholders’ equity. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange differences are recognised in the statement of profit or loss and other comprehensive income, as part of the gain or loss on sale where applicable. (e) Segment Reporting For management purposes, the Company is organised into one main operating segment, which involves exploration for copper and base metals. All of the Company’s activities are interrelated, and discrete financial information is reported to the management (Chief Operating Decision Makers) as a single segment. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole. (f) Changes in accounting policies and disclosures The Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company’s operations and effective for future reporting periods. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Company and therefore, no change will be necessary to Company accounting policies. (g) Exploration and evaluation expenditure Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied: the rights to tenure of the area of interest are current; and (i) (ii) at least one of the following conditions is also met: (a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or (b) exploration and evaluation activities in the area of interest have not at the balance date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. Odin Metals Limited 30 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. Where an area of interest is abandoned, any expenditure carried forward in respect of that area is written off. (h) Income Tax The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting year. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date. Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except when: ▪ the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or ▪ the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except when: Odin Metals Limited 31 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 ▪ the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or ▪ the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be recognised. The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be recognised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is recognised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. (i) Other taxes Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Government. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the Government is included as part of receivables or payables in the statement of financial position. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which is receivable from or payable to the Government, are disclosed as operating cash flows. (j) Impairment of non-financial assets other than goodwill The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Company of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash- generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre- tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Odin Metals Limited 32 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future years to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (k) Cash and cash equivalents Cash comprises cash at bank and in 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. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. (l) Employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably. Liabilities recognised in respect of employee benefits expected to be settled within 12 months, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date. (m) Trade and other payables Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Company prior to the end of the financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. (n) Provisions Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. Odin Metals Limited 33 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting year. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense. (o) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the purchase consideration. (p) Property, plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits. (q) Current and Non-Current Classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. (r) Revenue Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Interest income Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. (s) Earnings per share Basic earnings/loss per share is calculated as net profit/loss attributable to members, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit/loss attributable to members, adjusted for: ▪ costs of servicing equity (other than dividends) and preference share dividends; ▪ the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and Odin Metals Limited 34 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 ▪ other non-discretionary changes in revenues or expenses during the year that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. (t) Share-based payment transactions (i) Equity settled transactions: The Company provides benefits to individuals acting as, and providing services similar to employees (including Directors) of the Company in the form of share-based payment transactions, whereby individuals render services in exchange for shares or rights over shares (‘equity settled transactions’). There is currently an Employee Share Option Plan (ESOP) in place, which provides benefits to Directors and individuals providing services similar to those provided by an employee. The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by using the Black Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in note 18. The expected price volatility is based on the historic volatility of the Company’s share price on the ASX. In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Odin Metals Limited (‘market conditions’).The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the year in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’).The cumulative expense recognised for equity settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting year has expired and (ii) the number of awards that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of the market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a year represents the movement in cumulative expense recognised at the beginning and end of the year. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of the modification. Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet recognised for the award is recognised immediately. However if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods and services received unless this cannot be measured reliably, in which case the cost is measured by reference to the fair value of the equity instruments granted. The dilutive effect, if any, of outstanding options is reflected in the computation of loss per share (note 16). Odin Metals Limited 35 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (ii) Cash settled transactions: The Company may also provide benefits to employees in the form of cash-settled share-based payments, whereby employees render services in exchange for cash, the amounts of which are determined by reference to movements in the price of the shares of the Company. The cost of cash-settled transactions is measured initially at fair value at the grant date using the Black-Scholes formula taking into account the terms and conditions upon which the instruments were granted. This fair value is expensed over the year until vesting with recognition of a corresponding liability. The liability is remeasured to fair value at each balance date up to and including the settlement date with changes in fair value recognised in profit or loss. (u) Critical accounting estimates and judgements The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the year in which the estimate is revised if it affects only that year, or in the year of the revision and future years if the revision affects both current and future years. Share-based payment transactions: The Company measures the cost of equity-settled transactions and cash-settled share-based payments with employees and third parties by reference to the fair value of the equity instruments at the date at which they are granted. The fair value at the grant date is determined using the Black and Scholes option pricing model taking into account the terms and conditions upon which the instruments were granted and the assumptions detailed in note 18. Deferred Exploration and evaluation Expenditure Deferred exploration and evaluation expenditure has been capitalised on the basis that the company will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the year in which this determination is made. Coronavirus (COVID-19) pandemic Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the consolidated entity based on known information. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic. (v) New standards and interpretations not yet adopted The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Odin Metals Limited 36 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 The Company adopted AASB 16 Leases as of 1 July 2019. The adoption of this standard did not have significant impact on the financial results or disclosures of the Company. Conceptual Framework for Financial Reporting (Conceptual Framework) The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards. Where the consolidated entity has relied on the existing framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under the Australian Accounting Standards, the consolidated entity may need to review such policies under the revised framework. At this time, the application of the Conceptual Framework is not expected to have a material impact on the consolidated entity's financial statements. 3. Income tax (a) Income tax expense Major component of tax expense for the year: Current tax Deferred tax 2020 $ 2019 $ - - - - - - (b) Numerical reconciliation between aggregate tax expense recognised in the statement of profit or loss and other comprehensive income and tax expense calculated per the statutory income tax rate. A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the Company’s applicable tax rate is as follows: Loss from continuing operations before income tax expense Tax at the Australian rate of 27.5% (2019: 30%) Add: Tax effect of: - other non-allowable items - other deductible items Less: Tax effect of: (1,703,367) (468,426) (833,752) (250,126) 212,772 116,530 73,678 8,703 (139,124) (167,745) - tax losses not recognised due to not meeting recognition criteria Income tax expense (139,124) - (167,745) - The Group has tax losses arising in Australia of $6,926,065 (2019: $6,496,367) that are available indefinitely for offset against future taxable profits of the Group. The benefit for tax losses will only be obtained if: i. the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised; and ii. the Company continues to comply with the conditions for deductibility imposed by tax legislation; and iii. no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses. Odin Metals Limited 37 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 4. Cash and cash equivalents Reconciliation of cash Cash comprises of: Cash at bank Reconciliation of operating loss after tax to net cash flow from operations Loss after tax Non-cash and non-operating items Share-based payment Gain on available for sale assets Other Impairment expense Change in assets and liabilities Decrease / (increase) trade and other receivables (Decrease) / increase in trade and other payables Net cash flow used in operating activities 2020 $ 2019 $ 2,635,783 1,379,172 (1,851,854) (833,752) 638,329 (552,000) 4,233 306,999 (40,098) 31,850 (1,462,541) 245,115 - (1,060) 65,646 261 56,606 (467,184) Non-cash investing and financing activities During the year ended 30 June 2019, the Company issued 50,000,000 unlisted options exercisable at $0.40 pursuant to the terms of an Earn-in Option Agreement signed with Glencore Canada Corporation to consolidate the highly prospective Sturgeon Lake Base Metals District on the historical Mattabi Zinc-Copper Trend, Ontario, Canada. 5. Trade and other receivables Trade debtors Other receivables Prepayments GST receivable 375 100,0001 5,276 42,400 148,051 - - - 7,952 7,952 1 On 21 April 2020 the Company issued 2,500,000 shares at $0.04 per share to a sophisticated investor however funds were not received until 20 July 2020. Debtors, other debtors and GST receivable are non-interest bearing and generally receivable on 30-day terms. They are neither past due nor impaired. The amount is fully collectible. Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value. 6. Assets held for sale Exploration asset M27/263 552,000 - In June 2020, the Company signed a binding Heads of Agreement to transfer the remaining 30% ownership of the prospective and mineralised tenement M27/263 to 70% joint venture partner Moho Resources Limited. The key terms of the acquisition (subject to Moho shareholder approval) were as follows: 1. Moho to pay Odin $120,000 in cash within 30 days of signing; 2. Odin to be issued 4,500,000 shares in Moho at a deemed issue price of $0.065 per share; and 3. Moho to grant Odin a net smelter royalty of 0.5% on minerals, mineral products and concentrates, produced and sold from the tenement. 4. The asset was previously impaired for $470,139 in 2018. It was subsequently reversed in the current year. The fair value as at 30 June 2020 is $552,000 and the gain on asset held for sale is $81,861. Odin Metals Limited 38 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 Upon assessment, the Board has decided to reclassify its 30% ownership interest in M27/263 to Assets Held for Sale at 30 June 2020. 7. Property, plant and equipment Plant and Equipment, net Movements in property, plant and equipment: Plant and Equipment Opening balance Additions Depreciation Closing balance 8. Deferred exploration and evaluation expenditure Exploration and evaluation phase - at cost Opening balance Acquisition of exploration tenements Exploration expenditure written off Exploration and evaluation expenditure incurred during the year Movements in prepayments Closing balance 2020 $ 2019 $ 48,131 48,131 - 52,362 (4,231) 48,131 - - - - - - 5,721,107 720,0001 (306,999)2 411,633 - 6,545,741 2,662,845 550,0003 (65,646) 2,477,3784 96,530 5,721,107 1 In February 2020, the Company announced that it had signed an option agreement to acquire 100% of the Monte Azul Zinc Project in Brazil from Vale S.A.. Key terms included: 1. Vale grants Odin an exclusive option to purchase the Project until the later of 30 days from the date of execution of the sale and purchase agreement (“SPA”) and 28 February 2020 2. Within 15 days of Odin notifying Vale that it wishes to exercise its option to purchase the Project, Odin shall pay Vale US$500,000 3. Within 1 year after the payment in point 2 Odin to pay VALE US$1,500,000 and the Project will be transferred to Odin 4. Within 2 years after the payment in point 2 Odin to pay VALE US$2,000,000 5. Within 4 years after the payment in point 2 Odin to pay VALE US$3,000,000 6. Odin to pay Vale 1% NSR on any zinc and lead production over and above the contained zinc metal equivalent of 470,000t as per the Foreign Resource Estimate Regional Exploration Joint Venture and Option Agreement Odin entered into an exploration Joint Venture (“JV”) with IMS Engenharia Mineral Ltda (“IMS”) consisting of 8 granted exploration licences covering an area of approximately 105km2. Key terms included: 1. the JV was precedent on the Vale agreement becoming effective; 2. the exploration licences were to be transferred to Odin upfront; 3. 1,000,000 Odin shares were granted to the quota holders of IMS on 18 June 2020 at deemed issue price of $0.035 per share; 4. Odin can earn 70% by expending AU$2,000,000 in exploration over 3 years; 5. At Odin’s election it may acquire the remaining 30% by paying A$2,000,000 (half of this amount can be paid through the issuance of Odin shares to the quota holders of IMS, subject to shareholder approval); and Odin Metals Limited 39 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 6. 1% NSR is payable to IMS on production above 120,000t of zinc metal from the acquired license area In addition, Odin entered into a binding letter of intent with GRB Grafite Do Brasil Mineração Ltda (“GRB”), who has been granted the right to 15 exploration licences (12 granted and 3 applications), covering an area of approximately 260km2. Odin completed a 10-day due diligence period, following which, the Company elected to exercise the option to purchase the 15 Exploration Licenses and negotiated a definitive contract that included the following payments to GRB of: 1. 5,000,000 Odin shares to be granted to GRB or its nominees (issued 22 June 2020) at a deemed issue price of $0.037; 2. A 1-year deferred payment of A$150,000 in Odin shares and A$100,000 in cash; and 3. An underlying 1% NSR is payable on any production from the acquired licenses to Falcon Metais Ltda. 2 The Sturgeon Lake management committee (Odin and Glencore) agreed to relinquish the First Quantum Option from the “Odin Properties”. As a result, exploration and evaluation expenditure in relation to the First Quantum Option was written down to nil. The impairment expense recognised was $306,999. 3 The Company issued 50,000,000 unlisted options exercisable at $0.40 pursuant to the terms of an Earn-in Option Agreement signed with Glencore Canada Corporation to consolidate the highly prospective Sturgeon Lake Base Metals District on the historical Mattabi Zinc-Copper Trend, Ontario, Canada. Refer to note 18 (d). 4 At 30 June 2019 the deferred exploration and evaluation balance included approximately $2,003,749 of Project expenditures under an Earn-in Option Agreement to acquire a 50% interest in the Glencore Sturgeon Lake Properties. 9. Trade and other payables Trade payables Other payables 2020 $ 2019 $ 35,505 157,057 192,562 30,242 55,838 86,080 Trade creditors and other creditors are non-interest bearing and generally payable on 30-day terms. Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value. 10. Issued capital (a) Issued and paid up capital Issued and fully paid 16,405,271 12,595,418 2020 Number of shares 2019 Number of shares $ $ (b) Movements in ordinary shares on issue Opening balance Shares issued via placement Shares issued as consideration for acquisition1 Transaction costs on share issue Closing balance 153,719,335 100,000,000 6,000,000 - 259,719,335 12,595,418 153,719,335 - 4,000,000 - 220,000 - (410,147) 16,405,271 153,719,335 12,595,418 - - - 12,595,418 Odin Metals Limited 40 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 1 5,000,000 Odin shares were granted to GRB on 22 June 2020 at a deemed issue price of $0.037 and 1,000,000 Odin shares were granted to the quota holders of IMS on 18 June 2020 at deemed issue price of $0.035 per share. (c) Ordinary shares The Company does not have authorised capital nor par value in respect of its issued capital. Ordinary shares have the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company. (d) Capital risk management The Company’s capital comprises share capital, reserves less accumulated losses amounting to a net equity of $9,737,144 at 30 June 2020. The Company manages its capital to ensure its ability to continue as a going concern and to optimise returns to its shareholders. The Company was ungeared at year end and not subject to any externally imposed capital requirements. Refer to note 17 for further information on the Company’s financial risk management policies. (e) Share options As at 30 June 2020 there were 99,400,000 unissued ordinary shares under options. The details of the options are as follows: Number Exercise Price $ Expiry Date 6,200,000 5,200,000 28,000,000 3,500,000 3,250,000 3,250,000 50,000,000 99,400,000 $0.001 $0.001 $0.0001 $0.08 $0.10 $0.12 $0.40 3 April 2022 26 February 2022 1 May 2024 31 March 2023 31 March 2023 31 March 2023 Exercisable during the period commencing on the Closing Date1 until one year after the Closing Date1. 1 Closing Date: As that term is defined in the Earn-in Option Agreement signed with Glencore Canada Corporation. No option holder has any right under the options to participate in any other share issue of the Company or any other entity. 1,000,000 options lapsed unexercised and 2,000,000 options were forfeited during the financial year. No options were exercised during or since the year ended 30 June 2020. 11. Reserves Share option reserve Foreign exchange translation reserve 2020 $ 2019 $ 1,603,840 5,086 1,608,926 446,501 - 446,501 Odin Metals Limited 41 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 Movements in Reserves Share option reserve Opening balance Share-based payments (refer note 18(a)) Proceeds from option issue Closing balance 2020 $ 2019 $ 864,261 738,579 1,000 1,603,840 69,105 795,116 40 864,261 The share option reserve is used to record the value of equity benefits provided to Directors and executives as part of their remuneration and non-employees for their goods and services and to record the premium paid on the issue of unlisted options. Refer to note 18 for further details of the securities issued during the financial year ended 30 June 2020. Foreign exchange translation reserve Opening balance Foreign exchange translation difference Closing balance - 5,086 5,086 - - - The foreign exchange differences arising on translation of foreign controlled entities are taken to the foreign currency translation reserve. 12. Accumulated losses Movements in accumulated losses were as follows: Opening balance Loss for the year Closing balance 13. Auditor’s remuneration The auditor of Odin Metals Limited is RSM Australia Partners. Amounts received or due and receivable by the parent auditor for: - an audit or review of the financial report 14. Directors and Key Management Personnel disclosures (a) Remuneration of Directors and Key Management Personnel (6,437,528) (1,851,854) (8,289,382) (5,603,776) (833,752) (6,437,528) 31,000 24,600 Details of the nature and amount of each element of the emolument of each Director and key management personnel of the Company for the financial year are as follows: Short term employee benefits Post-employment benefits Share-based payments Total remuneration 545,000 33,087 423,670 1,001,757 342,923 12,411 115,350 470,684 The Remuneration Report contained in the Director's Report contains details of the remuneration paid or payable to each member of Odin Metals Limited's key management personnel for the year ended 30 June 2020 and their interests in shares and options of the Company. Odin Metals Limited 42 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 (b) Other transactions with Key Management Personnel BR Corporation Pty Ltd, a company in which Mr. Jason Bontempo is a director, charged the Company consulting fees of $135,000 during the year ended 30 June 2020 (2019: $140,000). The consulting fee is included in note 14(a) “Remuneration of Directors and Key Management Personnel”. Nil was outstanding at year end. 1918 Consulting Pty Ltd, a company in which Mr. Aaron Bertolatti is a director, charged the Company consulting fees of $65,000 during the year ended 30 June 2020 (2019: $60,000). The consulting fee is included in note 14(a) “Remuneration of Directors and Key Management Personnel”. Nil was outstanding at year end. Exore Resources Limited, of which former Director Justin Tremain is a Director, received reimbursement for the rental of office space in the amount of $1,500 exclusive of GST during the year ended 30 June 2020 (2019: $500). Nil was outstanding at year end. Transactions with key management personnel were made at arm’s length at normal market prices and normal commercial terms. There were no other transactions with key management personnel for the year ended 30 June 2020. 15. Related party disclosures (a) Key management personnel For Director related party transactions please refer to Note 14 “Key Management Personnel disclosures”. (b) Subsidiaries The consolidated financial statements include the financial statements of Odin Metals Limited and the subsidiaries listed in the following table: Name of Entity Evandale Minerals Pty Ltd Punch Resources Pty Ltd Odin Canada Inc Odin Brasil Mineração Ltda. Country of Incorporation Australia Australia Canada Brazil Equity Holding 100% 100% 100% 100% 2020 $ 2019 $ 16. Loss per share Loss used in calculating basic and dilutive EPS (1,851,854) (833,752) Weighted average number of ordinary shares used in calculating basic loss per share: Effect of dilution: Share options Adjusted weighted average number of ordinary shares used in calculating diluted loss per share: Number of Shares 176,389,080 153,719,335 176,389,080 153,719,335 There is no impact from 99,400,000 options outstanding at 30 June 2020 on the earnings per share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the future. There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements. Odin Metals Limited 43 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 17. Financial risk management Exposure to foreign currency risk, credit risk, liquidity risk and interest rate risk arises in the normal course of the Company’s business. The Company uses different methods as discussed below to manage risks that arise from these financial instruments. The objective is to support the delivery of the financial targets while protecting future financial security. (a) Liquidity risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of the business and investing excess funds in highly liquid short-term investments. The responsibility for liquidity risk management rests with the Board of Directors. Alternatives for sourcing our future capital needs include our cash position and the issue of equity instruments. These alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. The Directors expect that present levels of liquidity along with future capital raising will be adequate to meet expected capital needs. (b) Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of financial instruments. The Company’s exposure to market risk for changes to interest rate risk relates primarily to its earnings on cash and term deposits. The Company manages the risk by investing in short term deposits. Cash and cash equivalents 2020 $ 2019 $ 2,635,783 1,379,172 Interest rate sensitivity The following table demonstrates the sensitivity of the Company’s statement of profit or loss and other comprehensive income to a reasonably possible change in interest rates, with all other variables constant. Change in Basis Points Increase 75 basis points Decrease 75 basis points Effect on equity including retained earnings ($) Increase/(Decrease) Effect on Post Tax Loss ($) Effect on equity including retained earnings ($) Increase/(Decrease) Effect on Post Tax Loss ($) 2020 19,768 (19,768) 2019 19,768 (19,768) 10,344 (10,344) 10,344 (10,344) A sensitivity of 75 basis points has been used as this is considered reasonable given the current level of both short term and long-term Australian Dollar interest rates. The change in basis points is derived from a review of historical movements and management’s judgement of future trends. (c) Credit risk exposures Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause the Company to incur a financial loss. The Company’s maximum credit exposure is the carrying amounts on the statement of financial position. The Company holds financial instruments with credit worthy third parties. At 30 June 2020, the Company held cash at bank. 84% of the Company’s cash was held in financial institutions with a rating from Standard & Poors of AA or above (long term). The Company has no past due or impaired debtors as at 30 June 2020. Odin Metals Limited 44 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 18. Share-based payments (a) Recognised share-based payment transactions Share-based payment transactions recognised either as operational expenses in the statement of profit or loss and other comprehensive income or as capital raising costs in the equity during the year were as follows: Employee and Director share-based payments (note 18 (b)) Share-based payments to suppliers (note 18 (c)) Recognised as an expense in profit or loss Share-based payments to suppliers (note 18 (c)) Recognised as a capital raising cost in equity 2020 $ 488,666 249,913 638,329 100,250 100,250 2019 $ 135,531 109,585 245,116 - - Project acquisition share-based payments (note 18 (d)) Recognised as an asset acquisition cost - - 550,000 550,000 Total share-based payments 738,579 795,116 (b) Employee and Director share-based payments The Company issues options to assist in the recruitment, reward, retention and motivation of directors, employees and consultants of Odin Metals Limited. An individual may receive the options or nominate a relative or associate to receive the options. The fair value at grant date of options granted during the reporting year was determined using a combination of the Parisian barrier and share price barrier option pricing models that take into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share, the risk-free interest rate for the term of the option and the market performance condition. The table below summarises options granted during the year ended 30 June 2020: Grant Date Expiry date Exercise price per option Balance at start of the year Granted during the year Exercised during the year Expired during the year Balance at end of the year Exercisable at end of the year 01/05/2020 01/05/2024 $0.0001 Number Number Number Number Number Number - 24,000,000 24,000,000 - 2,000,000 22,000,000 - 2,000,000 22,000,000 -1 - 1The Performance Options are subject to the following vesting conditions: • 5.5m Options (25%) to vest immediately upon shareholder approval (received 9 April 2020); • 5.5m Options (25%) vest upon the share price of Odin exceeding $0.08 for 20 consecutive trading days; and • 11.0m Options (50%) vest 24 months from the date of issue, subject to the 15-day VWAP of Odin exceeding A$0.20. The expense recognised in respect of the above options granted during the year was $176,988. The expense recognised during the year on options granted in prior periods was $311,678. Odin Metals Limited 45 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 The model inputs, not included in the table above, for options granted during the year ended 30 June 2020 included: share price at grant date was $0.03; a) options were granted for nil consideration; b) expected life of the options is 4 years; c) d) expected volatility of 100%; e) expected dividend yield of nil; and f) a risk-free interest rate was 0.45% The table below summarises options granted during the year ended 30 June 2019: Grant Date Expiry date Exercise price per option Balance at start of the year Number Number Granted during the year 28/11/2018 03/04/2022 $0.001 19/02/2019 26/02/2022 $0.001 17/05/2019 20/05/2020 $0.001 - 2,800,000 - 5,200,000 - 1,000,000 - 9,000,000 1 The Options will vest on the earlier of: Exercised during the year Balance at end of the year Expired during the year Number Number Number - 2,800,000 - 5,200,000 - 1,000,000 - 9,000,000 - - - - Exercisable at end of the year Number - 1 - 1 - 1 - a) the Company’s share price being equal to or greater than a volume weighted average price of $0.40 or more for 20 consecutive trading days on the ASX; and b) the occurrence of a Change of Control Event. The expense recognised in respect of the above options granted during the year was $135,531. The model inputs, not included in the table above, for options granted during the year ended 30 June 2019 included: a) options were granted for consideration ranging from nil to $0.0001; b) expected life of the options ranged from 1.0 to 3.4 years; c) share price at grant date ranged from $0.11 to $0.15; d) expected volatility of 100%; e) expected dividend yield of nil; and f) a risk-free interest rate ranged from 1.21% to 2.09% There were no unlisted options issued to employee’s and Director’s during the year ended 30 June 2018. (c) Share-based payment to suppliers During the financial year ended 30 June 2020 the Company issued unlisted options to provide consideration to lead managers, consultants and corporate advisors for services rendered to date and over the coming 12 months. These options have been valued using the Black-Scholes option pricing model. Grant Date Expiry date Exercise price per option 21/04/2020 31/03/2023 $0.08 21/04/2020 31/03/2023 $0.10 21/04/2020 31/03/2023 $0.12 01/05/2020 01/05/2024 $0.0001 Balance at start of the year Granted during the year Exercised during the year Expired during the year Balance at end of the year Exercisable at end of the year Number Number - 3,500,000 - 3,250,000 - 3,250,000 6,000,000 - 16,000,000 Number - - - - Number Number Number - 3,500,000 3,500,000 - 3,250,000 3,250,000 - 3,250,000 3,250,000 -1 - 6,000,000 16,000,000 10,000,000 Odin Metals Limited 46 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 1The Performance Options are subject to the following vesting conditions: • 5.5m Options (25%) to vest immediately upon shareholder approval (received 9 April 2020); • 5.5m Options (25%) vest upon the share price of Odin exceeding $0.08 for 20 consecutive trading days; and • 11.0m Options (50%) vest 24 months from the date of issue, subject to the 15-day VWAP of Odin exceeding A$0.20. The expense recognised in respect of the above options granted during the year was $105,542. The expense recognised during the year on options granted in prior periods was $144,371. The model inputs, not included in the table above, for options granted during the year ended 30 June 2020 included: share price at grant date of $0.03; a) options were granted for nil consideration; b) expected lives of the options ranged from 3 to 4 years; c) d) expected volatility of 100%; e) expected dividend yield of nil; and f) a risk-free interest rate ranging from 0.25 to 0.45% There were no unlisted options issued to suppliers during the year ended 30 June 2019. (d) Project acquisition share-based payments During the financial year ended 30 June 2019, 50,000,000 unlisted options exercisable at $0.40 were issued pursuant to an Earn-in Option Agreement with Glencore Canada Corporation as part consideration for the acquisition of a 50% interest in the Glencore Sturgeon Lake Properties. Grant Date Expiry date Exercise price per option Balance at start of the year Granted during the year Exercised during the year Expired during the year Balance at end of the year Exercisable at end of the year 04/04/2019 04/04/2020 $0.40 Number Number - 50,000,000 - 50,000,000 Number - - Number Number - 50,000,000 - 50,000,000 Number - - The amount recognised in respect of the above options granted during the year was $550,000, being the entire valuation amount, as the Glencore options have no vesting conditions attached to them. This amount was capitalised as a deferred exploration and evaluation expenditure asset in the current year as the options represent consideration paid for an interest in exploration tenements (refer note 8). These options have been valued using a Black Scholes option pricing model. The model inputs, not included in the table above, for the project acquisition options granted as consideration for the acquisition included: a) b) c) d) e) expected life of the options is 1.0 year; share price at grant date was $0.11; expected volatility was 105%; expected dividend yield of nil; and a risk-free interest rate of 1.50% 19. Dividends No dividend was paid or declared by the Company in the year ended 30 June 2020 or the period since the end of the financial year and up to the date of this report. The Directors do not recommend that any amount be paid by way of dividend for the financial year ended 30 June 2020. Odin Metals Limited 47 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 20. Segment information The Group has identified its operating segments based on the internal reports that are reported to Executives (the chief operating decision makers) in assessing performance and in determining the allocation of resources. The Board as a whole will regularly review the identified segments in order to allocate resources to the segment and to assess its performance. The Group operates predominately in one industry, being the exploration of mineral resources. The main geographic areas that the entity operates in are Australia and Canada. The parent entity is registered in Australia. The Group’s exploration assets were located in Australia, Brazil and Canada. The following table present revenue, expenditure and certain asset and liability information regarding geographical segments for the years ended 30 June 2020 and 30 June 2019: Year ended 30 June 2020 Interest income Segment revenue Result Loss before tax Income tax expense Loss for the year Asset and liabilities Segment assets Segment liabilities Year ended 30 June 2019 Interest income Segment revenue Result Loss before tax Income tax expense Loss for the year Asset and liabilities Segment assets Segment liabilities Australia $ Canada $ Brazil $ Total $ 3,654 3,654 (1,753,134) - (1,753,134) - - - - 87 87 3,741 3,741 (98,720) (98,720) (1,851,854) - (1,851,854) 2,945,488 165,355 5,598,701 - 1,385,517 27,207 9,929,706 192,562 73,476 73,476 - - (833,632) - (833,632) (120) - (120) 1,378,981 86,080 5,729,250 - - - - - - - - 73,476 73,476 (833,752) - (833,752) 7,108,231 86,080 21. Contingent assets and liabilities There are no known contingent assets or liabilities as at 30 June 2020. 22. Commitments There are no known contractual commitments as at 30 June 2020. 23. Significant events after the reporting date There have been no other significant events subsequent to the end of the financial year to the date of this report. Odin Metals Limited 48 2020 Annual Report to Shareholders  Odin Metals Limited Notes to the Consolidated Financial Statements for the year ended 30 June 2020 24. Parent entity information The following details information related to the parent entity, Odin Metals Limited, at 30 June 2020. The information presented here has been prepared using consistent accounting policies with those presented in Note 2. Current assets Total assets Current liabilities Total liabilities Net assets Issued capital Reserves Accumulated losses Loss of the parent entity Other comprehensive income for the year 2020 $ 2,891,282 9,901,157 (165,355) (165,355) 9,735,802 16,417,600 1,603,840 (8,285,638) 9,735,802 2019 $ 1,378,981 7,013,136 (86,080) (86,080) 6,927,056 12,595,418 864,261 (6,532,623) 6,927,056 (1,753,015) - (1,753,015) (833,632) - (833,632) Odin Metals Limited 49 2020 Annual Report to Shareholders  Directors’ Declaration In accordance with a resolution of the Directors of Odin Metals Limited, I state that: 1. In the opinion of the Directors: a) the financial statements and notes of Odin Metals Limited for the year ended 30 June 2020 are in accordance with the Corporations Act 2001, including: i. ii. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2020 and of its performance for the year ended on that date; and complying with Accounting Standards (including the Australian Accounting Interpretations), the Corporations Regulations 2001 and other mandatory professional reporting requirements; and b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 2(b). 2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 3. This declaration has been made after receiving the declarations required to be made by the Directors in accordance with sections of 295A of the Corporations Act 2001 for the financial year ended 30 June 2020. On behalf of the Board Jason Bontempo Executive Chairman Perth, Western Australia 29 September 2020 Odin Metals Limited 50 2020 Annual Report to Shareholders AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Odin Metals Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA PARTNERS Perth, WA Dated: 29 September 2020 ALASDAIR WHYTE Partner Level 32, Exchange Tower, 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844 RSM Australia Partners T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ODIN METALS LIMITED Opinion We have audited the financial report of Odin Metals Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How our audit addressed this matter Carrying value of Deferred Exploration and Evaluation Expenditure Refer to Note 8 in the financial statements The Group has capitalised exploration and evaluation expenditure, with a carrying value of $6,545,741 as at 30 June 2020. We considered this to be a key audit matter due to the significant management judgments involved in assessing the carrying value of the assets including:  Determination of whether the exploration and evaluation expenditure can be associated with finding specific mineral resources, and the basis on which that expenditure is allocated to an area of interest;  Assessing whether any indicators of impairment are present and if so, judgement applied to determine and quantify any impairment loss; and  Determination of whether exploration activities have reached a stage at which the existence of an economically recoverable reserves may be determined. Valuation of Share Based Payments Refer to note 18 in the financial statements During the year ended 30 June 2020 the Group issued options to key management, employees and suppliers. The Group recognised $638,329 as an expense in profit and loss and $100,250 as a capital raising cost. have Management these arrangements in accordance with AASB 2 Share- based Payment and used an option pricing model to value the options. accounted for We considered this to be a key audit matter due to the complex and significant judgement involved in assessing the share-based payment. fair value of the Our audit procedures in relation to the carrying value of exploration and evaluation expenditure asset included:  Obtaining evidence that the right to tenure of the area of interest is current;  Agreeing a sample of additions to supporting documentation and ensuring the amounts are capital in nature and relate to the area of interest;  Assessing that the impairment expense recognised for the year ended was appropriately calculated;  Enquiring with management and reviewing budgets and other documentation as evidence that active and significant operations in, or relation to, the area of interest will be continued in the future; and  Through discussions with the management and review of the Board Minutes, ASX announcements and other relevant documentation, assessing management’s determination that exploration activities have not yet progressed to the stage where the existence or otherwise of economically recoverable reserves may be determined. Our audit procedures included:  Reviewing the key terms and conditions of the share- based payments arrangements;  Obtaining the valuation models prepared by management and assessing whether the models were appropriate for valuing the options granted during the year;  Checking the mathematical accuracy of the computation;  Challenging the reasonableness of key assumptions used by management relative to the valuations at grant date;  Reviewing the minutes of Board of Director meetings and ASX announcements in relation to the granting of the options; and  Reviewing the adequacy and accuracy of the relevant disclosures in the financial statements. Other Information The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2020 but does not include the financial report and the auditor's report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or 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 further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor's report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2020. In our opinion, the Remuneration Report of Odin Metals Limited, for the year ended 30 June 2020, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. RSM AUSTRALIA PARTNERS Perth, WA Dated: 29 September 2020 ALASDAIR WHYTE Partner  ASX Additional Information Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current at 7 September 2020. Distribution of Share Holders 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - and over TOTAL Number of Holders 14 22 68 291 258 653 Ordinary Shares Number of Shares 1,441 66,579 661,749 12,552,533 246,437,033 259,719,335 % 0.00 0.03 0.25 4.83 94.89 100 There were 153 holders of ordinary shares holding less than a marketable parcel. Top Twenty Share Holders The names of the twenty largest holders of quoted equity securities are listed below: Name SUNSET CAPITAL MANAGEMENT PTY LTD VONROSS NOMINEES PTY LTD BLAMNCO TRADING PTY LTD HSBC CUSTODY NOMINEES LIMITED CITICORP NOMINEES PTY LIMITED ROWLEY SUPER INVESTMENTS PTY LTD J & J BANDY NOMINEES PTY LTD MR GAVIN JEREMY DUNHILL THREE ZEBRAS PTY LTD BNP PARIBAS NOMINEES PTY LTD STRATA NOMINEES PTY LTD JET CAPITAL PTY LTD ARALAD MANAGEMENT PTY LTD MR JONATHAN RALPH SHAPIRO DAVID LIPSKY CORPORATION MR KURT KITAYAMA ZESSHAM PTY LTD LUIS MAURICIO FERRAIUOLI AZEVEDO ROVON INVESTMENTS PTY LTD MR JASON BONTEMPO + MRS TIZIANA BATTISTA Shares 16,250,000 7,006,402 7,000,000 6,706,520 6,163,210 5,600,000 5,000,000 4,900,000 4,225,000 4,048,088 4,000,001 4,000,000 3,955,238 3,871,665 3,800,000 3,800,000 3,750,000 3,500,000 3,443,333 3,333,333 % 6.26 2.70 2.70 2.58 2.37 2.16 1.93 1.89 1.63 1.56 1.54 1.54 1.52 1.49 1.46 1.46 1.44 1.35 1.33 1.28 93,181,125 35.89 Substantial Shareholders Name SUNSET CAPITAL MANAGEMENT PTY LTD Shares 16,250,000 % 6.26 On-Market Buy Back There is no current on-market buy back. Odin Metals Limited 56 2020 Annual Report to Shareholders ASX Additional Information Voting Rights All ordinary shares carry one vote per share without restriction. Options have no voting rights. Use of Proceeds In accordance with listing rule 4.10.19, the Company confirms that it has used cash and assets in a form readily convertible to cash in a way consistent with its business objectives during the financial year ended 30 June 2020. Unlisted Options Number Class 6,200,000 Options over ordinary shares exercisable at $0.001 on or before 3 April 2022. 5,200,000 Options over ordinary shares exercisable at $0.001 on or before 26 February 2022. Holders with more than 20% - Aralad Management Pty Ltd 1,000,000 Options - Jet Capital Pty Ltd 1,000,000 Options - Simon Mottram 5,000,000 Options 28,000,000 Options over ordinary shares exercisable at $0.0001 on or before 1 May 2024. - Simon Mottram 10,000,000 Options - Mrs Tiziana Battista 6,000,000 Options 3,500,000 3,250,000 3,250,000 1,000,000 Options over ordinary shares exercisable at $0.08 on or before 31 March 2023. - Horizon Investment Services Pty Ltd 2,916,669 Options Options over ordinary shares exercisable at $0.10 on or before 31 March 2023. - Horizon Investment Services Pty Ltd 2,666,666 Options Options over ordinary shares exercisable at $0.12 on or before 31 March 2023. - Horizon Investment Services Pty Ltd 2,566,665 Options Options over ordinary shares exercisable at $0.08 on or before 8 July 2023. - Rodrigo Menezes 1,000,000 Options 3,000,000 Options over ordinary shares exercisable at $0.08 on or before 8 July 2022. - 2428 PTY LTD 1,000,000 Options - Gaks Investment Holdings Pty Ltd 1,000,000 Options - Malahide Management Pty Ltd 1,000,000 Options 3,000,000 Options over ordinary shares exercisable at $0.10 on or before 8 July 2022. - 2428 PTY LTD 1,000,000 Options - Gaks Investment Holdings Pty Ltd 50,000,000 Options over ordinary shares exercisable at $0.40 during the period commencing on the Closing Date1 until one year after the Closing Date1. 1,000,000 Options - Malahide Management Pty Ltd 1,000,000 Options - Glencore Canada Corporation 50,000,000 Options 1 Closing Date: As that term is defined in the Earn-in Option Agreement signed with Glencore Canada Corporation. Odin Metals Limited 57 2020 Annual Report to Shareholders  Schedule of Tenements Odin Metals Limited’s Projects Tenement BRAZIL 832.707/2014 830.844/2013 830.845/2013 830.846/2013 830.847/2013 831.350/2018 831.351/2018 831.352/2018 831.353/2018 831.354/2018 831.355/2018 831.358/2018 831.347/2018 831.348/2018 831.349/2018 831.356/2018 831.359/2018 831.911/1993 831.912/1993 831.617/2019 (Application) 831.618/2019 (Application) 830.081/2020 (Application) 830.848/2013 831.709/2015 832.711/2014 831.357/2018 (Application) 831.360/2018 (Application) 831.361/2018 (Application) Location Area Structure Minas Gerais, Brazil 195.42 HA Option to acquire 70% Minas Gerais, Brazil 1495.90 HA Option to acquire 70% Minas Gerais, Brazil 1497.98 HA Option to acquire 70% Minas Gerais, Brazil 1438.12 HA Option to acquire 70% Minas Gerais, Brazil 1898.81 HA Option to acquire 70% Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil 1968.61 HA 1967.39 HA 1957.32 HA 1992.71 HA 1938.11 HA 1960.03 HA 1910.15 HA 1423.81 HA 1629.82 HA 1712.20 HA 692.11 HA 1835.80 HA 718.58 HA 491.17 HA 879.69 HA 125.49 HA 674.70 HA 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Minas Gerais, Brazil 1440.17 HA Option to acquire 70% Minas Gerais, Brazil 1195.17 HA Option to acquire 70% Minas Gerais, Brazil 1308.54 HA Option to acquire 70% Minas Gerais, Brazil Minas Gerais, Brazil Minas Gerais, Brazil 1023.68 HA 1911.06 HA 1982.09 HA 100% 100% 100% Tenement Location Area Structure CANADA (Glencore Canada right to acquire 50%) Exploration claim – 4281448 Exploration claim – 4281449 Exploration claim – 4281450 Exploration claim – 4281451 Exploration claim – 4281452 Ignace Area, Ontario Ignace Area, Ontario Ignace Area, Ontario Ignace Area, Ontario Ignace Area, Ontario Single Cell Mining Claim – 547803 Bell Lake Area, Ontario Single Cell Mining Claim – 547804 Bell Lake Area, Ontario Single Cell Mining Claim – 547805 Bell Lake Area, Ontario Single Cell Mining Claim - 547806 Bell Lake Area, Ontario ML 106627 ML 107141 Ignace Area, Ontario Ignace Area, Ontario CLM248 (mining and surface rights) Ignace Area, Ontario CLM249 (mining and surface rights) Ignace Area, Ontario CLM250 (mining and surface rights) Ignace Area, Ontario 2.08 km2 1.92 km2 2.56 km2 2.56 km2 2.56 km2 0.21 km2 0.21 km2 0.21 km2 0.21 km2 1.61 km2 1.44 km2 2.36 km2 3.44 km2 2.21 km2 100% 100% 100% 100% 100% 100% 100% 100% 100% Option to acquire 100% Option to acquire 100% Option to acquire 100% Option to acquire 100% Option to acquire 100% Odin Metals Limited 58 2020 Annual Report to Shareholders  Schedule of Tenements Label/Claim Type Location Structure Glencore Canada Tenements – Sturgeon Lake 11/18/99 Lease 11/15/99 11/17/99 10/07/99 01/25/94 01/22/94 01/24/94 01/23/94 03/20/94 43330-12 01/02/00 29447-10 16070-9 29447-4 27180-1 43329-3 43329-1 43329-2 27181-11 08/14/80 29447-2 09/13/80 16071 TB 7913 PART 7 01/23/00 01/27/00 01/04/00 01/24/81 29610-13 01/09/00 01/10/00 09/23/76 28026-6 16070-8 CLS 115819 03/16/00 05/23/93 12/07/92 05/22/93 06/20/96 06/19/96 06/18/96 03/12/94 03/11/94 11/10/93 10/10/99 10/11/99 11/16/99 Lease Lease Lease Lease Lease Lease Lease Lease Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Patent Lease Lease Lease Lease Lease Lease Lease Lease Lease Lease Lease Lease Lease Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Bell Lake Area, Ontario Odin right to acquire 50% Six Mile & Bell Lake Areas, Ontario Odin right to acquire 50% Bell Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario GTP Block 7, Ontario Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Penassi & Valora Lake Areas, Ontario Odin right to acquire 50% Penassi Lake Area, Ontario Odin right to acquire 50% Penassi Lake Area, Ontario Odin right to acquire 50% Penassi & Six Mile Lake Areas, Odin right to acquire 50% Ontario Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Odin Metals Limited 59 2020 Annual Report to Shareholders  Schedule of Tenements 29447-5 Patent PA 1145072 Mining Claim PA 1195743 Mining Claim PA 1195858 Mining Claim PA 4241547 Mining Claim PA 4242860 Mining Claim PA 4242923 Mining Claim PA 4256551 Mining Claim PA 4256552 Mining Claim PA 4256553 Mining Claim PA 4256554 Mining Claim PA 4256555 Mining Claim PA 4256556 Mining Claim PA 4256557 Mining Claim PA 4256558 Mining Claim PA 4258008 Mining Claim PA 4258009 Mining Claim GTP Block 7, Ontario Odin right to acquire 50% Penassi Lake Area, Ontario Odin right to acquire 50% Bell Lake Area, Ontario Bell Lake Area, Ontario Odin right to acquire 50% Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Valora Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% Six Mile Lake Area, Ontario Odin right to acquire 50% 561460 to 501 42 Single Cell Mining Claims Bell Lake Area, Ontario 561519 to 575 57 Single Cell Mining Claims Bell Lake Area, Ontario Odin right to acquire 50% Odin right to acquire 50% BL – Blocks HA – Hectares km2 – Kilometres squared Brazilian Project Location Odin Metals Limited 60 2020 Annual Report to Shareholders  Schedule of Tenements Canadian Project Locations Odin Metals Limited 61 2020 Annual Report to Shareholders 

Continue reading text version or see original annual report in PDF format above