Ora Banda Mining Limited
Annual Report 2022

Plain-text annual report

Annual Report 2022 1 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 20222 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Corporate Directory DIRECTORS SHARE REGISTRY Peter Mansell (Non-executive Chairman) David Quinlivan (Non-executive Director) Keith Jones (Non-executive Director) Mark Wheatley (Non-executive Director) COMPANY SECRETARIES Tony Brazier Susan Park REGISTERED & PRINCIPAL OFFICE ADDRESS Level 1, 2 Kings Park Road West Perth 6005 Australia Telephone: Within Australia: 1300 035 592 Outside Australia: +61 8 6365 4548 Email: admin@orabandamining.com.au Website: www.orabandamining.com.au Computershare Investor Services Pty Limited GPO Box 2975 Melbourne VIC 3001 Telephone: 1300 555 159 AUDITOR KPMG 235 St Georges Terrace Perth WA 6000 SECURITIES EXCHANGE LISTING Listed on the Australian Securities Exchange under the trading code OBM 3 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 20224 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Contents 4 6 CHAIRMAN’S LETTER DIRECTORS’ REPORT 33 ANNUAL MINERAL RESOURCE AND ORE RESERVE STATEMENT 38 40 AUDITOR’S INDEPENDENCE DECLARATION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 41 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 42 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 43 CONSOLIDATED STATEMENT OF CASH FLOWS 44 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 76 DIRECTORS’ DECLARATION 78 INDEPENDENT AUDITOR’S REPORT 83 ASX ADDITIONAL INFORMATION 3 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Chairman’s Letter Dear Shareholder I am pleased to present Ora Banda Mining Limited’s (‘Ora Banda’ or ‘Company’) annual report for the 2022 financial year. This year was a difficult one for the Company as it continued to encounter obstacles whilst bedding down its 100%-owned Davyhurst Gold Project located approximately 120km north-west of Kalgoorlie, in Western Australia. Ora Banda battled a collective of external influences during the financial year, including rising materials and contractor costs, a tight labour market for skilled and experienced workers and regular disruptions caused by COVID-19, all of which contributed to poor mining and milling performances. As a result, Ora Banda struggled to hit its production and profit performance targets consistently quarter-on-quarter. Appreciating that this operating climate was unlikely to change in the foreseeable future, the Company’s board resolved that change was needed. In March of this year, it implemented a strategic review to set a new direction. In essence, the strategic review determined that the business needed to simplify: It needed to change from a multi-mine to single mine operation; it needed to cut costs at every level practicable; and, it needed to direct greater effort and resources into the Davyhurst process plant, such that it consistently achieved its nameplate capacity at 1.2Mtpa production level. The strategic review also highlighted the need to intensify the Company’s exploration, not just to replace depleted reserve ounces, but also to create new mine optionality for the future. The board decided that, to ensure it had adequate cash during this period of transition, it would be prudent to go to market for further working capital. Consequently, in March Ora Banda raised $20 million (before costs) from a combined placement and entitlement offer. Shortly afterwards in April, Ora Banda publicly announced its Operational Reset Plan (‘ORP’) – being the actionable items that came from the strategic review. The key steps in the ORP were: • Stopping mining at the Riverina open pit and concentrating on the Missouri open pit; • Rationalising the mining fleet, delivering a substantial cut to the Project’s cost base; • Reducing staff numbers and contractor labour; • Bringing fresh rigour to the crushing circuit, improving performance and reducing downtime; and • Appointing a new General Manager of Operations to execute these changes I am pleased to report that the implementation of stage one of Ora Banda’s ORP has been successful. Performance has stabilised and Davyhurst’s cost base has reduced. Work to further improve our mining and process practices remains urgent and ongoing. Whilst I am pleased that we are moving into FY23 on a more solid footing, Ora Banda recognises that its historical misses have been costly and, as a result, its share market performance has been wanting. This needs to be turned around over the next twelve months. The turnaround will not occur overnight. It will take time and will be driven by our renewed focus on exploration, or Geology First, which is the term we have coined for our new approach. 4 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022C H A I R M A N ’ S ’ L E T T E R Ora Banda’s geological potential is enormous. The Company has 1,200 square kilometres of ground and more than 120km of mineralised strike traversing a highly attractive gold belt. To date this outstanding discovery potential has not been well exploited and has been hindered by operational underperformance – but the value proposition for investors remains intact. Driving our Geology First initiative is Luke Creagh, who was appointed Chief Executive Officer in July. Recently serving as Chief Operating Officer at Northern Star Resources Limited, Luke is well equipped to guide the Company through the next stages of our ORP and build Ora Banda into an organically driven business and, in doing so, change the narrative around the Company from ‘small gold miner’ to ‘high value gold miner’. The mechanisms for Ora Banda’s renewed exploration push are in place and have already started. The Company plans to spend a minimum of $10 million this year targeting higher-grade underground orebodies at its three main resource hubs: Siberia/Davyhurst; Riverina/Mulline and Callion/Lady Ida. RC and diamond drilling has begun to extend and infill our first high-grade underground resource at Riverina. Further drilling is planned at higher-grade targets including the Callion underground and open pit extensions and underground targets at Siberia. This new focus on higher gold grades from underground is a natural step for Ora Banda, especially given that a number of our historically mined deposits have multiple high-grade intercepts at depth, which have never been followed up. Also, from the perspective of producing ounces, higher grade orebodies can quickly change the Company’s production profile and cash inflow. We are very excited about the possible flow-on effects a high-grade discovery might make, potentially lifting Ora Banda’s headline gold output past its current production rate of approximately 60,000 ounces per annum. Any meaningful high grade discovery could give rise to significant change, given the Company’s enviable position relative to peers. It has no debt and a 1.2Mtpa process facility and associated infrastructure, all of which are fully paid. So as difficult as the year just gone was, Ora Banda is learning, maturing and it will ultimately reap the benefits. The next 12 months will be very much focussed on the principles the Company has announced in its detailed strategy and values presentation – the keys to which are chasing higher margin ounces and generating more free cash sooner, to be able to fund our exciting drilling opportunities. I would like to take this opportunity to thank my fellow directors, our staff, contractors and consultants for all their efforts during the year. Finally, I would also like to thank our shareholders for their continued support. Peter Mansell Chairman 5 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Director’s Report The directors of Ora Banda Mining Limited (‘Ora Banda’, ‘Company’ or ‘OBM’) present their report on the results and state of affairs of the Group, being the Company and its controlled entities for the financial year ended 30 June 2022. DIRECTORS The names and details of the Group’s directors in office during the financial year and until the date of this report are as follows: NAMES, QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES OF DIRECTORS & COMPANY SECRETARIES Director Qualifications, experience and special responsibilities Peter Mansell Non-executive Chairman Appointed 22 June 2018 B.Com, LLB, H. Dip. Tax, FAICD Mr Mansell has extensive experience in the mining, corporate and energy sectors, both as an advisor and independent non-executive director of listed and unlisted companies. Mr Mansell practised law for a number of years as a partner in corporate and resources law firms in South Africa and Australia. Other current ASX directorships: - Energy Resources Australia Limited (appointed 26 October 2015) - DRA Global Limited (appointed 16 September 2019) Former ASX directorships in the last three years: - Nil B.Eng., GradDipAppFin GAICD, MAusIMM, SF Fin Mr Nicholson has over 25 years of industry experience in operational and mine management roles coupled with experience in private equity across companies involved in international mining and mining services. His experience spans a range of assets and commodities over 50 countries. Other current ASX directorships: - Nil Former ASX directorships in the last three years: - Nil B.App Sci, Min Eng, GradDipFinServ, FAusImm, FFINSA, MMICA Mr Quinlivan is a mining engineer and principal of Borden Mining Services. He has over 35 years’ experience on projects throughout the world including mining and executive leadership experience gained through a number of mining development roles. Mr Quinlivan is a Fellow of the Australian Institute of Mining and Metallurgy, Fellow of the Financial Services Institute of Australia, Member of the Mining Industry Consultants Association and Member of the Institute of Arbitrators & Mediators Australia. Other current ASX directorships: - Silver Lake Resources Limited (appointed 25 June 2015) - Dalaroo Metals Limited (appointed 5 March 2021) Former ASX directorships in the last three years: - Nil Peter Nicholson Managing Director Appointed 1 July 2021 Ceased 6 April 2022 David Quinlivan Non-executive Director Appointed 2 April 2019 6 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Director Qualifications, experience and special responsibilities Keith Jones Non-executive Director Appointed 2 April 2019 Mr Jones is a chartered accountant with over 40 years’ industry experience. He led the Western Australian practice of Deloitte for 15 years, the Energy and Resources group, and was Chairman of Deloitte Australia. Mark Wheatley Non-executive Director Appointed 2 April 2019 Joint company secretaries Name Tony Brazier Appointed 2 April 2019 Other current ASX directorships: - Coda Minerals Limited (appointed 26 April 2018) Former ASX directorships in the last three years: - Gindalbie Resources Limited (appointed 27 February 2013 / resigned 23 July 2019) B.E (Chem Eng Hons 1), MBA Mr Wheatley is a chemical engineer with over 30 years in mining and related industries. He has been involved as a director in both large and small companies and has led a number of listed company exploration and production turnaround stories. Other current ASX directorships: - Peninsula Energy Limited (appointed 26 April 2016) - Prospect Resources Limited (appointed 8 January 2021) Former ASX directorships in the last three years: - Nil Qualifications, experience and special responsibilities B.Bus, ACA, AGIA, ACIS Mr Brazier is a chartered accountant with over 25 years’ experience across a range of industries. He has extensive experience in project modelling and financing, process optimisation, financial reporting and analysis, corporate governance and risk management. Susan Park B.Com, ACA, F Fin, FGIA, FCIS, GAICD Appointed 2 April 2019 Ms Park has over 25 years’ experience in the corporate finance industry. She has held senior management positions at Ernst & Young, PricewaterhouseCoopers, Bankwest and Norvest Corporate. Directors’ Interests in Shares, Options and Performance Rights in Ora Banda Mining Limited Direct and indirect interests of the directors and their related parties in the Company’s shares, options and performance rights as at 27 September 2022 were: Directors Peter Mansell David Quinlivan Keith Jones Mark Wheatley Fully Paid Shares Unlisted Incentive Options Unlisted Performance Options 7,725,071 5,801,635 2,762,916 2,168,752 592,592 1,728,395 395,061 395,061 - 865,660 - - Further details of the vesting conditions applicable are disclosed in the remuneration report. 7 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T PRINCIPAL ACTIVITIES The principal activities of the Group during the financial year were mineral exploration, mine development and operation and the sale of gold, in Western Australia. REVIEW OF OPERATIONS The Davyhurst Gold Project (‘DGP’) is located approximately 120 km north-west of Kalgoorlie, within the tier 1 gold mining province of the Eastern Goldfields in Western Australia. OBM’s tenement package consists of 92 granted tenements covering an area of approximately 1,210 km2. Refer Figure 1 for a map of project locations. The Company’s operations were challenged during the year by the ongoing and evolving industry-wide COVID-19 response – impacting labour supply and constraining supply chains. OBM recognised these issues and was able to mitigate against them as far as practicable by assessing the risks associated with these disruptions and implementing appropriate contingency plans. Davyhurst Activities During the year the Company worked to ramp up production and streamline the operation culminating in the Operational Reset Plan (‘ORP’) which was announced in April 2022. 8 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Figure 1: Project locations 9 O R A BA N DA MINING L IM IT ED AN D ITS C ON T ROL L ED ENTITIE S ACN 100 038 266 AN N U AL REPORT 2022 D I R E C T O R S ’ R E P O R T Infrastructure During the year the Group constructed and commissioned Tailings Storage Facility – Cell B (‘TSF’) at a cost of $4.51 million. The TSF has a capacity of 1.01 million cubic metres. Figure 2: TSF Cell B Mining Operations Refer Table 1 for a summary of mining activities during the year. Riverina – Open Pit The Riverina mine is located approximately 44 km north of the Davyhurst gold processing plant. Mining operations ceased during the fourth quarter of the financial year as part of the ORP. Golden Eagle – Underground Mining operations at the Golden Eagle mine were completed in early January with the underground mining contractor demobilising following the mine’s closure. Missouri – Open Pit The Missouri mine is located approximately 37 km south-west of the Davyhurst gold processing plant. As part of the ORP, efficiencies were identified which began to be implemented in last quarter of the financial year. Further improvements have been identified in FY23 as Missouri becomes a key value driver for the Company as mined tonnes and grades increase at depth. 10 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Davyhurst Gold Project Mining Open Pit Riverina Units FY 2021 Sep-21 Dec-21 Mar-22 Jun-22 FY 2022 Quarter Material Moved bcm 2,868,327 650,997 304,984 261,809 46,222 1,264,012 Ore Mined Mined Grade Ounces Mined Missouri t g/t oz 549,699 196,961 131,249 77,242 27,790 433,242 1.24 1.6 1.4 21,915 10,307 5,935 1.3 3,175 1.3 1,160 1.5 20,577 Material Moved bcm 47,977 976,297 1,104,443 857,899 850,012 3,788,651 Ore Mined Mined Grade Ounces Mined Underground Golden Eagle Ore mined Mined Grade Ounces Mined Davyhurst Total Ore Mined Mined Grade Ounces Mined t g/t oz t g/t oz t g/t oz Table 1: Summary of mining activities during the year 6,339 75,496 134,028 214,764 196,121 620,409 1.28 261 1.4 1.8 1.6 1.9 1.7 3,303 7,576 11,296 11,936 34,111 97,470 92,389 112,026 2,996 2.76 8,645 2.2 2.9 6,618 10,381 1.4 138 - - - 207,411 2.6 17,137 653,508 364,846 377,303 295,002 223,911 1,261,062 1.47 1.7 2.0 1.5 1.8 1.8 30,821 20,228 23,892 14,609 13,096 71,825 1 1 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Processing Operations Mined ore is treated at the Davyhurst gold processing plant. A summary of processing plant production is set out below in Table 2. Following the refurbishment and commissioning of the 1.2Mtpa processing facility, ore processing and production commenced in early February 2021. Processing and plant throughput were negatively affected during the year by material handling characteristics and maintenance issues. Slurry viscosity of the predominantly oxide feed blend resulted in lower than forecast leach and adsorption tank slurry densities. This resulted in lower than forecast throughput. However as the year progressed and the percentage of oxide in the feed reduced the viscosity issues receded. Davyhurst Gold Project Processing Milled Tonnes Head grade Recovery Gold Recovered Gold Sold Bullion on hand Quarter Units FY 2021 Sep-21 Dec-21 Mar-22 Jun-22 FY 2022 t g/t % oz oz oz 330,317 230,128 270,755 257,980 267,310 1,026,173 1.70 88.5 2.0 90 2.3 92 1.9 93 1.9 92 15,974 13,459 18,557 14,585 15,053 13,869 13,522 18,806 13,540 15,060 857 1,647 - 1,657 1,668 2.0 92 61,654 60,928 1,668 Table 2: Summary of processing plant production Exploration Riverina Deeps In August 2021 the Company announced the results of an 18-hole, 3,460 metre diamond drill programme which targeted infill and extensions to the current underground mineral resource at Riverina, which totals 1.01 million tonnes at 5.6 g/t for 183,000 ounces (refer ASX announcement dated 29 July 2021). Assays results returned from Riverina Underground include: • 5.0m at 16.7 g/t from 200m • 2.8m at 21.2 g/t from 253.7m • 6.8m at 8.6 g/t from 143.8m • 1.3m at 25.3 g/t from 217.8m • 2.6m at 13.4 g/t from 250m (including 1.9m at 19.2g/t) • 1.7m at 7.7 g/t from 199.7m • 1.4m at 18.1 g/t from 281.6m These results were included in the updated Mineral Resource Estimate (‘MRE’) which was published in August (refer ASX announcement dated 1 August 2022 and page 33). Refer Figure 3 for an area location plan of Riverina (refer ASX announcement dated 2 August 2021). 12 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Greater Callion During the year fresh mapping and rock chip sampling at Greater Callion area delivered highly encouraging results and identified five new drill targets. The Greater Callion area surrounds the high-grade Callion mine which has a gold endowment of 200,000oz at an average grade of 6.4g/t. The best rock chip samples include Welcome Stranger – 26.9g/t and 18.6g/t; Lady Dorothy 18.9g/t; Callion North 7.7g/t and Lady Kate 6.7g/t and 6.3g/t. RC drill to test these targets is underway and regional air core drilling commenced during the year west of the main Callion deposit (refer ASX announcement dated 24 May 2022). Regional Exploration During the year, results of a first pass exploration air-core (‘AC’) drilling programme of priority grass roots targets dispersed throughout the Company’s tenement package were received. The regional programme focussed on testing gold targets with no previous drilling or effective exploration. A total of 16,112 drilling metres were completed. Three of the four targets (for which results have been returned) intersected gold mineralisation which is highly significant for first pass exploration drilling. Of these, the Sunraysia North and Santalum prospects returned standout results. The Sunraysia North drilling was designed to test the southern continuation of the Riverina and British Lion mineralised trend in an area with no previous drilling. Results are highly promising with significant end of hole mineralisation intersected along the Riverina trend in three successive drill lines spaced 400m apart. The Santalum drilling was designed to test an undrilled auger surface geochemical anomaly on the southern end of the interpreted Round Dam mineralised trend. Significant gold mineralisation was intersected in one hole on the most northern line with mineralisation open to the north. Further AC and RC drilling is currently being planned to follow up these encouraging results. The Company’s mineral resource statement stands at 15.5 Mt @ 2.7g/t for 1,328k ounces of contained gold. Refer to page 33 for further details. 13 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Figure 3: Riverina Area Location Plan 14 O RA BA NDA MININ G L IM ITED A N D I TS CON T ROL L ED EN TIT IES ACN 100 038 266 AN NU A L REP ORT 2022 D I R E C T O R S ’ R E P O R T Figure 4: Regional location map 15 O R A BA N DA MINING L IM IT ED AN D ITS C ON T ROL L ED ENTITIE S ACN 100 038 266 AN N U AL REPORT 2022 D I R E C T O R S ’ R E P O R T Corporate Fund Raising On 5 July 2021 the Company announced the results of the Share Purchase Plan that accompanied the $21 million capital raising completed in June 2021. $0.75 million was raised before costs from the issue of 4,382,393 fully paid ordinary shares. On 18 August 2021, subsequent to receipt of shareholder approval, the Company issued 588,236 fully paid ordinary shares to David Quinlivan, a director, at $0.17 per share to raise $100,000, in connection with his participation in the raising announced in June 2021. On 22 February 2022 the Company announced it was seeking to raise up to $20 million comprising an institutional placement of up to $5 million, and an underwritten 4 for 13 accelerated non-renounceable entitlement offer to raise approximately $15 million, at an issue price of $0.05 per fully paid ordinary share. In total, $19.99 million was raised before costs with the shares issued in three tranches as follows: 1. 254,831,849 fully paid ordinary shares issued on 4 March 2022; 2. 2,726,633 fully paid ordinary shares issued on 9 March 2022; and 3. 142,204,316 fully paid ordinary shares issued on 24 March 2022. Financial Review The Group recorded a net loss of $87.94 million for the year ended 30 June 2022 (30 June 2021: net loss of $22.28 million). During the year ended 30 June 2022 the Group incurred $30.49 million (30 June 2021: $33.97 million) of mine development and exploration expenditure; and acquired plant and equipment of $6.89 million (30 June 2021: $23.14 million). During the year ended 30 June 2022 the Group recorded net cash outflows of $13.88 million in operating and investing activities (excluding divestments), which was funded by existing cash of $24.22 million at 1 July 2021 and cash inflows of $20.83 million from share issues (before costs) and sale of subsidiary for proceeds of $11.04 million (before costs). The Group’s closing cash balance at 30 June 2022 was $27.75 million. Impairment Impairment indicators were considered for DGP, as a single cash generating unit (‘CGU’), as at 30 June 2022. This concluded there were several probable indicators, resulting in an impairment test to determine the recoverable amount of the DGP CGU. The test determined that a pre-tax, non-cash impairment of $77.80 million (2021: nil) be recognised for the year. For further details on the impairment loss incurred, refer to Note 15 of the financial statements. Liquidity and Capital Resources The table below summarises information about the Group’s earnings and movements in shareholder wealth for the five years to 30 June 2022: Performance Measures FY 2022 $ FY 2021 $ FY 2020 $ FY 2019 $ FY 2018 $ Net assets/(liabilities) 34,835,000 102,017,000 48,031,000 35,368,000 (35,977,000) Current assets 46,042,000 46,567,000 12,040,000 14,710,000 3,544,000 Cash 27,755,000 24,220,000 10,577,000 14,142,000 5,000 Contributed equity 463,299,000 443,696,000 368,194,000 350,519,000 287,168,000 Accumulated losses 431,213,000 344,550,000 322,266,000 (328,181,000) (336,255,000) Net (loss)/profit before tax (87,936,000) (22,284,000) (6,675,000) 8,233,000 (86,390,000) Share price at start of year Share price at end of year Earnings/(loss) per share 0.15 0.3 (8.03) 0.27 0.15 (2.73) 0.16 0.27 (0.12) 0.11 0.16 0.11 0.37 0.11 (1.69) 16 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T CAPITAL STRUCTURE As During the year ended 30 June 2022: • Company issued 4,382,393 ordinary shares following completion of a Share Purchase Plan at a price of $0.17 per share, raising $0.75 million (before costs); • $0.10 million was raised via the issue of fully paid ordinary shares at $0.17 to David Quinlivan, a director, in connection with a capital raising announced in June 2021, subsequent to obtaining shareholder approval in July 2021; • $19.99 million was raised (before costs) from the issue of 399,762,798 fully paid ordinary shares via a placement and accelerated non-renounceable entitlement issue at $0.05 per share. Additionally, 490,000 ordinary shares were issued on the exercise of performance rights at a nil exercise price. A total of 24,597,493 unlisted performance rights were granted during the year. 20,153,449 are subject to a vesting condition based on Relative Total Shareholder Return, whereby the Company’s total shareholder return is measured relative to the returns of a peer group over the performance period 1 July 2021 to 30 June 2024, with a further 4,444,494 unlisted performance rights having a performance period of 1 July 2020 to 30 June 2023. A total of 50% of the performance rights will vest if the Company’s performance relative to the peer group is at the 50th percentile, while 100% will vest if the Company’s performance relative to the peer group is at the 75th percentile. The vesting of the performance rights between the 50th and the 75th percentile will be 50% to 100% vesting based on a straight-line pro rata basis. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of Ora Banda during the year. EVENTS AFTER BALANCE DATE On 4 July 2022 the Company announced that Luke Creagh had been appointed Chief Executive Officer with immediate effect. On 16 July 2022 the Company announced that Keith Jones, a director, had advised his intention to resign from the board on 30 September 2022. Further, Alan Rule is to replace Mr Jones. Apart from the above, no other matters have arisen since the end of the financial year that impact or are likely to impact the results of the Group in subsequent financial periods. DIVIDENDS No dividend has been declared nor paid by the Company up to the date of this report. LIKELY DEVELOPMENTS The directors are not aware of any likely developments of which could be expected to significantly affect the results of the Group’s operations in future financial years not otherwise disclosed in the Principal Activities; Review of Operations or the Events After Balance Date sections of the Directors’ Report. CORPORATE GOVERNANCE In recognising the need for appropriate standards of corporate behaviour and accountability, the directors have adhered to the principles of good corporate governance. The Company’s corporate governance policies are located on the Company’s website. 17 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T KEY RISKS The following summarises the key risks the Group faces in achieving its objectives: • Price and demand for gold – it is difficult to predict with accuracy future demand and gold price movements and such movements may adversely impact on the Group’s profit margins, future development and planned future production; • Reserves and resources – the mineral resources and ore reserves for the Group’s assets are estimates only and no assurance can be given that they will be realised; • Operations – the Group’s operations are subject to operating risks that could result in decreased production, increased costs and/ or reduced revenues. Operational difficulties may impact the amount of gold produced, delay deliveries or increase the cost of mining for varying lengths of time; • Government changes – The gold mining industry is subject to a number of Government taxes, royalties and charges. Changes to the rates of taxes, royalties and charges can impact on the profitability of the Group; • Exploration and development risk – The ability to sustain or increase the level of production in the longer term is in part dependent on the success of the Group’s exploration activities; development projects and the expansion of existing mining operations. The exploration for and development of mineral deposits involves significant risks, further major expenses may be required to locate and establish mineral reserves; to establish rights to mine and receive all necessary operating permits; • Environmental – The Group has environmental liabilities associated with the tenements which arise as a consequence of mining operations including waste management; tailings management; chemical management; water management and energy efficiency. The Group monitors its ongoing environmental obligations and risks and implements corrective actions as appropriate through compliance with its environmental management system; • People risks – The Group seeks to ensure that it provides a safe workplace to minimise risk of harm to its employees and contractors. It achieves this through an appropriate safety culture; safety management systems; training and emergency preparedness; • COVID-19 – coronavirus restrictions have had an adverse effect on the Group’s access to interstate and overseas labour resources. The consequences have been higher turnover, lower productivity and higher costs. In addition, the Group’s operations have been and continue to be impacted by ongoing supply chain constraints that have arisen as an effect of the pandemic. OPTIONS AND PERFORMANCE RIGHTS The following table summarises unissued ordinary shares of the Company under option and performance right as at 27 September 2022: Date granted 31 January 2018 31 January 2018 Various1 Various1 11 June 2019 Various2 Various3 Number of unissued ordinary shares Exercise price Expiry date 2,178,331 2,178,331 3,854,862 3,854,862 2,916,667 10,084,518 29,086,147 $3.3328 $2.9578 $3.3328 $2.9578 $1.1203 Nil Nil 31 January 2023 31 January 2023 2 February 2023 2 February 2023 11 June 2023 Various Various 1. Consists of options issued to Hawke’s Point, as participants under the rights issue (including pursuant to underwriting arrangements). The issue dates of these options were 9 February 2018, 27 February 2018 and 14 March 2018. 2. Options issued under the Group’s employee share scheme to various key management personnel are subject to the satisfaction of the vesting conditions outlined in the remuneration report. 3. Performance rights issued under the Group’s employee share scheme to various key management personnel are subject to the satisfaction of the vesting conditions outlined in the remuneration report. 18 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T The following ordinary shares of the Company were issued during or since the end of the financial year as a result of the exercise of an option or performance right: Date issued 16 September 2021 MEETINGS OF DIRECTORS Number of ordinary shares issued Amount paid per share 490,000 Nil The number of meetings of the board of directors held during the year and the number of meetings attended by each director was as follows: Peter Mansell Peter Nicholson David Quinlivan Keith Jones Mark Wheatley Board of Directors Remuneration & Nomination Committee Audit & Risk Management Committee Eligible to attend Attended Eligible to attend Attended Eligible to attend Attended 41 36 41 41 41 41 36 38 41 40 2 - - 2 2 2 - - 2 2 3 - - 3 3 2 - - 3 3 19 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T REMUNERATION REPORT (AUDITED) This remuneration report outlines the remuneration arrangements in place for key management personnel (‘KMP’) of the Group which includes the executive director, non-executive directors and senior executives. Contents: 1. Basis of preparation; 2. Key management personnel; 3. Remuneration governance; 4. FY22 KMP remuneration; 5. Link between Company performance, shareholder wealth generation and remuneration; and 6. KMP holdings. 1. BASIS OF PREPARATION This remuneration report has been prepared and audited in accordance with the requirements of the Corporations Act 2001 and applicable accounting standards. 2. KEY MANAGEMENT PERSONNEL KMP comprise 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). Unless otherwise indicated, all KMP held their position throughout the financial year and up to the date of this report. The report details the remuneration arrangements for the Group’s KMP including non-executive directors, executive directors and senior executives: Name Position Non-executive Directors Peter Mansell Non-executive Chairman Keith Jones Non-executive Director Mark Wheatley Non-executive Director David Quinlivan Non-executive Director Executive Director Term as KMP Full year Full year Full year Full year Peter Nicholson Managing Director 1 July 2021 to 6 April 2022 Senior Executives Tony Brazier Chief Financial Officer & Company Secretary Andrew Czerw General Manager – Resource Development Brendan Fyfe General Counsel Full year Full year Full year Derek Byrne Chief Operating Officer 1 July 2021 to 19 April 2022 20 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 D I R E C T O R S ’ R E P O R T 3. REMUNERATION GOVERNANCE Board and Remuneration & Nomination Committee responsibility The Remuneration & Nomination Committee is a subcommittee of the board. It assists the board to ensure that the Company develops and implements remuneration policies and practices that are appropriate for a company of the nature, size and standing of OBM. The Remuneration & Nomination Committee is responsible for making recommendations to the board on: • Remuneration arrangements (including base pay, performance targets, bonuses, equity awards, superannuation, retirement rights, termination payments) for the executive director and senior executives; • Remuneration of non-executive directors; and • Establishment of employee incentive and equity-based plans and the number and terms of any incentives proposed to be issued to Executives pursuant to those plans, including any vesting criteria. Remuneration principles The Company’s remuneration strategy and structure is reviewed by the board and the Remuneration & Nomination Committee for business appropriateness and market suitability on an ongoing basis. KMP are remunerated and rewarded in accordance with the Company’s remuneration policies (outlined in further detail below). Engagement of remuneration consultants During the year, the Company did not engage remuneration consultants to provide a ‘remuneration recommendation’ (as defined in the Corporations Act 2001), however independent advice was received when the current remuneration framework was established. This advice was in respect of remuneration reporting and general advice in respect of market practice for long term incentive plans. In addition, the Committee benchmark KMP remuneration annually using external independent industry reports and data to ensure that remuneration levels are competitive and meet the objectives of the Company. 2021 AGM voting outcome and comments The Company received more than 94% votes in favour of the adoption of its remuneration report for the 2021 financial year. 4. FY21 KMP REMUNERATION In determining KMP remuneration, the board aims to ensure that remuneration practices are: • Competitive and reasonable, enabling the Company to attract and retain high calibre talent; • Aligned to the Company’s strategic and business objectives and the creation of shareholder value; • Transparent and easily understood; and • Acceptable to shareholders. The Company’s approach to remuneration ensures that remuneration is competitive, performance focussed, clearly links appropriate reward with desired business performance, and is simple to administer and understand by executives and shareholders. In line with the remuneration policy, remuneration levels are reviewed annually to ensure alignment to the market and the Company’s stated objectives. The Company’s reward structure for executives provides for a combination of fixed and variable pay with the following components: • Fixed remuneration in the form of base salary, superannuation and benefits; • Variable remuneration in the form of short-term incentives (‘STI’) and long-term incentives (‘LTI’). In accordance with the Company’s objective to ensure that executive remuneration is aligned to Company performance, a portion of executives’ remuneration is placed ‘at risk’. The relative proportion of target FY22 total remuneration packages split between the fixed and variable remuneration is shown below: Fixed Remuneration (% of total remuneration) Target STI (% of total remuneration) Target LTI (% of total remuneration) 40% 40% 20% 20% 40% 40% Executive Managing Director Senior Executives 21 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T a. Fixed remuneration Fixed remuneration is set at a level that is aligned to market benchmarks and reflective of executives’ skills, experience, responsibilities and performance. When positioning base pay, the Company presently aims to position aggregate fixed remuneration at approximately the 50th percentile of the industry benchmark AON Report (an independent, industry recognised report on the gold and mining industry). This is to ensure that the Company’s remuneration arrangements remain competitive against peer companies to assist with the retention and attraction of key talent. Executive remuneration is benchmarked annually to ASX-listed entities of similar size (by market capitalisation), revenue base, employee numbers and complexity. Specific reference is also made to peer companies within the mining and exploration sectors. b. Short-term incentive (‘STI’) arrangements The purpose of the STI plan is to link the achievement of key Company targets with the remuneration received by those executives charged with meeting those targets. The STI plan is structured so that executives have the opportunity to earn a cash and/or equity bonus if certain key performance indicators (‘KPIs’) are achieved. The Company must report a surplus of net cash flows from operating activities for the applicable performance period for any cash STI to be paid. Each year the Committee, in conjunction with the board, sets KPI targets for executives. Ordinarily, the KPIs would include measures relating to the Group and the individual, and include environmental, health & safety, financial, production, exploration, business development and company performance measures. The maximum target STI opportunity for executives is as follows: Executive Managing Director Senior Executives Maximum STI Opportunity – Cash Maximum STI Opportunity – Equity 50% of fixed remuneration 75% of fixed remuneration 50% of fixed remuneration 75% of fixed remuneration FY22 Performance against STI measures A summary of the KPI targets set for FY22 and their respective weightings is as follows: KPI Weighting Measure Management response performance Corporate, financial & operational goals Company performance 50% 40% 10% Management’s effectiveness in responding to issues arising during the 2022 financial year Performance against annual corporate and financial goals TSR performance In assessing KMP performance against the KPI targets, the Committee considered the following against objectives set at the start of the year: • Achievement of OH&S objectives; • Achievement of environmental objectives; • Delivery of positive exploration results; and • Company’s total shareholder return (‘TSR’) performance. Based on the above assessment, STI payments for FY22 to executives were as follows: Maximum STI Opportunity % STI Awarded STI Awarded – Cash STI Awarded – Rights Value of Rights Granted ($) 100% 100% 100% 100% 100% - - - - - - - - - - - - - - - - - - - - STIP Rights Class FY2022 incentive rights FY2022 incentive rights FY2022 incentive rights FY2022 incentive rights FY2022 incentive rights Executive Peter Nicholson Tony Brazier Andrew Czerw Brendan Fyfe Derek Byrne 22 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T The assessment of performance against KPIs resulted in no STI payments being made for the year. There were no rights issued during the year (as the intention was for any payment to be made in cash), and therefore no rights required to be cancelled. c. Long-term incentive (“LTI”) arrangements Participation in the LTI plan involves a grant of incentives (being performance rights) under the Company’s LTI plan. The grant of incentives, including the terms attached to the grant, will be determined annually by the Committee, in conjunction with the board. Typically, the vesting period for incentives granted under the LTI plan is three years. During the 30 June 2022 financial year, the following were issued to KMP under the Company’s employee incentive plan: Performance Right Class Underlying security share price at grant date Exercise price Grant date Vesting date Expiry date Risk-free rate Volatility Dividend yield Number of performance rights granted Valuation per option Fair value per option class RTSR LTI Performance Rights $0.074 Nil 26/11/2021 30/06/2023 30/06/2026 0.525% 80% Nil 4,444,494 $0.038 $168,891 RTSR LTI Performance Rights $0.062 Nil 16/12/2021 30/06/2024 30/06/2026 1.00% 80% Nil 7,648,785 $0.038 $290,654 The measure of volatility used in the option pricing model is the annualised standard deviation of the continuously compounded rates of return on the historical TSR of Ora Banda Mining Limited and each constituent of the peer group for the length of time equal to the measurement period. Volatilities of the Company and peer group constituents was calculated over a one, two and three-year period. Share-based payments Performance rights are subject to a vesting condition based on Relative Total Shareholder Return (‘RTSR’), whereby the Company’s total shareholder return is measured relative to the returns of a peer group over the performance period: 1 July 2020 to 30 June 2023 (for 4,444,494 performance rights); and 1 July 2021 to 30 June 2024 (for 7,648,785 performance rights). The fair value of the RTSR performance rights was estimated as at the date of grant using a Monte-Carlo simulation model taking into account the terms and conditions upon which the performance rights were granted. These performance rights will vest according to the following schedule: Company’s Performance Relative to Peer Group Percentage of Performance Rights Eligible to Vest ASX Comparator Group Below 50th percentile -% 50th to 75th percentile 50% to 100% on a straight-line pro rata Above 75th percentile 100% ALK; BC8; BDC; BGL; DCN; GOR; MML; PNR; PRU; RMS; RSG; SBM; SLR; TRY; WGX 23 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T d. Contracts with Key Management Personnel Peter Nicholson – Chief Executive Officer (Ceased 6 April 2022) Mr Nicholson was employed under an executive employment agreement which commenced on 2 April 2021. Mr Nicholson received the following remuneration: • Fixed remuneration of $550,000 per annum (inclusive of superannuation); • Non-cash incentive: Participation in the Company’s incentive scheme, at the full discretion of the board, as amended from time to time. The termination provisions of the agreement were: • For no cause or incapacity: twelve months’ notice period (or any greater period required by the Fair Work Act 2009); • Redundancy: redundancy pay in accordance with applicable legislation; • Serious misconduct or fraud: no notice period to be provided. Mr Nicholson ceased employment with the Company on 6 April 2022. Luke Creagh – Chief Executive Officer (Commenced 4 July 2022) Mr Creagh is employed under an executive employment agreement which commenced on 4 July 2022. Remuneration under the contract is as follows: • Fixed remuneration of $400,000 per annum (inclusive of superannuation); • Sign-on share purchase scheme: 50 million shares funded by a $1.75 million limited recourse, interest free loan repayable by 30 June 2025; • Sign-on performance rights scheme: - 25 million performance rights to vest on 31 December 2023 where Mr Creagh is an OBM employee and the shares’ VWAP is equal to or greater than $0.0525 for the 20 trading days prior to 31 December 2023; - 25 million performance rights to vest on 30 June 2025 where Mr Creagh is an OBM employee and the shares’ VWAP is equal to or greater than $0.07 for the 20 trading days prior to 30 June 2025; • Short term incentive scheme: based on performance hurdles to be set by the OBM Board and where Mr Creagh is an employee at 30 June 2023, as either $200,000 in cash or $300,000 in shares issued at $0.035 per share at his election; • Long term incentive scheme: long term performance right incentives issued in accordance with the Company’s employee incentive plan with the number of performance rights in FY23 being $400,000 divided by $0.035 per share and 100% of TFR in future years at prices to be determined by the OBM board. The termination provisions of the agreement are: • For no cause or incapacity: by the Company, on three months’ notice in the first 36 months or on six months’ notice thereafter by both the Company and Mr Creagh; • Redundancy: the greater of a lump sum amount equivalent to 30% of fixed remuneration package or any redundancy payment as calculated in accordance with applicable legislation; • Serious misconduct: no notice period would be provided. Tony Brazier – Chief Financial Officer & Company Secretary Mr Brazier is employed under an executive employment agreement which commenced on 7 January 2019. Mr Brazier received the following remuneration: • Fixed remuneration of $364,650 per annum, comprising a base salary of $331,500 and 10% superannuation; • Non-cash incentive: Participation in the Company’s incentive scheme, at the full discretion of the board, as amended from time to time. The termination provisions of the agreement are: • For no cause or incapacity: three months’ notice period (or any greater period required by the Fair Work Act 2009); • Redundancy: 30% of the fixed remuneration (or greater as required by the Fair Work Act 2009); • Serious misconduct or fraud: no notice period would be provided. 24 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Andrew Czerw – General Manager – Resource Development Mr Czerw is employed under an employment agreement which commenced on 10 April 2014. Mr Czerw received the following remuneration: • Fixed remuneration of $392,700 per annum, comprising a base salary of $357,000 and 10% superannuation; • Non-cash incentive: Participation in the Company’s incentive scheme, at the full discretion of the board, as amended from time to time. The termination provisions of the agreement are: • For no cause or incapacity: three months’ notice period (or any greater period required by the Fair Work Act 2009); • Redundancy: 30% of the fixed remuneration (or greater as required by the Fair Work Act 2009); • Serious misconduct or fraud: no notice period would be provided. Brendan Fyfe – General Counsel Mr Fyfe is employed under an executive employment agreement which commenced on 6 January 2020. Mr Fyfe received the following remuneration: • Fixed remuneration of $336,600 per annum, comprising a base salary of $300,000 and 10% superannuation; • Non-cash incentive: Participation in the Company’s incentive scheme, at the full discretion of the board, as amended from time to time. The termination provisions of the agreement are: • For no cause or incapacity: three months’ notice period (or any greater period required by the Fair Work Act 2009); • Redundancy: 30% of the fixed remuneration (or greater as required by the Fair Work Act 2009); • Serious misconduct or fraud: no notice period would be provided. Derek Byrne – Chief Operating Officer (Ceased 19 April 2022) Mr Byrne was employed as the Chief Operating Officer under an executive employment agreement which commenced on 1 June 2021. Mr Byrne received the following remuneration: • Fixed remuneration of $373,568 per annum, comprising a base salary of $350,000 and 10% superannuation to the maximum super contribution base; • Non-cash incentive: Participation in the Company’s incentive scheme, at the full discretion of the board, as amended from time to time. The termination provisions of the agreement were: • For no cause or incapacity: three months’ notice period (or any greater period required by the Fair Work Act 2009); • Redundancy: redundancy pay in accordance with applicable legislation; • Serious misconduct or fraud: no notice period would be provided. e. Non-executive Directors’ Remuneration The Company’s policy is to remunerate non-executive directors (‘NEDs’) at market rates (for comparable companies) for their time commitment and responsibilities. To align their interests with those of shareholders, NEDs are encouraged to hold shares in the Company. The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed annually against fees paid to NEDs of comparable companies. Payments reflect the demands that are made on and the responsibilities of NEDs. NED fees and payments are reviewed annually by the board. The Company’s constitution and ASX Listing Rules specify that the NED remuneration fee pool shall be determined from time to time at a general meeting of shareholders. In accordance with current corporate governance practices, the remuneration structure for NEDs and senior executives is separate and distinct. Shareholders approve the maximum aggregate remuneration for NEDs. On 7 June 2019 shareholders approved the current limit of $850,000. The board determines the actual payments to directors. The remuneration of NEDs (inclusive of all committee fees and exclusive of superannuation) for the year ended 30 June 2022 have been set at $165,000 for the Chair and $110,000 for other NEDs. On 27 July 2022 the Company announced NED remuneration had reduced. The reduced amounts are $120,000 for the Chair and $80,000 for other NEDs, exclusive of superannuation. 25 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T f. Key Management Personnel Remuneration Table The following table discloses details of the nature and amount of each element of the emoluments of each director of Ora Banda and each of the senior executives determined a KMP for the years ended 30 June 2022 and 30 June 2021. Short Term Post employ- ment Other long term Share- based Payments Salary & Fees STI (Cash) STI (Equity)4 Superann- uation Leave Accrued Rights4 Total Performance related Remuneration KMP Year $ $ $ $ $ $ $ % Non-executive Directors Peter Mansell Keith Jones Mark Wheatley David Quinlivan3 2022 2021 2022 2021 2022 2021 2022 2021 165,000 165,000 110,000 110,000 110,000 110,000 121,000 - - - - - - - - - - - - - - 16,500 15,675 11,000 10,450 11,000 10,450 - 380,000 150,000 110,391 36,100 - - - - - - - - - 17,684 199,184 52,868 233,543 11,789 132,789 35,245 155,695 11,789 132,789 35,245 155,695 354,822 475,822 196,993 873,484 112,594 1,104,671 Executive Director Peter Nicholson1 Senior Executives Tony Brazier Andrew Czerw Brendan Fyfe Derek Byrne2 Total 2022 2021 968,509 130,605 2022 2021 2022 2021 2022 2021 2022 2021 331,500 325,000 357,000 350,000 306,000 300,000 386,010 29,167 2022 2,855,019 - - - - - - - - - - - - - - 23,568 5,355 10,046 - 146,006 33,150 10,173 191,169 565,992 73,826 34,998 8,792 175,909 618,525 - 35,700 (8,215) 195,010 579,495 79,476 36,736 14,093 173,707 654,012 - 30,600 1,329 198,723 536,652 132,681 30,894 14,817 182,896 661,288 - 23,568 - (34,209) 375,369 1,779 2,771 2,805 4,241 40,763 - 185,086 3,287 1,059,371 4,102,763 2021 1,899,772 150,000 398,153 183,429 50,553 857,104 3,539,011 9% 23% 9% 23% 9% 23% 75% 52% 10% - 34% 40% 34% 39% 37% 48% - 15% 26% 40% 1. Peter Nicholson ceased employment with the Company on 6 April 2022. Total includes a $526,432 termination benefit 2. Derek Byrne ceased employment with the Company on 19 April 2022. Total includes a $59,572 termination benefit 3. David Quinlivan was paid a cash STI following satisfaction of performance hurdles 4. Fair value of performance rights is calculated at the date of grant using the Black-Scholes and Monte-Carlo simulation option pricing models and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of the fair value of the performance rights recognised as an expense in each reporting period. Share-based awards are recognised as an expense straight-line over the expected time to vesting 26 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 D I R E C T O R S ’ R E P O R T 5. LINK BETWEEN COMPANY PERFORMANCE, SHAREHOLDER WEALTH GENERATION AND REMUNERATION The Committee applies a series of criteria to assess the performance of the Company. Criteria used in this assessment was execution of development projects and exploration success as well as the following metrics in respect of the current and previous financial years. Criteria Closing cash balances at 30 June ($m) Closing share price at 30 June ($) 2022 27.75 0.03 2021 24.22 0.15 2020 10.58 0.27 2019 14.14 0.16 2018 0.01 0.11 The Company’s remuneration practices aim to reward based on the achievement of Company and KMP performance objectives. The Company’s overall objective has been to continue to define mineral resources and ore reserves and attain steady state production rates, within budgeted cost parameters. 6. KEY MANAGEMENT PERSONNEL HOLDINGS Option and Performance Rights holdings of Key Management Personnel Balance at 1 July 2021 Granted as compen- sation1 Rights/ options exercised2 Rights/ options forfeited3 Rights/ options expired Balance at 30 June 2021 Vested during the year Vested and exercisable at 30 June 2022 30 June 2021 Non-executive Directors Peter Mansell Keith Jones Mark Wheatley Executive Director 592,592 395,061 395,061 - - - - - - - - - - (490,000) (2,461,531) David Quinlivan 5,679,016 Senior Executives Peter Nicholson - 4,444,494 Tony Brazier 3,372,042 1,885,885 Andrew Czerw 3,368,203 2,030,953 Brendan Fyfe 3,514,787 1,740,817 Derek Byrne4 689,635 1,991,130 - - - - - - (1,506,625) (1,423,500) (2,354,395) (2,605,796) Total 18,006,397 12,093,279 (490,000) (10,351,847) - - - - - - - - - - 592,592 395,061 395,061 - - - - - - 2,727,485 490,000 110,391 4,444,494 3,751,302 3,975,656 2,901,209 74,969 - - - - - 19,257,829 490,000 - 259,310 279,156 239,902 74,969 936,728 1. Performance rights granted as compensation represent RTSR performance rights issued under the terms outlined in section C above 2. All options and performance rights were exercised at nil price and each KMP received a quantity of ordinary shares equivalent to the number of options and performance rights exercised 3. Following testing, no FY20 LTIs were eligible for vesting and were forfeited 4. Derek Byrne ceased employment with the Company on 19 April 2022 and all performance rights were forfeited 27 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Value of Options and Performance Rights Exercised and Forfeited The following table summarises the fair value of options and performance rights when exercised or forfeited, calculated as the number of options/rights multiplied by the share price on the dates of which those options/rights were exercised or forfeited: 30 June 2022 Non-Executive Directors Peter Mansell Keith Jones Mark Wheatley Executive Director David Quinlivan Senior Executives Peter Nicholson1 Tony Brazier Andrew Czerw Brendan Fyfe Derek Byrne2 Total Exercised Value on date of exercise ($) Forfeited Value on date of forfeiture ($) - - - - - - - - - - - - 490,000 53,900 2,461,531 270,768 - - - - - - - - - - - 1,506,625 1,423,500 2,354,395 2,605,796 490,000 53,900 10,351,847 - 40,679 38,435 65,569 130,290 545,741 Ordinary Shareholdings of Key Management Personnel 30 June 2022 Non-Executive Directors Peter Mansell Keith Jones Mark Wheatley David Quinlivan Executive Director Peter Nicholson1 Senior Executives Tony Brazier Andrew Czerw Brendan Fyfe Derek Byrne2 Total Balance at 1 July 2021 Purchases Other On the exercise of options/rights Balance at 30 June 2022 5,730,936 2,415,504 1,992,281 4,723,399 - 1,909,455 2,143,586 959,007 16,297 1,994,135 347,412 176,471 588,236 - - - - - 19,890,465 3,106,254 - - - - - - - - - - - - - 490,000 - - - - - 7,725,071 2,762,916 2,168,752 5,801,635 - 1,909,455 2,143,586 959,007 16,297 490,000 24,486,719 1. Peter Nicholson ceased employment with the Company on 6 April 2022. Closing balance is as at that date 2. Derek Byrne ceased employment with the Company on 19 April 2022. Closing balance is as at that date No alterations to the terms and conditions of performance rights granted as remuneration have been made since their grant dates. 28 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T Loans to Key Management Personnel There were no loans to KMP during the financial year (30 June 2021: Nil). Other transactions with Directors Other than those described in this remuneration report, no other transactions between the Group and directors or their related entities have occurred. End of REMUNERATION REPORT (AUDITED) 29 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T ENVIRONMENTAL REGULATIONS The Group is subject to significant environmental regulation in respect to its mineral exploration activities. These obligations are regulated under relevant government authorities within Australia. The Group is a party to exploration and mine development licences. Generally, these licences specify the environmental regulations applicable to exploration and mining operations in the respective jurisdictions. The Group aims to ensure that it complies with the identified regulatory requirements in each jurisdiction in which it operates. Compliance with environmental obligations is monitored by the directors. No environmental breaches have been notified to the Group by any government agency during the year ended 30 June 2022. WARDENS COURT PROCEEDINGS The Company (and its wholly owned subsidiaries) is a party to various proceedings in the Western Australian Wardens Court pursuant to which third parties are seeking to challenge its title to various mining tenements by way of forfeiture and other proceedings. The directors are confident that the Company (and its wholly owned subsidiaries) will be successful in defending these proceedings. There were no proceedings against any subsidiary that could bring into doubt whether the Company controlled any of its subsidiaries within the Group. PROCEEDINGS ON BEHALF OF THE COMPANY Other than as referred to above, no person has applied for leave of court or 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. NON AUDIT SERVICES The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group are important. The directors consider the general standard of independence for auditors imposed by the Corporations Act 2001 before any engagements are agreed. No non audit services were provided by KPMG, the Group’s auditor, during the year (30 June 2021: $Nil). Further details of remuneration of the auditor are set out at Note 22. AUDITOR INDEPENDENCE A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included immediately following the Directors’ Report and forms part of this Directors’ Report. INDEMNIFICATION OF AUDITOR The Company has not provided any insurance or indemnity to the auditor of the Company. 30 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022D I R E C T O R S ’ R E P O R T INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Company has entered into indemnity agreements with each of the directors and officers of the Company. Under the agreements, the Company will indemnify those officers against certain claims or for any expenses or costs which may arise as a result of work performed in their respective capacities as officers of the Company or any related entities. The Company has taken out an insurance policy insuring directors and officers of the Company against any liability arising from a claim brought by a third party against the Company or its directors or officers, and against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in their capacity as a director or officer of the Company, other than conduct involving a wilful breach of duty in relation to the Company. During the year, the Company paid premiums in respect of the above insurance policy. The contract prohibits the disclosure of the nature of the liabilities and/or the amount of the premium. ROUNDING OF AMOUNTS In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the Directors’ Report and in the financial report have been rounded to the nearest one thousand dollars, or in certain cases, to the nearest dollar (where indicated). This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the directors Peter Mansell Chairman Perth, Western Australia 27 September 2022 31 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 202232 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Annual Mineral Resource and Ore Reserve Statement 3 3 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022A N N U A L M I N E R A L R E S O U R C E A N D O R E R E S E R V E S TAT E M E N T In accordance with ASX Listing Rule 5.21, the Company reviews and reports its mineral resources and ore reserves at least annually. The date of reporting is 30 June each year, to coincide with the Company’s end of financial year balance date. If there are material changes to its mineral resources or ore reserves during the course of the year, the Company is required to promptly report those changes. Mineral Resource at 30 June 2022 Total mineral resources at 30 June 2022 are estimated to be 15.5 Mt @ 2.7 g/t Au for 1,328,000 ounces of contained gold. PROJECT DEPOSIT (‘000t) (g/t Au) (‘000t) (g/t Au) (‘000t) (g/t Au) (‘000t) (g/t Au) (‘000oz.) MEASURED INDICATED INFERRED TOTAL MATERIAL RIVERINA RIVERINA AREA Underground - Open Pit 599 TOTAL 599 SIBERIA Open Pit SAND KING Underground TOTAL Open Pit MISSOURI Underground TOTAL 73 - 73 - - - Siberia Subtotal 73 DAVYHURST WAIHI Underground Open Pit TOTAL Open Pit CALLION Callion Underground TOTAL - - - - - - 1.5 - 1.5 2.3 - 2.3 - - - 2 - - - - - - 2,120 351 2,471 923 408 1,331 980 378 1,358 2,689 1,948 188 2,136 241 255 496 LADY IDA IGUANA Underground - Open Pit 148 Combined Total TOTAL 148 820 1.9 - 1.9 1.7 3,847 357 4,204 11,996 1.6 6.7 2.3 3.4 3.5 3.4 3.3 3.3 3.3 3.3 2.4 3.7 2.5 3.7 6.0 4.9 1.7 3.5 1.8 2.5 110 361 471 201 586 787 50 409 459 1,246 131 195 326 28 156 184 146 314 460 2,687 1.6 6.5 5.3 3.0 3.4 3.3 2.9 3.6 3.5 3.4 2.9 4.0 3.5 1.6 5.5 4.9 1.7 2.7 2.4 3.7 2,829 712 3,541 1,1977 994 2,191 1,030 787 1,817 4,008 2,079 383 2,462 269 411 680 4,141 671 4,812 15,503 1.6 6.6 2.6 3.2 3.4 3.3 3.2 3.4 3.3 3.3 2.4 3.8 2.6 3.5 5.8 4.9 1.7 3.1 1.9 2.7 141 151 292 124 110 235 107 87 194 429 159 47 206 30 77 107 226 68 294 1,328 1. Missouri, Sand King, Riverina, Waihi and Callion mineral resources have been updated in accordance with all relevant aspects of the JORC code 2012, and initially released to ASX on 15 December 2016 and 26 May 2020 (Missouri); 3 January 2017 and 26 May 2020 (Sand King); 2 December 2019 and 26 May 2020 (Riverina); 4 February 2020 (Waihi); 15 May 2020 and 29 June 2020 (Callion) 2. For details on the Iguana and Riverina Underground mineral resources see ASX announcement dated 1 August 2022 3. Riverina, Waihi, Sand King, Missouri, Callion and Iguana open pit mineral resource estimates are reported within a A$2,400/oz pit shell above 0.5g/t. Riverina, Waihi, Sand King, Missouri, Callion and Iguana underground mineral resource estimates are reported from fresh material outside the A$2,400 pit shell and above 2.0 g/t 4. Resources are inclusive of in-situ ore reserves and are exclusive of surface stockpiles 5. Values in the above table have been rounded 34 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 A N N U A L M I N E R A L R E S O U R C E A N D O R E R E S E R V E S TAT E M E N T Ore Reserve at 30 June 2022 Total ore reserves at 30 June 2022 are estimated to be 4.6 Mt @ 1.9 g/t Au for 276,000 ounces of contained gold. PROJECT DEPOSIT (‘000t) (g/t Au) (‘000t) (g/t Au) (‘000t) (g/t Au) (‘000oz) PROVED PROBABLE TOTAL MATERIAL SIBERIA Missouri Sand King RIVERINA Riverina DAVYHURST Waihi CALLION Callion LADY IDA Iguana Sub-Total STOCKPILES Siberia / Riverina Total - 10 80 - - 100 190 610 800 - 2.4 1.9 - - 2.0 2.0 1.0 1.2 1,090 400 10 340 140 1,800 3,860 2.2 2.2 1.9 2.3 3.0 1.7 2.0 1,090 410 90 340 140 1,910 3,970 610 3,860 2.0 4,580 2.2 2.2 1.9 2.3 3.0 1.7 2.0 1.0 1.9 78 29 5 24 13 107 257 19 276 1. Table contains rounding adjustments to reflect accuracy and do not total exactly 2. Ore reserve was estimated from practical mining envelopes and the application of modifying factors for mining dilution and ore loss 3. Open pit ore reserve dilution skins were applied to the undiluted mineral resource estimate. Dilution was included at the background grade estimated into each model. The dilution grade ranged from zero to 0.4 g/t with the global average being 0.2 g/t. The in-pit dilution is estimated to average 41% at Sand King; 65% at Missouri; 59% at Riverina; 30% at Waihi; 59% at Callion and 42% at Iguana. The global dilution for the project was estimated to be 47% Inferred mineral resource within the mining envelope was considered as waste 4. 5. Open pit ore reserve was estimated using incremental cut-off grades specific to location and weathering classification. They range from 0.8 g/t to 1.0 g/t Au and are based on a gold price of A$1,850 per ounce. Costs used in the cut-off grade calculation allow for ore transport, processing, site overheads and selling costs as well as process recovery specific to the location and domain. Process recoveries range from 85% to 96% 6. Ore reserve is inclusive of surface stockpiles above the relevant incremental cut-off and total 610,000t at 1.0 g/t. All surface stockpiles were classified as Proved 3 5 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 A N N U A L M I N E R A L R E S O U R C E A N D O R E R E S E R V E S TAT E M E N T Governance Arrangements and Internal Controls The Company has ensured that the mineral resources and ore reserves quoted are subject to good governance arrangements and internal controls. The mineral resources and ore reserves reported have been generated by internal Company geologists, who are experienced in best practice in modelling and estimation methods. The competent person has also undertaken reviews of the quality and suitability of the underlying information used to generate the resource estimation. In addition, the Company’s management carry out regular reviews and audits of internal processes and external contractors that have been engaged by the Company. Competent Person Statement The information contained in this report that relates to exploration results and the Riverina, Riverina South, British Lion, Forehand, Silver Tongue, Waihi, Golden Eagle, Callion, Iguana, Sand King and Missouri mineral resources is based on information compiled under the supervision of Mr Ross Whittle-Herbert, an employee of Ora Banda Mining Limited, who is Member of the Australian Institute of Geoscientists. Mr Whittle-Herbert has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Whittle-Herbert consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The Missouri, Sand King, Riverina Area, British Lion, Waihi, Callion, Golden Eagle, Iguana, Forehand and Silver Tongue mineral resources have been updated in accordance with all relevant aspects of the JORC code 2012, and initially released to the market on 15 December 2016 and 26 May 2020 (Missouri); 3 January 2017 and 26 May 2020 (Sand King); 2 December 2019 and 26 May 2020 (Riverina); 4 February 2020 (Waihi); 15 May 2020 and 29 June 2020 (Callion); 8 April 2020 (Golden Eagle); 29 July 2021 (British Lion, Forehand & Silver Tongue) and 1 August 2022 (Iguana). Mineral Resources other than Sand King, Missouri, Riverina, Forehand, Silver Tongue, British Lion, Waihi, Iguana, Golden Eagle and Callion were first reported in accordance with the JORC 2004 code in Swan Gold Mining Limited prospectus released to ASX on 13 February 2013. Mineral resources other than Sand King, Missouri, Riverina, Forehand, Silver Tongue, British Lion, Waihi, Iguana, Golden Eagle and Callion have not been updated to comply with JORC Code 2012 on the basis that the information has not materially changed since it was first reported. The information in this report that relates to ore reserves is based on information compiled by Mr Geoff Davidson, who is an independent mining engineering consultant, and has sufficient relevant experience to advise Ora Banda Mining Limited on matters relating to mine design, mine scheduling, mining methodology and mining costs. Mr Davidson is a Fellow member of the of the Australian Institute of Mining and Metallurgy. Mr Davidson is satisfied that the information provided in this statement has been determined to a pre-feasibility level of accuracy or better, based on the data provided by Ora Banda Mining Limited. Mr Davidson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 36 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 202237 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Auditor’s Independence Declaration Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Ora Banda Mining Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Ora Banda Mining Limited for the financial year ended 30 June 2022 there have been: i. ii. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. KPMG R Gambitta Partner Perth 27 September 2022 38 38 O RA BA NDA MININ G L IM ITED A N D I TS CON T ROL L ED EN TIT IES ACN 100 038 266 AN NU A L REP ORT 2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 A U D I T O R ’ S I N D E P E N D E N C E D E C L A R AT I O N Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Ora Banda Mining Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Ora Banda Mining Limited for the financial year ended 30 June 2022 there have been: i. ii. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. KPMG R Gambitta Partner Perth 27 September 2022 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by 3 9 a scheme approved under Professional Standards Legislation. ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 Consolidated Statement of Profit or Loss and other comprehensive income for the year ended 30 June 2022 Revenue Cost of sales Gross profit Other income General and administration expenses Exploration and evaluation expenses Impairment expense Other operating expenses Operating loss Gain on sale of subsidiary Finance income Finance expense Loss before income tax expense Income tax (expense)/benefit Loss for the year Notes 30 June 2022 $’000 30 June 2021 $’000 3 4 5 6(a) 15 6(b) 7 6(c) 6(c) 8 154,261 (151,146) 3,115 82 (10,748) (6,121) (77,797) (7,919) (99,388) 12,448 20 (1,016) 25,115 (25,938) (823) 44 (10,904) (6,125) - (3,942) (21,750) 88 (622) (87,936) (22,284) - - (87,936) (22,284) Total comprehensive loss for the year (87,936) (22,284) Total comprehensive loss attributable to: Equity holders of the Parent (87,936) (22,284) Basic loss per share Diluted loss per share 30 30 (8.03) (8.03) (2.73) (2.73) The above statement should be read in conjunction with the accompanying notes. 40 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Consolidated Statement of Financial Position as at 30 June 2022 Notes 30 June 2022 $’000 30 June 2021 $’000 Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Prepayments Total current assets Non-current assets Receivables and other assets Exploration, evaluation and development expenditure Property, plant and equipment Right-of-use assets Investments Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Lease liabilities Provisions Total current liabilities Non-current liabilities Trade and other payables Lease liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Share capital Reserves Accumulated losses Total equity 9 10 11 10 12 13 14 16 18 17 19 18 17 19 20 21 27,755 1,236 16,164 887 46,042 2,616 21,162 18,142 12,417 363 54,700 100,742 19,537 13,547 1,523 34,607 50 10,793 20,457 31,300 65,907 34,835 463,299 2,749 (431,213) 34,835 24,220 1,396 20,312 639 46,567 3,085 58,538 36,863 27,455 - 125,941 172,508 21,050 9,178 1,036 31,264 75 18,010 21,142 39,227 70,491 102,017 443,696 2,871 (344,550) 102,017 The above statement should be read in conjunction with the accompanying notes. 41 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Consolidated Statement of Changes In Equity for the year ended 30 June 2022 Consolidated Notes Contributed equity $’000 Accumulated losses $’000 Share-based payments reserve $’000 Fair value of investments in listed equities reserve $’000 Total $’000 48,031 (22,284) (22,284) 72,161 1,976 2,133 79,270 102,017 (87,936) (87,936) 19,511 - 1,289 - (46) - - - - - - - - - - - - - - (46) At 1 July 2020 368,194 (322,266) 2,103 Loss for the year Total comprehensive loss - - (22,284) (22,284) Issue of ordinary shares (net of costs) 20 Options/rights exercised Share-based payments 31 Transactions with owners in capacity of owners 72,161 1,976 1,365 75,502 - - - - - - - - 768 768 At 30 June 2021 443,696 (344,550) 2,871 Loss for the year Total comprehensive loss Issue of ordinary shares (net of costs) Options/rights exercised Share-based payments 20 20 31 Lapsed share-based payments Fair value movements in investments Transactions with owners in capacity of owners - - (87,936) (87,936) 19,511 92 - - - - - - 1,273 - - - - (92) 1,289 (1,273) - 19,603 1,273 (76) (46) 20,754 At 30 June 2022 463,299 (431,213) 2,795 (46) 34,835 The above statement should be read in conjunction with the accompanying notes. 42 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Consolidated Statement of Cash Flows for the year ended 30 June 2022 Notes 30 June 2022 $’000 30 June 2021 $’000 Cash flows from operating activities Receipts from customers Other receipts Payments to suppliers and employees Interest paid Net cash flows from/(used in) operating activities 29 Cash flows from investing activities Payments for development expenses Payments for property, plant and equipment Payments for other assets Proceeds from sale of subsidiary Receipts from pre commercial production sales Refund of deposits Proceeds from sale of plant and equipment Interest received Net cash flows used in investing activities Cash flows from financing activities Proceeds from the issue of shares Payments for costs of raising capital Proceeds from the exercise of options Repayment of lease liabilities Net cash flows from financing activities 7 20 20 20 154,261 82 (128,715) (891) 24,737 (30,490) (8,681) - 11,041 - 500 32 20 25,115 44 (36,053) (428) (11,322) (24,292) (23,136) (4,146) - 7,154 1,091 13 82 (27,578) (43,234) 20,833 (1,322) - (13,135) 6,376 76,093 (3,932) 1,976 (5,938) 68,199 Net increase in cash and cash equivalents held 3,535 13,643 Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 9 24,220 27,755 10,577 24,220 The above statement should be read in conjunction with the accompanying notes. 43 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022Notes to the Consolidated Financial Statements for the year ended 30 June 2022 4 4 4 4 O RA BA NDA MININ G L IM ITED A N D I TS CON T ROL L ED EN TIT IES ACN 100 038 266 AN NU A L REP ORT 2022 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 1. BASIS OF PREPARATION Ora Banda Mining Limited (‘Company’) and its subsidiaries (‘Group’) are a for-profit group of companies incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange (‘ASX’). The nature of the operations and principal activities of the Group are described in the Directors’ Report. The consolidated financial statements were approved by the board of directors on 27 September 2022. The consolidated financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’). The financial report has been prepared on a historical cost basis, except for certain financial assets and liabilities which are measured on a fair value basis. The consolidated financial report is presented in Australian dollars, which is the functional and presentation currency of the Company and its subsidiaries. Compliance with Australian Accounting Standards ensures that the consolidated financial statements and notes comply with International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’). The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in accordance with that Instrument, all financial information has been rounded off to the nearest thousand dollars, unless otherwise stated. Where necessary comparatives have been adjusted to ensure consistent presentation. (a) Basis of consolidation The consolidated financial statements comprise the financial statements of the Group. A list of controlled companies (subsidiaries) at year end is disclosed in Note 27. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. (b) Fair value measurement A number of the Group’s accounting policies and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reflects its non-performance risk. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. When measuring the fair value of an asset or liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (ie: as prices) or indirectly (ie: derived from prices); • Level 3: Inputs for the asset or liability that are not based on observable market data. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. (c) New accounting standards and standards not yet effective The Company has adopted all new standards and pronouncements applicable to the reporting period. Any new, revised or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted and are not expected to have a material impact on the Group. 4 5 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S (d) Commercial production Amortisation of capitalised mine development costs begins when pre-determined levels of operating capacity intended by management have been achieved. The determination of when a mine is in the position for it to be capable of operating in the manner intended by management (known as commercial production) is a matter of significant judgement. Management considers several factors when determining when a mining operation has achieved the intended levels of operating capacity, including: • When the mine is substantially complete and ready for its intended use; • When the mine has the ability to sustain ongoing production at a steady or increasing level; • When the mine has reached a level of pre-determined percentage of design capacity; • When mineral recoveries are at or near intended production levels; and • When a reasonable period of testing of mining and processing operations have been successfully completed. Once commercial production is declared, the capitalisation of certain mine development and construction costs ceases. Subsequent costs are regarded as either forming part of the cost of inventories or are expensed. However, any costs relating to mining asset additions or improvements, or mineable reserve development, are assessed to determine whether capitalisation is appropriate. In March 2021 the board declared commercial production had been achieved as at 31 March 2021 and this is reflected in the comparatives. (e) Going concern The consolidated financial report has been prepared on a going concern basis, which presumes the continuity of normal business activities, the realisation of assets and the settlement of liabilities in the ordinary course of business. At 30 June 2022 the Group had cash and bullion on hand of $31.82 million and a net working capital surplus of $11.43 million. It incurred a loss after tax of $87.94 million for the year ended 30 June 2022, which includes an impairment charge of $77.80 million. Net cash outflows from operating and investing activities (excluding the proceeds of sale of a subsidiary of $11.04 million) were $13.88 million reflecting operations during the year. While the directors consider the preparation on a going concern basis to be appropriate based on cashflow forecasts, these rely on the attainment of planned production from open pit mining operations, together with planned processing plant activities and costs of production. The Group initiated an operational reset plan in April 2022. Critical to the cash flow forecast is achieving forecast gold production and pricing. The Group has a reasonable expectation that such production forecasts will be achieved by improving processing plant stability. The realisation of forecast gold production at anticipated pricing and costs of production pursuant to the operational reset, is key to the Company’s ability to continue as a going concern. 46 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 2. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Judgements and estimates which are material to the financial report are found in the following notes: • Note 8: Income tax – consideration of recognition of deferred tax assets; • Note 12: Amortisation of development expenditure – estimation of future mineable inventory and future development expenditure when calculating units of production amortisation; • Note 12: Reserves and resources – estimating reserves and resources; • Notes 12, 13 and 15: Impairment of mine development and property, plant & equipment • Note 19: Provision for rehabilitation – measurement of provision based on key assumptions; and • Note 31: Share-based payments – estimations involving valuation of performance rights issued to directors and employees. 3. REVENUE Gold sales Silver sales 30 June 2022 $’000 30 June 2021 $’000 154,040 221 154,261 25,087 28 25,115 Gold sales during the 2021 financial year exclude $7.15 million of gold sold prior to commercial production being declared. These sales were capitalised to mine development expenditure. No sales were made under hedge arrangements during the financial year and at 30 June 2022 and the Company has no hedge arrangements for future financial years. Accounting policies Gold bullion sales Under AASB 15 Revenue from Contracts with Customers, revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control requires judgement. With the sale of gold bullion, this occurs when physical bullion, from a contracted sale, is transferred out from the Company’s metal account. 47 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 4. COST OF SALES Mining and processing costs Amortisation and depreciation Employee benefits expense Royalties Accounting policies Mining and processing costs 30 June 2022 $’000 30 June 2021 $’000 86,449 41,147 19,827 3,723 151,146 16,067 5,965 3,187 719 25,938 This includes all costs related to mining, haulage and milling, net of costs capitalised to mine development and production stripping. This category also includes movements in the cost of inventory and any net realisable value write downs. Amortisation The Group applies the units-of-production method for amortisation of its production phase assets. This results in an amortisation charge proportional to the depletion of the anticipated remaining life of mine production. These calculations require the use of estimates and assumptions in relation to reserves and resources, metallurgy and the complexity of future capital development requirements. These estimates and assumptions are reviewed annually and changes to these estimates and assumptions may impact the amortisation charge in profit or loss and asset carrying values. The Group uses ounces mined over estimated remaining reserves as its basis for depletion of production phase assets. Depreciation Depreciation is calculated on either a reducing balance basis or straight-line basis over the estimated useful life of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful life while the processing plant is depreciated on a life-of-mine basis. Capital works in progress are not depreciated until the assets are ready for use. Depreciation methods, useful lives and residual values are reassessed at each reporting date. The estimated useful lives for the current and comparative period are as follows: Buildings Haul roads Plant and equipment Office furniture and equipment Motor vehicles Period 3-6 years 3-6 years 3-6 years 3-6 years 5-7 years 48 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 5. OTHER INCOME Profit on sale of property, plant & equipment Debts recovered Other income 6. (a) GENERAL AND ADMINISTRATION EXPENSES Employee benefits expenses Share-based payments (Note 31) Administration and corporate costs Movements in expected credit loss Depreciation expense 6. (b) OTHER OPERATING EXPENSES Site contractors and consultants Consumables Salaries and wages Depreciation and amortisation Other operating expenses 6. (c) FINANCE INCOME/(EXPENSE) Interest income Finance income Accretion of rehabilitation provision Interest expense on lease liabilities Finance expense Net finance expense 49 30 June 2022 $’000 30 June 2021 $’000 31 - 51 82 13 31 - 44 30 June 2022 $’000 30 June 2021 $’000 4,084 1,289 4,876 - 499 10,748 1,986 1,663 2,852 (125) 450 6,826 30 June 2022 $’000 30 June 2021 $’000 4,193 804 2,298 69 555 7,919 1,370 563 671 816 522 3,942 30 June 2022 $’000 30 June 2021 $’000 20 20 (126) (890) (1,016) (996) 88 88 (74) (548) (622) (534) ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Accounting policies Interest income comprises bank interest on funds invested and is recognised as it accrues, using the effective interest method. Finance expenses comprise interest expense on borrowings (including leases) and unwinding of the discount on provisions. All borrowing costs are recognised in profit or loss using the effective interest method in the period in which they are incurred except borrowing costs that are directly attributable to the acquisition, construction and production of a qualifying asset that necessarily takes a substantial period to get ready for its intended use or sale. In this case, borrowing costs are capitalised as part of the qualifying asset. 7. SALE OF SUBSIDIARY On 24 September 2021 the Company announced it had completed sale of Mt Ida Gold Pty Limited for cash consideration of $11.04 million, including the disposal of the rehabilitation provision of $2.29 million. The Group recognised a gain on disposal of $12.45 million. 8. INCOME TAX (a) Components of tax expense: Current tax benefit Deferred tax (b) Deferred income tax related to items recognised directly to equity Gain on financial asset at fair value through other comprehensive income (c) Prima facie income tax expense The prima facie tax payable on loss before income tax is reconciled to the income tax expense as follows: Prima facie income tax benefit/(expense) on loss before income tax at 30% (2021: 30%) Tax effect of: - Expenses not deductible in determining taxable profit/loss - Losses and other deferred tax balances not recognised during the year Income tax expense/(benefit) attributable to loss 30 June 2022 $’000 30 June 2021 $’000 - - - - - - - - (26,381) (6,685) (3,236) 29,617 - 643 6,042 - Based on the Group’s 2021 financial year income tax return and estimates for 30 June 2022, the Group has an unrecognised deferred tax asset of $80.20 million on carried forward tax losses of $267.32 million. Losses carried forward of $170.24 million as at 30 June 2016 are subject to the satisfaction of the same business test or the business continuity test, due to several continuity of ownership failures during the loss years. Losses incurred post 30 June 2016 are subject to the satisfaction of the continuity of ownership test. 50 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Accounting policies Income tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at balance date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at balance date. Tax losses Deferred tax assets are recognised for the carry-forward of unused tax losses to the extent that it is probable that taxable profits will be available in the future against which unused tax losses can be utilised. The deductible carry-forward tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits therefrom, detailed further in significant judgements below. Tax consolidation Ora Banda Mining Limited and its wholly owned Australian resident subsidiaries have formed a tax consolidated group with effect from 1 July 2002. Ora Banda Mining Limited is the head entity of the tax consolidated group. Tax effect accounting by members of the tax consolidated group The head entity and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group. The current and deferred tax amounts are measured in a systematic manner that is consistent with the broad principles in AASB 112 Income Taxes. Significant judgements Deferred tax assets Deferred tax assets, including those arising from unutilised tax losses, require the Group to assess the likelihood that it will generate sufficient taxable earnings in future periods, in order to utilise recognised deferred tax assets. Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These estimates of future taxable income are based on forecast cash flows from operations (which are impacted by production and sales volumes, commodity prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure and other capital management transactions). To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets could be impacted. 9. CASH AND CASH EQUIVALENTS Cash at bank and on hand Accounting policies 30 June 2022 $’000 30 June 2021 $’000 27,755 27,755 24,220 24,220 Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or less. The Group ensures that as far as possible it maintains excess cash and cash equivalents in short-term high interest-bearing deposits. The Group’s exposure to interest rate risk and a sensitivity analysis of financial assets and liabilities are disclosed in Note 26. 51 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 10. TRADE AND OTHER RECEIVABLES Current GST receivables Other receivables Less provision for expected credit loss Non-current Security deposits The Group’s exposure to credit risk is disclosed in Note 26. Accounting policies 30 June 2022 $’000 30 June 2021 $’000 1,112 1,645 (1,521) 1,236 1,065 2,271 (1,940) 1,396 2,616 3,085 Trade receivables are recognised initially at the value of the invoice sent to the counterparty and subsequently at the amounts considered recoverable (amortised cost). Where there is evidence that the receivable is not recoverable, it is impaired with a corresponding change to profit or loss. GST receivable balances are recorded initially as the consideration to be received from the federal government, and then subsequently at amortised cost. Impairment of receivables Reconciliation of provision for expected credit loss Carrying amount at beginning of year Reversal due to debt recovery Amounts written off during the year Carrying amount at the end of year Significant judgements 30 June 2022 $’000 30 June 2021 $’000 1,940 (408) (11) 1,521 1,976 - (36) 1,940 Provision for expected credit losses of trade and other receivables The provision relates to outstanding amounts for shares issued to former related parties and advances provided to former related parties for the recharge of costs incurred by the Group on behalf of the former related party arising from prior periods. These amounts are disclosed as ‘other receivables’. All related party receivables have been fully provided for based on an expected credit loss rate of 100%. The assessment of expected credit losses is a significant estimate. The amount of expected credit losses is sensitive to changes in circumstances. The Group’s historical credit loss experience may also not be representative of customer’s actual default in the future. 11. INVENTORIES CURRENT Materials and supplies Ore stocks Gold in circuit Bullion on hand Total inventories 52 30 June 2022 $’000 30 June 2021 $’000 3,070 5,977 3,052 4,065 16,164 1,360 15,032 2,200 1,720 20,312 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Accounting policies Inventories Ore stockpiles, gold in circuit and gold bullion are physically measured or estimated and valued at the lower of cost and net realisable value. The cost comprises direct materials, labour and transportation expenditure in bringing such inventories to their existing location and condition, together with an appropriate portion of fixed and variable overhead expenditure based on weighted average cost incurred during the period in which such inventories were produced. Net realisable value is the estimated selling price in the ordinary course of business less estimated cost of completion and the estimated cost necessary to perform the sale. Inventories of consumable supplies and spare parts that are expected to be used in production are valued at cost. Obsolete or damaged inventories of such items are valued at net realisable value. During the year ore stockpiles were reduced by $31.05 million (2021: $3.89 million) as a result of a write down to net realisable value. This write down was recognised as an expense. As a result at 30 June 2022 ore stockpiles were held at net realisable value with all other inventories at cost. Bullion on hand Bullion on hand comprises gold that has been poured prior to year-end but which has not yet been delivered into a sale contract. 12. EXPLORATION EVALUATION AND DEVELOPMENT EXPENDITURE 30 June 2022 $’000 30 June 2021 $’000 Exploration and evaluation phase Cost brought forward Transferred to development phase Balance at 30 June Development phase Cost brought forward Transfer from exploration and evaluation phase Expenditure during the year Disposal of subsidiary Rehabilitation provision adjustment Revenue capitalised Transferred to production phase Impairment expense Balance at 30 June Production phase Cost brought forward Transfer from development phase Expenditure during the year Rehabilitation provision adjustment Amortisation expense Impairment expense Balance at 30 June Total 53 - - - 11,321 - 1,015 (866) - - (285) (5,495) 5,690 47,217 285 29,475 1,333 (19,554) (43,284) 15,472 1,972 (1,972) - 42,869 1,972 25,415 - (257) (7,161) (51,517) - 11,321 - 51,517 2,429 1,699 (8,428) - 47,217 21,162 58,538 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Accounting policies and significant judgements Exploration and evaluation phase Expenditure on areas of interest in the exploration and evaluation phase are those incurred in connection with the exploration for and evaluation of minerals resources before technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Exploration and evaluation phase assets include the costs of acquiring exploration licenses or exploration rights and the fair value (at acquisition date) of exploration and evaluation assets acquired. All other expenditure on areas of interest in the exploration and evaluation phase, including all expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred. Capitalised exploration and evaluation expenditure is accumulated in respect of each identifiable area of interest. An ‘area of interest’ is an individual geological area which is considered to constitute a favourable environment for the presence of a mineral deposit or has been proved to contain such a deposit. These costs are carried forward only if they relate to an area of interest for which rights of tenure are current and where: • such costs are expected to be recouped through successful development and exploitation or from sale of the area; and • exploration and evaluation activities in the area have not, at balance date, reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable resources, and active and significant operations in, or relating to, this area are continuing. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward capitalised costs in relation to the area of interest. If capitalised costs do not meet the criteria noted above, they are written off in full to profit or loss. During the year, $6.12 million of costs incurred on areas of interest in the exploration and evaluation phase were expensed to profit or loss (2021: $6.13 million) as they did not meet the recognition criteria noted above. Exploration and evaluation assets are transferred to development phase assets once technical feasibility and commercial viability of an area of interest is demonstrable. At this stage, exploration and evaluation assets are tested for impairment, and any impairment loss is recognised, prior to being reclassified. Impairment testing of exploration and evaluation assets Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist: • Term of exploration licence in the specific area of interest has expired during the reporting period or will expire in the near future, and is not expected to be renewed; • Substantive expenditure on further exploration and evaluation of mineral resources in the specific area are not budgeted or planned; • Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resource and the decision was made to discontinue such activities in the specific area; or • Sufficient data exists to indicate that, although development in the specific area of interest is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be fully recovered from successful development or by sale. When a potential impairment is indicated, an assessment is performed for each cash generating unit which is no larger than the area of interest. There were no impairment indicators during the financial year. 54 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Development phase assets The Group capitalises expenditure on areas of interest in the development phase only where the following criteria are met: • The Group has right of tenure in the area of interest; • The expenditure is for the purpose of furthering an already proven mineral resource area; and • The expenditure provides future economic benefit by developing the underlying resources to further progress the asset towards commercial production. Development phase assets are transferred to mine properties and mining assets when mining production commences at the area of interest. Impairment testing of assets in the development or production phase The carrying amounts of assets in the development or production phase are reviewed at each balance date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value-in-use (‘VIU’) and its fair value less costs of disposal (‘FVLCD’). For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (‘cash-generating unit’). An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit or loss. Impairment losses recognised in prior periods are assessed at each balance date for any indications that the loss has decreased or no longer exists and therefore should be reversed. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had initially been recognised. Impairment reversals are also recognised in profit or loss. Exploration expenditure commitments Exploration expenditure commitments represent tenement rentals and minimum spend requirements that are required to be met under the relevant legislation should the Group wish to retain tenure on all its current tenements (refer Note 23). Mine properties and mining assets Mine properties represent the acquisition cost and/or accumulated exploration, evaluation and development expenditure in respect of areas of interest in which mining has commenced. When production commences, capitalised costs in the development phase are transferred to mine properties, at which time it is amortised on a unit of production basis based on ounces mined over the total estimated reserves related to this area of interest. Significant factors considered in determining the technical feasibility and commercial viability of the project are the completion of a feasibility study, the existence of sufficient resources to proceed with development and approval by the board of directors to proceed with development of the project. Underground development expenditure incurred in respect of mine development after the commencement of production is carried forward as part of mine development only when substantial future economic benefits are expected, otherwise this expenditure is expensed as incurred. Impairment During the year impairment indicators were identified in relation to the Davyhurst cash generating unit. Refer note 15 for further information on impairment losses recorded during the year. Deferred stripping costs Stripping is the process of removing overburden and waste materials from surface mining operations to access the ore. Stripping costs are capitalised during the development of a mine and are subsequently amortised over the life of mine on a units of production basis, where the unit of account is ounces of gold mined from reserves. Stripping costs capitalised at year end are included in the production phase of development expenditure. 55 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Reserves and resources Resources are estimates of the amount of gold product that can be economically extracted from the Group’s mine properties. In order to calculate resources, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, future capital requirements, short and long term commodity prices and exchange rates. Estimating the quantity and/or grade of resources requires the size, shape and depth of ore bodies to be determined by analysing geological data. This process may require complex and difficult geological judgments and calculations to interpret the data. The Group determines and reports ore resources under the Australian Code of Reporting for Mineral Resource and Ore Reserves (2004 and 2012), known as the JORC Code. The JORC Code requires the use of reasonable assumptions to calculate resources. Due to the fact that economic assumptions used to estimate resources change from period to period, and geological data is generated during the course of operations, estimates of reserves and resources may change from period to period. Changes in reported resources and reserves may affect the Group’s financial results and financial position in a number of ways, including: • asset carrying values may be impacted due to changes in estimates of future cash flows; • amortisation charged in profit or loss may change where such charges are calculated using the units-of-production basis; • decommissioning, site restoration and environmental provisions may change due to variations in estimated resources after expectations about the timing or costs of these activities change; and • recognition of deferred tax assets, including tax losses. 13. PROPERTY, PLANT AND EQUIPMENT Balance at 1 July 2020 Additions Transfers Depreciation expense Balance at 30 June 2021 Balance at 1 July 2021 Additions Transfers Depreciation expense Impairment expense Balance at 30 June 2022 Motor Vehicles $’000 Buildings & Infrastructure $’000 Plant & Equipment $’000 164 479 - (49) 594 594 343 - (156) (384) 397 - - 7,647 (191) 7,456 7,456 56 5,894 (3,710) (4,763) 4,933 13,305 356 14,929 (591) 27,999 27,999 904 - (4,717) (11,881) 12,305 Capital WIP $’000 1,089 22,301 (22,576) - 814 814 5,587 (5,894) - - 507 Total $’000 14,558 23,136 - (831) 36,863 36,863 6,890 - (8,583) (17,028) 18,142 56 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Accounting policies All assets acquired, including property, plant and equipment, are initially recorded at their cost of acquisition being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition. Property, plant and equipment assets located on a mine site are carried at cost less accumulated depreciation and any accumulated impairment losses. All such assets are depreciated over the estimated remaining economic life of the mine, using a units-of- production method, based on reserves. The cost of certain items of property, plant and equipment has been determined with reference to its fair value, detailed in significant judgements below. All other property, plant and equipment assets are carried at cost less accumulated depreciation and impairment losses. These items are depreciated on a straight-line basis over the assets estimated useful life which is three to seven years. Depreciation commences from the time the asset is ready for use. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Impairment testing Property, plant and equipment is evaluated annually, at 30 June, to determine whether there are any indications of impairment or any circumstances justifying the reversal of previously recognised impairment losses. Factors such as changes in assumptions in future commodity prices, exchange rates, production rates and input costs, are monitored to assess for indications of impairment or reversal of previously recognised impairments. If any such indications of impairment or impairment reversals exist, a formal estimate of the recoverable amount is performed. In assessing whether an impairment is required, the carrying value of the asset is compared with its recoverable amount, which is the higher of FVLCD and VIU. As at 30 June 2022 several indicators were identified of impairment. Refer note 15 for further information on impairment losses recorded during the year. 14. RIGHT-OF-USE ASSETS Non-current Cost Opening balance Disposals Additions Closing balance Accumulated depreciation and impairment Opening balance Disposal Depreciation charge for the year Impairment charge for the year Closing balance Carrying amount – Opening balance Carrying amount – Closing balance 57 Property, plant and equipment $’000 2022 Property, plant and equipment $’000 2021 33,775 (471) 10,530 43,834 6,320 (471) 13,578 11,990 31,417 27,455 12,417 603 (132) 33,304 33,775 222 (132) 6,230 - 6,320 381 27,455 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S The Group leases mining; power generation and other equipment for the purposes of production and exploration activities. These leases run for a period of approximately 1 to 5 years, with an option to renew the lease after that date. Leases that contain extension options are exercisable by the Group and not the lessor. Refer note 15 for further information on impairment losses recorded during the year. 15. IMPAIRMENT OF MINE DEVELOPMENT, PROPERTY PLANT & EQUIPMENT AND RIGHT-OF-USE ASSETS The carrying amount of the Group’s non-current assets, including mine development and property plant & equipment, are reviewed at each reporting date to determine whether there is any indication of impairment. Where an indicator of impairment exists a formal estimate of recoverable amount is made. Indicators of impairment – Mine development, property plant & equipment and right-of-use assets Mine development, land & buildings and plant & equipment assets are assessed for impairment on a cash generating unit (‘CGU’) basis. A CGU is the smallest group of assets that generates largely independent cash flows. Generally, mining operations that process through a common facility are considered a single CGU. As the Group has a single processing facility, it has been assessed as a single CGU only; the Davyhurst gold project (‘DGP’) CGU. Individual assets within a CGU may become impaired if their ongoing use changes or if the benefits to be obtained from ongoing use are likely to be less than the carrying value of the individual asset. Impairment losses or reversal of impairment losses An impairment loss is recognised in profit or loss whenever the carrying amount of an asset or its CGU exceed its recoverable amount. Impairment losses recognised in respect of CGUs are allocated to reduce the carrying amount of the assets in the CGU on a pro rata basis. Any reversal of impairment losses is recognised in profit or loss when the recoverable amount of an asset or CGU exceeds its carrying amount and impairment losses are reversed only to the extent that the asset carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised. Recoverable amount The recoverable amount of a CGU is the greater of its FVLCD (based on level 3 fair value hierarchy) and its value in use (‘VIU’), using an asset’s estimated future cash flows discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU. The CGU’s recoverable amount has been determined based on FVLCD. The FVLCD represents the discounted cashflows of the operational reset plan for DGP, together with an implied value for the existing resource and reserve base and assessment on the likelihood of recoverability from successful development or sale. The discounted future estimated cash flows expected to be generated from the continued use of the CGU use market-based gold price assumptions, the level of gold production from the operational reset, estimated quantities of recoverable gold, production levels, operating costs and sustaining capital requirements. The cash flow forecasts are discounted using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the DGP CGU. 58 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Key judgement, estimate or assumption – Impairment of DGP CGU Estimates of future USD gold prices are based on the Group’s best estimate of future market prices with reference to consensus views of external market analyst forecasts. Future gold prices are reviewed at least annually. Forecasts of the AUD/USD exchange rate are based on the Group’s best estimates with reference to external market data and forward values including analysis of consensus estimates. The future USD gold price and AUD/USD exchange rate used to calculate the future AUD gold price were as follows: Unit US$/oz AUD/USD exchange rate A$/oz FY 2023 1,785 0.70 2,550 FY 2024 1,680 0.70 2,400 The discount rate applied to the future forecast cash flows is based on the weighted average cost of capital. The nominal post-tax discount rate that has been applied to non-current assets is 13%. Where future circumstances differ from these assumptions, the recoverable amount of the Group’s DGP CGU assets could change materially, resulting in impairment losses or the reversal of previous impairment losses. DGP CGU impairment Indicator assessment A review of potential impairment indicators for the DGP CGU was undertaken as at 30 June 2022. The following factors were identified as indicators: • Evidence that the DGP CGU’s economic performance was worse than expected including but not limited to a 24% reduction in expected gold production (against initial FY22 guidance) and material net realisable value (‘NRV’) charges against ore stockpiles; • Significant increases to the risk free interest rate underpinning the applicable discount rate; abnormally high inflation rates and other cost pressures, including significant increases in the diesel price; and • Quoted market capitalisation of the Group was lower than its net asset carrying value before the recognition of any impairment losses. As a result, an impairment test was performed to determine the recoverable amount for the DGP CGU. The review conducted determined that a pre-tax, non-cash impairment loss of $61.29 million be recognised for the 2022 financial year. The composition of the impairment loss across the Group’s non-financial assets is summarised below: Asset classification Mine development – Production assets Property, plant and equipment Right-of-use assets Total impairment loss $’000 32,274 17,028 11,990 61,292 59 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Sensitivity analysis It is estimated that the following reasonable possible changes in the key assumptions would have the following approximate impact (increase or decrease) on the fair value of the DGP CGU: Assumption A$100 per ounce change in the gold price 5% increase/decrease in forecast gold production 1% increase/decrease in the discount rate 5% increase/decrease in assumed operating costs 5% increase/decrease in implied resources/reserve multiple $’000 6,377 7,922 742 6,838 562 It should be noted that the sensitivities above assume that the identified assumptions move in isolation whilst all other assumptions are held constant. In reality, due to the interrelated nature of the assumptions, movements in any one variable can have an indirect impact on others and individual variables rarely change in isolation. Additionally, management can be expected to respond to some movements to mitigate downsides and take advantage of upsides as circumstances allow. Action is also usually taken by management to respond to adverse changes in economic assumptions that may mitigate the impact of any such change. As part of its ORP, the Group ceased mining at its Riverina open pit mine. All mine development expenditure associated with the operation was impaired at that point. This amounted to $16.51 million. Total impairment is reconciled as below: FY22 impairment expense Mine development – Riverina mine Mine development – Other production assets Property, plant and equipment Right-of-Use assets Total impairment loss 16. INVESTMENTS Investments in listed entities – at fair value Movements are as follows: Balance at 1 July Acquisitions Change in fair value Balance at 30 June $’000 16,505 32,274 17,028 11,990 77,797 30 June 2022 $’000 30 June 2021 $’000 363 - 409 (46) 363 - - - - - - During the financial year the Group received shares in Indiana Resources Limited (ASX: IDA) in full and final settlement of a debt. Accounting policies A financial asset is classified as fair value through other comprehensive income if it is not held for trading and the Group has made an irrevocable election at initial recognition to classify it as fair value through other comprehensive income. Financial assets are measured at fair value and changes are recognised in other comprehensive income. The fair value of investments in equity securities are determined with reference to their quoted ASX closing price at balance date. 60 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 17. LEASE LIABILITIES Analysed as: Current Non-current Maturity analysis Within one year Later than one year but not later than five years Minimum lease payments Future finance charges Total lease liabilities 30 June 2022 $’000 30 June 2021 $’000 13,547 10,793 24,340 14,060 11,081 25,141 (801) 24,340 9,178 18,010 27,188 9,860 18,710 28,570 (1,382) 27,188 Payments amounting to $29.72 million (2021: $8.65 million) were made during the financial year under lease arrangements qualifying under AASB 16 Leases. The payments were variable in nature and therefore not included in the minimum lease payments used to calculate lease liabilities. Amounts paid include payments for services, including labour charges, under those lease contracts that include payments for the right-of-use assets. Payments made in relation to low value items and leases less than a year not recognised as right-of-use assets amounted to $0.11 million (2021: $0.36 million). The right-of-use assets to which the lease liabilities relate are disclosed in Note 14. For the year ended 30 June 2022, the Group recognised $10.29 million of additional lease liabilities, $4.17 million of lease repayments and $0.21 million of interest costs in relation to these leases. Accounting policies The Group leases assets, including properties and equipment. As a lessee, the Group previously classified leases as operating or financial leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of ownership. Following the implementation of AASB 16 Leases, the Group recognises right-of-use assets and the corresponding lease liability for applicable leases. Pursuant to AASB 16, a contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period in exchange for consideration. The Group recognises right-of-use assets at the commencement date of the lease. Such assets are initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for any changes to lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date. For short-term leases with terms of 12 months or less or leases of low-value assets, the Group has elected not to recognise a right- of-use asset and corresponding lease liability. Lease payments on these assets are expensed to profit or loss as incurred. Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification to an index or rate, a change in the residual value guarantee, or changes in the assessment of whether a purchase, extension or termination option will be exercised. The lease payments include fixed monthly payments, variable lease payments and amounts expected to be paid under residual value guarantees less any incentives received. Variable lease payments that do not depend on an index or rate are recognised as an expense in the period it was incurred. The lease payment also includes the exercise price, or termination price, of a purchase option in the event the lease is likely to be extended, or terminated, by the Group. The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that includes renewal options. The assessment of these options will impact the lease term and therefore affects the amount of lease liabilities and right-of-use assets recognised. 61 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 18. TRADE AND OTHER PAYABLES Current Trade payables Accruals Other payables Non-current Other payables 30 June 2022 $’000 30 June 2021 $’000 10,325 7,289 1,923 19,537 50 50 7,951 11,004 2,095 21,050 75 75 A sensitivity analysis of financial assets and liabilities, together with the Group’s exposure to liquidity risk, are disclosed in Note 26. Accounting policies Trade payables are recognised at the value of the invoice received from a supplier. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid. They arise when the Group becomes obliged to make future payments in respect of the purchase of goods and services. The amounts are unsecured and generally paid within 14 to 30 days of recognition. 19. PROVISIONS Current Annual leave Long service leave Rehabilitation Non-current Restoration Rehabilitation (a) Provision for rehabilitation Carrying amount at beginning of year Disposal of subsidiary Re-assessment of provision Accretion Carrying amount at the end of year 30 June 2022 $’000 30 June 2021 $’000 1,330 103 90 1,523 786 19,671 20,457 20,596 (2,292) 1,331 126 19,761 945 91 - 1,036 546 20,596 21,142 19,077 - 1,445 74 20,596 The Group fully provides for the future cost of rehabilitating mine sites and related production facilities on a discounted basis on the development of mines or installation of those facilities. The value of the provision represents the present value of expected costs relating to the rehabilitation of mine sites and decommissioning of the processing plant and other infrastructure. 62 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S The provision is based on estimates provided by external consultants. Key inclusions and pertinent matters underpinning the provision are: • Provision covers the three project areas, being Carnegie, Siberia and Heron; • Project areas (apart from the DGP site) have undergone limited scale exploration activities; • Cost estimates for the three project areas include actual mining contractor, equipment rates and average industry contracting rates; • Provision incorporates costs for the demolition and cartage of fixed infrastructure to the nearest nominated waste disposal area; • Rehabilitation costs are incurred over a four-year forecast period; • 10% (2021: 10%) contingency has been included in the provision calculation; • Allowance has been made within the contingency for post-closure maintenance and reworking of environmental rehabilitation; • Discount rate applied of 3.36%, estimated based on yields of government risk-free bonds; and • Inflation rate of 3.8%, estimated based on Reserve Bank of Australia forecast and rate for inflation. Assumptions, which are based on current economic environment, have been made which the Company believes are a reasonable basis upon which to estimate the future liability. These estimates are reviewed regularly to take into account any material changes to the assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for necessary decommissioning works required which will reflect market conditions at the relevant time. Accounting policies Provisions are recognised: • When the Group has a present (legal or constructive) obligation as a result of a past event; • It is probable the Group will be required to settle the obligation; and • A reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at balance date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost. Short-term employee benefits Liabilities for employee benefits for wages, salaries and annual leave represents present obligations resulting from employees’ services provided to balance date and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at balance date including related on-costs. Long-term employee benefits The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs. The benefit is discounted to determine its present value using a discount rate that equals the yield at balance date based on Australian high-quality corporate bonds that have maturity dates approximating the terms of the Group’s obligations. 63 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Rehabilitation costs Mine rehabilitation costs will be incurred by the Group either while operating, or at the end of the operating life of, the Group’s facilities and mine properties. The Group assesses its mine rehabilitation provision at each balance date. The Group recognises a rehabilitation provision where it has a legal and constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. The nature of these restoration activities includes dismantling and removing structures; rehabilitating mines and tailings dams; dismantling operating facilities; closing plant and waste sites; and restoring, reclaiming and revegetating affected areas. The obligation generally arises when the asset is installed, or the ground/environment is disturbed at the mining operation’s location. When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the carrying amount of the related mining assets to the extent that it was incurred as a result of the development/construction of the mine. Additional disturbances that arise due to further development/construction at the mine are recognised as additions or charges to the corresponding assets and rehabilitation liability when they occur. Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with prospectively by recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, if the initial estimate was originally recognised as part of an asset measured in accordance with AASB 116 Property, Plant and Equipment. Property Plant and Equipment. Rehabilitation provisions associated with property, plant and equipment 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 a financing cost. The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Significant judgements Provision for rehabilitation Decommissioning and restoration costs are a normal consequence of mining and much of this expenditure is incurred at the end of a mine’s life. In determining an appropriate level of provision, consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine) and the estimated future level of inflation. The ultimate cost of decommissioning and restoration is uncertain, and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates. Currently expected to be 2026 (2021: 2026). Changes to the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results. At 30 June 2022, the provision of $19.76 million (30 June 2021: $20.60 million) represents the Company’s best estimate of the rehabilitation costs required. 64 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 20. SHARE CAPITAL Issued and paid up capital 1,373,987,303 463,299 968,763,876 443,696 30 June 2022 Number 30 June 2022 $’000 30 June 2021 Number 30 June 2021 $’000 (a) Movements in share capital Balance as at 1 July 2020 Shares issued under placement Shares issued on exercise of options Shares issued on vesting of performance rights Shares issued in relation to director and employee incentives Shares issued under placement Shares issued on exercise of director options Shares issued on vesting of employee incentive options Cost of capital raising Balance as at 30 June 2021 Shares issued under share purchase plan1 Shares issued under placement2 Shares issued on vesting of performance rights3 Shares issued under placement and institutional placement4 Shares issued under retail entitlement offer4 Shares issued under retail entitlement offer4 Cost of capital raising Balance as at 30 June 2022 590,284,962 368,194 239,501,170 7,666,667 3,136,727 1,632,431 55,085 1,976 514 490 123,575,252 21,008 1,777,778 1,188,889 - 968,763,876 4,382,393 588,236 490,000 254,831,849 2,726,633 142,204,316 - 217 145 (3,933) 443,696 745 100 92 12,742 136 7,110 (1,322) 1,373,987,303 463,299 1. On 5 July 2021 the Company announced the results of a share purchase plan that accompanied the $21 million capital raising completed in June 2022. $0.75 million was raised before costs from the issue of 4,382,393 fully paid ordinary shares; 2. On 18 August 2021, subsequent to receipt of shareholder approval, the Company issued 588,236 fully paid ordinary shares to David Quinlivan, a director, at $0.17 per to raise $100,000 in connection with his participation in the capital raising announced in June 2022; 3. 490,000 fully paid ordinary shares were issued as a result of the exercise of unlisted vested performance rights at a nil exercise price; 4. On 22 February 2022 the Company announced it was undertaking a capital raising for up to $20 million comprising an institutional placement to raise up to $5 million and an underwritten 4 for 13 accelerated non-renounceable entitlement offer to raise approximately $15 million. The raising was undertaken at an issue price of $0.05 per fully paid ordinary share. In total $19.99 million was raised before costs with the shares issued in three tranches as follows: a. 254,831,849 fully paid ordinary shares issued on 4 March 2022; b. 2,726,633 fully paid ordinary shares issued on 9 March 2022; and c. 142,204,316 fully paid ordinary shares issued on 24 March 2022. 65 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S (b) Rights of each type of share Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At shareholders’ meetings each ordinary share gives entitlement to one vote when a poll is called. (c) Share options and performance rights Employee share scheme The Group continued to offer employee participation in short term and long term incentive schemes as part of the remuneration packages for the employees of the Group. Refer to Note 31 for further information. (d) Dividends paid or proposed No dividends were paid or proposed during the current or previous financial year. No dividends have been proposed subsequent to the end of the current financial year. Accounting policies Issued and paid-up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. 21. RESERVES Fair value of investments in listed equities reserve Share-based payment reserve (a) Fair value of investments in listed equities reserve (i) Nature and purpose of reserve Notes (a) (b) 30 June 2022 $’000 30 June 2021 $’000 (46) 2,795 2,749 - 2,871 2,871 This reserve is used to record unrealised movements in investments in listed equities at fair value through other comprehensive income. They are not distributable. (ii) Movements in reserve Balance at beginning of year Fair value movements Transferred to retained earnings Balance at end of year (b) Share-based payments reserve (i) Nature and purpose of reserve - (46) - (46) 751 - (751) - The reserve is used to record the fair value of shares, options or performance rights issued to directors and employees as part of their remuneration. The balance is transferred to share capital when options or performance rights are exercised. The balance is transferred to retained earnings when options or performance rights expire. (ii) Movements in reserve Balance at beginning of year Share-based payments expense (Note 31) Options and rights exercised Lapsed options/rights transferred to retained earnings Balance at end of year 66 2,871 1,289 (92) (1,273) 2,795 2,103 2,133 (1,365) - 2,871 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 22. REMUNERATION OF AUDITOR Amounts paid or due and payable to: KPMG - Auditing and reviewing the financial reports 30 June 2022 $ 30 June 2021 $ 136,171 136,171 105,000 105,000 23. EXPLORATION EXPENDITURE COMMITMENTS The terms and conditions under which the Group retains title to its various mining tenements oblige it to meet the tenement rentals and minimum levels of exploration expenditure as gazetted by the Western Australian government, as well as local government rates and taxes. Exploration expenditure commitments represent these obligations as the Group intends to retain tenure on all current tenements in which it has an interest. The exploration commitments of the Group not provided for in the consolidated financial statements and payable are as follows: Amounts paid or due and payable to: Within one year Between two and five years 24. SEGMENT INFORMATION 30 June 2022 $ 30 June 2021 $ 1,053 2,362 3,415 1,132 1,370 2,502 An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The Group has one operating segment, being gold production and exploration in Western Australia. The Group does not have customers other than the Perth Mint and its bankers, and all the Group’s assets and liabilities are located within Western Australia. Group performance is evaluated based on the financial position and operating profit or loss and is measured on a consistent basis with the information contained in the consolidated financial statements. As such, no additional information is provided to that already contained in the consolidated financial statements. Major customer During the year ended 30 June 2022, $154.26 million in revenue was derived from sales to one customer, being Perth Mint. In the prior year, $25.11 million was derived. 67 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 25. RELATED PARTY TRANSACTIONS (a) Key management personnel compensation - Short-term employee benefits - Post-employment benefits - Share-based payments 30 June 2022 $ 30 June 2021 $ 2,855,019 188,373 1,059,371 4,102,763 2,100,325 183,429 1,255,257 3,539,011 (b) Individual directors and executives’ compensation disclosures Information regarding individual directors and executive’s compensation and some equity instruments disclosures as permitted by Corporations Regulations 2M.3.03 is provided in the Remuneration Report section of the Directors’ Report. During the year 12,093,279 performance rights were awarded to KMP. Refer Note 31 and the Remuneration Report for further details of related party transactions. 26. FINANCIAL RISK MANAGEMENT The Group’s principal financial assets comprise cash and trade and other receivables that arises directly from its operations. The Group’s principal financial liabilities comprise trade payables. The main purpose of these financial instruments is to manage cash flow and assist the Group in its daily operational requirements. The Group is exposed to the following financial risks in respect to the financial instruments that it held at the end of the year: • Interest rate risk; • Liquidity risk; and • Credit risk. The directors have overall responsibility for identifying and managing operational and financial risks. (a) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. At balance date, the interest rate profile of the Group’s interest-bearing financial instruments are: Fixed rate instruments Lease liabilities Variable rate instruments Cash and cash equivalents 30 June 2022 $’000 30 June 2021 $’000 24,340 27,188 27,755 24,220 An increase/decrease of 1% in the interest rate applicable to the interest-bearing financial instruments at balance date would result in an increase/decrease in net loss of $278,000 for the year ended 30 June 2022 (2021: an increase/decrease in net profit of $242,000). This analysis assumes that all other variables remain constant. 68 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S (b) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group manages liquidity risk by maintaining adequate cash reserves from funds generated from operations and by continuously monitoring forecast and actual cash flows. Maturity analysis The tables below represent the undiscounted contractual settlement terms for financial instruments and the Group’s expectation for settlement of maturities: 30 June 2022 Trade and other payables Lease liabilities Net maturities < 12 month $’000 2-5 years $’000 > 5 years $’000 19,537 14,060 33,597 50 11,081 11,131 - - - 30 June 2021 Trade and other payables Lease liabilities Net maturities < 12 month $’000 2-5 years $’000 > 5 years $’000 21,050 9,860 30,910 75 18,710 18,785 - - - Total contractual cash flows $’000 19,587 25,141 44,728 Total contractual cash flows $’000 21,125 28,570 49,695 Carrying amount $’000 19,587 24,340 43,927 Carrying amount $’000 21,125 27,188 48,313 (c) Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade and other receivables). Exposure to credit risk associated with its financing activities arising from deposits with banks and financial institutions, foreign exchange transactions and other financial instruments is not considered to be significant. Trade and other receivables Customer credit risk is managed subject to the Group’s established policy, procedures and control relating to customer credit risk management. The Group trades only with recognised creditworthy third parties. The Group’s only customer is Perth Mint. At 30 June 2022 the Group’s exposure to credit risk associated with this customer and trade receivables is not significant. The Group has other receivables that have been specifically identified as being of significant risk with respect to collection and are, therefore, included, in full, in the expected credit loss. An impairment analysis is performed at each balance date using a provision matrix to measure expected credit losses. The provision rates are based on days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability weighted outcome, the time value of money and reasonable and supportable information that is available at balance date. Other considerations include past events, current conditions and forecasts of future economic conditions. The maximum exposure to credit risk for trade and other receivables at the balance date is the carrying value of each class of financial assets disclosed in Note 10. The Group does not hold collateral as security. Cash and cash equivalents The Group limits its exposure to credit risk by only investing in liquid securities with major Australian financial institutions. (d) Fair values versus carrying values The carrying value of cash and cash equivalents, trade and other receivables and trade and other payables is considered to be a fair approximation of their fair values. 69 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Market Risk Foreign currency risk The Group undertakes transactions impacted by foreign currencies hence has exposure to exchange rate fluctuations. The majority of the Group’s revenue is affected by movement in USD:AUD exchange rates that impact on the Australian dollar gold price whereas the majority of costs, including capital expenditure, are denominated in Australian dollars. Commodity price risk The Group’s revenue is exposed to commodity price fluctuations, in particular to gold prices. Price risk relates to the risk that the fair value of future cash flows of gold sales will fluctuate because of changes in market prices, largely due to supply and demand factors for commodities and gold price commodity speculation. The Group is exposed to commodity price risk due to the sale of gold on physical delivery at prices determined by markets at the time of sale. 27. INVESTMENTS IN CONTROLLED ENTITIES The Company has control of the following subsidiaries: Name of controlled entities Monarch Nickel Pty Limited Monarch Gold Pty Limited Carnegie Gold Pty Limited Siberia Mining Corporation Pty Limited Eastern Goldfields Mining Services Pty Limited Controlled entities of Siberia Mining Corporation Pty Limited Mt Ida Gold Operations Pty Limited Ida Gold Operations Pty Limited Pilbara Metals Pty Limited Siberia Gold Operations Pty Limited Mt Ida Gold Pty Limited Holding company Country of incorporation Class of shares Equity holding 2022 2021 Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary 100 80 100 100 100 100 100 100 100 - 100 80 100 100 100 100 100 100 100 100 The ultimate holding company of the Group is Ora Banda Mining Limited, a company based in Western Australia and listed on the Australian Securities Exchange. Accounting policies Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. 28. CONTINGENT LIABILITIES The Company and its wholly owned subsidiaries are parties to various proceedings in the Western Australian Wardens Court pursuant to which third parties are seeking to challenge its title to various mining tenements by way of forfeiture and other proceedings. The Group has legal representation in respect of these plaints. The directors do not believe the plaints have a reasonable prospect of success and the plaints will be vigorously defended by the Group. 70 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 29. CASH FLOW STATEMENT (a) Reconciliation of cash and cash equivalents Cash balances comprise: Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts and credit card balances. (b) Reconciliation of net cash outflows from operating activities to loss after income tax Loss after income tax Adjusted for non-cash items: Depreciation and amortisation Impairment expense Accretion of rehabilitation provision Share-based payments Profit on sale of property, plant and equipment NRV adjustment Gain on sale of subsidiary Changes in operating assets and liabilities: Decrease in receivables (Increase) in inventories (increase)/decrease in other assets (Decrease)/increase in payables and provisions Net cash outflow from operating activities 30. LOSS PER SHARE 30 June 2022 $’000 30 June 2021 $’000 27,755 24,220 (87,936) (22,284) 41,715 77,797 126 1,289 (31) 10,931 (12,448) 161 (4,907) (249) (1,711) 24,737 7,074 - 74 2,133 - 3,879 - 12 (20,257) 525 17,522 (11,322) (Loss)/profit used in the calculation of basic (loss)/earnings per share (87,936) (22,284) 30 June 2022 $’000 30 June 2021 $’000 Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share Effect of dilution: Weighted average number of ordinary shares on issue adjusted for the effect of dilution Basic loss per share Diluted loss per share Number Number 1,095,341,781 817,426,397 - - 1,095,341,781 817,426,397 (8.03) (8.03) (2.73) (2.73) A total of 54,153,718 options and performance rights were on issue at 30 June 2022 (30 June 2021: 36,337,005). They have not been accounted for in the above diluted earnings per share calculations as the Group is in a loss position. 71 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S Accounting policies Basic EPS is calculated as profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares. Diluted EPS is determined by adjusting the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, including options and performance rights granted to directors and employees. 31. SHARE-BASED PAYMENTS Equity-settled share-based payments are provided to directors, employees, consultants and other advisors. The issue to each individual director, employee, consultant or advisor is controlled by the board and ASX Listing Rules. Terms and conditions of the payments are determined by the board, subject to approval where required. During the year ended 30 June 2022, a share-based payment expense of $1,289,000 (30 June 2021: $2,133,000) was recognised in profit or loss. $92,000 (30 June 2021: $64,000) was recognised as a share-based payment expense that was offset against share capital. Option movements during the year At 1 July Granted during the year Exercised/expired during year Forfeited during the year At 30 June 2022 Number 36,337,005 24,597,943 (490,000) (12,688,690) 47,756,258 2022 WAEP ($) 1.13 - - - 2021 Number 40,046,782 10,636,448 (14,346,225) - 0.84 36,337,005 2021 WAEP ($) 1.12 - 0.14 - 1.13 The weighted-average share price at the date of exercise for options exercised during the year ended 30 June 2021 was $0.28 (2020: $0.23). 30 June 2022 A total of 24,597,943 unlisted performance rights were granted during the year ended 30 June 2022. The performance rights are subject to a vesting condition based on RTSR, whereby the Company’s total shareholder return is measured relative to the returns of a peer group over the performance period 1 July 2020 to 30 June 2023 (4,444,494 rights) and 1 July 2021 to 30 June 2024 (20,153,449 rights). The fair value of the RTSR performance rights was estimated as at the date of grant using a Monte-Carlo simulation model taking into account the terms and conditions upon which the performance rights were granted. These performance rights will vest according to the following schedule: Company’s Performance Relative to Peer Group Percentage of Performance rights Eligible to Vest ASX Comparator Group Below 50th percentile -% 50th to 75th percentile 50% to 100% on a straight-line pro rata Above 75th percentile 100% ALK; BC8; BDC; BGL; DCN; GOR; MML; PNR; PRU; RMS; RSG; SBM; SLR; TRY; WGX 72 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S As stated above, the fair value of performance rights granted during the 2022 year was calculated at the date of grant using the Monte-Carlo simulation option pricing model. Inputs to the valuation models used to determine the fair value at the grant dates were as follows: Performance Right Class Underlying security share price at grant date Exercise price Grant date Vesting date Expiry date Risk-free rate Volatility Dividend yield Number of performance rights granted Valuation per performance right Fair value per performance right class 30 June 2021 RTSR $0.074 Nil RTSR $0.062 Nil 26/11/2021 16/12/2021 30/06/2023 30/06/2024 30/06/2026 30/06/2026 0.53% 80% Nil 1.00% 80% Nil 4,444,494 20,153,449 $0.038 $168,891 $0.038 $765,831 A total of 10,636,449 unlisted performance rights were issued during the year ended 30 June 2021. Of the issued performance rights, 7,087,713 are subject to a vesting condition based on RTSR, whereby the Company’s total shareholder return is measured relative to the returns of a peer group over the performance period 1 July 2020 to 30 June 2022 (633,681 performance rights – Nil vested) and 1 July 2020 to 30 June 2023 (6,454,032 performance rights). The fair value of the RTSR performance rights was estimated as at the date of grant using a Monte-Carlo simulation model taking into account the terms and conditions upon which the performance rights were granted. These performance rights will vest according to the following schedule: Company’s Performance Relative to Peer Group Percentage of Performance Rights Eligible to Vest ASX Comparator Group Below 50th percentile -% 50th to 75th percentile 50% to 100% on a straight-line pro rata Above 75th percentile 100% BC8; BDC; BGL; DCN: GOR; MML; PNR; PRU; RMS; RSG; SBM; SLR; TRY; WGX; WMX Of the issued performance rights, 354,874 are subject to a vesting condition based on the Company’s TSR over the performance period 1 July 2020 to 30 June 2021 (Nil vested). The fair value of the TSR performance rights was estimated as at the date of grant using a Monte-Carlo simulation model taking into account the terms and conditions upon which the performance rights were granted. These performance rights will vest according to the following schedule: Company’s TSR as at 30 June 2021 Percentage of Performance Rights Eligible to Vest TSR <0% 0%≤TSR<5% 5%≤TSR<10% 10%≤TSR<15% 15%≤TSR<20% TSR>20% -% 10% 25% 50% 75% 100% The remaining 3,193,862 issued performance rights were subject to a vesting condition based on the achievement of the Company’s performance metrics over the performance period 1 July 2020 to 30 June 2021. The fair value of these performance rights was estimated as at the date of grant using the Black-Scholes option pricing methodology taking into account the terms and conditions upon which the performance rights were granted. 73 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S These performance rights will vest according to the following schedule: Option Vesting Conditions Performance Rights Eligible to Vest Ora Banda corporate, financial & operational goals Ora Banda management response 1,419,494 1,774,368 On 30 June 2021, 35% equivalent to 1,233,183 (2020: 86% equivalent to 1,171,267) of STIP ‘Other’ performance rights vested and the remaining 65% equivalent to 2,315,554 (2020: 14% equivalent to 189,090) of STIP ‘Other’ performance rights were forfeited. The terms and conditions upon which the options and performance rights were granted are summarised in the following table: Option/Performance Right Class Underlying security share price at grant date Exercise price Grant date Vesting date Expiry date Risk-free rate Volatility Dividend yield RTSR RTSR RTSR TSR TSR Other Other LTI Zero-priced Options LTI Perform- ance Rights LTI Perform- ance Rights STI Perform- ance Rights STI Perform- ance Rights STI Perform- ance Rights STI Perform- ance Rights $0.295 $0.295 $0.300 $0.295 $0.300 $0.295 $0.300 Nil Nil Nil Nil Nil Nil Nil 02/11/2020 02/11/2020 27/11/2020 02/11/2020 27/11/2020 02/11/2020 27/11/2020 30/06/2022 30/06/2023 30/06/2023 30/06/2021 30/06/2021 30/06/2021 30/06/2021 30/06/2024 30/06/2028 30/06/2028 30/06/2026 30/06/2026 30/06/2026 30/06/2026 0.11% 0.13% 80% Nil 80% Nil 0.09% 100% Nil 0.11% 80% Nil 0.03% 100% Nil 0.11% 80% Nil 0.03% 100% Nil Number of performance rights issued 633,681 4,996,589 1,457,443 245,565 109,308 2,210,089 983,774 Valuation per option $0.154 $0.229 $0.2611 $0.192 $0.2062 $0.295 $0.30 Fair value per option class $97,587 $1,144,219 $380,538 $47,148 $22,539 $651,976 $295,132 The measure of volatility used in the option pricing model represents the annualised standard deviation of the continuously compounded rates of return on the historical TSR of Ora Banda Mining Limited and each constituent of the peer group for the length of time equal to the measurement period. The recent volatilities of the constituents of the peer group and Ora Banda Mining Limited (using comparable companies) was calculated over a one, two and three-year period. Accounting policies The grant date fair value of equity-settled share-based payment awards granted to directors and employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. 32. EVENTS AFTER BALANCE DATE On 4 July 2022 the Company announced that Luke Creagh had been appointed Chief Executive Officer with immediate effect. On 16 July 2022 the Company announced that Keith Jones, a director, had advised his intention to resign from the board on 30 September 2022. Further, Alan Rule is to replace Mr Jones. Apart from the above, no other matters have arisen since the end of the financial year that impact or are likely to impact the results of the Group in subsequent financial periods. 74 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022N O T E S T O T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 33. PARENT ENTITY INFORMATION (a) Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Total liabilities Equity Contributed equity Accumulated losses Reserves Total equity (b) Financial performance Loss for the year Total comprehensive (loss) for the year (c) Contingent liabilities and commitments 30 June 2022 $’000 30 June 2021 $’000 32,920 16,200 49,120 14,285 14,285 463,299 (431,213) 2,749 34,835 27,167 88,407 115,574 13,557 13,557 443,696 (344,550) 2,871 102,017 (87,937) (87,937) (18,743) (18,743) Contingent liabilities and commitments identified are as per those detailed within Notes 23 and 28 of this report. (d) Deed of cross guarantee Ora Banda Mining Limited and the following entities are parties to a deed of cross guarantee (which was executed on 26 June 2018 and lodged with the Australian Securities and Investments Commission) under which each Company guarantees the debts of the others: • Monarch Nickel Pty Limited; • Carnegie Gold Pty Limited; • Siberia Mining Corporation Pty Limited; • Mt Ida Gold Pty Limited; • Mt Ida Gold Operations Pty Limited; • Ida Gold Operations Pty Limited; • Pilbara Metals Pty Limited; and • Siberia Gold Operations Pty Limited. By entering into the deed, the wholly owned entities have been relieved from the requirement to prepare financial statements and a Directors’ Report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission. The above companies represent a ‘Closed Group’ for the purposes of the Corporations Instrument, and as there are no other parties to the deed of cross guarantee that are controlled by Ora Banda Mining Limited, they also represent the ‘Extended Closed Group’. As the Extended Closed Group includes all material subsidiaries of Ora Banda Mining Limited, there is no difference between the Consolidated Statement of Profit or Loss and Other Comprehensive Income and Consolidated Statement of Financial Position of the Ora Banda Mining Limited consolidated entity and the Extended Closed Group. 75 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 Directors’ Declaration 1. In the opinion of the directors of Ora Banda Mining Limited and its controlled entities: (a) the Group’s consolidated financial statements and notes set out on pages 40 to 75 are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance, for the financial year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; (b) the financial report also complies with International Financial Reporting Standards as set out in Note 1; (c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable; and (d) at the date of this declaration, there are reasonable grounds to believe that the Company and the subsidiaries identified in Note 27, will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those subsidiaries. 2. the directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2022. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors Peter Mansell Chairman Perth, Western Australia 27 September 2022 76 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 77 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022I N D E P E N D E N T A U D I T O R ’ S R E P O R T Independent Auditor’s Report 78 78 O RA BA NDA MININ G L IM ITED A N D I TS CON T ROL L ED EN TIT IES ACN 100 038 266 AN NU A L REP ORT 2022 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022I N D E P E N D E N T A U D I T O R ’ S R E P O R T Independent Auditor’s Report Independent Auditor’s Report Independent Auditor’s Report To the shareholders of Ora Banda Mining Limited Report on the audit of the Financial Report To the shareholders of Ora Banda Mining Limited To the shareholders of Ora Banda Mining Limited Report on the audit of the Financial Report Opinion Report on the audit of the Financial Report We have audited the Financial Report of Ora Banda Mining Limited (the Company). Opinion Opinion In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations We have audited the Financial Report of Ora Banda We have audited the Financial Report of Ora Banda Act 2001, including: Mining Limited (the Company). Mining Limited (the Company). • giving a true and fair view of the Group’s In our opinion, the accompanying Financial Report of In our opinion, the accompanying Financial Report of financial position as at 30 June 2022 and of its the Company is in accordance with the Corporations the Company is in accordance with the Corporations financial performance for the year ended on that Act 2001, including: Act 2001, including: date; and • giving a true and fair view of the Group’s • giving a true and fair view of the Group’s • complying with Australian Accounting Standards financial position as at 30 June 2022 and of its financial position as at 30 June 2022 and of its and the Corporations Regulations 2001. financial performance for the year ended on that financial performance for the year ended on that date; and date; and complying with Australian Accounting Standards complying with Australian Accounting Standards and the Corporations Regulations 2001. and the Corporations Regulations 2001. • • Basis for opinion The Financial Report comprises: • Consolidated balance sheet as at 30 June 2022; • Consolidated statement of profit or loss and other The Financial Report comprises: comprehensive income, Consolidated statement The Financial Report comprises: of changes in equity, and Consolidated statement • Consolidated balance sheet as at 30 June 2022; • Consolidated balance sheet as at 30 June 2022; of cash flows for the year then ended; • Consolidated statement of profit or loss and other • Consolidated statement of profit or loss and other • Notes including a summary of significant comprehensive income, Consolidated statement comprehensive income, Consolidated statement accounting policies; and of changes in equity, and Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended; • Directors’ Declaration. of cash flows for the year then ended; • Notes including a summary of significant The Group consists of the Company and the entities • Notes including a summary of significant it controlled at the year-end or from time to time during the financial year. • Directors’ Declaration. • Directors’ Declaration. The Group consists of the Company and the entities The Group consists of the Company and the entities it controlled at the year-end or from time to time it controlled at the year-end or from time to time during the financial year. during the financial year. accounting policies; and accounting policies; and We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Basis for opinion Basis for opinion Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements we have obtained is sufficient and appropriate to provide a basis for our opinion. of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial of the Financial Report section of our report. of the Financial Report section of our report. Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Key Audit Matters Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. The Key Audit Matter we identified is: • Valuation of Davyhurst. Key Audit Matters Key Audit Matters The Key Audit Matter we identified is: The Key Audit Matter we identified is: • Valuation of Davyhurst. • Valuation of Davyhurst. 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 Key Audit Matters are those matters that, in our Key Audit Matters are those matters that, in our audit of the Financial Report as a whole, and in professional judgement, were of most significance in professional judgement, were of most significance in forming our opinion thereon, and we do not provide a our audit of the Financial Report of the current period. our audit of the Financial Report of the current period. separate opinion on these matters. These matters were addressed in the context of our These matters were addressed in the context of our audit of the Financial Report as a whole, and in audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a forming our opinion thereon, and we do not provide a separate opinion on these matters. separate opinion on these matters. KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and 79 with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 I N D E P E N D E N T A U D I T O R ’ S R E P O R T Valuation of Davyhurst Refer to Note 15 to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s only cash generating unit (CGU) is the Davyhurst gold project (Davyhurst). Davyhurst has experienced operational challenges, which led to the Group implementing an operational reset plan. These factors led the Group to the conclusion that impairment indicators exist and an impairment test was performed for Davyhurst as at 30 June 2022. The Davyhurst CGU contains non-current assets such as property, plant and equipment, right of use assets and development expenditure. A key audit matter for us was the Group’s impairment testing of Davyhurst, given Davyhurst is the sole CGU of the Group. We focused on the significant and judgemental forward-looking assumptions the Group applied in their fair value less costs of disposal (FVLCOD) models, including: • • Forecast cashflows including forecast sales, production output, production costs and capital expenditure; Forecast gold prices and AUD/USD exchange rate - fluctuating gold prices and exchange rates increase the risk of future fluctuations and inaccurate forecasting; • Discount rate - these are complicated in nature and vary according to the conditions and environment the specific Cash Generating Unit (CGU) is subject to from time to time; • Life of mineral reserves and resources - inherent estimation uncertainty related to life of mine reserves and resources increases the range of forecasting outcomes to consider, and • Reserve and resource multiples. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. Our procedures included: • We considered the appropriateness of the fair value less costs of disposal method applied by the Group to perform the impairment test against the requirements of the accounting standards; • We checked the mathematical accuracy of the calculation of the FVLCOD models; • We evaluated the sensitivity of the FVLCOD model by considering reasonably possible changes to the key assumptions such as forecast gold price, operating costs, discount rate and inflation rate; • We assessed the key assumptions used in the FVLCOD models, specifically forecast sales, production output, production costs and capital expenditure, using our knowledge of the Group, their past performance, and our industry experience; • We compared the forecast cash flows and capital expenditure in the model to Board approved forecast; • We assessed the accuracy of previous Group forecasts to inform our evaluation of forecasts incorporated in the FVLCOD models; • Working with our valuation specialists, we compared expected forecast gold prices and foreign exchange rates to published views of the market commentator on future trends; • We compared reserve and resource multiples to publicly available market data for comparable entities; • We assessed the scope, competence and objectivity of the Group’s external expert in relation to the resources statement; • Working with our valuation specialists, we independently developed a discount rate considered comparable, using publicly available market data for comparable entities; and • We assessed the disclosures in the financial report using our understanding obtained from our testing and against the requirements of the accounting standards. 80 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 I N D E P E N D E N T A U D I T O R ’ S R E P O R T Other Information Other Information is financial and non-financial information in Ora Banda Mining Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our Auditor’s Report. 81 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 I N D E P E N D E N T A U D I T O R ’ S R E P O R T Report on the Remuneration Report Opinion Directors’ responsibilities In our opinion, the Remuneration Report of Ora Banda Mining Limited for the year ended 30 June 2022, complies with Section 300A of the Corporations Act 2001. The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. R Gambitta Partner Perth 27 September 2022 KPMG 82 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022 ASX Additional Information SCHEDULE OF TENEMENTS Tenement No. Status Registered Holder Ownership Location Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD ATRIPLEX PTY LIMITED Application SIBERIA MINING CORPORATION PTY LTD Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted HERON RESOURCES LIMITED SIBERIA MINING CORPORATION PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Granted Granted Granted Granted Granted Granted Granted CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Kalgoorlie Kalgoorlie Menzies Kalgoorlie Menzies Coolgardie Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie E16/0344 E16/0456 E16/0473 E16/0474 E16/0475 E16/0480 E16/0482 E16/0483 E16/0484 E16/0486 E16/0487 E24/0203 E24/0234 E29/0889 E29/0955 E30/0333 E30/0335 E30/0338 E30/0454 E30/0468 E30/0490 E30/0491 E30/0504 G30/0006 G30/0007 G30/0008 G30/0009 L15/0224 L16/0058 L16/0062 L16/0072 L16/0073 83 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022A S X A D D I T I O N A L I N F O R M AT I O N Tenement No. Status Registered Holder Ownership Location Granted SIBERIA MINING CORPORATION PTY LTD Application SIBERIA MINING CORPORATION PTY LTD Application SIBERIA MINING CORPORATION PTY LTD Application SIBERIA MINING CORPORATION PTY LTD Application SIBERIA MINING CORPORATION PTY LTD Granted Granted Granted Granted Granted Granted Granted Granted SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application SIBERIA MINING CORPORATION PTY LTD Granted Granted Granted Granted Granted CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Application CARNEGIE GOLD PTY LTD Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted CARNEGIE GOLD PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CHARLES ROBERT GARDNER SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD HERON RESOURCES LIMITED 100/100 100/100 100/100 100/100 100/100 100/100 96/96 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 96/96 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 96/96 96/96 100/100 96/96 100/100 100/100 Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Menzies Coolgardie Coolgardie Coolgardie Coolgardie Coolgardie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie L16/0103 L16/0134 L16/0137 L16/0138 L16/0142 L24/0085 L24/0115 L24/0170 L24/0174 L24/0188 L24/0224 L24/0233 L24/0240 L24/0242 L24/0246 L30/0035 L30/0037 L30/0066 L30/0069 L30/0074 L30/0077 L30/0078 L30/0079 L30/0080 L30/0081 L30/0082 L30/0083 L30/0086 L30/0088 M16/0262 M16/0263 M16/0264 M16/0268 M16/0470 M24/0039 M24/0115 M24/0159 M24/0208 M24/0376 M24/0634 84 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022A S X A D D I T I O N A L I N F O R M AT I O N Tenement No. Status Registered Holder Ownership Location HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED 100/100 100/100 100/100 Kalgoorlie Kalgoorlie Kalgoorlie HERON RESOURCES LIMITED / IMPRESS ENERGY 90/100 & 10/100 Kalgoorlie Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD HERON RESOURCES LIMITED HERON RESOURCES LIMITED SIBERIA MINING CORPORATION PTY LTD Application HERON RESOURCES LIMITED Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD CARNEGIE GOLD PTY LTD HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED HERON RESOURCES LIMITED SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD SIBERIA MINING CORPORATION PTY LTD Application SIBERIA MINING CORPORATION PTY LTD Application SIBERIA MINING CORPORATION PTY LTD M24/0660 M24/0663 M24/0664 M24/0665 M24/0683-I M24/0686 M24/0757 M24/0772-I M24/0797 M24/0845 M24/0846 M24/0847 M24/0848 M24/0915-I M24/0916 M24/0960 M24/0973 M30/0102 M30/0103 M30/0111 M30/0123 M30/0126 M30/0157 M30/0187 M30/0253 M30/0255 M30/0256 P16/2921 P16/2922 P24/4395 P24/4396 P24/4400 P24/4401 P24/4402 P24/4403 P24/5073 P24/5074 P24/5075 P24/5536 P24/5537 85 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 96/96 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 100/100 Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Menzies Menzies Menzies Menzies Menzies Menzies Coolgardie Menzies Coolgardie Menzies Coolgardie Coolgardie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie Kalgoorlie ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022A S X A D D I T I O N A L I N F O R M AT I O N Tenement Acquisitions & Disposals Mining tenements disposed: P30/1122; P24/4750; P24/4751; P24/4754 Mining tenements acquired: E30/504 granted on 15 September 2021 Mining tenements applied: E24/234 and L16/142 The following information is provided, in accordance with Listing Rule 4.10: CORPORATE GOVERNANCE The Company’s corporate governance plan is available on the Company’s website at www.orabandamining.com.au SECURITY HOLDERS SUBSTANTIAL SHAREHOLDERS The Company has the following substantial shareholders as at 12 September 2022: Hawke’s Point Holdings I Limited Shares Held 622,230,559 NUMBER OF HOLDERS IN EACH CLASS OF EQUITY SECURITIES AND THE VOTING RIGHTS ATTACHED (AS AT 12 SEPTEMBER 2022) ORDINARY SHARES There are 2,947 holders of ordinary shares as at 12 September 2022. Each shareholder is entitled to one vote per share. In accordance with the Company’s constitution, on a show of hands every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held. OPTIONS & PERFORMANCE RIGHTS There are 404 holders of unlisted options and 81 holders of performance rights. There are no voting rights attaching to the options or performance rights. A total of 25,067,571 options and 29,086,147 performance rights are on issue. If exercised, the 25,067,571 options and 29,086,147 performance rights will convert into 54,153,718 ordinary shares. The options and performance rights have the following exercise prices and expiry dates: No. of holders No. of Options Exercise Price Expiry Date 2,178,331 2,178,331 3,854,862 3,854,862 2,916,667 10,084,518 29,086,147 $2.9578 $3.3328 $2.9578 $3.3328 $1.1203 Nil Nil 31/01/2023 31/01/2023 2/02/2023 2/02/2023 11/06/2023 Various Various 60 59 349 348 4 12 81 86 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022A S X A D D I T I O N A L I N F O R M AT I O N DISTRIBUTION SCHEDULE OF THE NUMBER OF HOLDERS IN EACH CLASS OF EQUITY SECURITY AS AT 12 SEPTEMBER 2022 Total holders Units % Units Range ORDINARY SHARES 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total 283 458 375 1,230 601 2,947 48,873 1,443,278 2,954,755 49,482,414 1,320,057,983 1,373,987,303 UNLISTED OPTIONS EXPIRING 31 JANUARY 2023 AT $2.9578 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total UNLISTED OPTIONS EXPIRING 31 JANUARY 2023 AT $3.3328 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total UNLISTED OPTIONS EXPIRING 2 FEBRUARY 2023 AT $2.9578 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total UNLISTED OPTIONS EXPIRING 2 FEBRUARY 2023 AT $3.3328 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total 87 3 23 13 16 5 60 2 23 13 16 5 59 286 47 8 5 3 349 286 45 9 5 3 348 2,666 74,996 97,166 466,836 1,536,667 2,178,331 1,666 74,996 98,166 466,836 1,536,667 2,178,331 48,419 112,365 58,269 206,642 3,429,167 3,854,862 48,419 104,040 66,594 206,642 3,429,167 3,854,862 0.00 0.11 0.22 3.60 96.07 100.00 0.12 3.44 4.46 21.43 70.55 100.00 0.08 3.44 4.51 21.43 70.54 100.00 1.26 2.91 1.51 5.36 88.96 100.00 1.26 2.70 1.73 5.36 88.95 100.00 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022A S X A D D I T I O N A L I N F O R M AT I O N DISTRIBUTION SCHEDULE OF THE NUMBER OF HOLDERS IN EACH CLASS OF EQUITY SECURITY AS AT 12 SEPTEMBER 2022 (Cont) Range Total holders Units % Units UNLISTED OPTIONS EXPIRING 11 JUNE 2023 AT $1.1203 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total - - - - 4 4 - - - - 2,916,667 2,916,667 UNLISTED INCENTIVE OPTIONS EXPIRING BETWEEN 30 SEPTEMBER 2021 AND 30 JUNE 2024 AT NIL EXERCISE PRICE 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total - - - - 12 12 - - - - 10,084,518 10,084,518 UNLISTED PERFORMANCE RIGHTS EXPIRING BETWEEN 30 JUNE 2026 AND 30 JUNE 2028 AT NIL EXERCISE PRICE 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 Over Total - - - 11 70 81 - - - 763,024 28,323,123 29,086,147 - - - - 100.00 100.00 - - - - 100.00 100.00 - - - - 100.00 100.00 88 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022A S X A D D I T I O N A L I N F O R M AT I O N MARKETABLE PARCEL On 12 September 2022 there were 952 shareholders with less than a marketable parcel (being 8,065 shares), based on the closing price of $0.062 per share. TWENTY LARGEST HOLDERS OF EACH CLASS OF QUOTED SECURITY The names of the 20 largest holders of each class of quoted security, the number of equity securities each holds and the percentage of issued capital each holds (as at 12 September 2022) are set out below: Rank Name Units % of Units 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. CITICORP NOMINEES PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED MR HENDRICUS INDRISIE NPS MINING ALLIANCE PTY LIMITED MR ANTHONY PETER BARTON + MRS CORINNE HEATHER BARTON V B S EXCHANGE PTY LIMITED VBS EXCHANGE PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED- MR ANTHONY PETER BARTON + MRS CORINNE HEATHER BARTON BNP PARIBAS NOMINEES PTY LTD VASPIP 2 PTY LTD RALMANA PTY LIMITED MRS ROWENA JAYNE WINKS J P MORGAN NOMINEES AUSTRALIA PTY LIMITED L & E FISHER NOMINEES PTY LTD BNP PARIBAS NOMS PTY LTD MANFAM PTY LTD

MR MICHAEL PIPEROGLOU P G COLEMAN PTY LTD

DEVELOPMENT AND FINANCE PTY LTD TOP TWENTY SHAREHOLDERS TOTAL REMAINING SHAREHOLDERS TOTAL SHAREHOLDERS 630,916,701 97,893,006 47,564,191 40,619,516 28,300,000 21,409,006 21,120,495 18,298,006 16,000,000 14,975,306 9,666,666 9,044,586 8,678,571 8,641,556 8,500,000 8,108,463 7,725,071 6,833,333 6,500,000 5,336,926 45.92 7.12 3.46 2.96 2.06 1.56 1.54 1.33 1.16 1.09 0.70 0.66 0.63 0.63 0.62 0.59 0.56 0.50 0.47 0.39 1,016,131,399 357,855,904 1,373,987,303 73.95 26.05 100.00 89 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022left blank intentionally for your notes 90 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 20229 1 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022orabandamining.com.au 92 ORA BANDA MINING LIMITED AND ITS CONTROLLED ENTITIES ACN 100 038 266ANNUAL REPORT 2022

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