2 | PEAK RARE EARTHS CONTENTS 01. Who We Are 02. Message from the Executive Chairman 03. Message from the Chief Executive Officer 04. Review of Operations 05. Sustainability 06. Financial Report Directors’ Report Auditor’s Independence Declaration Independent Auditor’s Report Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes in Equity Notes to the Financial Statements Consolidated Entity Disclosure Statement Directors’ Declaration 07. ASX Additional Information 08. Tenement Schedule, Reserve & Resources 09. Corporate Directory 4 8 10 12 26 38 39 56 57 62 63 64 65 66 95 96 97 99 103 2024 ANNUAL REPORT | 3 WHO WE ARE 01. Our purpose is to develop and operate world-class and sustainable rare earth and critical minerals projects that support global decarbonisation, local communities, and shareholder value creation. We are focused on developing our world-class Ngualla Rare Earth Project (Ngualla Project) in Tanzania. Its development will create substantial shareholder value, generate thousands of jobs and millions of dollars (USD) of revenue for the Government of Tanzania over its life, enhance infrastructure and economic opportunities for the local community and produce rare earths that will support low carbon technologies in powering the green transformation. Located approximately 147km from the city of Mbeya in southern Tanzania the Ngualla Project is regarded as one of the world’s premier underdeveloped rare earths projects. It contains one of the largest and highest-grade Neodymium and Praseodymium (NdPr) deposits in the world. The Ngualla Project is supported by a Special Mining Licence (SML) and Framework Agreement with the Government of Tanzania. It entails the construction of a mine, mill, beneficiation plant, community projects and associated infrastructure. The construction of the Ngualla Project is expected to create around 600 direct and 3,000 indirect jobs during construction and around 220 direct and 1,000 indirect jobs during operations. 4 | PEAK RARE EARTHS Following construction and commissioning, the Ngualla Project will produce a rare earth concentrate that will initially be shipped to refineries that will produce NdPr Oxide and other separated rare earths products. Longer-term there is the potential for the Ngualla Project to move further downstream into the production of a Mixed Rare Earth Carbonate and potentially NdPr Oxide. NdPr Oxide is a critical component of high-strength permanent magnets, which are used in the production of electric vehicles and wind turbines. The demand outlook for NdPr Oxide is strong and closely aligned to global trends around decarbonisation, the electrification of transport and renewable energy generation. The Ngualla Project has the benefit of a complete offtake solution covering 100% of its rare earth production for an initial 7-years term. High-Grade Ore Reserves1 TREO - 4.80% and NdPr - 1.02% Multi-Generational 24-year life-of-mine based on Ore Reserves, which account for less than 20% of Mineral Resources1 Low Radionuclides1 U - 15ppm and Th - 53ppm Significant milestones were achieved at the Ngualla Project during FY2024 which support the future development of the Ngualla Project. More information on our assets and activities can be found on our website and in our Annual Report. 1See Completion of FEED Study announced on ASX on 30 November 2023 and the Compliance Statement on page 102. Significant Explorations and Development Upside Includes heavy rare earths, niobium, phosphate and fluorspar Compelling Project Economics1 NPV8% of USD$1,483m and IRR of 37.3% 2024 ANNUAL REPORT | 5 At Peak, we act with integrity to achieve our purpose and to ensure the safety, health and wellbeing of our people and communities. Our corporate governance framework is expressed in our Corporate Governance Statement and Board Charter, where roles, responsibilities and structures of the Board are defined. Integrity Ethics, transparency and adherence to anti-bribery and corruption Accountability Reliability, trust and responsibility Progressive Innovation, diversity, new technologies and commitment to continuous improvement, empowerment and speaking up Safety, health & wellbeing Commitment to safety best practice and the health and wellbeing of the team Sustainability Long term sustainability ethos VISION AND VALUES 6 | PEAK RARE EARTHS OUR VALUES ‘Kazi wajibu utu’, which translates to ‘working responsibly to better humanity’ in Swahili, is the belief that underpins our purpose, and approach to sustainability. We are committed to delivering low carbon technologies to drive the decarbonisation transition. This commitment is essential to ensuring the long-term success of our business. PEAK VALUES STATEMENT We act with integrity to achieve our purpose and to ensure the safety, health and wellbeing of our people and communities. We are accountable to our shareholders, employees, and stakeholders to deliver and operate our assets by employing a sustainability ethos and a progressive mindset. By adopting the kazi wajibu utu principle, we are clear on the pathway to evolve Peak’s culture and derive how we go about delivering our purpose. 2024 ANNUAL REPORT | 7 MESSAGE FROM THE EXECUTIVE CHAIRMAN Dear Peak Shareholders, I am pleased to provide you the Annual Report for Peak Rare Earths Limited (Peak or the Company) for a highly productive 2024 Financial Year. In a year when we have seen a great deal of short-term weakness in the pricing of rare earths, Peak was able to make critical progress in taking forward the development of our Ngualla Project in Tanzania. Our conviction for the quality of the Ngualla Project has remained steadfast throughout the volatility. We have had to adapt our development strategy with the changing market conditions and done so in a pragmatic way, always with the best interests of Peak shareholders at the heart of our decisions. This culminated in a truly landmark term sheet agreement with Shenghe in July 2024 which we expect will underpin a pathway for a final investment decision for Ngualla in late 2024. We are now in the process of finalising the transaction documentation and execution ahead of a shareholder meeting expected in fourth quarter 2024. I highly encourage all shareholders to support the transaction. Shenghe shares our view that Ngualla is the best rare earth development project in the world. The Project has a large, high grade deposit supporting a long mine life with untapped exploration upside. The Project has key approvals in place and has been de-risked through extensive technical studies which will be further enhanced through the rare earth expertise of Shenghe. In addition, we now have very strong indicators of a potential Phosphate Project. In a market where it is challenging to finance even the highest quality rare earth projects, our agreement with Shenghe provides for a fully funded solution with no requirement for further equity funding from Peak for the development of the Ngualla project. Building on our offtake agreement with Shenghe, we believe we now have a dedicated partner that has the experience and intellectual property to backstop development costs and work collaboratively to optimise Ngualla and make it a major contributor to the global renewables transition. Our strategy locks Ngualla immediately into the existing supply chains for the delivery of rare earths into global markets while retaining medium to longer-term flexibility. The fundamentals of the renewable energy transition remain strong and linked to the continued growth of global economies. One of the most rewarding things about our progress this year is the impact it will have locally in Tanzania. Tanzania is rapidly emerging as a premier mining jurisdiction with strong support for our industry across all levels of Government. Mining has been an important factor in making the country 02. 8 | PEAK RARE EARTHS one of the fastest growing economies in Africa with an average GDP growth rate of 6.1% over the past decade. I reiterate our collective commitment to the development of Ngualla having tangible benefits for the nearby Ngwala Village and the broader Songwe Region. We endeavour to live by our underlying belief in ‘Kazi Wajibu Utu’, a phrase in Swahili for ‘working responsibly to better humanity’. Through our subsidiary in Tanzania, Mamba Minerals, we continue to prioritise and actively engage with nearby communities. These ongoing initiatives include the construction of classrooms for the new Ngwala Secondary School, development of a police post and the commencement of a tree planting campaign aimed at planting 300 trees around schools, health centres and other public areas. You can read more about these initiatives and other important environmental and social issues in the Sustainability section of this Annual Report. Our management team, under the leadership of Chief Executive Officer Bardin Davis, should be commended for their dedication and achievements in the face of strong headwinds this year. Thank you also to my fellow Board members for their guidance and direction. Special mention also to our growing team in Tanzania which is a critical part of our future success. My message to shareholders is that we have a fantastic opportunity ahead if we see through the cycle and bring Ngualla into production with a truly aligned and capable partner. There is plenty to be excited about in what will be another dynamic year ahead. Yours faithfully, Dr Russell Scrimshaw AM Executive Chairman 2024 ANNUAL REPORT | 9 MESSAGE FROM THE CHIEF EXECUTIVE OFFICER 03. Dear Peak Shareholders, The Financial Year 2024 was transformational for Peak, Mamba Minerals and the Ngualla Project. During the period, the Ngualla Project was further de-risked from a technical, regulatory, offtake and funding perspective and is now firmly positioned as the most advanced rare earth development project in the world. In November 2023, we delivered a Front-End Engineering and Design (FEED) Study, which supported a technically and economically enhanced Ngualla Project. It built upon a Bankable Feasibility Study Update (BFS Update) completed in October 2022 and an initial Bankable Feasibility Study in April 2017. Notwithstanding an allowance for broader inflationary pressures, the FEED Study supported lower capital and operating costs compared to the BFS Update. The FEED Study re-affirmed the world-class status of the Ngualla Project, which is supported by high-grade Ore Reserves and a long life-of-mine. Our strategic relationship with our major shareholder, Shenghe Resources, is a key point of differentiation from our rare earth development peers. Shenghe Resources is an international rare earth group, listed on the Shanghai Stock Exchange and is the largest importer of rare earth concentrate into China. They are internationally recognised for their rare earth expertise and have a proven track-record of providing a combination of offtake, investment, funding and technical support to MP Materials’ Mountain Pass Project in the United States. In August 2023, we announced the execution of a binding offtake agreement and a signed non-binding memorandum of understanding (MOU) with Shenghe Resources, covering co-operation on delivering an engineering, construction and funding solution for the Ngualla Project. The binding offtake agreement covers 100% of concentrate production and 50% of any intermediate or final separated rare earth oxides. It has a 7-year term with “take or pay” obligations and support a high degree of rare earth payability. Our partnership with Shenghe, was further strengthened in July 2024, with the signing of a non-binding Term Sheet supporting a fully funded solution for the Ngualla Project. This entails Shenghe investing ~A$96m to subscribe for a 50% interest in Peak’s wholly owned subsidiary, Ngualla Group UK Limited (NGUK), which holds an 84% effective interest in the Ngualla Project. The difference between the Ngualla Project’s total development costs and Shenghe’s investment of ~A$96m is to be funded via a Shenghe arranged debt facility. Importantly, upon completion, Peak will not have to contribute any further development equity to the Ngualla Project. 10 | PEAK RARE EARTHS Under the Term Sheet, Shenghe will also deliver a competitive and low-cost engineering and development solution with incentive and penalty mechanisms to support a material reduction in capital costs and an expedited development schedule. Since the signing of the Term Sheet, Peak and Shenghe have made considerable progress in identifying major project optimisation and cost reduction opportunities. Whilst our primary focus remains on developing our rare earth project, we believe there is the potential to also develop other critical mineral projects within our Special Mining Licence area. To this end, we initiated a new exploration programme focused on two highly prospective areas within the deposit, the Northern Zone and the Breccia Zone. The programme has identified widespread and high-grade phosphate mineralisation within the Northern Zone and a major high-grade fluorspar discovery within the Breccia Zone. Following the completion of bioavailability analysis of our phosphate samples, which confirmed its potential use as a direct application phosphorus fertiliser, we signed a non- binding MOU with Minjingu Mines and Fertiliser Limited. Key aspects of the MOU include co- operation around sales, offtake and co-investment and the development of a low-cost beneficiation flowsheet. Our commitment to sustainability is well captured by the Swahili phrase, “Kazi Wajibu Utu”, which translates to “working responsibly to better humanity”. We have continued to provide strong support to the Ngwala Community through a range of programmes including the ongoing maintenance and enhancement of regional roads, the provision of a resident paramedic to support the local medical clinic as well as major health and education initiatives. On behalf of the Company, I would like to extend my appreciation to our employees, contractors, local communities, the Government of Tanzania, the board of directors of both Peak and Mamba Minerals and our shareholders for their engagement and support. We look forward to working with all of our stakeholders in moving forward with the targeted commencement of construction and development of the Ngualla Project during Financial Year 2025. Yours faithfully, Bardin Davis Chief Executive Officer 2024 ANNUAL REPORT | 11 REVIEW OF OPERATIONS Peak Rare Earths Limited continued to progress the pre-development and commercialisation of its world-class Ngualla Project in Tanzania. Key events over the 12 months to 30 June 2024 and to the date of the Directors report are as follows: • Signing a non-binding investement, Funding and Development Term Sheet with Shenghe; • Executing a binding offtake agreement and a non-binding strategic EPC and funding MOU for the Ngualla Project; • Signing a non-binding Debt Term Sheet supporting US$176.6m of debt; • Completing a Front-End Engineering and Design (FEED) Study; • Initiating a Cost and Optimisation Study; • Advancing early and enabling works and other technical initiatives; • Advancing resettlement and land valuation activities; • Undertaking a critical minerals exploration programme that confirmed widespread and high-grade mineralisation of phosphate, fluorspar, niobium and rare earths; • Signing a non-binding MOU with Minjingu Mines and Fertiliser for the future supply of phosphate; • Enlarging the Ngualla Project Special Mining Licence (SML) area from ~18km2 to ~51km2; and • Acquiring freehold title and commencing a sale process of the Teesside industrial land site. SIGNING A NON-BINDING FUNDING AND DEVELOPMENT TERM SHEET WITH SHENGHE On 24 July 2024, Peak announced the signing of a non-binding Term Sheet (Shenghe Term Sheet) with Shenghe Resources Holding Co., Ltd. (Shenghe) covering an integrated investment, funding and development solution for the Ngualla Project. This represents a significant de-risking milestone for the Ngualla Project and positions it as the only rare earth development project globally with a complete offtake, development and funding solution1. As part of a fully funded solution, Shenghe is to invest ~A$96m to subscribe for a 50% interest in Peak’s wholly owned subsidiary, Ngualla Group UK Limited (NGUK), which holds an 84% effective interest in the Ngualla Project. The difference between the Ngualla Project’s total development costs and Shenghe’s NGUK investment of ~A$96m is to be funded via a Shenghe arranged debt facility, which is expected to be on terms more favourable than a typical international project financing facility. Upon completion, Peak will not have to contribute any further development equity to the Ngualla Project. 1See 24 July 2024 ASX Announcement – Signed Term Sheet with Shenghe for A$96m Investment and Fully Funded Project Solution for Ngualla 04. 12 | PEAK RARE EARTHS Other key elements of the agreed Term Sheet include: • Formation of a Joint Owner’s Team to further optimise the Ngualla Project and reduce costs; • Shenghe to have a 55% share of NGUK net earnings or losses after tax for the first 5 years following the commencement of commercial production; • Each party to appoint two Directors to the NGUK Board, with Peak retaining a casting vote; • Each party to appoint a Director to Mamba Minerals Board, with voting to be in accordance with NGUK instructions; • An extension of the existing standstill restrictions limiting Shenghe to a 19.9% interest in Peak to 30 September 2027; and • An industry standard right of first refusal mechanism. Completion of the NGUK investment remains conditional upon: • Shenghe being awarded an EPC, EPCM or EPS contract; • Shenghe delivering an actionable project funding solution; • Approvals from Chinese regulators; and • Peak and Shenghe shareholder approval. Peak and Shenghe have agreed to work collaboratively to further optimise the Ngualla Project and to expedite its development and construction. Figure 1: Funding and Investment Structure 2024 ANNUAL REPORT | 13 EXECUTION OF A BINDING OFFTAKE AGREEMENT On 8 August 2023, Peak entered into a binding offtake agreement with Shenghe Resources (Singapore) Pte. Ltd. (Shenghe Singapore), a wholly owned subsidiary of Shenghe. Key terms of the binding offtake agreement include: • Products - 100% of rare earth concentrate and, subject to entering into subsequent binding offtake agreements, a minimum of 50% of any intermediate (e.g. a Mixed Rare Earth Carbonate) or final separated rare earth products (e.g. NdPr Oxide); • Take-or-Pay - Shenghe Singapore is obligated to pay for and take delivery of all agreed products; • Pricing – market-based pricing formula based on the value of contained rare earth oxides less deductions relating to VAT, trading fees as well as refining recoveries, charges and margins; and • Term - an initial term of 7 years, which may be extended by mutual agreement. All conditions precedent within the Offtake Agreement have been either satisfied or waived. SIGNING A NON-BINDING DEBT TERM SHEET SUPPORTING US$176.6M OF DEBT Prior to the signing of the Shenghe Term Sheet, Peak had, as part of a dual track process, been exploring the potential of a South African led EPCM execution model supported by an international project financing facility. In support of this alternate approach, Peak announced on 16 July 2024 the signing of a non-binding indicative Lenders Consortium Term Sheet, which underpinned aggregate debt of US$176.6m. Following the signing of the Shenghe Term Sheet, it is expected that a Shenghe arranged debt facility will be on terms more favourable than those included in the Lenders Consortium Term Sheet. Accordingly, Peak’s primary focus will be to work with Shenghe on finalising an attractive and actionable debt facility. The Shenghe arranged debt facility may include some of the lenders within the Lenders Consortium. COMPLETION OF THE NGUALLA PROJECT FRONT-END ENGINEERING AND DESIGN STUDY A FEED Study on the Ngualla Project was finalised in November 2023 and re-affirmed the Ngualla Project’s position as one of the world’s most advanced and attractive undeveloped rare earths projects. Key aspects of the FEED Study included the following: • Optimisation of the process plant, airstrip, road and Tailings Storage Facility (TSF); • Adoption of contracting mining and a hybrid Build Own Operate (BOO) power solution; • Progressing geotechnical and hydrological drilling; • Identification of capital cost savings including those attributable to roads, bulk earthworks, TSF, power, reagents and logistics; and • A reduction in operating costs through lower power, logistics and reagent solutions. 14 | PEAK RARE EARTHS Notwithstanding an allowance for global inflationary pressures in the updated cost estimates, the FEED Study delivered materially lower capital and operating costs compared to the BFS Update, which was completed in October 2022. Estimated upfront capital costs decreased from US$320.7m to US$286.9m (an 11% decrease) and average annual operating costs reduced from US$93.3m to US$76.7m (an 18% decrease). PROJECT ECONOMICS A summary of the updated project economics relating to the FEED Study is set out in Table 1, which incorporates revised long-term price projections from Adamas Intelligence (Adamas) published subsequent to the completion of the FEED study. The Ngualla Project retains highly attractive project economics and valuations, including an estimated NPV8%, real of ~US$809m (~A$1,245m) under the Adamas Base Scenario and ~US$584m (~A$898m) under the Adamas Downside Scenario. Table 1. Updated project economics Pricing scenarios Financial Metrics* Unit Adamas Base Adamas Downside US$120/kg (flat) US$100/kg (flat) Net payability (LOM) % 52.9% 51.9% 50.8% 49.9% Average annual revenue US$m pa 355 299 235 194 Average annual EBITDA US$m pa 238 191 134 99 Peak NPV8%, real US$m 809 584 384 208 Peak NPV10%, real US$m 610 427 278 132 IRR % 30.8% 26.1% 24.7% 18.8% *Financial outputs shown are net of distributions to the Government of Tanzania which include corporate taxes, royalties and other fees, and dividends attributable the GOT’s 16% free-carried interest. Net Present Value estimations have used real discount rates. A summary of the All-In Sustaining Cost (AISC) profile for the Ngualla Project at different NdPr Oxide prices is set out in the chart below. The AISC estimates are inclusive of operating costs, by-product credits, royalties, rehabilitation provisions, sustaining capital expenditure and shipping costs to China. The chart highlights the financial robustness of the Ngualla Project and its capacity to generate strong margins even at lower rare earth prices. Figure 2: AlSC analysis 2024 ANNUAL REPORT | 15 2 See 30 November 2023 ASX Announcement – Ngualla Rare Earth Project Completion of FEED Study. Further details on the FEED Study outcomes are set in the Peak ASX Announcement dated 30 November 2023, titled “Ngualla Rare Earths Project Completion of FEED Study”. The Company confirms that aside from the changes to rare earth pricing assumptions that have been referenced in subsequent announcements and ongoing cost savings and optimisation initiatives, at this time it is not aware of any new information or data that materially affects the information included in the announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. COST AND OPTIMISATION STUDY At the time of completing the FEED Study for the Ngualla Project, further optimisation and cost reduction opportunities were identified. Following the enlargement of the Special Mining Licence (SML) in April 2024 from ~18km2 to 51km2, an opportunity was identified to reconfigure the layout of the project. In June 2024, a Cost and Optimisation Study was initiated to cover these and other potential optimisation opportunities including: • Building relocation and layout optimisation – relocating buildings, plant and storage facilities from Ngualla Hill to flatter areas, reducing bulk-earthworks and required capex on the Plant Access Road; • Optimisation of contract packages - including reducing unit rates via combining packages for earth works, civils, quarry, TSF construction and mining; • Deferral of new airstrip – by remediating and expanding the existing airstrip; • Increased plant availability - revising plant availability from 80% to 88% based on a peer benchmarking exercise; • Re-scope buildings and storage facilities - utilising lower cost local construction solutions, removing unnecessary coverings and reducing storage capacity; and • Adopting more competitive tendering solutions – supporting reductions in logistics and power costs. Following the signing of the Shenghe Term Sheet, a Peak-Shenghe Technical Steering Committee was formed, that identified the following additional cost reduction and optimisation opportunities: • Relocation of the TSF – from the top of Ngualla Hill to a flatter area within the enlarged SML; • Adoption of a single flotation process – shifting from a two-stage fand a one-stage flotation process with the use of more selective bespoke reagents; • Redesign of the processing plant – relocating the processing plant from Ngualla Hill to better optimise the use of gravity and to reduce reliance upon pumping; and • Adoption of lower cost plant, equipment and engineering solutions – by utilising Shenghe’s longstanding relationships with vendors. It is intended that the Wood Group will also assist in reviewing and assessing these opportunities. 16 | PEAK RARE EARTHS ADVANCEMENT OF EARLY AND ENABLING WORKS AND OTHER TECHNICAL INITIATIVES During the period, key early and enabling works and initiatives for the Ngualla Project were advanced including: • Completion of geotechnical drilling and core sample selection; • Expansion of the existing Ngualla Camp including, construction of a new office building, upgrading IT, communications and safety systems and connecting the Ngualla Camp to the TANESCO power grid; • Constructing a weather and communications tower; • Identifying and developing several borrow pits and quarries; • Commencing the extension of the existing airstrip; • Advancing upgrade works to the Southern Access Road; • Completing geotechnical assessments for the TSF and process plant areas; • Undertaking a TSF breach analysis and re-evaluating the location of some infrastructure and plant. • Finalising a water borehole drilling programme within the enlarged Ngualla SML; • Progressing hydrology studies covering both project and Ngwala community water requirements; • Completing additional ore variability analysis, which has increased confidence around responding to ore variation through minor adjustments to reagent dosages; • Progressing planning around water treatment options and follow-up testwork; • Completion of a Life Cycle Analysis for the Ngualla Project; and • Ongoing baseline studies as part of an environmental management plan. ADVANCEMENT OF RESETTLEMENT AND LAND VALUATION ACTIVITIES Substantial progress was made on resettlement and land valuation workstreams during the year. Key activities progressed include: • Engagement of a Tanzanian land valuer, Property Matrix, to support the co- ordination and delivery of an IFC compliant resettlement and compensation process; • Meetings with the local Village Counsel, Songwe Region Land Commissioner and District Commissioner; • Completion of the land area surveys; • Assessment of the land, crop, building and asset compensation estimates; and • Referral of the compensation estimates to the Village Counsel and the affected individual landowners. Resettlement and land valuation activities are targeted to be finalised by October 2024. CRITICAL MINERALS EXPLORATION PROGRAMME3 During the period substantial progress was made on a critical minerals exploration programme targeting the multi-commodity potential of the Ngualla carbonatite system. To date, the programme has focussed on two particularly prospective areas of the Ngualla deposit: 2024 ANNUAL REPORT | 17 • Northern Zone - prospective for a range of critical minerals including phosphate (used in fertilisers and lithium iron phosphate EV batteries), niobium (used in high- tech and green energy applications including niobium-titanium oxide EV anode cells) and rare earths (used in high strength permanent magnets in EVs, wind turbines, robotics and other electronic devices); and • Breccia Zone – prospective for fluorspar (used in electrolytes within lithium batteries and to purify graphite anodes). Key activities progressed during the year included: • Development of a geological model for the Northern Zone; • Assay of 344 trench samples from Breccia Zone; and • Completion of 57 drill holes for 4,200m of total drilling across the Northern Zone and Breccia Zone. A summary of the drilling is set out in the table below. Table 2. Exploration drilling programme 3 Further details on the results of the critical minerals exploration programme are set out in the following ASX announcements: • 18 December 2023 - First Assay Results from Exploration Programme • 5 February 2024 - Breccia Zone Trench Samples Assay Results • 26 February 2024 – Phosphate Bioavailability Test Results • 4 March 2024 – Further Northern Zone Exploration Assay Results • 20 March 2024 - Major high-grade fluorspar discovery The Company confirms that at this time it is not aware of any other new information included in the announcements and that all material assumptions and technical parameters underpinning the estimates in the announcements continue to apply and have not material changed. Northern Zone Breccia Zone Total RC 44 holes / 3,104m 11 holes / 885m 55 holes / 3,989m DD - 2 holes / 211m 2 holes / 211m Total 44 holes / 3,104m 13 holes / 1,096m 57 holes / 4,200m Results Drilling completed in the Northern Zone confirmed widespread and high-grade phosphate mineralisation as well as high grade intercepts of niobium and rare earths. Key intercepts included: • NRC384 - 28m at 16.7% Phosphate (P2O5) from 6m and 41m at 22.9% P2O5 from 39m to end of hole; • NRC388 - 40m at 20.3% P2O5 from 6m; • NRC367 - 60m at 20.5% P2O5 from 10m; • NRC368 - 32m at 22.0% P2O5 from surface, 10m at 19.5% P2O5 from 38m and 8m at 22.3% P2O5 from 64m • NRC356 - 14m at 0.55% Niobium (Nb2O5) from 14m including 10m at 0.61% Nb2O5 from 14m, as well as 14m at 14.5% P2O5 from 16m; • NRC372 - 62m at 1.26% Nb2O5 from surface including 36m at 1.88% Nb2O5 from 22m; the highest- grade niobium intercept at Ngualla to date; and • NRC375 - 10m at 23.0% P2O5 from surface and 11m at 18.8% P2O5 from 46m. Rare earth mineralisation within these assay results was also associated with enriched levels of heavy rare earth elements (terbium and dysprosium) and a higher overall basket value compared to rare earth mineralisation within the Bastnaesite Zone (which forms the basis of the Ngualla Project’s Ore Reserves). 18 | PEAK RARE EARTHS Drilling results received from Breccia Zone trench samples demonstrated extensive high- grade fluorspar mineralisation across the entire ~3.7km extent of the area supporting the potential of a high-grade and globally significant fluorspar deposit. High-grade rare earth mineralisation was also identified within the northern Breccia Zone. Key intercepts from the Breccia Zone trench samples included: • NC010 - 70m (end of trench) at 36% Fluorspar (CaF2) from 0m; • NCS013 - 114m at 46% CaF2 from 32m including 44m at 65% CaF2 from 80m; • NCS020 - 34m at 39% CaF2 from 42m including 8m at 68% CaF2 from 64m; • NCS021 - 68m at 2.9% Total Rare Earth Oxide (TREO) from 24m including 6m at 6.9% TREO from 26m; and • NCS023 - 28m at 2.0% TREO from 30m including 6m at 3.5% TREO from 38m. Figure 3: Northern Zone Assay Contours for Phosphate 2024 ANNUAL REPORT | 19 SIGNING OF A NON-BINDING MOU WITH MINJINGU MINES AND FERTILISER In April 2024, Peak announced a non-binding Memorandum of Understanding (MOU) with Tanzanian phosphate and fertilizer group, Minjingu Mines and Fertiliser Limited (Minjingu Mines) around the future supply of phosphate from the Ngualla Project. Minjingu Mines has extensive experience in the Eastern and Southern African fertiliser market and operates the Minjingu Phosphate Mine in Tanzania, one of the only active phosphate mines in Eastern Africa, where it produces a range of organic and blended fertiliser products. Figure 4: Breccia Zone Drill Results Highlights 20 | PEAK RARE EARTHS Under the terms of the non-binding MOU, Peak and Minjingu Mines agreed to evaluate potential co-operation around the future development of phosphate from the Ngualla Deposit including: • Mining and beneficiation; • Offtake and sales arrangements; • Transport and logistics; and • Potential joint venture, co-investment, partnering and funding structures. A joint study group was also formed to expedite the development of a low-cost phosphate beneficiation flowsheet. The MOU with Minjingu Mines followed an identified opportunity to supply phosphate into the regional fertiliser sector. Preliminary bioavailability testwork completed during February 2024 confirmed the potential use of Ngualla phosphate as a direct application phosphorus fertiliser, with composite samples showing high levels of bioavailability under standard laboratory conditions. Figure 5. Bioavailability of phosphate 1’High’ bioavailability – greater than 9.4; ‘’Medium’ bioavailability – between 6.7 and 8.4; ‘Low’ availability – less than 6 (‘Solubility Test in Some Phosphate Rocks and their Potential for Direct Application in Soil’, Gholizadeh et al, 2009) ENLARGEMENT OF THE NGUALLA SML AREA In April 2024, the Tanzanian Mining Commission approved a near tripling of the size of the Ngualla Project SML area. As provided under the terms of the Framework Agreement with the Government of Tanzania, the enlarged SML area was expanded to include two Prospecting Licences previously held within the Peak Group. Following the enlargement, the total SML area increased from ~18km2 to ~51km2, providing a substantial landholding to accommodate the initial development of the Ngualla Project as well as exploration and growth initiatives. 4See 26 February 2024 ASX Announcement – Phosphate Bioavailability Test Results 2024 ANNUAL REPORT | 21 Key benefits from enlarging the SML area include: • A larger footprint to develop the Ngualla Rare Earth Project and associated infrastructure requirements; • Capacity to relocate the TSF, power plant, processing plant and storage capacity from Ngualla Hill to flatter areas within the enlarged SML; • Greater capacity to co-develop concurrent rare earths, phosphate and fluorspar projects as well as support future expansions; • Increased flexibility around the location for a potential MREC facility, which is consistent with Peak’s longer-term downstream strategy; and • Enables future exploration over the broader area. Consistent with the multi-generational potential of the Ngualla Project, the initial term of the enlarged SML has been extended to 30 years with an ability to apply for future extensions. Figure 6: Enlarged SML area for the Ngualla Project 22 | PEAK RARE EARTHS ACQUISITION OF FREEHOLD TITLE AND COMMENCING A SALE PROCESS OF THE TEESSIDE SITE In March 2024, Peak acquired freehold title over its 19-hectare Teesside site from Homes England, which followed the exercise of a £1,858,712 option to enter a 250-year lease in May 2021. Key benefits of freehold title include a higher land value relative to a long-term lease and greater flexibility around future development and exit options. The Teesside site is no longer a core asset given: • The adoption of a sequenced development strategy entailing the initial development of the Ngualla Project as a standalone high-grade concentrate project; and • A longer-term intention of developing Tanzanian downstream operations including a MREC facility. Since entering into the option agreement in July 2018, the broader Teesside area has established itself as an emerging green energy hub. The site is also strategically positioned within the Teesside designated freeport and within 3km of the deep-water Teesport. It also benefits from existing access to reliable competitively priced power, utilities and services. Following strong inbound interest, Peak commenced a sale process for its Teesside site in the United Kingdom. A sale of the Teesside site would provide Peak with an additional source of capital. BOARD APPOINTMENTS AND MANAGEMENT CHANGES Board appointment On 1 July 2023, Hannah Badenach was appointed as a Non-Executive Director. Management changes On 15 August 2024, Johan Coetzee commenced employment as the Ngualla Project Director with responsibility to manage and oversee the construction and commissioning of the Ngualla Project. Johan holds a 30-year track-record in developing and constructing African mining projects and holds a Bachelor of Electrical Engineering, Master in Strategic and Change Management and a Master in Project Management. The following individuals ceased employment with Peak: • Lello Galassi, Head of Development and Operations, resigned for health reasons in July 2024; • Following the successful execution of an offtake agreement with Shenghe, Andrea Cornwell’s role as Head of Marketing and Sales, was made redundant and she ceased employment in December 2023; and • Ray Anguelov, Head of Technical Services, ceased employment on 6 September 2024. Peak would like to thank Lello, Andrea and Ray for their substantial contribution to Peak and the Ngualla Project. 2024 ANNUAL REPORT | 23 RISK MANAGEMENT The Company is exposed to various risks which could negatively affect the company’s strategies, financial prospects, and activities. In accordance with the company’s Risk Management Policy guidelines, during the period Peak evaluated the key risks inherent to its business and stakeholders during the period. A comprehensive corporate Risk Register is the framework for which risks are identified and controlled by the Executive Management team, and to which the Audit, Risk & Sustainability Committee and Board has oversight. The Risk Register defines and prioritises the risks, and pre and post mitigation ratings. Risk owners are assigned and are responsible for mitigation action planning and review. With respect to the governance of the company’s Risk Management Framework, the Audit, Risk & Sustainability Committee assists the Management team to identify and manage project and operations, commercial and financial, corporate and strategic, environmental, social, governance and sustainability, and compliance and regulatory risks. Material risks that were identified, reassessed, and managed by the company during FY2024 include but are not limited to the risks listed in table below (not in order of priority). The mitigation and a year-on-year change to the risk trend is indicated via the following arrow symbols; (no change), (increasing risk), (decreasing risk). 24 | PEAK RARE EARTHS Health & Safety Risk • No reportable lost time injuries or fatalities were reported for the period. • Risks are controlled through the Safety Management Plan in compliance with Tanzanian Law, the Occupational Health and Safety Policy, and IFC Standard OHS Incident Reporting Guidelines. Regulatory Risk • Regulatory Compliance action plan regarding the establishment of the Mamba entities in Tanzania was implemented. • Anti-bribery and Corruption Policy is in place. • Annual Corporate Social Responsibility (CSR) plan has been developed. • In compliance with Tanzanian Law and IFC Performance Standards, the land valuation, compensation and relocation of affected persons for the Ngualla project is nearing completion (please refer to the Review of Operations and Community Benefit Risk section for details). Opertation & Technical Risk • Enlargement of the Ngualla SML area from ~18km2 to ~51km2. • Project costs and timeline amended following the FEED Study Update. • Advancement of enabling works and technical initiatives. • Identification of potential Ngualla Project capital cost savings. • Progressing with Shenghe on strategic, EPC and funding cooperation. • Critical Minerals exploration programme confirming widespread and high- grade mineralisation of phosphate, fluorspar, niobium and rare earths. • Optimisation test programs initiated for flowsheet design, grade, recovery and optimisation. Counterparty & Funding Risk • Signing a non-binding Funding and Development Term Sheet with Shenghe • Execution of binding offtake agreement with conditions precedent satisfied • Appointment of Macquarie Capital as Peak’s strategic and financial adviser • Receipt of indicative, non-binding expressions of interest for a total of US$176.6m in senior debt funding. Environmental Management & Sustainability Risk • Updates to the Environmental and Social Management Plan for the purpose of project construction, and development of an Environmental and Social Action Plan. • Ongoing seasonal baseline water and water sourcing study completed. • Ecosystem Survey report and Bio-diversity studies completed. • Progression of the company’s strategic Sustainability roadmap including ॰ Updated Materiality Matrix. ॰ Completion of a Life-Cycle-Assessment. ॰ Board incorporated Sustainability into the Risk and Audit Committee. The new Risk, Audit and Sustainability Charter can be found on our website. ॰ Adoption of the Human Rights and Modern Slavery Policy. Macro-economics • Whilst rare earth prices have been impacted by several temporary headwinds, the long-term outlook for rare earths remains positive with market analysts continuing to forecast a growing supply demand deficit and rising prices for NdPr Oxide. • Current challenging equity and capital market conditions. Community Benefit Risk • Following a Human Impact Study, a Land valuation and Resettlement Action Plan (RAP) program is underway and due for completion later in 2024, in parallel with stakeholder engagement with Project-Affected People (PAP). • Ongoing impact assessment of the Ngwala-Kininga Road upgrade completed in FY2022 considering the growth of agribusiness and electrification of the local villages. • Ongoing community engagement and development of a 5-year Social Development Plan. Cybersecurity • Peak engages an Information Technology (IT) firm and uses specialist IT solutions to reduce the impact and likelihood of a potential cyber security event. This is supported by companywide security processes and offsite real-time monitoring for early identification of potential events. As the Company matures, it will continue to monitor and increase its cyber security capability. 2024 ANNUAL REPORT | 25 SUSTAINABILITY 05. KAZI WAJIBU UTU - FOR THE BETTERMENT OF HUMANITY Our approach to sustainability is well captured by the Swahili phrase kazi wajibu utu meaning ‘working responsibly to better humanity’. This philosophy is reflected in our purpose "To be responsible for developing and operating world-class and sustainable rare earth projects that support global decarbonisation, local communities, and shareholder value creation". Sustainability is a core value alongside Integrity, Accountability, Safety, Health and Wellbeing, and Progressive Mindset, and is integrated into every aspect of our business. We recognise the importance of reducing our environmental footprint, supporting our host communities, and embracing diversity. Our goals and objectives are aligned to delivering ongoing improvements over time. We are committed to an inclusive culture, striving to provide a recruitment process as Peak and Mamba grow, that is fair, equitable and accessible for all, as well as a work environment that recognises respect, and celebrates our cultural differences. 'We are working responsibly to build a better, greener and more sustainable future for our communities, customers and stakeholders' 2017 The first BFS was released for Ngualla Project. First baseline Environmental & Social Impact Assessment Study (ESIA) submitted. 2021 A new management team re-activates the Ngualla project under new Tanzanian mining laws. Commence ESIA update work taking into account updated standards and project expansion. 2018 ESIA is approved by the Tanzanian authorities. 2017 2018 2021 26 | PEAK RARE EARTHS 2022 2023 2024 2022 Shenghe becomes a substantial shareholder, and a Strategic and Offtake MOU is executed. The BFS Update is completed, as well as the Environmental and Social Management Plan. Purpose, Values, Sustainability ambition and the first materiality matrix is developed. The corporate risk register is adapted with Sustainability inputs. 46 km Ngwala-Kininga road reconstruction upgrade. Tailings Dam Breach Impact Assessment Study. Baseline bio-diversity (dry season) study, a Health Survey Report and a Cultural Heritage Report were all completed. 2024 Human Rights and Modern Slavery policy is approved by the Board. The Risk and Audit Committee adds ‘Sustainability’ to its charter. Inaugural Sustainability Report is prepared. Groundwater Study completed. Baseline data compilation from all prior studies. 2023 Incorporation of Tanzanian entities – Mamba Minerals and Mamba Refining, execution of Framework Agreement and granting of Special Mining License. Binding Offtake Agreement and Funding MOU with Shenghe. FEED Study, ESIA update work, and Life Cycle Assessment is completed. Stakeholder Survey is conducted, and a new materiality matrix is formed. Completion of Health, Safety and Environment Management Plan and Human Impact Study. Board approves the inaugural Sustainability Policy and Mamba Minerals begins establishing governance and compliance systems and processes. Positive impacts of Ngwala-Kininga road reconstruction are tabled, and Community engagement continues in themes of education, public health and sponsorships. Baseline water sourcing, water quality, Hydrology and Hydrocensus, bio-diversity (wet season) studies were completed. 2024 ANNUAL REPORT | 27 CORPORATE GOVERNANCE Business Ethics & Governance Peak is committed to conducting its operations ethically, with integrity, and in compliance with all applicable laws and regulations. We respect the written and customary laws and practices where we operate. We work together with countries and communities to promote ethical business practices, sustainable development, and equitable distribution of benefits. These commitments are upheld within our Code of Business Conduct which is available on our website. Peak strictly forbids all forms of bribery and corruption and will take reasonable and necessary steps to ensure that such conduct does not occur in Peak’s business operations. Our Anti- Bribery and Corruption Policy ensures the effective monitoring and prevention of unethical business practices. The Policy sets out the standards and practices that are expected of Peak and its personnel and business partners and provides information and guidance to those working with Peak on how to recognise and deal with bribery and corruption issues. This is also supplemented with the Company's Whistleblower Policy. During the reporting period there were no incidents of bribery or corruption reported. These policies are reviewed annually by the Board and updated as required. Training will be provided to all personnel, as appropriate, to ensure they are familiar with all prohibitions and obligations imposed by the policies. 28 | PEAK RARE EARTHS Modern Slavery and Human Rights We support universal human rights as defined in the Universal Declaration of Human Rights and the Voluntary Principles on Security and Human Rights. The Human Rights and Modern Slavery Policy can be found on Peak's website. Through this policy we recognise and respect the wellbeing and dignity of all employees, contractors, families, and communities, and promote civil relations and conflict prevention in the places where we work. We will seek to engage with affected stakeholders to identify the most salient challenges affecting its activities. At Peak we seek to respect and preserve the cultural knowledge and practices of Indigenous Peoples, to engage with Indigenous communities based on the principles of free, prior, and informed consent, and to promote appropriate and sustainable development in a culturally appropriate manner. Understanding the local regulatory context in Tanzania We engage a specialist consulting firm to provide strategic advisory support on monitoring, interpretation and compliance with applicable Tanzanian laws and mining licenses. Weekly and monthly reports are provided to the management team. The support received forms part of the risk mitigation actions undertaken as part of Peak's Risk Register. COMMITMENT TO SUSTAINABLE DEVELOPMENT Our Approach to Sustainability Our sustainability governance is bounded by our Sustainability Policy. The Policy reinforces our sustainability obligations to meet our responsibilities and objectives. Acceptance of the Sustainability Policy is a fundamental term of engagement with the Company and is the responsibility each person who works for, contracts with, or does business with the Company. Implementation of the Sustainability Policy is the responsibility of management under the oversight of the Company Secretary, and the Board. Currently, the Audit, Risk and Sustainability Committee are responsible for the identification and management of environmental, social and governance risks where appropriate. The company is taking into consideration future alignment of remuneration and sustainability targets for future remuneration policy reviews. Our Sustainability Policy is available on our website. 2024 ANNUAL REPORT | 29 Commitment to the UN Sustainable Development Goals Peak has assessed its Sustainability strategy and actions regarding the United Nations Sustainable Development Goals and are pleased to make these public commitments to goals number 4, 8, and 12. Peak’s longstanding work with the local communities over the years continues to enable and improve the education for the local youth, both in terms of school attendance, and in pass rates of national examinations at all levels. Peak looks to create local employment opportunities as the Ngualla Project develops, promoting fair labour practices and driving economic development in the regions where we operate, especially through future job opportunities and by supporting the growth of farming and agricultural trade in the region. Peak will implement sustainable mining practices, minimise environmental impact and promote efficient use of resources throughout its project development. Sustainability Ambition We continue to work on our objective to integrate sustainability into every aspect of our business. We strive to hold ourselves to the highest standards so that the Ngualla Project becomes a long term, environmentally and socially sustainable supplier of choice in the global rare earth market. To ensure we fully embed sustainability into our business as we transition from development to construction and production, we must ensure everyone is aligned with the purpose and values of the business. Our statement of ambition articulates what sustainability means to Peak. It aims to set a standard and give focus to the overall objectives of Peak’s sustainability and ESG activities. Strategic Plan Our ESG roadmap ensures we are targeting global best practice as we mature, increase our scope, and expand transparency. The roadmap timeline reflects and remains aligned with the latest project timelines following the signing of the binding Framework Agreement and issuance of the Special Mining Licence to Mamba Minerals Limited in April 2023, and the commencement of the early works program. The roadmap begins with establishing measurement systems to understand our current level of ESG maturity. Once measurement systems have been established, the next stages are to improve our ESG performance. 30 | PEAK RARE EARTHS FY2022 • Internal stakeholder engagement mapping • Materiality assessment • Sustainability positioning • Annual Report • Gap review and roadmap finalised FY2023 • Sustainability Policy formalised • External Stakeholder engagement survey • Selection of priority materiality topics • Second Annual Report Sustainability section • Governance Review FY2024 • Life Cycle Assessment (LCA) • Updated Materiality Assessment • Preferred ESG frameworks selected • Incorporation of Risk, Audit and Sustainability Committee and Charter • Human Rights and Modern Slavery Policy • Environmental and Social Impact Studies • Inaugural sustainability report FY2025 • Commence reporting against selected Frameworks and build reporting metrics • Engage with ESG rating agencies • Second sustainability report • Supply chain / responsible sourcing engagement project 2024 ANNUAL REPORT | 31 SOCIAL COMMITMENT Health and Safety The health and safety of all employees, contractors, visitors and community members is of paramount importance. We are committed to the elimination and control of hazards and the promotion and enforcement of safe working practices and behaviours. Zero fatalities Zero TRIFR In the Ngwala region, poisonous snakes are prevalent and are common within nearby villages and the Ngualla Project SML. There has been prior incidences of fatal snake bites in the community. To mitigate this risk, several measures have recently been implemented: These measures aim to enhance the safety and preparedness of both the camp staff, visitors and the local communities in the event of snake encounters. In support of the local community, Peak has recently engaged a paramedic to support the Ngualla Project Camp and the Ngwala Medical Centre. The Company also intends to support the completion of the maternity ward at the Ngwala Medical Center. • Training programs We launched the first of our training programs in June 2024 and all Ngualla camp staff received comprehensive snake handling and first aid training, specifically for snake bites. • Health and Safety Personal Protective Equipment (PPE) The company has procured PPE such as anti-snake gaiters to enhance personal protection from snake bite prevention. • Environmental controls Efforts are made to maintain clean and snake-free surroundings. Fine mesh wires have been installed around the camp to deter snakes from entering the compound. • Antivenom availability Mamba has purchased antivenom for both Ngualla Camp personnel and community use. • Healthcare training The company is planning for training of the personnel at the Ngwala Health Centre, to ensure they are equipped to administer antivenom if needed. 32 | PEAK RARE EARTHS Social value creation We aim to enhance the communities where we operate by prioritising community development, community benefits, security, and health, and safety. In addition to creating employment opportunities, our social initiatives open doors for new and expanded agricultural activities, fostering potential population growth in the area. This growth would naturally lead to the development of associated infrastructure. Road impact on agricultural trade Last year, we disclosed our efforts in reconstructing 46 kilometres of the Ngwala-Kininga Road in Tanzania. Through FY2024, with support from the Songwe District Council and the Tanzanian Rural and Urban Road Authorities, we have conducted repairs on extensive sections of the road degraded by heavy rains during the wet season. Our annual budget for the project was approximately US$210,000. This work has continued to provide significant positive impacts on the local Ngwala community by improving connectivity, social development, and economic growth. The road has improved accessibility which has lowered transport costs, driving greater demand for agricultural trade and the community is benefitting from increased business transactions and income. Since the Ngwala-Kininga road upgrade, prices of agricultural products have been on the rise as buyers and trucks can now come directly to Ngwala village to purchase and transport produce which has lifted the demand for the produce. The renewed interest in agriculture, is increasing the size of the market for the farmers' produce. To maintain this growth, we are developing a livelihood program aimed at enhancing the income of individuals and households in surrounding communities and improving food security. The program will span over a five-year period and involve engagement with local agriculturalists to enhance current farming practices. FY2024 Diversity Breakdown Male Female Total Tanzanian Nationals Peak Board of Directors 4 2 6 1 Peak Employees 8 2 10 0 Mamba Board of Directors 5 0 5 4 Mamba Employees (Tanzania) 17 5 22 21 Diversity We are dedicated to fostering workplace diversity throughout our corporate and site- based operations. We understand the numerous benefits that stem from having a diverse workforce and Board, such as attracting a broader pool of high-quality talent, enhancing employee retention, incorporating varied perspectives and ideas, and fully leveraging all available skills and expertise. Diversity includes, but is not limited to, gender, age, ethnicity and cultural background. Our commitments are upheld within our Diversity Policy which employees are expected to comply. It is our intention to actively provide and maintain a fair and discrimination-free workplace. Formal female workforce targets are not explicitly set to ensure all available skilled workers are available as candidates to the company, but we do desire and will strive for gender diversity numbers with step-by-step improvements over time should male employment dominate in the early years of our development in Tanzania. 2024 ANNUAL REPORT | 33 Road impact on health access The road construction has also provided access for the Government to commence construction of the Ngwala Medical Centre. The centre will ultimately consist of 13 buildings, including an Outpatient Department (OPD) with six doctors’ rooms, a theatre, a maternity unit, male and female wards, as well as laundry facilities. The road has ensured efficient and affordable transportation of construction materials. The OPD building is currently operational, while other buildings are still under construction. We are currently collaborating with local authorities to determine how we can further contribute to the process, for example, with provision of medical equipment and supplies. The medical centre will service approximately 15,000 community members. Road impact on access to electricity With greater accessibility to the local communities now available, the Tanzanian Government has installed a power line from Kapalala ward to Ngwala that have brought electrification to these communities that were not previously connected to the national electricity grid. Before this, locals relied on the use of small solar panels and kerosene lamps. Powerline installation is now complete with electric meters now being connected and electrification infrastructure extended to the Ngualla Project’s camp facilities. COMMUNITY ENGAGEMENT Each year in August the local communities celebrate Nanenane, “National Farmers Day”. As part of these celebrations, Peak has been sponsoring a sports festival since 2014, which sees various sports, games and singing and dancing take place. This year the company hosted and was joined by three officials from the Department of Sports and Culture. At the festival we launched various health awareness campaigns including a blood donation drive. In collaboration with the Songwe District Medical Office, health attendants from the Mwambani District Hospital conducted the blood donation program to address a shortage of blood with the District Blood Bank. Supporting local education In August 2022, we commenced a reward program to encourage young students to participate in the Inter- school Examination Program by providing incentives to local students to support their educational outcomes. The program rewards students for taking the National Examination which is essential for high school eligibility. Teachers have noted an increase in meaningful engagement during class with students putting in more effort to learn and pass their exams. Students who perform well are rewarded with gifts such as exercise books, pens, uniforms, and school bags. Since the program began, class attendance has significantly improved from ~60% attendance to nearly 100%. 34 | PEAK RARE EARTHS Students who sat for National exam Students who passed the exam Pass rate (%) 2022 2023 2022 2023 2022 2023 Ngwala Kati Primary School 57 84 27 60 47 71 Ngwala Magereza Primary School 22 24 9 14 41 58 Itiziro Primary School 25 26 12 20 48 80 TOTAL 104 134 48 94 46 70 We have also begun to reward students who demonstrate positive progress in their learning, show good discipline, uniform cleanliness, and active participation in sports. Previously, prizes were given on an annual basis, however this year, prizes will be given each semester. Recently, the Company begun the construction of 2 new classrooms at the Ngwala secondary school. The new classrooms will enable the school to take on additional students and enable registration of new form one students next year. Upon completion, the School will be eligible for secondary school registration which will open up additional funding from the regional Government. 2024 ANNUAL REPORT | 35 Electrification During FY2024, Mamba Minerals entered into an agreement with the Tanzanian Electric Supply Company Limited (TANESCO), to connect the Ngualla Camp to the local power grid. Work to extend the TANESCO electrification poles and wire infrastructure to the camp commenced in May 2024 and connection was completed in September 2024. The connection to the power grid has materially reduced the usage of diesel in on-site power generators. Tanzania's national power is predominantly sourced from hydropower and natural gas. Managing our Social Impact During FY2023, we completed Phase 1 of a Human Impact Study which was a comprehensive survey of the impacted individuals and valuation of the land and livelihood that will be impacted by the development of the Ngualla Project. Phase 2 of the Study began in FY2024 and includes community and individual consultation and negotiation for compensation and developing a Resettlement Action Plan (RAP) in compliance with Tanzanian laws and IFC performance standards. Resettlement and land valuation activities are targeted to have finalised by the end of October 2024. ENVIRONMENT STEWARDSHIP Environmental Management Approach Our commitment to continual improvement of environmental, social and sustainability performance is embodied by and implemented through an Environmental and Social Management System (ESMS) and an Environmental and Social Management Plan (ESMP). Consistent with this approach, we will identify impacts and risks, set clear targets and objectives, develop actionable management plans and monitor implementation. Through regular compliance review and external feedback from stakeholders the project risks will be adjusted, and targets and objectives revised, thus establishing a continual improvement loop. 36 | PEAK RARE EARTHS In June of 2023, we completed our ESMP for pre-construction phase of the Ngualla Project. This ESMP is intended to identify, assess and provide management measures to mitigate risks associated with environmental and social impacts because of pre-construction activities. It sets out the risk management process to determine the significance of potential environmental and social impacts. CLIMATE CHANGE MANAGEMENT We have a responsibility to participate in global efforts to combat climate change. We aim to operate sustainably and incorporate decarbonisation strategies through electrification and renewable energy technologies, reducing our carbon footprint where feasible. The energy demand for the Ngualla site will be provided by a hybrid diesel and solar PV power station that is supported by a battery energy storage system. The use of renewable energy will significantly reduce the operating costs associated with power supply and has the added benefit of reducing the Project’s carbon footprint. Solar PV generation is targeted to contribute approximately 30% to overall generation. After completing the project level Life Cycle Assessment, we recognised that the primary climate change impact of the project comes from the use of diesel with mining equipment and processing. To ensure we can cope with the uplift in energy demand as we transition into construction and operational phases, we will require an increase in diesel consumption. However, we will continue to strive to improve the share of renewable power. Our 2023 FEED study already identified opportunities to increase solar penetration by potentially 10%. Accessing the national power grid when electrification is completed imminently will also improve as the national power is largely hydropower and natural gas. Long term wind and other renewables will also be investigated. Emissions reduction activities we will assess include: • National grid power; • Maximise solar power; • Wind generation; and • Responsible procurement. BIODIVERSITY We aim to prevent and minimise negative impacts and promote positive impacts to biodiversity and the surrounding environment. Where negative impacts cannot be avoided, we will implement mitigation and remediation measures in line with relevant legislation and best practice principles, to reduce impacts on the environment. Our updated ESMP contains a Biodiversity Management Plan (BMP) which outlines the management measures that will be implemented during the pre-construction phase of the Ngualla Project to minimise the impact on terrestrial and aquatic flora and fauna. The three key objectives of the BMP are: • Protection of natural resources (flora and fauna) in the SML and downstream environment from impacts associated with Project activities; • Educating/sensitising employees on the importance of conservation; and • Promoting community awareness on importance of conservation. We continue to conduct ecological field surveys to verify the classification of habitat and determine the presence of species of conservation significance. 2024 ANNUAL REPORT | 37 FINANCIAL REPORT 06. 38 | PEAK RARE EARTHS INFORMATION ON DIRECTORS Dr Russell Scrimshaw (AM) – Executive Chairman (Appointed 15 August 2022) Russell is a distinguished corporate executive and company director with experience in large scale mining project development and operations, product marketing, finance, business development and technology. Russell was a founding director of Fortescue Metals Group and served in executive roles including Deputy CEO and Executive Director. He was a key part of the management team that developed Fortescue’s mining, port and rail operations and was instrumental in establishing Fortescue’s strong relationships with large steel mill groups across a vast Asian customer base. More recently Russell was Chairman of UK-listed Sirius Minerals PLC from 2011 to March 2020 (acquired by Anglo American in 2020), which is developing a large polyhalite fertiliser project in North Yorkshire, in close proximity to Peak’s Teesside site. He has also held senior executive positions at the Commonwealth Bank of Australia and Optus. Russell is currently Chairman of the Garvan Research Foundation, a Non-Executive Director of the Garvan Institute of Medical Research and a Non-Executive Chairman of ARI Pty Ltd. Russell is a member of the Audit, Risk & Sustainability Committee, Nomination & Remuneration Committee and Technical & Development Committee. Russell held no other listed public company directorships in the past three years. The Hon. Abdullah Mwinyi – Non-Executive Director (Appointed 15 November 2020) Abdullah is a member of the Tanzanian Parliament, having entered Parliament in 2007. He has also held roles as a Member of the East African Legislative Assembly (2007 – 2017), where he was Chair of the Legal, Privileges and Rules Committee and the Regional Affairs and Conflict Resolution Committee, and Chair of Swala Oil and Gas (Tanzania) plc. Abdullah is a lawyer by profession, having been awarded a LLB and LLM from the University of Cardiff, and, in 2007, established Asyla Attorneys, where he specialised in corporate, commercial, labour and employment law. Abdullah has held no other listed public company directorships in the past three years. Dr Shasha Lu - Non-Executive Director (Appointed 30 November 2022) Since early 2014, Dr Lu has been the Managing Director of Shenghe Resources Overseas Development where she leads and manages overseas investment, cross-border corporate management, international trade and the building of a complete rare earth supply chain. Prior to that, Dr Lu was an Executive Director and CEO of Hong Kong East China Non-Ferrous Mineral Resources Co. Ltd and Sino-Australia International Mineral Resources Limited, responsible for overseas investment, scientific Russell Scrimshaw Executive Chairman Abdullah Mwinyi Non-Executive Director Shasha Lu Non-Executive Director Ian Chambers Non-Executive Director Nick Bowen Non-Executive Director Hannah Badenach Non-Executive Director (appointed 1 July 2023) DIRECTORS’ REPORT The Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Peak Rare Earths Limited (“Company” or “Peak”) (ACN: 112 546 700) and its controlled entities for the financial year ended 30 June 2024. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: DIRECTORS The names of directors who held office during or since the end of the year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated. 2024 ANNUAL REPORT | 39 research and management. Dr Lu has previous experience as a director of ASX-listed companies, having been an Executive Director of Arafura Resources Limited (ASX:ARU) and an Executive Director and Vice President of Globe Metals and Mining Corporation (ASX:GBE). Dr Lu holds a Bachelor and a Masters of Medical Science from Nanjing University, a Doctorate of Medical Science (PhD) from Tianjin Medical University & Karolinska Institute, a Post-Doctorate of Medical Science from Karolinska Institute, and an Executive Master of Business Administration from Nanjing University. Dr Lu is also a graduate of the Australian Institute of Company Directors (GAICD). Dr Lu held no other listed public company directorships in the past three years. Ian Chambers - Non-Executive Director (Appointed 20 March 2023) Ian is a distinguished executive and company director with more than 35 years of experience in international financial markets including institutional securities, wealth management and capital markets. Ian spent approximately 24 years with Morgan Stanley Australia where he was Managing Director, Head of Institutional Equities and Head of Wealth Management Australia. Ian has a proven record in organisational development, governance, operational management and financial performance. He is a member of ASIC’s Financial Services Credit Panel and Markets Disciplinary Panel and was inducted into the Australian Stockbrokers Foundation Hall of Fame in 2015. Ian has held no other listed public company directorships in the past three years. Ian is Chair of the Audit, Risk & Sustainability Committee and a member of the Nomination & Remuneration Committee. Nick Bowen - Non-Executive Director (Appointed 5 June 2023) Nick has extensive experience in the construction, development and operation of international mining projects. He has spent over 35 years with ASX-listed construction and contract mining companies operating in both Australia and overseas, including Africa. Previous roles include 12 years as Managing Director of Macmahon Holdings Limited, two years as Executive Global Head of Mining Services with Orica Limited and nine years as Managing Director of mining contractor, Eltin Limited. He has also held the head executive role at the Lubambe Copper Mine in Zambia and the Shishen Iron Ore Mine in South Africa. Nick is a Life Member of the Western Australian Chamber of Minerals and Energy, Member of the Australian Institute of Mining and Energy and Fellow of the Australian Institute of Company Directors. Nick serves as a non-executive director of Aveng Limited (JSE) from 17 July 2023. Nick is Chair of the Nomination & Remuneration Committee and the Technical & Development Committee. Hannah Badenach - Non-Executive Director (Appointed 1 July 2023) Hannah is an experienced executive and company director with more than 20 years of experience in resources, supply chain, business development, commodity trading and marketing in global markets across Africa, Europe, Asia, South America and the Middle East. Hannah has extensive African and Chinese experience, has built and run multiple metal supply chains across Africa (including Tanzania) and has an extensive network in China across sales and marketing. She holds a Bachelor of Arts/Law (Hons) from the University of Tasmania and is a graduate of the Australian Institute of Company Directors. Hannah was a non-executive director of ASX listed public company, Aspire Mining Limited, until 31 January 2023. Hannah is a member of the Audit, Risk & Sustainability Committee. COMPANY SECRETARY Phil Rundell – Company Secretary and Chief Financial Officer (Appointed 16 December 2020) Phil is a former Partner at Coopers & Lybrand (now PricewatehouseCoopers) and a Director at Ferrier Hodgson. He has been a sole practitioner Chartered Accountant specialising in providing company secretarial, compliance and accounting services for the last 12 years. 40 | PEAK RARE EARTHS PRINCIPAL ACTIVITIES During the year, the principal activities of the Company included: • Mineral exploration; • Mineral processing technological evaluations; • Mining and associated infrastructure feasibility evaluations; • Rare earth offtake structuring and negotiations; • Progressing funding, investment and development options for the Ngualla Rare Earth Project (Ngualla Project); and • Progressing regulatory approvals for the Ngualla Project. OPERATING RESULTS The loss of the Group after providing for income tax amounted to $18,175,830 (2023: $32,800,639). The material expenditures that contributed to the loss that were necessarily incurred to progress the activities of the Company include: • Employee benefits expenses of $4,047,706 (2023: $3,157,157) (refer to the Remuneration Report and Review of Operations); • Administration and other costs of $3,050,146 (2023: $3,853,724) that include consultants and legal costs primarily associated with financing, offtake documentation, negotiation and advice, and insurance costs; • Technical feasibility costs of $8,685,767 (2023: $3,297,432) on completion of the Front-End Engineering and Design Study (FEED Study), other technical studies and the early works on the Ngualla Project (refer to the Review of Operations); and • Exploration and evaluation costs of $1,308,239 (2023: $nil) on the new critical minerals exploration programme (refer to the Review of Operations). The basic and diluted loss per share for the Group for the year was 6.85 cents (2023: 15.38 cents). FINANCIAL POSITION The net assets of the Group have decreased from $88,883,143 at 30 June 2023 to $70,072,632 at 30 June 2024. The Group’s working capital, being current assets less current liabilities, was $9,205,937 at 30 June 2024 (2023: $23,807,448). The Company had $7,625,845 cash at bank at the end of the reporting period to fund the pre- development activities in respect of the Ngualla Project, and corporate and administration requirements. DIVIDENDS PAID OR RECOMMENDED The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report. REVIEW OF OPERATIONS The Review of Operations commentary is contained in the section above on page 12. EVENTS SUBSEQUENT TO REPORTING DATE On 24 July 2024, Peak announced a signed non-binding Term Sheet with Shenghe covering an integrated investment, funding and development solution for the Ngualla Project. Shenghe holds an approximate 19.9% interest in Peak and appointed a nominee Non-Executive Director to Peak’s Board in December 2022. 2024 ANNUAL REPORT | 41 Key elements of the agreed Term Sheet between Peak and Shenghe include the following: • Investment structure – Shenghe to acquire a 50% interest in Ngualla Group UK Limited (NGUK), which holds an 84% effective interest in the Ngualla Project, through a subscription of new shares for ~A$96m; • Fully funded solution – the balance of Ngualla Project development costs to be funded via a Shenghe arranged debt facility, which is expected to be on terms more favourable than a typical international project financing facility. Upon completion, Peak will not be required to contribute any additional equity funding towards the development of the Ngualla Project; and • Term – in the absence of execution of transaction documentation, the Term Sheet will expire on 31 March 2025 unless mutually extended. Other Term Sheet elements include an engineering delivery solution, profit sharing and incentivisation payments and subsidiary Board representation. The drafting of legally binding agreements is underway, together with preparations for satisfying conditions precedent (including Peak shareholder approval). Other than the matters referred to above there were no other events that have a material impact on the financial statements or operations of the Group and Company. SIGNIFICANT CHANGES IN STATE OF AFFAIRS Other than detailed in Note 24 of the financial statements (subsequent events) and in the Review of Operations above, there were no significant changes in the state of affairs of the Company during the financial year. MEETINGS OF DIRECTORS The number of meetings attended by each Director of the Company during the financial year was: Director Full meetings of Directors Audit, Risk & Sustainability Committee Meetings Nomination & Remuneration Committee Meetings Technical Committee Meetings A B A B A B A B Russell Scrimshaw 4 4 6 6 - - 2 2 Abdullah Mwinyi 1 4 - - - - - - Shasha Lu 3 4 - - - - - - Ian Chambers 4 4 6 6 - - - - Nick Bowen 4 4 - - - - 2 2 Hannah Badenach^ 4 4 4 4 - - - - ^Appointed during the year A Number of meetings attended B Number of meetings held during the time the Director held office and was a member of the relevant committee during the year. 42 | PEAK RARE EARTHS EQUITY HOLDINGS OF DIRECTORS As at the date of this report, the Directors’ interest in the Company were: Details of issues made to directors during the period are provided in the Remuneration Report. Equity shares Equity options Performance Rights Russell Scrimshaw 1,200,000 - 3,100,000 Abdullah Mwinyi 106,623 - 571,447 Shasha Lu - - 600,000 Ian Chambers 1,700,000 - 600,000 Nick Bowen 210,000 - 600,000 Hannah Badenach 256,000 - 600,000 FUTURE DEVELOPMENTS Likely future developments in the operations of the Group are referred to elsewhere in the Annual Financial Report. ENVIRONMENTAL ISSUES The Company is aware of its environmental obligations with regards to its exploration activities at the Ngualla Project and the Teesside refinery site and ensures that it complies with all regulations when carrying out any exploration work. The directors of the Company are not aware of any breach of environmental regulations for the year under review. The Directors have considered the National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduced a single national reporting framework for the reporting and dissemination of information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations which exceed specified thresholds. At the current stage of development, the Directors have determined that the NGER Act has no effect on the Company for the current or subsequent financial year. The Directors will reassess this position as and when the need arises. REMUNERATION REPORT (AUDITED) The remuneration report outlines the director and executive remuneration arrangements for the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. Remuneration Policy The remuneration policy of the Company has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component which is assessed against market rates and offering specific share-based incentives based on key performance areas affecting the Company’s activities, milestones and financial results. The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain skilled and experienced directors and executives to manage the Company. The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of the Company is as follows: The Company has a Nomination & Remuneration Committee to review the remuneration policy that sets the remuneration and performance terms and conditions for the executive directors and other senior executives. All executives receive a base salary (which is determined on factors such as length of service, expertise, experience and peer comparatives) and superannuation is paid for Australian resident employees and directors. The Company reviews executive packages annually by reference to the Company’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The Board may exercise discretion in relation to approving incentives, bonuses, performance rights and options. The policy is to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder value. Executives and employees are also entitled to participate in the employee share arrangements. 2024 ANNUAL REPORT | 43 The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company and subject to shareholder approval are able to participate in the employee incentive plan. Non- executive directors are provided superannuation benefits in accordance with Australian statutory requirements, where the Non-Executive Director is a non-Australian resident the superannuation benefit is provided as an additional fee. All remuneration paid to directors and executives is valued at the cost to the Company and expensed. Options and performance rights are valued using the appropriate valuation methodology. Details of options and performance rights provided to directors are detailed in the Remuneration Report. Non-Executive Director Remuneration The total remuneration of non-executive directors has been set at a maximum of $700,000 (that includes superannuation and excludes share-based payments) as approved by shareholders at the 29 November 2021 Annual General Meeting. It does not mean that the Company has utilised the entire maximum sum of $700,000 approved for non-executive directors’ fees in each year. The total non- executive director remuneration inclusive of superannuation for 2024 was $288,243 (2023: $247,222). Performance Based Remuneration The Company continues to review and consider the inclusion of performance-based components built into director and executive remuneration packages. The Company received approval from shareholders for adoption of an Incentive Employee Option Plan (EOP), Incentive Performance Rights Plan (PRP), and Director Fee Plan at the Annual General Meeting on 23 December 2020. On 15 June 2023 shareholders approved the adoption of an Employee Incentive Plan (EIP) compliant with legislative changes. The objectives of the EOP, PRP and EIP are to attract, motivate and retain key employees and the Company considers that the adoption of the Plans and the future issue of securities under the Plans will provide selected employees with the opportunity to participate in the future growth of the Company. During the year the following director and executive performance rights were issued/ exercised/ lapsed or were cancelled: Issued: • 3,210,000 incentive performance rights expiring 9 November 2028 • 2,311,404 incentive performance rights expiring 30 November 2028 Exercised: • 1,289,868 vested performance rights with an exercise price of $nil Lapsed: • nil 44 | PEAK RARE EARTHS 2024 2023 2022 2021 2020 Total income ($) 956,995 697,986 8,602 111,008 12,374,452 Net profit/(loss) before tax ($) (18,175,830) (32,800,639)* (22,731,602) (4,770,848) 7,652,714# Net profit/(loss) after tax ($) (18,175,830) (32,800,639) (22,731,602) (4,770,848) 7,652,714# Closing share price at end of year (cents), adjusted^ $0.185 $0.465 $0.295 $0.100 $0.210 Basic earnings/(loss) per share (cents)^ (6.85) (15.38) (11.66) (3.13) 6.52 Dividends per share (cents) - - - - - *Includes a share based payment for government participation of $21,189,140 for the accounting valuation on the issue of the 16% free carried interest in the Ngualla Project to the Government of Tanzania. # Includes gain on remeasurement of financial liabilities of $1.7 million and gain on derecognition of associate of $10.4 million. ^ Note that the closing share price at end of year (cents) and the basic earnings/(loss) per share have been adjusted to reflect the effects of the 1 for 10 share consolidation on 9 December 2021. Company Performance, Shareholder Returns and Director’s and Executive’s Remuneration Summary of Group’s performance and movements in the Peak Rare Earths Limited share price over the last five years: The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. Currently, this is facilitated through a policy to issue performance rights to the majority of directors and executives to encourage the alignment of personal and shareholder interests. The Company believes the policy will be effective in increasing shareholder wealth. Details of directors and executives’ interests in shares and options at year end are detailed below. Details of KMP Remuneration The relevant Key Management Personnel (KMP) of the group for the 2024 financial year were: • Russell Scrimshaw - Executive Chairman; • Abdullah Mwinyi - Non-Executive Director; • Shasha Lu - Non-Executive Director; • Ian Chambers - Non-Executive Director; • Nick Bowen - Non-Executive Director; • Hannah Badenach - Non-Executive Director (appointed 1 July 2023); • Bardin Davis - Chief Executive Officer; • Philip Rundell - Chief Financial Officer & Company Secretary; • Lello Galassi - Head of Development & Operations; • Andrea Cornwell - Head of Marketing & Sales (ceased employment 15 December 2023); and • Ray Anguelov - Head of Technical Services. Total KMP remuneration for the year was: 2024 $ 2023 $ Salary and fees 2,161,822 1,987,358 Superannuation 72,881 103,399 Share based payments* 1,351,723 1,457,999 Termination payments 36,058 - Total 3,622,484 3,548,756 *Share Based Payments are non-cash components of remuneration and the consideration reported is an accounting value determined in accordance with AASB 2. Inclusive in the consideration reported is the accounting value of unvested performance rights subject to performance milestones that as at 30 June 2024 had not yet been achieved. The cash benefit of the unvested performance rights will only be received by the KMP following any sale of the resultant shares, which can only be attained after the rights have vested, been exercised and the shares are issued. 2024 ANNUAL REPORT | 45 Short term benefits Post-employment Share based payments* Termination Payments Total Proportion related to: Salary & fees Non-monetary Superannuation Performance Rights* Options Equity Performance 30-Jun-24 $ $ $ $ $ $ $ % % Directors Russell Scrimshaw 210,000 - 20,350 719,046 - - 949,396 0% 76% Abdullah Mwyini 55,125 - - 35,518 - - 90,643 0% 39% Shasha Lu 55,500 - - 27,055 - - 82,555 0% 33% Ian Chambers 55,000 - 6,050 57,608 - - 118,658 0% 49% Nick Bowen 55,000 - 6,068 27,055 - - 88,123 0% 31% Hannah Badenach 55,500 - - 27,055 - - 82,555 0% 33% 486,125 - 32,468 893,337 - - 1,411,930 0% 63% Executives Bardin Davis 412,500 - 27,500 295,254 - - 735,254 0% 40% Philip Rundell 257,500 - - 46,749 - - 304,249 0% 15% Lello Galassi 498,029 - - 59,152 - - 557,181 0% 11% Andrea Cornwell1 166,974 - 12,913 57,231 - 36,058 273,176 0% 21% Raytcho Anguelov 340,694 - - - - - 340,694 0% 0% 1,675,697 - 40,413 458,386 - 36,058 2,210,554 0% 21% Total 2,161,822 - 72,881 1,351,723 - 36,058 3,622,484 0% 37% *Share Based Payments are non-cash components of remuneration and the consideration reported is an accounting value determined in accordance with AASB 2. Inclusive in the consideration reported is the accounting values of unvested performance rights subject to performance milestones that as at 30 June 2024 had not yet been achieved. The cash benefit of the unvested performance rights will only be received by the KMP following any sale of the resultant shares, which can only be attained after the rights have vested, been exercised and the shares are issued. 1Mrs Cornwell ceased to be an employee on 15 December 2023 but continued to provide services as and when required as an engaged consultant. Remuneration of individual KMP’s: 46 | PEAK RARE EARTHS Short term benefits Post-employment Share based payments* Termination Payments Total Proportion related to: Salary & fees Non-monetary Superannuation Performance Rights^ Options^ Equity # Performance # 30-Jun-23 $ $ $ $ $ $ $ % % Directors Russell Scrimshaw1 105,484 - 11,076 271,349 - - 387,909 0% 70% Abdullah Mwyini2 55,000 - - 35,673 - - 90,673 0% 39% Shasha Lu3 32,242 - - - - - 32,242 0% 0% Ian Chambers4 14,113 - 1,482 3,283 - - 18,878 0% 17% Nick Bowen5 3,611 - 379 - - - 3,990 0% 0% Tony Pearson 55,443 - 5,822 177,296 - - 238,561 0% 74% Giles Stapleton6 46,528 - 4,885 12,500 - - 63,913 0% 20% Giselle Collins7 25,083 - 2,634 - - - 27,717 0% 0% 337,504 - 26,278 500,101 - - 863,883 0% 58% Executives Bardin Davis8 350,000 - 27,500 590,614 - - 968,114 0% 61% Philip Rundell 240,000 - - 83,697 - - 323,697 0% 26% Lello Galassi 444,186 - - 113,984 - - 558,170 0% 20% Andrea Cornwell 312,500 - 27,500 85,137 - - 425,137 0% 20% Raytcho Anguelov9 45,449 - - - - - 45,449 0% 0% Mark Godfrey10 257,719 - 22,121 84,466 - - 364,306 0% 23% 1,649,854 - 77,121 957,898 - - 2,684,873 0% 36% Total 1,987,358 - 103,399 1,457,999 - - 3,548,756 0% 41% *Share Based Payments are non-cash components of remuneration and the consideration reported is an accounting value determined in accordance with AASB 2. Inclusive in the consideration reported is the accounting values of unvested performance rights subject to performance milestones that as at 30 June 2023 had not yet been achieved. The cash benefit of the unvested performance rights will only be received by the KMP following any sale of the resultant shares, which can only be attained after the rights have vested, been exercised and the shares are issued. ^Includes the write back of the share-based payments previously recognised for options and performance rights that lapsed during the current period. #The % excludes the value of the options which were written back during the year 1Mr Scrimshaw was appointed to the role of Executive Chairman on 15 August 2023. 2Mr Mwinyi received a prepayment of his director fees for the period 1 July 2023 to 31 March 2024 of $41,250 not included in his reported 30 June 2023 salary & fees. 3Ms Lu was appointed to the role of Non-Executive Director on 30 November 2022. 4Mr Chambers was appointed to the role of Non-Executive Director on 20 March 2023. 5Mr Bowen was appointed to the role of Non-Executive Director on 5 June 2023. 6Mr Stapleton resigned 5 June 2023. 7Mrs Collins resigned 9 November 2022. 8Mr Davis stepped down as MD on 9 July 2022 to take on the CEO role, his full remuneration is reported under the executive section. 9Mr Anguelov was appointed to the role of Head of Technical Services on 15 May 2023. 10Mr Godfrey was from his executive role on 13 April 2023 but continues to provide services as and when required as an engaged consultant. Remuneration of individual KMP’s: 2024 ANNUAL REPORT | 47 30-Jun-24 Date of issue Number of performance rights issued Fair value per performance right* Total value of issue $^ Vesting Date# Exercise Price Expiry Date Number vested during the year Number lapsed/ cancelled during the year Directors Russell Scrimshaw 21-Jun-24 $nil 15-Dec-26 900,000 - Abdullah Mwyini 4-Dec-23 511,404 $0.385 196,891 - - 30-Nov-28 - - Abdullah Mwyini - - - - 29-Nov-23 $nil 5-Feb-25 7,500 - Abdullah Mwyini - - - - 21-Jun-24 $nil 9-Dec-25 21,053 - Shasha Lu 4-Dec-23 600,000 $0.385 231,000 - - 30-Nov-28 - - Ian Chambers 9-Nov-23 600,000 $0.500 300,000 - - 9-Nov-28 - - Nick Bowen 4-Dec-23 600,000 $0.385 231,000 - - 30-Nov-28 - - Hannah Badenach 4-Dec-23 600,000 $0.385 231,000 - - 30-Nov-28 - - 2,911,404 1,189,891 928,553 - Executives Bardin Davis 9-Nov-23 1,700,000 $0.385 654,500 - - 9-Nov-28 - - Bardin Davis - - - - 29-Nov-23 $nil 5-Feb-25 187,500 - Bardin Davis - - - - 21-Jun-24 $nil 9-Dec-25 200,000 Philip Rundell 9-Nov-23 410,000 $0.385 157,850 - - 9-Nov-28 - - Philip Rundell - - - - 21-Jun-24 $nil 9-Dec-25 80,000 - Philip Rundell - - - - 23-Nov-23 $nil 23-Sep-26 10,000 - Lello Galassi - - - - 29-Nov-23 $nil 23-Sep-26 75,000 - Andrea Cornwell - - - - 8-Aug-23 $nil 23-Sep-26 112,500 - Raytcho Anguelov 9-Nov-23 500,000 $0.385 192,500 - - 9-Nov-28 - - 2,610,000 1,004,850 665,000 - Total 5,521,404 2,194,741 1,593,553 - ^The Performance Rights were granted for no consideration and the employee received no cash benefit at the time of receiving the rights. The cash benefit will be received by the employee following any sale of the resultant shares, which can only be attained after the rights have vested, been exercised and the shares are issued. * For performance rights with non-market conditions, the fair value is measured using the closing share price at grant date. For performance rights with market conditions, the fair value is measured using a binomial pricing model. # For vesting of performance rights with the same expiry date occurring on multiple dates during the period the most recent date is reported in the table. Performance rights and options granted / vested / lapsed during the year ended 30 June 2024 Movements in performance rights during the year: 48 | PEAK RARE EARTHS 30-Jun-23 Date of issue Number of performance rights issued Fair value per performance right* Total value of issue $^ Vesting Date# Exercise Price Expiry Date Number vested during the year Number lapsed/ cancelled during the year Directors Russell Scrimshaw 15-Dec-22 3,500,000 $0.475 1,662,500 - $nil 30-Nov-26 - - Russell Scrimshaw 15-Dec-22 250,000 $0.440 110,000 - $nil 30-Nov-26 - - Russell Scrimshaw 15-Dec-22 250,000 $0.360 90,000 - $nil 30-Nov-26 - - Tony Pearson - - - - 25-Apr-23 $nil 5-Feb-24 75,000 - Tony Pearson - - - - 17-Apr-23 $nil 9-Dec-25 200,000 - Abdullah Mwinyi - - - - 25-Apr-23 $nil 5-Feb-25 15,000 - Abdullah Mwinyi - - - - 17-Apr-23 $nil 9-Dec-25 28,070 - Giselle Collins - - - - - $nil 9-Dec-25 - (100,000) Giles Stapleton 15-Dec-22 100,000 $0.475 47,500 17-April-23 $nil 15-Dec-26 26,316 (73,684) 4,100,000 1,910,000 344,386 (173,684) Executives Bardin Davis 25-Apr-23 $nil 5-Feb-24 375,000 - Bardin Davis 17-Apr-23 $nil 9-Dec-25 300,000 - Philip Rundell 17-Apr-23 $nil 9-Dec-25 80,001 - Philip Rundell 23-Sep-22 100,000 $0.480 48,000 30-Jun-23 $nil 23-Sep-26 30,000 - Mark Godfrey 23-Sep-22 500,000 $0.480 240,000 30-Jun-23 $nil 23-Sep-26 169,000 - Lello Galassi 23-Sep-22 500,000 $0.480 240,000 30-Jun-23 $nil 23-Sep-26 175,000 - Andrea Cornwell 23-Sep-22 450,000 $0.480 216,000 30-Jun-23 $nil 23-Sep-26 112,500 - 1,550,000 744,000 1,241,501 - Total 5,650,000 2,654,000 1,585,887 (173,684) ^The Performance Rights were granted for no consideration and the employee received no cash benefit at the time of receiving the rights. The cash benefit will be received by the employee following any sale of the resultant shares, which can only be attained after the rights have vested, been exercised and the shares are issued. * For performance rights with non-market conditions, the fair value is measured using the closing share price at grant date. For performance rights with market conditions, the fair value is measured using a binomial pricing model. # For vesting of performance rights with the same expiry date occurring on multiple dates during the period the most recent date is reported in the table. Movements in options during the year: There were no options granted / vested / lapsed during the year. Performance rights and options granted / vested / lapsed during the year ended 30 June 2023 Movements in performance rights during the year: 2024 ANNUAL REPORT | 49 30-Jun-23 Date of issue Number of options issued Fair value per Option* Total value of issue $ Vesting Date# Exercise Price Expiry Date Number vested during the year Number lapsed/ cancelled during the year Directors Russell Scrimshaw - - - - - - Abdullah Mwyini - - - - - - Shasha Lu - - - - - - Ian Chambers - - - - - - Nick Bowen - - - - - - Tony Pearson - - - $1.50 21-Jun-23 - (500,000) Giles Stapleton - - - - - - Giselle Collins - - - - - - - - - - (500,000) Executives Bardin Davis Philip Rundell - - - - - - Lello Galassi - - - - - - Andrea Cornwell - - - - - - Raytcho Anguelov - - - - - - Mark Godfrey - - - - - - - - - - - - Total - - - - - (500,000) Movements in options during the year: 50 | PEAK RARE EARTHS 30-Jun-24 Opening Balance Granted as Remuneration Exercise of Options/PRs Market/ Other Movements Closing Balance Directors Russell Scrimshaw 300,000 - 575,000 - 875,000 Abdullah Mwinyi 78,070 - 21,535 - 99,605 Shasha Lu - - - - - Ian Chambers 1,200,000 - - 500,000 1,700,000 Nick Bowen 110,000 - - 100,000 210,000 Hannah Badenach - - - 256,000 256,000 1,688,070 - 596,535 856,000 3,140,605 Executives Bardin Davis 1,580,510 - 287,500 - 1,868,010 Philip Rundell 105,001 - 68,333 - 173,334 Lello Galassi 100,000 - 150,000 - 250,000 Ray Anguelov - - - - - Andrea Cornwell 37,500 - 187,500 (225,000) - 1,823,011 - 693,333 (225,000) 2,291,344 Total 3,511,081 - 1,289,868 631,000 5,431,949 Shareholdings of KMP’s * Ceased to be KMP’s during the period and their holdings are not reported at period end. 2024 ANNUAL REPORT | 51 30-Jun-24 Opening Balance Granted as Remuneration Exercise of Options & PRs Expired/ Lapsed Other Movements Closing Balance Vested at 30 June Directors Russell Scrimshaw 4,000,000 - (575,000) - - 3,425,000 325,000 Abdullah Mwinyi 88,596 511,404 (21,535) - - 578,465 7,018 Shasha Lu - 600,000 - - - 600,000 - Ian Chambers¹ - 600,000 - - - 600,000 - Nick Bowen - 600,000 - - - 600,000 - Hannah Badenach - 600,000 - - - 600,000 - 4,088,596 2,911,404 (596,535) - - 6,403,465 332,018 Executives Bardin Davis 1,700,000 1,700,000 (287,500) - - 3,112,500 100,000 Philip Rundell 194,999 410,000 (68,333) - - 536,666 26,667 Lello Galassi 400,000 - (150,000) - - 250,000 - Ray Anguelov - 500,000 - - - 500,000 - Andrea Cornwell* 412,500 - (187,500) - (225,000) - - 2,707,499 2,610,000 (693,333) - (225,000) 4,399,166 126,667 Total 6,796,095 5,521,404 (1,289,868) - (225,000) 10,802,631 458,685 Note that balances pre share consolidation have been adjusted to reflect the effects of the 1 for 10 share consolidation on 9 December 2021. * Ceased to be KMP’s during the period and their holdings are not reported at period end. 1Mr Chambers was offered 600,000 performance rights, which were approved by shareholders on 15 June 2023, these performance rights were issued during the period. Performance Rights Holdings of KMP’s 52 | PEAK RARE EARTHS Performance income as a proportion of total income No bonuses have been paid to executives during the year. Service agreements: The key terms of the service agreements with the KMP’s are: Russell Scrimshaw (Executive Chairman from 15 August 2022) Russell is appointed as an Executive Director by letter of agreement. The Executive Director appointment has no fixed term and ceases on resignation or removal as a director in accordance with the Corporations Act 2001. Executive Chairman fees are currently set at $300,000 plus superannuation entitlements per annum and are subject to an annual review. Following a salary review by a recognised consultant and approval by the Board, the Executive Chairman fees were increased from $120,000 to $300,000 on 1 January 2024. Non-Executive Directors Non-Executive Directors are appointed by letter of agreement. The Director appointments have no fixed term and cease on resignation or removal as a director in accordance with the Corporations Act 2001. Fees are currently set at $50,000 plus superannuation entitlements per annum, with non- resident directors entitled to receive the superannuation component as fees. Subject to shareholder approval the Non-Executive Directors are eligible to be offered and issued performance rights under the Company’s Performance Rights and Employee Incentive Plans. Non-Executive Directors are entitled to an additional fee for Chairing the various committees, with the Chair fee for the Audit, Risk & Sustainability Committee being $10,000 per annum, and the Chair fees for the Nomination & Remuneration Committee and the Technical & Development Committee being $5,000 per annum, with the additional fees attracting statutory superannuation. Bardin Davis – Managing Director - (Non-Executive Director from 21 Oct 2020, Managing Director from 9 Dec 2020, Chief Executive Officer from 9 July 2022) Bardin is employed under an Executive Service Agreement (ESA). Following a salary review by a recognised consultant and approval by the Board, Badin’s salary was increased on 1 September 2023 from $350,000 to $425,000 plus statutory superannuation. Bardin is entitled to leave in accordance with the relevant legislation. The engagement had no fixed term but is subject to a six-month notice period from either party. Philip Rundell – CFO & Company Secretary (Appointed 16 December 2020) Philip is employed under a consulting agreement with the Company with a fixed retainer of $25,000 per month. The engagement has no fixed term. Lello Galassi – Head of Development and Operations - (Appointed 20 September 2021, ceased 7 July 2024) Lello was employed under an Executive Service Agreement (ESA). The ESA provided for an annual salary of USD$300,000 plus discretionary performance bonuses and 24 days of annual leave per year. The engagement had no fixed term but was subject to a three-month notice period from either party. Lello resigned on 8 April 2024, and he ceased employment with the Company on 7 July 2024. During the period, Lello received a final payment to satisfy all accrued leave and notice entitlements under his ESA. Andrea Cornwell – Head of Marketing and Sales - (Appointed 29 November 2021, ceased 15 December 2023) Andrea was employed under an Executive Service Agreement (ESA). The ESA provided for an annual salary of $312,500 plus discretionary performance bonuses. The Executive was entitled to superannuation and leave in accordance with the relevant legislation. The engagement had no fixed term but was subject to a three-month notice period from either party. The Head of Marketing and Sales position was made redundant following the execution of the offtake agreement with Shenghe. Andrea ceased employment with the Company on the 15 December 2023 and she received a statutory redundancy payment of $36,058 during the period. 2024 ANNUAL REPORT | 53 Ray Anguelov – Head of Technical Services - (Appointed 15 May 2023, ceased 6 September 2024) Ray was employed under an Executive Service Agreement (ESA). The ESA provided for an annual salary of CAD $300,000. The engagement had no fixed term but was subject to a three-month notice period from either party. Ray was issued 500,000 performance rights under the Company’s Employee Incentive Plan. Ray’s contract was terminated during the year, and he ceased employment with the Company on 6 September 2024. Related party transactions There were no related party transactions with Key Management Personnel during the year (2023: $nil). (End of Remuneration Report) OPTIONS AND PERFORMANCE RIGHTS At the date of this report Performance Rights on issue to directors and employees are: Expiry Date Exercise Price Number of Performance Rights 5 February 2025 $Nil 1,105,000 9 December 2025 $Nil 364,860 23 September 2026 $Nil 1,048,500 15 December 2026 $Nil 3,100,000 9 November 2028 $Nil 4,704,540 30 November 2028 $Nil 2,311,404 28 March 2029 $Nil 50,000 During the year, 7,065,944 performance rights were issued to directors and employees of the Company. A total of 1,724,294 performance rights were exercised for $nil consideration and a total of 387,500 performance rights lapsed, were cancelled, or expired. At the date of this report no listed or unlisted options over ordinary shares were on issue. Performance rights and option holders do not have any right, by virtue of the option or right to participate in any share issue of the Company or any related body corporate. INDEMNIFYING OFFICERS OR AUDITOR During the financial year, the company paid a premium in respect of a contract insuring the Directors and officers of the Company and related body corporates against a liability incurred as a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer of the Company or of any related body corporate against a liability incurred as an officer. To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. PROCEEDINGS ON BEHALF OF COMPANY No person has applied to the court under legislation such as section 237 of the Corporations Act of Australia for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the consolidated entity with leave of the court under such legislation. 54 | PEAK RARE EARTHS The Group occasionally receives claims which arise in the normal course of business. Where the Group is in receipt of such claims it reviews their nature and substance in order to assess the need for accounting recognition or disclosure. The directors are of the opinion that, based on information available, there is currently no material exposure to the Group arising from actual or pending claims at balance date. AUDITOR’S INDEPENDENCE DECLARATION The lead auditor’s independence declaration for the year ended 30 June 2024 has been received and can be found immediately following this Directors’ report. No amounts have been paid or payable to the auditor for non-audit services. Payments to the auditors are set out in Note 3 to the Financial Statements. The Directors’ report is signed in accordance with a resolution of Directors made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the Directors, Dr Russell Scrimshaw (AM) Executive Chairman Sydney, NSW 27 September 2024 2024 ANNUAL REPORT | 55 AUDITOR’S INDEPENDENCE DECLARATION 56 | PEAK RARE EARTHS INDEPENDENT AUDITOR’S REPORT 2024 ANNUAL REPORT | 57 INDEPENDENT AUDITOR’S REPORT (CONTINUED) 58 | PEAK RARE EARTHS INDEPENDENT AUDITOR’S REPORT (CONTINUED) 2024 ANNUAL REPORT | 59 INDEPENDENT AUDITOR’S REPORT (CONTINUED) 60 | PEAK RARE EARTHS INDEPENDENT AUDITOR’S REPORT (CONTINUED) 2024 ANNUAL REPORT | 61 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Note 2024 $ 2023 $ Interest income 572,164 111,705 R&D rebate 384,831 586,281 Total income 956,995 697,986 Employee benefits expenses (4,047,706) (3,157,157) Share based payments expenses 17 (1,523,124) (1,665,584) Depreciation expenses 10, 12 (483,060) (320,209) Loss on disposal of investment (7,175) - Share based payments for government participation 22 - (21,189,140) Finance costs 12 (27,608) (15,379) Administrative and other costs (3,050,146) (3,853,724) Technical feasibility costs (8,685,767) (3,297,432) Exploration and evaluation costs (1,308,239) - Loss before income tax (18,175,830) (32,800,639) Income tax expense 6 - - Loss after income tax (18,175,830) (32,800,639) Other comprehensive income net of tax Items that could be transferred to profit or loss in future: Exchange differences on translation of foreign operations (2,157,806) 1,900,864 Total comprehensive loss for the year (20,333,636) (30,899,775) Loss after income tax attributable to: Members of the parent (17,281,399) (29,386,856) Non-controlling interests (894,431) (3,413,783) (18,175,830) (32,800,639) Total comprehensive loss attributable to: Members of the parent (19,439,205) (27,485,992) Non-controlling interests (894,431) (3,413,783) (20,333,636) (30,899,775) Loss per share (in cents) Basic and Diluted loss per share 4 (6.85) (15.38) For the Year Ended 30 June 2024 The statement should be read in conjunction with the accompanying notes 62 | PEAK RARE EARTHS CONSOLIDATED STATEMENT OF FINANCIAL POSITION Note 2024 $ 2023 $ ASSETS Current assets Cash and cash equivalents 7 7,625,845 25,852,484 Trade and other receivables 8 116,095 251,377 Prepayments 101,089 169,957 Deposits 25,179 - Assets held for sale 11 3,490,457 - Total current assets 11,358,665 26,273,818 Non-current assets Other financial assets 9 63,794 63,794 Property plant and equipment 10 852,118 535,479 Right-of-use asset 12 558,392 3,604,882 Exploration and evaluation costs 13 59,754,156 60,997,405 Investments 14 - 8,000 Total non-current assets 61,228,460 65,209,560 Total assets 72,587,125 91,483,378 LIABILITIES Current liabilities Trade and other payables 15 1,719,219 2,140,418 Provisions 16 220,519 180,554 Lease liability – current 12 212,990 145,398 Total current liabilities 2,152,728 2,466,370 Non-current liabilities Lease liability – non-current 12 361,766 133,865 Total non-current liabilities 361,766 133,865 Total liabilities 2,514,494 2,600,235 Net assets 70,072,631 88,883,143 EQUITY Equity attributable to equity holders of the Company Contributed equity 18 166,874,257 166,874,257 Reserves 17 8,129,329 8,764,011 Accumulated losses (121,811,881) (104,530,482) Equity attributable to equity holders of the Company 53,191,705 71,107,786 Non-controlling interests 16,880,926 17,775,357 Total Equity 70,072,631 88,883,143 As at 30 June 2024 The statement should be read in conjunction with the accompanying notes 2024 ANNUAL REPORT | 63 CONSOLIDATED STATEMENT OF CASH FLOWS Note 2024 $ 2023 $ OPERATING ACTIVITIES Payments to suppliers and employees (18,423,813) (9,848,732) Finance costs paid (27,608) (15,379) Interest received 620,314 53,122 Government rebates received 384,831 586,281 Cash used in operating activities 7 (17,446,276) (9,224,708) INVESTING ACTIVITIES Acquisition of property, plant and equipment (761,299) (370,338) Proceeds from sale of investments 825 - Cash used in investing activities (760,474) (370,338) FINANCING ACTIVITIES Proceeds from issue of equity shares - 27,582,500 Costs of issuing equity shares - (1,513,612) Payment of lease liabilities (221,286) (123,900) Cash generated from financing activities (221,286) 25,944,988 Net increase in cash and cash equivalents (18,428,036) 16,349,942 Balance at the beginning of the year 25,852,484 9,479,379 Effect of foreign currency translation 201,397 23,163 Balance at the end of the year 7 7,625,845 25,852,484 For the Year Ended 30 June 2024 The statement should be read in conjunction with the accompanying notes 64 | PEAK RARE EARTHS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Contributed Equity $ Share based payment reserve $ Foreign currency translation reserve $ Accumulated losses $ Non- controlling interests $ Total equity $ At 30 June 2022 140,805,369 5,254,532 (56,969) (75,143,626) - 70,859,306 Loss for the year - - - (29,386,856) (3,413,783) (32,800,639) Other comprehensive income - - 1,900,864 - - 1,900,864 Total comprehensive income/ (loss) for the year - - 1,900,864 (29,386,856) (3,413,783) (30,899,775) Equity issued 27,582,500 - - - - 27,582,500 Share based payments for government participation (Note 22) - - - - 21,189,140 21,189,140 Equity based payments - 1,665,584 - - - 1,665,584 Transaction costs (1,513,612) - - - - (1,513,612) At 30 June 2023 166,874,257 6,920,116 1,843,895 (104,530,482) 17,775,357 88,883,143 Loss for the year - - - (17,281,399) (894,431) (18,175,830) Other comprehensive income - - (2,157,806) - - (2,157,806) Total comprehensive loss for the year - - (2,157,806) (17,281,399) (894,431) (20,333,636) Equity based payments - 1,523,124 - - - 1,523,124 At 30 June 2024 166,874,257 8,443,240 (313,911) (121,811,881) 16,880,926 70,072,631 For the Year Ended 30 June 2024 The statement should be read in conjunction with the accompanying notes 2024 ANNUAL REPORT | 65 NOTES TO FINANCIAL STATEMENTS 1. CORPORATE INFORMATION The financial report of Peak Rare Earths Limited and its subsidiaries (the Group) for the year ended 30 June 2024 was authorised for issue in accordance with a resolution of the directors on 27 September 2024. Peak Rare Earths Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange (ASX). The address of its registered office and principal place of business is disclosed in the corporate directory in the Annual Report. The principal activity of the Group during the year was exploration and evaluation of mineral licences. 2. MATERIAL ACCOUNTING POLICY INFORMATION a) Basis of Preparation The consolidated financial statements have been prepared on the basis of historical cost. All amounts are presented in Australian Dollars unless otherwise noted. Statement of compliance The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and complies with other requirements of the law. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). Going concern The Group incurred a loss after tax of $18,175,830 (2023: $32,800,639) and had operating cash outflows of $17,446,276 for the year ended 30 June 2024 (2023: $9,224,708). The Group’s ability to continue as a going concern and meet its debts as and when they fall due is dependent on its ability to raise additional capital and/or secure project funding. As set out in Note 24, on 2 July 2024 Peak signed a non-binding Term Sheet with Shenghe Resources Holding Co., Ltd. (Shenghe) covering an investment, funding and development solution for the Ngualla Rare Earth Project (Ngualla Project). Key elements of the Term Sheet include the following: • Investment structure – Shenghe to acquire a 50% interest in Ngualla Group UK Limited (NGUK), which holds an 84% effective interest in the Ngualla Project, through a subscription of new shares for ~A$96m; • Fully funded solution – upon completion, Peak will not be required to contribute any additional equity funding towards the development of the Ngualla Project. The difference between the Ngualla Project’s total development costs and Shenghe’s NGUK investment of ~A$96m will be funded via a Shenghe arranged debt facility. Whist the definitive binding agreements are yet to be settled, in the directors’ opinion there is a reasonable belief that agreements will be executed with Shenghe that will provide the total funding to construct and commission the Ngualla Project and to meet other direct costs. Peak has $7,625,845 cash at bank at the end of the reporting period, however, the Group’s cashflow forecasts indicate that there will be a need in the future to obtain further funding. A successful sale of the Teesside site (see Note 11) will also provide funds for working capital. In the directors’ opinion, there are reasonable grounds to believe that the Group has the ability to raise further funding as and when required based on the aforegoing and its past ability to raise equity funding. However, in the event that additional funding is not forthcoming to continue with the planned development of the Ngualla Project and meet its corporate and administration 66 | PEAK RARE EARTHS requirements, there is a material uncertainty whether the Group will be able to progress with its current development initiatives and continue as a going concern and therefore in this circumstance whether it will realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the consolidated financial statements. No adjustments have been made relating to the recoverability and classification of recorded asset amounts and the amount and classification of liabilities that might be necessary should the Group not continue as a going concern. b) Impact of new standards applied for the first time The accounting policies adopted in the preparation of the consolidated financial statements for the year are consistent with those followed in the preparation of the Company’s annual financial report for the year ended 30 June 2024, except for the adoption of new and amended accounting standards and interpretations effective as of 1 July 2023. The adoption of these new and amended accounting standards and interpretations did not have a material impact on the consolidated entity and no restatement of comparative financial information to reflect the adoption of these new standards and interpretations was required. The Company has not early adopted any other accounting standard, interpretation or amendment that has been issued but is not yet effective. Standards issued but not yet effective Significant Australian Accounting Standards and Interpretations that are issued, but are not yet effective, up to the date of issuance of the Group’s financial statements is not expected to be material. The Group intends to adopt these new standards and interpretations, if applicable, when they become effective. The standards issued and amendments but not yet effective are not expected to have a material impact on the Group. • AASB 2020-1 Amendments to AASs – Classification of Liabilities as Current or Non-current • AASB 2022-6 Amendments to AASs – Non-current Liabilities with Covenants • AASB 2014-10 Amendments to AASs – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture • AASB 2022-5 Amendments to AASs – Lease Liability in a Sale and Leaseback • AASB 2023-1 Amendments to AASs – Amendments to AASB 107 and AASB 7 – Disclosures of Supplier Finance Arrangements • AASB 2023-5 Amendments to Australian Accounting Standards – Lack of Exchangeability • AASB 18- Presentation and Disclosure in Financial Statements (effective 1 January 2027). AASB 18 aims to improve how entities communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss. AASB 18 is accompanied by limited amendments to the requirements in AASB 107 Statement of Cash Flows. AASB 18 is effective from 1 January 2027 and applied fully retrospective. Entities are permitted to apply AASB 18 before that date. AASB 18 replaces AASB 1 - Presentation of Financial Statements. The requirements in AASB 1 that are unchanged have been transferred to AASB 18 and other standards. There are 3 main areas of changes: ॰ requiring additional defined subtotals in the statement of profit or loss, which makes entities' financial performance easier to compare and provides a consistent starting point for investors' analysis; ॰ requiring disclosures about management-defined performance measures, which increases discipline over use and transparency about their calculation; and ॰ adding new principles for grouping (aggregation and disaggregation) of information, which improves effective communication of information. c) Basis of consolidation The consolidated financial statements of Peak Rare Earths Limited comprise the financial statements of the Company and its subsidiaries as at 30 June 2024. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: 2024 ANNUAL REPORT | 67 • Power over the investee (i.e. existing rights that give it the current ability to direct the relevant • activities of the investee) • Exposure, or rights, to variable returns from its involvement with the investee, and • The ability to use its power over the investee to affect its returns When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: • The contractual arrangement with the other vote holders of the investee • Rights arising from other contractual arrangements • The Group’s voting rights and potential voting rights The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary. All inter-company balances and transactions between entities in the Group, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those policies applied by the parent entity. All controlled entities have a June financial year-end. If the Group loses control over a subsidiary, it derecognises the related assets, liabilities, non- controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. Where controlled entities have entered or left the economic entity during the year, their operating results have been included/ excluded from the date control was obtained or until the date control ceased through an equity transaction. d) Foreign Currency Translation The financial statements have been presented in Australian Dollars, which is the parent entities presentation currency. Foreign currency transactions In preparing the financial statements of each individual group entity, transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. The Company’s functional currency is Australian dollars. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date, and gain or loss in exchange rate movements are recognised in profit or loss. Translation of foreign operations As at the reporting date the assets and liabilities of foreign operations are translated from their functional currency at the rate of exchange ruling at the reporting date and the statement of comprehensive income, statement cash flows and statement of changes in equity are translated at the weighted average exchange rates for the year. The exchange differences arising on translation are recognised in other comprehensive income and accumulated balances are carried forward as a separate component of equity. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively). 68 | PEAK RARE EARTHS On disposal of a foreign operation, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the profit or loss. e) Other income Interest Interest income is recognised as the interest accrues on the financial asset carried at amortised cost. R&D rebate grant The Group is treating its receipt of the R&D rebate as a government grant. Government grants are recognised as income when there is reasonable assurance that the grant will be received and all conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. When the grant relates to an asset, it is deducted from the asset to which it relates, the net value of which is amortised over its expected useful life. f) Employee benefits Employee benefits such as salary and wages are measured at the rate at which the entity expects to settle the liability; and recognised during the period over which the employee services are being rendered. Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Superannuation entitlements Contributions are made by the Group to employee superannuation funds and are charged as expenses when incurred. g) Leases The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short- term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. i) Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. The right-of-use assets are also subject to impairment. The carrying values of right-of-use assets are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses, if any, are recognised in the profit or loss. 2024 ANNUAL REPORT | 69 ii) Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. iii) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases of its office space. This has been recognised as an expense in Administrative and other costs in the consolidated statement of comprehensive income. h) Income tax Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for the financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except: • Where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised except: • Where the deferred income tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and • In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. 70 | PEAK RARE EARTHS Income taxes relating to items recognised directly in equity are recognised in equity and not in the profit or loss. i) Other taxes Revenues, expenses and assets are recognised net of the amount of GST/VAT except: When the GST/VAT incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST/VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and Receivables and payables, which are stated with the amount of GST/VAT included. The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. The GST/VAT component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, is classified as part of operating cash flows. Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to, the taxation authority. j) Loss per share i) Basic loss per share Basic loss per share is determined by dividing the group operating result after income tax attributable to members by weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. ii) Diluted loss per share Diluted loss per share is calculated by dividing the profit attributable to ordinary equity holders of the parent (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. k) Financial Instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under AASB 15. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. 2024 ANNUAL REPORT | 71 Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the asset. Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: • Financial assets at amortised cost (debt instruments) • Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) • Financial assets at fair value through profit or loss Financial assets at amortised cost (debt instruments) This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met: • The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group’s financial assets at amortised cost includes trade receivables. Financial assets designated at fair value through OCI (equity instruments) Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under AASB 132 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by- instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment. The Group elected to classify irrevocably its non-listed equity investments under this category. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. 72 | PEAK RARE EARTHS Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when: • The rights to receive cash flows from the asset have expired; or • The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Impairment of financial assets The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). Financial liabilities Initial recognition and measurement Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below. Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss. 2024 ANNUAL REPORT | 73 The financial instruments of the Group are (i) cash and cash equivalents, including other financial assets; (ii) trade and other receivables; (iii) investments, (iv) trade and other payables. l) Cash and Cash Equivalents Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. 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. m) Trade and Other Receivables Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently at amortised cost, less provisions for expected credit losses. For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. n) Property, plant and equipment Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Plant and equipment is depreciated on the straight line basis over their expected useful lives to their estimated residual value The useful life of the assets have been set at the following levels to determine the depreciation rates: Plant and equipment: 2 to 5 years Impairment The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. Impairment losses, if any, are recognised in the profit or loss. Derecognition and disposal An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised. o) Exploration and evaluation costs The Group expenses all exploration and evaluation expenditure (excluding acquisition costs) as incurred, as permitted by AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration and evaluation expenditure in relation to each separate area of interest is recognised as an exploration and evaluation asset in the year in which it is incurred where the following conditions are satisfied: The rights to tenure of the area of interest are current; and at least one of the following conditions is also met: • the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or • exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. 74 | PEAK RARE EARTHS Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). The recoverable amount of exploration and evaluation assets is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in profit or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to production assets. p) Trade and Other Payables Trade payables and other payables are initially recognised at fair value, then carried at amortised cost. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arising when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. q) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. r) Share-based payment transactions Equity settled transactions: The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions). The current plans in place to provide benefits to directors, senior executives and other eligible participants as determined by the Board are the Incentive Performance Rights Plan (PRP), the Incentive Employee Option Plan (EOP) and the Employee Incentive Plan (EIP) approved by shareholders on 15 June 2023. 2024 ANNUAL REPORT | 75 The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of Options is determined using a Black-Scholes option pricing model. For Performance Rights with non- market conditions, the fair value is measured using the closing share price at grant or shareholder approval date. For performance rights with market conditions, the fair value is measured using a binomial pricing model. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Peak Rare Earths Limited (market conditions) if applicable. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects: • the extent to which the vesting period has expired and • the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition. If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of loss per share. s) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. t) Non-controlling interest The Group elected to measure the non-controlling interests in Mamba Minerals Corporation Limited and Mamba Refinery Corporation Limited at its proportionate share of the book values of their net assets at each end of the reporting period. u) Critical accounting judgements and estimates In the application of Australian Accounting Standards, management is required to make judgments about applying accounting policies and estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are 76 | PEAK RARE EARTHS believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Impairment of exploration and evaluation costs The future recoverability of exploration and evaluation costs are dependent on a number of factors, including the level of proved, probable and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environment restoration obligations) and changes to commodity prices. To the extent that exploration and evaluation costs is determined not to be recoverable in the future, this impairment will reduce profits and net assets in the period in which this determination is made. Share based payment – key management personnel and employees The Group measures the cost of equity-settled transactions by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. Share based payment for government participation Estimating the fair value of the share based payment arising on the transfer of the 16% interest in the Ngualla project to the Tanzanian Government requires determination of the most appropriate valuation model significant judgement. As the fair value of the services received provided by the Tanzanian Government by to the Group under the framework agreement could not be reliably estimated, the fair value was determined taking into account utilising an indicative measure of the fair value of the Ngualla project at the date on which the Group and the Tanzanian Government entered into a framework agreement. 2024 ANNUAL REPORT | 77 3. AUDITORS REMUNERATION 4. LOSS PER SHARE 2024 $ 2023 $ Fees to Ernst & Young (Australia): Fees for auditing the statutory financial report of the parent covering the group and auditing the statutory financial reports of any controlled entities 84,700 84,700 Total fees to Ernst & Young (Australia) (A) 84,700 84,700 Fees to other overseas member firms of Ernst & Young (Australia) Fees for auditing the financial report of any controlled entities 51,690 30,722 Total fees to overseas member firms of Ernst & Young (Australia) (B) 51,690 30,722 Total auditor’s remuneration (A)+(B) 136,390 115,422 The following reflects the income and share data used in the total operations basic and dilutive loss per share computations: 2024 Cents 2023 Cents Basic and Diluted loss per share based on reported losses after tax as set out in the Statement of Comprehensive Income (6.85) (15.38) 2024 Nos. 2023 Nos. Weighted average number of ordinary shares used in calculating basic loss per share 265,229,079 213,201,222 Weighted average number of ordinary shares used in calculating diluted loss per share 265,229,079 213,201,222 Anti-dilutive options over ordinary shares and performance rights excluded from the weighted average number of shares 13,173,203 7,952,553 78 | PEAK RARE EARTHS 5. OPERATING SEGMENTS Information reported to the chief operating decision makers for the purposes of resource allocation and assessment of segment performance focuses on the exploration activities of the Group. The chief operating decision makers include the board of directors. The Group’s reportable segments under AASB 8 are as follows: • Exploration & Development (E&D) – Group’s exploration and development activities for the Ngualla project in Tanzania; and • Unallocated - to manage the corporate affairs of the group. The segments have applied the same accounting policies as applied to the Group and disclosed in the notes 1 and 2 to these financial statements. 30 June 2024 30 June 2023 E&D $ Unallocated $ Total $ E&D $ Unallocated $ Total $ Interest income - 572,164 572,164 - 111,705 111,705 Other income 384,831 384,831 586,281 586,281 Total income - 956,995 956,995 - 697,986 697,986 Depreciation and amortisation (324,997) (158,063) (483,060) (187,651) (132,558) (320,209) Share based payment expenses - (1,523,124) (1,523,124) (21,189,140) (1,665,584) (22,854,724) Borrowing costs - (27,608) (27,608) - (15,379) (15,379) Write-off of capitalised exploration costs - - - - - - Technical feasibility costs (8,685,767) - (8,685,767) (3,297,432) - (3,297,432) Exploration & evaluation costs (1,308,239) - (1,308,239) Other expenses - (7,105,027) (7,105,027) - (7,010,881) (7,010,881) Income Tax - - - - - - Segment results (10,319,003) (7,856,827) (18,175,830) (24,674,223) (8,126,416) (32,800,639) Segment assets 60,509,945 12,077,180 72,587,125 64,821,932 26,661,446 91,483,378 Segment liabilities (1,458,114) (1,056,380) (2,514,494) (358,268) (2,241,967) (2,600,235) Additions to non-current assets during the year: Plant and equipment 495,566 20,683 516,249 346,865 26,893 373,758 Right-of-use assets 516,779 - 516,779 - 86,521 86,521 1,012,345 20,683 1,033,028 346,865 113,414 460,279 2024 ANNUAL REPORT | 79 6. INCOME TAX CONSOLIDATED 2024 $ CONSOLIDATED 2023 $ a. The components of tax expense comprise: Current tax - - Deferred tax - - Income tax expense reported in statement of comprehensive income - - b. The prima facie tax benefit on loss from ordinary activities before income tax is reconciled to the income tax as follows: Loss before income tax (18,175,830) (32,800,639) Prima facie tax benefit on loss from ordinary activities before income tax at 30.0% (2023:30%) (5,452,752) (9,840,192) Add tax effect of: - Revenue losses not recognised 2,070,253 1,466,717 - Other non-allowable items 3,753,770 4,913,965 Less tax effect of: - Other deferred tax balances not recognised (255,821) (438,799) - Non-assessable items (115,450) - Income tax expense reported in statement of comprehensive income - - c. Recognised deferred tax assets at 30.0% (2023:30%) (Note 1): Deferred tax liabilities Prepayment (22,951) - Right of use asset (36,810) (77,268) Interest receivable (3,130) (17,575) Deferred tax assets Carry forward revenue losses 62,891 94,843 - - d. Unrecognised deferred tax assets at 30.0% (2023:30%) (Note 1): Carry forward revenue losses 13,377,933 11,754,678 Carry forward capital losses 355,256 295,504 Unrealised FX 421,933 543,997 Capital raising costs 348,095 400,947 Provisions and accruals 1,404,235 1,313,150 Net right-of-use assets/lease liability 40,160 80,878 Other 30,814 9,350 15,978,426 14,398,504 The tax benefits of the above deferred tax assets will only be obtained if: a. the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to be utilised; b. the Group continues to comply with the conditions for deductibility imposed by law; and c. no changes in income tax legislation adversely affect the company in utilising the benefits. Note 1 - the corporate tax rate for eligible companies is 25% providing certain turnover thresholds and other criteria are met. All other companies are taxed at 30%. Deferred tax assets and liabilities are required to be measured at the tax rate that is expected to apply in the future income year when the asset is realised or the liability is settled. The Directors have determined that the deferred tax balances be measured at the tax rates stated. Note 2 - Tax Consolidation For the purpose of income taxation, the Company and its 100% Australian controlled entities have formed a tax consolidated group effective from 1 July 2012. At 30 June 2024, Peak has adopted the stand-alone taxpayer method for measuring the current and deferred tax amounts. 80 | PEAK RARE EARTHS 7. CASH AND CASH EQUIVALENTS 8. TRADE AND OTHER RECEIVABLES Reconciliation of cash and cash equivalent 2024 $ 2023 $ For the purpose of the Cash Flow Statement, cash and cash equivalents comprise the following: Cash at bank and in hand 2,625,845 2,352,484 Short term deposits 5,000,000 23,500,000 7,625,845 25,852,484 Reconciliation of operating loss to operating cash flows Loss for the year (18,175,830) (32,800,639) Adjustments for non-cash items: Share based payments expenses 1,523,124 1,665,584 Share based payments for government participation - 21,189,140 Loss on sale of non-current asset 7,175 Depreciation expenses 483,060 320,209 Foreign exchange loss/(gain) (1,106,721) (9,084) Movement in working capital items: (Increase)/Decrease in trade and other receivables 135,282 723,034 (Increase)/Decrease in prepayments 68,868 (89,584) Increase/(Decrease) in trade and other payables (421,199) (307,555) Increase in provisions 39,965 84,187 (17,446,276) (9,224,708) 2024 $ 2023 $ Current GST/VAT receivable 95,579 180,641 Other receivable 20,516 70,736 116,095 251,377 Ageing of receivables Recoverable within 3 months 116,095 251,377 116,095 251,377 Receivables are non-interest bearing and unsecured. 2024 $ 2023 $ Bank Term Deposit 63,794 63,794 63,794 63,794 9. OTHER FINANCIAL ASSETS A deposit of $63,794 (2023: $63,794), has been secured against a guarantee issued by the bank for an office rental deposit. This cash balance is not available for withdrawal until the guarantee is withdrawn. 2024 ANNUAL REPORT | 81 10. PROPERTY, PLANT AND EQUIPMENT 2024 $ 2023 $ Plant and equipment At cost 1,041,970 826,572 Accumulated depreciation (189,852) (291,093) 852,118 535,479 Movement in net carrying amount: Balance at the beginning of the year 535,479 225,337 Net Additions 516,249 373,758 Depreciation for the year (165,198) (63,616) Depreciation for the year (34,412) - Balance at the end of the year 852,118 535,479 2024 $ 2023 $ Teesside freehold property Carrying value 3,490,457 - 3,490,457 - Movement in net carrying amount Balance at the beginning of the year - - Teesside right of use asset carrying value on acquisition of freehold title 3,245,407 - Additional Teesside freehold acquisition cost 245,050 - Balance at the end of the year 3.490.457 - 11. ASSETS HELD FOR SALE On 19 March 2024, the Company completed the acquisition of the freehold title over its 19-hectare Teesside site from Homes England for $245,050 (GBP 125,000). Prior to the acquisition of the freehold rights, the Company held a 250-year long-term pepper corn lease over the Teesside site, with the Company accounting for the lease payment as a right of use asset which had a carrying value of $3,425,407 at the date of the freehold acquisition. Following the acquisition of the freehold title, the Company commenced a sale process for the property. The Directors believe that it is highly probable that the Company is to divest the property during the 2025 financial year. 82 | PEAK RARE EARTHS 2024 $ 2023 $ Movement in net carrying amount: Balance at beginning of year 3,604,882 3,774,954 Additions 516,779 86,521 Transfer to Asset held for sale (3,245,407) - Depreciation for the year (317,862) (256,593) Balance at 30 June 2024 558,392 3,604,882 2024 $ 2023 $ Movement in net carrying amount: Balance at beginning of year 60,997,405 59,114,040 Foreign exchange movements (1,243,249) 1,883,365 Balance at 30 June 2024 59,754,156 60,997,405 Capitalised areas of interest Ngualla Rare Earth Project, Tanzania 59,754,156 60,997,405 59,754,156 60,997,405 2024 $ 2023 $ Investment in listed shares – at fair value through profit or loss - 8,000 - 8,000 2024 $ 2023 $ Movement in net carrying amount: Balance at beginning of year 279,263 316,643 Additions 516,779 86,521 Accretion of interest 27,608 15,379 Lease payments (248,894) (139,280) Balance at 30 June 2024 574,756 279,263 Current 212,990 145,398 Non-Current 361,766 133,865 Total 574,756 279,263 12. LEASES RIGHT OF USE ASSETS 13. EXPLORATION AND EVALUATION EXPENDITURE 14. INVESTMENTS LEASE LIABILITIES The Group also has certain contracts which contain a lease with terms of 12 months or less and contracts which contain a lease of low value. The Group applies the ‘short-term lease’ and ‘lease of low-value assets’ recognition exemptions for these. Leases that are short-term and low value amounted to $82,712 for the year ended 30 June 2024 (2023: $18,200). 2024 ANNUAL REPORT | 83 2024 $ 2023 $ Current Trade and other payables 1,719,219 2,140,418 Ageing of payables Payable within 3 months 1,719,219 2,140,418 1,719,219 2,140,418 2024 $ 2023 $ Employee benefits - leave entitlements 220,519 180,554 15. TRADE AND OTHER PAYABLES 16. PROVISIONS Trade and other payables are non-interest bearing, unsecured and are generally payable in 30-120 days. Share based payment reserve – the reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for supply of goods and services. Foreign currency translation reserve – the reserve is used to recognise exchange differences arising from translation of foreign operations to the Australian dollar. 17. RESERVES Share based payment reserve $ Foreign currency translation reserve $ Total $ At 30 June 2022 5,254,532 (56,969) 5,197,563 Share based payments 1,665,584 - 1,665,584 Exchange difference on translation of foreign operations - 1,900,864 1,900,864 At 30 June 2023 6,920,116 1,843,895 8,764,011 Share based payments 1,523,124 - 1,523,124 Exchange difference on translation of foreign operations - (2,157,806) (2,157,806) At 30 June 2024 8,443,240 (313,911) 8,129,329 84 | PEAK RARE EARTHS 18. CONTRIBUTED EQUITY Nos. $ Balance at 30 June 2022 207,348,537 140,805,369 Issue of shares for nil consideration on exercise of vested performance rights 5-Dec-22 514,399 - Issue of shares for nil consideration on exercise of vested performance rights 19-Dec-22 174,494 - Issue of shares on exercise of listed PEKOD options @ 30 cents per share 17-Feb-23 275,000 82,500 Issue of shares Tranche 1 Capital Raising @ 50 cents per share 5-May-23 28,648,186 14,324,093 Issue of shares for nil consideration on exercise of vested performance rights 15-May-23 905,036 - Issue of shares Tranche 2 Capital Raising @ 50 cents per share 20-Jun-23 15,215,000 7,607,500 Issue of shares Tranche 2 Capital Raising @ 50 cents per share 21-Jun-23 11,136,814 5,568,407 Equity Issue Costs (1,513,612) Balance at 30 June 2023 264,217,466 166,874,257 Issue of shares for nil consideration on exercise of vested performance rights 18-Jul-23 266,500 - Issue of shares for nil consideration on exercise of vested performance rights 21-Aug-23 157,500 - Issue of shares for nil consideration on exercise of vested performance rights 29-Dec-23 125,294 - Issue of shares for nil consideration on exercise of vested performance rights 9-Jan-24 1,175,000 - Equity Issue Costs - - Balance at 30 June 2024 265,941,760 166,874,257 Ordinary shares have the right to receive dividends as declared, and in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid upon on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. 2024 ANNUAL REPORT | 85 Options and Performance Rights over Ordinary Shares Date of expiry/ exercise or issue Nos Status Exercise Price Expiry Date Balance at 30 June 2023 8,219,053 Expired/ Lapsed/ Cancelled: Performance Rights lapsed on cessation of employment 15-Jan-24 (212,500) - 5-Feb-25 Performance Rights lapsed on cessation of employment 15-Jan-24 (175,000) - 9-Dec-25 (387,500) Issued: Performance Rights issued to employees. 9-Nov-23 4,104,540 Unvested - 9-Nov-28 Performance Rights issued to directors. 9-Nov-23 600,000 Unvested - 9-Nov-28 Performance Rights issued to directors. 4-Dec-23 2,311,404 Unvested - 30-Nov-28 Performance Rights issued to employees. 28-Mar-23 50,000 Unvested - 28-Mar-29 7,065,944 Exercised: Vested Performance Rights 17-Jul-23 (266,500) - 23-Sep-26 Vested Performance Rights 21-Aug-23 (157,500) - 23-Sep-26 Vested Performance Rights 29-Dec-23 (70,000) - 23-Sep-26 Vested Performance Rights 29-Dec-23 (7,500) - 5-Feb-25 Vested Performance Rights 29-Dec-23 (47,794) - 9-Dec-25 Vested Performance Rights 9-Jan-24 (95,000) - 23-Sep-26 Vested Performance Rights 9-Jan-24 (225,000) - 5-Feb-25 Vested Performance Rights 9-Jan-24 (280,000) - 9-Dec-25 Vested Performance Rights 9-Jan-24 (575,000) - 15-Dec-26 (1,724,294) Balance at 30 June 2024 13,173,203 Performance Rights over ordinary shares At the end of the reporting period, there were 13,173,203 performance rights over unissued shares as follows: For the year ended 30 June 2024, 4,154,540 employee performance rights and 2,911,404 director performance rights were issued under the Employee Incentive Plan approved at the General Meeting held on 15 June 2023. During the year a total of 1,724,294 performance rights were exercised and 387,500 expired, lapsed or were cancelled. At the end of the reporting period, the Company had no options outstanding over unissued shares. Capital Management Policy The Group’s policy is to effectively manage its capital structure so that it would continue to operate as a going concern. The Group manages its contributed equity and reserves as part of its capital. The Group is not subject to any externally imposed capital requirements. As is similar with many other exploration companies, the operational requirements of the Group are funded through equity and debt raised in various tranches. The overall capital management policy of the Group remains unchanged and is consistent with prior years. 86 | PEAK RARE EARTHS 19. SHARE BASED PAYMENTS Performance Rights Plan The Group has an Employee Incentive Plan for the granting of performance rights to eligible participants which was last approved by Shareholders at a General Meeting of the Company on 15 June 2023. Performance rights granted during and as at the year ended 30 June 2024: Number Exercise Price Fair value per performance right Outstanding at 1 July 2023 8,219,053 Granted during the year: Performance Rights issued under the Company’s Incentive Performance Rights Plan* 7,065,944 - 0.39 Expired/Lapsed during the year: (387,500) - Exercised during the year (1,724,294) - Outstanding at 30 June 2024 13,173,203 Exercisable at 30 June 2024 488,899 - Performance rights granted during and as at the year ended 30 June 2023: Number Exercise Price Fair value per performance right Outstanding at 1 July 2022 3,833,266 Granted during the year: Performance Rights issued under the Company’s Incentive Performance Rights Plan* 6,153,400 - 0.47 Expired/Lapsed during the year: (173,684) - Exercised during the year (1,593,929) - Outstanding at 30 June 2023 8,219,053 Exercisable at 30 June 2023 - - * Vest subject to achievement of performance criteria as determined by the Company’s Board. The volume weighted exercise price of rights issued during the year was $0.00 (2023: $0.00) The weighted average remaining contractual life for rights outstanding at 30 June 2024 was 3 years (2023: 3 years) The weighted average fair value of rights issued during the year was $0.39 per right (2023: $0.47) For performance rights with non-market conditions, the fair value is measured using the closing share price at grant or shareholder approval date. For performance rights with market conditions, the fair value is measured using a binomial pricing model. Performance rights were issued during the year with the follow inputs: 2024 ANNUAL REPORT | 87 Options and performance rights granted during the year ended 30 June 2024: 9-Nov-2023 – unvested LTI Performance Rights to vest on achievement of performance criteria by 9 November 2028 or the Performance Rights will lapse Share price on date of grant $0.39 Fair value per performance right – non-market based $0.39 9-Nov-2023 – unvested LTI Performance Rights to vest on achievement of performance criteria by 9 November 2028 or the Performance Rights will lapse Share price on date of shareholder approval $0.50 Fair value per performance right – non-market based $0.50 4-Dec-2023 – unvested LTI Performance Rights to vest on achievement of performance criteria by 30 November 2028 or the Performance Rights will lapse Share price on date of shareholder approval $0.39 Fair value per performance right – non-market based $0.39 28-Mar-2024 – unvested LTI Performance Rights to vest on achievement of performance criteria by 28 March 2029 or the Performance Rights will lapse Share price on date of grant $0.20 Fair value per performance right – non-market based $0.20 Options and performance rights granted during the year ended 30 June 2023: 23-Sep-2022 – unvested LTI Performance Rights to vest on achievement of performance criteria by 23 September 2026 or the Performance Rights will lapse Share price on date of grant $0.48 Fair value per performance right – non-market based $0.48 15-Dec-2022 – unvested LTI Performance Rights to vest on achievement of performance criteria by 15 December 2026 or the Performance Rights will lapse WA Share price on date of grant $0.475 WA Risk-free interest rate 3.75% Dividend yield 0% Expected volatility 80.7% Fair value per performance right – non market based $0.475 Fair value per performance right – market-based barrier price $0.80 $0.44 Fair value per performance right – market-based barrier price $1.50 $0.36 (WA weighted average) The expected volatility reflects the assumption that historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the case. The value of options and performance rights granted are expensed over the vesting period. Included in share based payments expense of $1,523,124 (2023: $1,665,584) is $Nil (2023: -$46,703*) relating to options granted during the year and prior years, and $1,665,584* (2023: $1,712,287*) relating to performance rights granted during the year and prior years. * Includes the write back of the share-based payments previously recognised for options and performance rights that lapsed during the current period. 88 | PEAK RARE EARTHS 2024 $ 2023 $ Up to 1 year 270,801 155,166 1 to 5 Years 489,004 137,549 759,805 292,715 Capital Commitments At 30 June 2024, the Group has no capital commitments (2023: Nil). Contingencies At 30 June 2024, the Group has no contingencies (2023: Nil). Peak’s 100% owned subsidiary Peak African Minerals has provided Peak with a working capital loan facility of US$4,209,317 (30 June 2023: US$4,209,317) with consists of a principal component of US$3,525,317 (30 June 2023: US$3,525,317) accruing interest at 8% per annum plus an initial finance charge of US$684,000 (30 June 2023: US$684,000) which is not interest bearing. The facility is fully drawn and is not currently due and payable, however if and when the facility is repaid the accrued interest and finance charge will be subject to withholding tax at 10% which is estimated to be US$337,127 as at 30 June 2024 (30 June 2023: US$302,891). The Group occasionally receives claims which arise in the normal course of business. Where the Group is in receipt of such claims it reviews their nature and substance in order to assess the need for accounting recognition or disclosure. The directors are of the opinion that, based on information available, there is currently no material exposure to the Group arising from actual or pending claims at balance date. 21. KEY MANAGEMENT PERSONNEL DISCLOSURE 20. CONTINGENCIES AND COMMITMENTS Lease commitments - Group as a lessee The maturity analysis of lease payments as at 30 June are as follows: 2024 $ 2023 $ Salary and fees – short term benefits 2,161,822 1,987,358 Superannuation 72,881 103,399 Share based payments^ 1,351,723 1,457,999 Termination payments 36,058 - 3,622,484 3,548,756 ^Includes write back of forfeited unvested non-market based Options and Performance Rights during the year. The balance outstanding at 30 June 2024 and included in trade and other payables is $15,000 (2023: $240,000). Loans to KMP’s No loans were made to KMPs during the financial year (2023: Nil) Other transaction and balances with KMPs There were no other related party transactions with KMPs during the year (2023: $Nil). There were no other balance outstanding at 30 June 2024 (2023: $Nil). 2024 ANNUAL REPORT | 89 22. GROUP STRUCTURE Parent and subsidiaries The parent and the ultimate parent entity of the Group is Peak Rare Earths Limited, a company listed on the Australian Securities Exchange. The components of the Group are: Ownership interest Incorporation 2024 2023 Parent Peak Rare Earths Limited Australia 100% 100% Controlled entities PRL Pty Ltd Australia 100% 100% Peak Hill Gold Mines Pty Ltd Australia 100% 100% Redpalm Pty Ltd Australia 100% 100% Pan African Exploration Limited Australia 100% 100% Peak Resources (Tanzania) Limited Tanzania 100% 100% Peak African Minerals Limited Mauritius 100% 100% PR Ng Minerals Limited (Indirectly) Tanzania 100% 100% Peak Technology Metals Limited United Kingdom 100% 100% Teesside Rare Earth Elements Limited (indirectly) United Kingdom 100% 100% Ngualla Group UK Limited (indirectly) United Kingdom 100% 100% Mamba Minerals Corporation Limited (indirectly) Tanzania 84% 84% Mamba Refinery Corporation Limited (indirectly) Tanzania 84% 84% Incorporation of Mamba Minerals Corporation Limited and Mamba Refinery Corporation Limited In February 2023, Peak and the Government of Tanzania, incorporated Mamba Minerals Corporation Limited (MML) and Mamba Refinery Corporation Limited (MRL), with the shareholders of both MML and MRL being Peak subsidiary, Ngualla Group UK Limited, holding 84% and the Government of Tanzania holding 16%. On 17 April 2023, the Framework Agreement was executed between the Tanzanian Government, Peak Rare Earths Limited, Ngualla Group UK Limited and PR NG Minerals Limited. The 16% interest in MML and MRL was issued to the Tanzanian Government without any consideration to fulfill the terms of the Framework Agreement and the Tanzanian legislation. The Tanzanian Government’s 16% interest is an un-dilutable, free carried interest and the Tanzania Government is not obliged to make any capital contributions for the development of the Ngualla Project or operations of MML and MRL. The Framework Agreement sets out the basis of the Government of Tanzania’s agreement for the licencing, development, economic benefit sharing and the formation of entities held by Peak and the Government of Tanzania with respect to the development and operation of the Ngualla Project. The Group was obliged to transfer all intellectual property, studies, reports, physical assets and any other assets acquired under the arrangement without any consideration to MML in accordance with the terms of the Framework Agreement. On 25 April 2023 the Special Mining Licence was issued to MML for the development and operations of the Ngualla Project. For the year ended 30 June 2023, the Group recognised a share based payment for government participation amounting to $21,189,140. Estimating the fair value of the share based payment arising on the issuance of the 16% interest in the Ngualla Project to the Tanzanian Government required determination of an appropriate valuation model under accounting standard AASB 2. The fair value was determined utilising the most appropriate measure available, being 16% of the Group’s adjusted market capitalisation of $132,432,122 at the date on which the Framework Agreement was executed. 90 | PEAK RARE EARTHS 1The total non-current assets of the Mamba entities on a standalone basis includes an uplift in the Exploration and Evaluation assets due to the fair value accounting for the initial Share Based Payment granted to Government of Tanzania. 23. FINANCIAL INSTRUMENTS The financial instruments of the Group are (i) cash and cash equivalents, including other financial assets; (ii) trade and other receivables; (iii) investments, (iv) trade and other payables. The Group’s principal financial instruments are cash and short-term deposits. The main purpose of these financial instruments is to finance the Group’s operations. It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken. The financial instruments expose the group to certain risks. The nature and extent of such risks, and the management's risk management strategy are noted below. 2024 $ 2023 $ Loss for the year (5,590,195) (21,336,143) Attributable to non-controlling interests (894,431) (3,413,783) Total comprehensive loss for the year (5,590,195) (21,336,143) Attributable to non-controlling interests (894,431) (3,413,783) Assets Current assets 417,361 - Non-current assets1 106,539,941 111,095,981 Total Assets 106,957,302 111,095,981 Liabilities Current liabilities 1,083,063 - Non-current liabilities 368,451 - Total Liabilities 1,451,514 - Total Equity 105,505,788 111,095,981 Attributable to: Equity holders of parent 88,624,862 93,320,624 Non-controlling interest 16,880,926 17,775,357 The summarised financial information of MML and MRL are as follows: 2024 $ 2023 $ Cash and cash equivalents 7,625,845 25,852,484 Trade and other receivables 116,095 251,377 Other financial assets 63,794 63,794 Investments - 8,000 Trade and other payables (1,719,219) (2,140,418) The carrying amount of financial instruments closely approximate their fair value on account of the short maturity. 2024 ANNUAL REPORT | 91 Credit Risk The Group's credit risks arise from potential default of trade and other receivables, cash and cash equivalents and other financial assets. The maximum credit exposure is limited to the carrying amount of trade and other receivables of $116,095 at 30 June 2024 (2023: $251,377). Credit risk from balances with banks and financial instruments is mitigated by holding balances with banks with a high credit rating. The maximum exposure for cash and cash equivalents is shown above. There were no significant concentrations of credit risks. Liquidity risk The Group's liquidity risks arise from potential inability of the Group to meet its financial obligations as and when they fall due, generally due to shortage of cleared funds. The Group is exposed to liquidity risk on account of trade and other payables. The Group manages its liquidity risk through continuously monitoring the cleared funds position; and by utilising short term cash budgets. The contractual maturity analysis of the Group's financial instruments are noted below: Interest rate risk Interest rate risk is the risk that fair values and cash flows of the Group’s financial instruments will be affected by changes in the market interest rates. The Group’s cash and cash equivalents are impacted by interest rate risks. Trade and other receivables and payables have short maturities and are non-interest bearing. Management believes that the risk of interest rate movement would not have a material impact of the Group’s operations. Management does not closely monitor the interest rates offered on cash and cash equivalents as the Group’s primary objective is exploration of resources rather than earning interest income. The cash balances are invested at the prevailing short term market interest rates with credit worthy financial institutions. The sensitivity of the interest-bearing financial instruments to a 1% change in market interest rate are noted below: 2024 2023 Up to 3 months $ > 3 months $ Total $ Up to 3 months $ > 3 months $ Total $ Financial liabilities Trade and other payables (1,719,219) - (1,719,219) (2,140,418) - (2,140,418) Lease Liabilities (60,884) (513,872) (574,756) (36,040) (243,223) (279,263) Total financial liabilities (1,780,103) (513,872) (2,293,975) (2,176,458) (243,223) (2,419,681) Financial assets Cash and cash equivalents and other financial assets 7,625,845 63,794 7,689,639 25,852,484 63,794 25,916,278 Investments - - - - 8,000 8,000 Trade and other receivables 116,095 - 116,095 251,377 - 251,377 Total financial assets 7,741,940 63,794 7,805,734 26,103,861 71,794 26,175,655 2024 $ 2023 $ Cash and cash equivalents 7,625,845 25,852,484 Impact on profit and equity: +1% movement 76,258 258,525 Impact on profit and equity: -1% movement (76,258) (258,525) 92 | PEAK RARE EARTHS Foreign currency risk The Group’s expenditure obligations in Tanzania are primarily in US dollars as a result the Group is exposed to fluctuations in the US dollar to Australian currency. The Group will transfer cash and cash equivalents into foreign currency to meet short term expenditure obligations. These exposures are not subject to a hedging programme. The Board and management from time to time having regard to likely forward commitments review this policy. Commodity price risk The Group’s exposure to commodity price risk is minimal at this stage of the operation. 24. SUBSEQUENT EVENTS On 24 July 2024, Peak signed a non-binding Term Sheet with Shenghe Resources Holding Co., Ltd. (Shenghe) covering an investment, funding and development solution for the Ngualla Rare Earth Project (Ngualla Project). Shenghe holds an approximate 19.9% interest in Peak and appointed a Non- Executive Director to the Company’s Board in December 2022. Key elements of the agreed Term Sheet between Peak and Shenghe include the following: • Investment structure – Shenghe to acquire a 50% interest in Ngualla Group UK Limited (NGUK), which holds an 84% effective interest in the Ngualla Project, through a subscription of new shares for ~A$96m; • Fully funded solution – upon completion, Peak will not be required to contribute any additional equity funding towards the development of the Ngualla Project. The difference between the Ngualla Project’s total development costs and Shenghe’s NGUK investment of ~A$96m will be funded via a Shenghe arranged debt facility, which is expected to be on terms more favourable than a typical international project financing facility; • Term – in the absence of execution of transaction documentation the Term Sheet to expire on 31 March 2025 unless mutually extended; • Various other commercial aspects around, engineering delivery solution, profit sharing and incentivisation payments and subsidiary Board representation are also considered. Other than the matters referred to above, there were no other events that have a material impact on the financial statements or operations of the Group and Company. Changes in liabilities arising from financing activities during the year ended 30 June 2024: 2024 1-Jul-23 $ Cash flows $ Foreign exchange movement $ Other Movement $ 30-Jun-24 $ Financial liabilities Lease liabilities 279,263 (248,894) - 544,387 574,756 Total liabilities from financing activities 279,263 (248,894) - 544,387 574,756 Changes in liabilities arising from financing activities during the year ended 30 June 2023: 2023 1-Jul-22 $ Cash flows $ Foreign exchange movement $ Other Movement $ 30-Jun-23 $ Financial liabilities Lease liabilities 316,643 (138,974) - 101,594 279,263 Total liabilities from financing activities 316,643 (138,974) - 101,594 279,263 2024 ANNUAL REPORT | 93 25. PARENT ENTITY DISCLOSURE The following details information related to the parent entity, Peak Rare Earths Limited. The information presented here has been prepared using consistent accounting policies as presented in Note 2. 2024 $ 2023 $ Financial position Current assets 10,862,062 25,940,650 Non-current assets 56,902,574 65,141,263 Total assets 67,764,636 91,081,913 Current liabilities 945,199 1,927,543 Non-current liabilities 10,394,074 10,043,456 Total liabilities 11,339,273 11,970,999 Net assets 56,425,363 79,110,914 Equity Contributed equity 166,874,256 166,874,257 Share based payment reserve 8,506,724 6,983,600 Accumulated losses (118,955,617) (94,746,943) Total equity 55,425,273 79,110,914 Financial performance Loss for the year (24,208,674) (10,707,606) Other comprehensive income - - Total comprehensive loss for the year (24,208,674) (10,707,606) Peak Rare Earths Limited had no commitments to purchase property, plant and equipment or contingent liabilities at 30 June 2024 (2023: $Nil). 94 | PEAK RARE EARTHS CONSOLIDATED ENTITY DISCLOSURE STATEMENT This consolidated entity disclosure statement has been prepared in accordance with the Corporations Act 2001 and includes information for each entity that was part of the consolidated entity as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements: As at 30 June 2024 Entity Name Entity Type Country of incorporation Beneficial interest % Country of tax residence Parent Peak Rare Earths Limited Body Corporate Australia Australia Controlled entities PRL Pty Ltd Body Corporate Australia 100% Australia Peak Hill Gold Mines Pty Ltd Body Corporate Australia 100% Australia Redpalm Pty Ltd Body Corporate Australia 100% Australia Pan African Exploration Limited Body Corporate Australia 100% Australia Peak Resources (Tanzania) Limited Body Corporate Tanzania 100% Australia Peak African Minerals Limited Body Corporate Mauritius 100% Australia PR Ng Minerals Limited (Indirectly) Body Corporate Tanzania 100% Australia Peak Technology Metals Limited Body Corporate United Kingdom 100% Australia Teesside Rare Earth Elements Limited (indirectly) Body Corporate United Kingdom 100% Australia Ngualla Group UK Limited (indirectly) Body Corporate United Kingdom 100% Australia Mamba Minerals Corporation Limited (indirectly) Body Corporate Tanzania 84% Tanzania Mamba Refinery Corporation Limited (indirectly) Body Corporate Tanzania 84% Tanzania 2024 ANNUAL REPORT | 95 DIRECTOR’S DECLARATION In accordance with a resolution of the directors of Peak Rare Earths Limited, I state that: In the opinion of the Directors a. Subject to the matters set out in Note 2(a) to the Financial Statements there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; b. the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 2 to the financial statements; c. the attached financial statements and notes thereto for the financial year ended 30 June 2024 are in accordance with the Corporations Act 2001 and Corporations Regulation 2001, including compliance with accounting standards and giving a true and fair view of the financial position as at 30 June 202 and performance of the Group for the year ended on that date; d. the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and correct; e. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 Signed in accordance with a resolution of the Directors made pursuant to s295(5) of the Corporations Act 2001. On behalf of the Directors Dr Russell Scrimshaw (AM) Executive Chairman Sydney, NSW 27 September 2024 96 | PEAK RARE EARTHS ASX ADDITIONAL INFORMATION Holding Ranges Ordinary Shares Unvested Performance Rights exercisable at $Nil No of Holders Total Units % Issued Share Capital No of Holders % IC 1 to 1,000 889 458,686 0.17 - 1,001 to 5,000 1,414 3,734,090 1.40 - 5,001 to 10,000 578 4,548,728 1.71 - 10,001 to 100,000 1,108 39,386,645 14.78 5 2.8 100,001 and over 278 218,302,510 81.94 13 97.2 Totals 4,267 266,430,659 100.00 18 100.00 07. The following additional information is required by the Australian Securities Exchange Ltd and was applicable as at 8 October 2024. DISTRIBUTION OF SECURITY HOLDERS UNMARKETABLE PARCELS There were 1,716 holders with less than a marketable parcel of fully paid shares representing 1,893,555 shares. RESTRICTED SECURITIES As at 8 October 2024, there were no restricted securities. Unquoted equity securities as at 8 October 2024 There were no persons holding greater than 20% of a class of unquoted securities not issued under an employee incentive scheme. Class of Equity Security Expiry Date Number Number of Security Holders Unvested Performance Rights exercisable at $Nil Various 11,709,304 18 SUBSTANTIAL HOLDERS The Substantial shareholders in the Company according to Form 604 notifications to ASX are: VOTING RIGHTS 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. On a poll every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held. Name of Holder Number held % Held Shenghe Resources (Singapore) Pte Ltd (21 June 2023) 52,399,173 19.80% 2024 ANNUAL REPORT | 97 Rank Name No. Shares %IC 1 SHENGHE RESOURCES (SINGAPORE) PTE LTD 52,899,173 19.85 2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 15,338,586 5.76 3 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 11,059,043 4.15 4 BNP PARIBAS NOMINEES PTY LTD 6,120,328 2.30 5 NETWEALTH INVESTMENTS LIMITED 5,588,737 2.10 6 CITICORP NOMINEES PTY LIMITED 5,639,086 2.12 7 BUTTONWOOD NOMINEES PTY LTD 4,529,953 1.70 8 SUTTON NOMINEES PTY LTD 4,308,745 1.62 9 SAMBOLD PTY LTD 3,740,000 1.40 10 AG 3,706,042 1.39 11 BNP PARIBAS NOMS PTY LTD 3,128,731 1.17 12 WISTRENGTH CAPITAL PTY LTD 2,182,814 0.82 13 ONE MANAGED INVESTMENT FUNDS LIMITED 2,072,891 0.78 14 BNP PARIBAS NOMINEES PTY LTD 2,047,565 0.77 15 PINNACLE SUPERANNUATION PTY LIMITED 2,000,000 0.75 15 LONERGAN FOUNDATION PTY LTD 2,000,000 0.75 15 BUSHELL NOMINEES PTY LTD 2,000,000 0.75 15 ASHABIA PTY LTD 2,000,000 0.75 15 PASAGEAN PTY LIMITED 2,000,000 0.75 16 MR RICHARD SMITH 1,923,334 0.72 17 CHARBELLU PTY LIMITED 1,900,000 0.71 18 BAROMODA HOLDINGS PTY LTD 1,760,093 0.66 19 MEURER INVESTMENTS PTY LTD 1,584,221 0.59 20 CRX SECURITIES PTY LIMITED 1,543,750 0.58 Total 141,073,092 52.95 EQUITY SECURITY HOLDERS The names of the twenty largest security holders of quoted equity securities as at 8 October 2024 are listed below: ON MARKET BUY-BACK The Company does not have any current on-market buy-back plans. 98 | PEAK RARE EARTHS TENEMENT SCHEDULE, RESERVE & RESOURCES Project Tenement % Status Arrangement/ Comment Ngualla SML 693/2023 84 Granted Held by Tanzanian subsidiary company, Mamba Minerals Corporation Limited, which is owned 84% by Peak (via 100% UK subsidiary, Ngualla Group UK Limited) and 16% by the Government of Tanzania (via the Treasury Registrar) JORC Category Ore Reserve as at 30 June 2024 (unchanged since October 2022) Ore Tonnes (Millions) REO % Contained REO Tonnes Proved 17.0 4.78 813,000 Probable 1.5 5.10 74,000 Total 18.5 4.80 887,000 ORE RESERVES AND MINERAL RESOURCES – ANNUAL REVIEW The Company reviews and reports its Ore Reserves and Mineral Resources at times which align with the strategic objectives of the Company. The tables below state the Ore Reserve and Mineral Resources as at 30 June 2024 which are unchanged from 30 June 2023. Table 1: Classification of Ore Reserve estimates for the Weathered Bastnaesite Zone at Ngualla. 08. 2024 ANNUAL REPORT | 99 See Table 2 for the breakdown of individual REO’s. Reported according to the JORC 2012 Code and Guidelines. Table 2: Relative components of individual rare earth oxides (including yttrium) as a percentage of total REO for the Ngualla Project Ore Reserve estimate (refer to Table 1) Values may not balance due to rounding to 0.01% Ore Reserves – Competent Person’s Statement The information in this report that relates to Ore Reserve estimates and estimated mine operating costs is based on information compiled by Mr Ryan Locke, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Locke is a Principal Consultant and is employed by Orelogy Mine Consulting Pty Ltd, an independent consultant to Peak Rare Earths Limited. Mr Locke has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Ryan Locke consents to the inclusion in the report of the maters based on his information in the form and context in which it appears. Table 3: Classification of All Mineral Resources for the Ngualla Rare Earth Project at a 1.0% REO cut-off grade. Rare Earth Oxides REO Grade % % of Total REO Proved Probable All Proved Probable All Lanthanum 1.318 1.418 1.326 27.59 27.80 27.61 Cerium 2.305 2.456 2.317 48.25 48.15 48.24 Praseodymium 0.228 0.243 0.229 4.77 4.77 4.77 Neodymium 0.788 0.838 0.792 16.49 16.43 16.49 Samarium 0.077 0.082 0.077 1.61 1.61 1.61 Europium 0.014 0.015 0.014 0.30 0.28 0.30 Gadolinium 0.029 0.031 0.030 0.62 0.60 0.62 Terbium 0.002 0.002 0.002 0.05 0.05 0.05 Dysprosium 0.004 0.004 0.004 0.07 0.07 0.07 Holmium 0.000 0.000 0.000 0.01 0.01 0.01 Erbium 0.001 0.002 0.002 0.03 0.03 0.03 Thulium 0.000 0.000 0.000 0.00 0.00 0.00 Ytterbium 0.001 0.001 0.001 0.01 0.01 0.01 Lutetium 0.000 0.000 0.000 0.00 0.00 0.00 Yttrium 0.010 0.010 0.010 0.20 0.19 0.20 Total REO 4.78 5.10 4.80 100.00 100.00 100.00 Lower Cut-Off Grade JORC Category Mineral Resource as at 30 June 2024 (unchanged from October 2022) Ore Tonnes (Millions) REO % Contained REO Tonnes BASO₄ % Ngualla all Mineral Resources 1.0% REO Measured 86.1 2.61 2,250,000 20.2 Indicated 112.6 1.81 2,040,000 13.8 Inferred 15.7 2.15 340,000 17.6 Total 214.4 2.15 4,620,000 16.6 *REO (%) includes all the lanthanide elements plus yttrium oxide. See Tables 5 for breakdown of individual REO’s. Figures above may not sum dueto rounding. The number of significant figures does not impy an added level of precision. The Weathered Bastnaesite Zone Mineral Resource estimate summarised below is a subset and contained within the All Mineral Resources reported in Table 3 above. 100 | PEAK RARE EARTHS Table 4: Classification of All Mineral Resources for the Weathered Bastnaesite Zone mineralisation at a 1.0% and 3% REO cut- off grades. Lower Cut-Off Grade JORC Category Mineral Resource as at October 2022 Ore Tonnes (Millions) REO % Contained REO Tonnes BASO₄ % Ngualla all Mineral Resources 1.0% REO Measured 18.9 4.75 900,000 37.8 Indicated 1.9 4.85 90,000 38.3 Inferred 0.5 4.43 20,000 31.5 Total 21.3 4.75 1,010,000 37.7 3.0% REO Measured 1.7 5.14 90,000 39.3 Indicated 0.4 4.84 20,000 35.4 Inferred 19.9 4.90 980,000 38.6 Total 19.9 4.90 980,000 38.6 *REO (%) includes all the lanthanide elements plus yttrium oxide. See Table 5 for breakdown of individual REO’s. The Weathered Bastnaesite ZoneMineral Resource is contained within an is a subset of the Total All Ngualla Project Mineral Resource at a 1% REO cut-off grade in Table 3 above. Figures above may not sum due to rounding. The number of significant figures does not impy an added level of precision. Table 5: Relative components of individual rare earth element oxides (including yttrium) as a percentage of total REO for 2018 Total Ngualla +1% REO, Weathered Bastnaesite Zone +1% REO and Weathered Bastnaesite Zone +3% REO and Mineral Resources summarised in Tables 3 and 4. Oxide Ngualla 2022 Total Mineral Resource Ngualla 2022 Weathered Bastnaesite Zone Resource Ngualla 2022 Weathered Bastnaesite Zone Resource 1% REO 1% REO 3% REO REO Grade (%) % of Total REO REO Grade (%) % of Total REO REO Grade (%) % of Total REO Lanthanum La₂O3 0.587 27.25 1.310 27.58 1.353 27.63 Cerium CeO2 1.039 48.23 2.293 48.27 2.364 48.27 Praseodymium Pr6O11 0.104 4.81 0.227 4.77 0.234 4.77 Neodymium Nd₂O3 0.348 16.2 0.784 16.5 0.806 16.5 Samarium Sm₂O3 0.036 1.66 0.076 1.60 0.078 1.60 Europium Eu₂O3 0.007 0.34 0.014 0.29 0.014 0.29 Gadolinium Gd2O3 0.016 0.75 0.029 0.61 0.030 0.61 Terbium Tb4O7 0.001 0.07 0.002 0.05 0.002 0.05 Dysprosium Dy₂O3 0.003 0.16 0.004 0.07 0.004 0.08 Holmium Ho₂O3 0.000 0.02 0.000 0.01 0.000 0.01 Erbium Er₂O3 0.001 0.06 0.002 0.03 0.002 0.03 Thulium Tm2O3 0.000 0.00 0.000 0.00 0.000 0.00 Ytterbium Yb2O3 0.001 0.04 0.001 0.01 0.001 0.01 Lutetium Lu2O3 0.000 0.00 0.000 0.00 0.000 0.00 Yttrium Y2O3 0.010 0.47 0.010 0.20 0.010 0.20 Total 2.15 100 4.75 100 4.90 100 *Figures may not sum due to rounding. Mineral Resource estimates – Competent Person’s Statement The information in this report that relates to the Mineral Resource estimates is based on work conducted by Rod Brown of SRK Consulting (Australasia) Pty Ltd, and the work conducted by Peak Rare Earths Limited, which SRK has reviewed. Rod Brown takes responsibility for the Mineral Resource estimate. Rod Brown is a Member of The Australian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activities undertaken, to qualify as Competent Person in terms of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 edition). Rod Brown consents to the inclusion of such information in this report in the form and context in which it appears. 2024 ANNUAL REPORT | 101 MINERAL RESOURCES AND ORE RESERVES GOVERNANCE The Company’s Mineral Resource and Ore Reserve estimates are completed by external consultants who qualify as Competent Persons as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Suitably qualified members of the PDI Board and management team provide input where required and review the estimates prior to release. COMPLIANCE STATEMENT Information in this report references the Company’s ASX announcements dated 24 October 2022 “Completion of Ngualla Project BFS Update”, 30 November 2023 “Completion of FEED Study”, and drilling and exploration results referenced by date announced on ASX which are also available to view on www.peakrareearths.com/announcements/. The Company confirms that at this time it is not aware of any new information or data that materially affects the information included in the relevant announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant announcement continue to apply and have not materially changed, save that (i) the 30 November 2023 announcement “Completion of FEED Study” provides new information and updates to estimates in the 24 October 2022 “Completion of the Ngualla Project BFS Update” and (ii) the change to the rare earths price assumptions as set out in the December 2023 Quarterly Activities Report and Review of Operations Section of the December 2023 Half-Year Financial Report. 102 | PEAK RARE EARTHS CORPORATE DIRECTORY PEAK RARE EARTHS LIMITED ABN: 72 112 546 700 DIRECTORS Russell Scrimshaw Executive Chairman Abdullah Mwinyi Non-Executive Director Shasha Lu Non-Executive Director Ian Chambers Non-Executive Director Nick Bowen Non-Executive Director Hannah Badenach Non-Executive Director Bardin Davis Chief Executive Officer Philip Rundell Company Secretary REGISTERED OFFICE Level 9 190 St Georges Terrace Perth WA 6000 SOLICITORS Corrs Chambers Westgarth (Australia) Level 6 Brookfield Place Tower 2 123 St Georges Terrace Perth WA 6000 Clyde & Co (Tanzania) 11th Floor, Jubilee Towers Ohio Street ,Dar es Salaam, Tanzania Bowmans Tanzania 2nd Floor, The Luminary Cnr Haile Selassie and Chole Roads Masaki, Dar es Salaam, Tanzania Corporate Governance Statement The Company has adopted the recommendations of the ASX Corporate Governance Council’s Principles and Recommendations (Third Edition) in regard to the Corporate Governance Disclosures and provides disclosure of the Company’s Corporate Governance Statement on the Company’s website here. AUDITORS Ernst and Young 11 Mounts Bay Road Perth WA 6000 SHARE REGISTRY Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 CONTACT DETAILS Website: www.peakrareearths.com Email: info@peakrareearths.com Telephone: (08) 9200 5360 Facsimile: (08) 9226 3831 STOCK EXCHANGE LISTING Australian Securities Exchange Limited Home Exchange: Perth, Western Australia Code: PEK 09. 2024 ANNUAL REPORT | 103