Reedy Lagoon Corporation Limited
Annual Report 2023

Plain-text annual report

A.C.N. 006 639 514 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Reedy Lagoon Corporation Limited Contents 30 June 2023 Chairman's letter Review of operations Tenement schedule Directors' report Auditor's independence declaration Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors' declaration Independent auditor's report to the members of Reedy Lagoon Corporation Limited Shareholder information Corporate directory 2 3 18 20 26 27 28 29 30 31 44 45 48 50 1 Level 44, 600 Bourke Street Melbourne VIC Australia Ph: (03) 8420 6280 Postal Address: P O Box 2236, Richmond VIC 3121 Email: info@reedylagoon.com.au reedylagoon.com.au Dear Shareholders Annual Report for Financial Year 2023 The Company has 3 very prospective projects: Lithium (cid:120) (cid:120) Gold (cid:120) Iron (magnetite) The status of these projects is summarised in the Review of Operations in this Annual Report. After Financial Year 2023 the Company sought to raise $1.32 million from shareholders under a 1 for 3 entitlement offer together with a related offer under which shareholders could apply for additional shares. The Company raised $349,748 under this offer. This funding has enabled the Company to secure its tenements and meet overheads for the time being, but further funding needs to be raised in order to be able to develop the Company’s projects and thereby create increased value for the Company’s assets. The Company is looking to obtain this further funding through farm­ins under joint ventures of one or more of its projects in preference to offering shares at a discount to the current share price which would be dilutive to existing shareholdings. Thank you for your continued support. Yours sincerely, Jonathan Hamer Chairman Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Overview Reedy Lagoon has exploration projects for lithium, gold and magnetite. During the 2023 financial year and in the period up to the date of this Review of Operations, the Company staked additional claims to expand its lithium- brine project in Nevada to include lithium-clay targets, identified new gold prospects by soil sampling for gold at Burracoppin and explored various options for progressing its Burracoppin Iron project. Corporate. Reedy Lagoon issued 9,292,689 shares at an issue price of $0.0119 per share to directors under the Scheme approved by shareholders at the annual general meeting held on 25 November 2022 relating to the payment of directors’ remuneration in respect of a prior period. Subsequent to the end of the 2023 financial year the Company issued 49,963,988 RLC shares at an issue price of $0.007 per share under an Entitlement Offer to shareholders raising $349,748 on 29 August 2023. On 27 July 2022 the agreement with Dinsdale Consultants Pty Ltd and Smelt Tech Consulting Pty Ltd to pursue a commercial objective of establishing “green iron” production in Western Australia using HIsmelt technology to smelt magnetite from the Burracoppin deposit using biochar as the reductant instead of coal was amended to have services in the future provided by MinRizon Projects Pty Ltd instead of Dinsdale Consultants Pty Ltd. 3 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Review of Projects Lithium Nevada Lithium Brine Projects Alkali Lake North (“ALN”): Clayton Valley (“CV”): LITHIUM BRINES RLC 100% Nevada, USA 334 placer claims and 157 lode claims – 9,657 acres (3,908 ha) 112 placer claims – 2,240 acres ( 906 ha) The Nevada lithium brine projects comprise: Alkali Lake North and Clayton Valley. The projects are located in two large and separate ground water catchment areas in Nevada, USA. The projects are within 30 kilometres of the Silver Peak Lithium Brine Operation owned by Albemarle Corp. which is located 360 kilometres by road (US-95 route) from the Tesla Gigafactory (Lithium-ion batteries) in Reno. Several other advanced lithium projects are active in the area and are shown in Figures 1 & 2. Figure 1. Location diagram. RLC’s Alkali Lake North and Clayton Valley lithium projects are  shown in blue.  Other lithium projects shown are: Silver Peak Lithium Brine Operation  (Albemarle Corp.), NeoLith Energy – Direct Extraction Li‐brine Pilot Plant (Schlumberger/Pure  Energy), Rhyolite Ridge Project (Li‐mineral) (Ioneer Ltd), Tonopah Lithium Project (Argosy  Minerals), TLC Lithium Deposit (Li‐clay) (American Lithium Corp.) and Tonopah North Lithium  Project (Li‐clay) (Blackrock Silver Corp./Tearlach Resources).    4 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 During the 2023 financial year reports of loosely bound lithium found within extensive shallow flat lying sediments in the area to the north of Reedy Lagoon’s Alkali Lake North project presented an additional potential pathway for Reedy Lagoon to becoming a low-cost producer of battery grade lithium chemical. Reedy Lagoon holds two project areas, Clayton Valley and Alkali Lake North, which comprise a combined area of 4,814 hectares (11,857 acres) under 446 placer claims and 157 lode claims. Brine targets defined in detailed geophysical data (3D-AMT) are present in both project areas. New lode claims acquired during the 2023 financial year expand the project area at Alkali Lake North to include an area where Siebert Formation sediments, the host sediments for lithium-clay deposits reported to the north, are interpreted to extend under shallow cover. All the claims are 100% owned and there are no non-government royalty arrangements. Clayton Valley Project LITHIUM in BRINE Nevada, USA RLC 100% The Clayton Valley lithium-brine project is located within 10 kilometres northwest of the Silver Peak Lithium Operation (owned by Albemarle Corporation) where the southern end of Big Smoky Valley meets the western side of Clayton Valley (refer Figure 1). The project comprises 112 placer claims covering 906 hectares (2,240 acres). A brine target potentially comprising a 200 metre thick interval of sediments containing multiple brine filled aquifers has been identified in Audio MagnetoTelluric (3D AMT) survey data (refer ASX release 23/8/2018). Importantly, we see similarities between the geology indicated in our 3D AMT survey with the geology that has been determined and reported for the Silver Peak lithium brine production area located a few kilometres to the southeast. The next phase of exploration is likely to comprise drilling the brine targets identified in the 3D AMT data. Timing depends on external developments including in direct extraction lithium-brine capabilities, availability of water rights and funding. Alkali Lake North Project LITHIUM in BRINE & CLAY Nevada, USA RLC 100% The Alkali Lake North Project (Nevada, USA) is exploring for lithium dissolved in salty ground water (lithium-brine) and for lithium in clay-sediments (lithium-clay) in the area about 15 kilometres southwest from Tonopah. The project comprises 334 placer claims and 157 lode claims, covering 3,908 hectares (9,657 acres). The project is located on the western margin of the Tonopah South Caldera. ALN was initiated to investigate for lithium-brine and the original placer claims staked by RLC were designed to cover a deep sub-basin interpreted from satellite and gravity data and now buried under recent alluvium (ASX release 30/01/2017 ). 5 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Lithium enriched clays discovered on projects including two located on the west side of Tonopah to the north of ALN have recently been reported by other explorers including Lithium Americas Corp. and Blackrock Silver Corp. (refer to Figure 2). Metallurgical testwork carried out by Lithium Americas on drill samples has demonstrated fast leach times for lithium extraction and this is because lithium atoms are loosely adsorbed onto clay molecules and not tied up in the molecular lattice of clay minerals such as hectorite. The lithium in clay discoveries near Tonopah occur within a volcanic ash unit known as the Siebert Formation. The Siebert Formation is widely distributed in this area and while the presence of lithium in the Formation is not ubiquitous, lithium enrichment is thought to be associated with geothermal activity in shallow lacustrine settings including caldera lakes, sedimentary basins and hot springs. The Siebert Formation is interpreted to extend into the RLC claims under shallow alluvial cover where it can readily be drill-tested (ASX release 28/04/2023). Figure 2.  RLC’s  Alkali Lake North  lithium project.  Other lithium  projects shown are:  American Lithium  Corp’s TLC Lithium  Project,  Blackrock  Silver Corp’s  Tonopah North  Lithium Project, Pan  American Energy  Corp’s Horizon  Project and Astute  Metal’s Polaris  project (and  others).   6 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Lithium-brine targets potentially comprising multiple brine aquifers within sediments have been identified (as conductors) in data from Audio MagnetoTelluric (“AMT” ; both 2D and 3D AMT) and seismic surveys (refer to Figure 3 and ASX release 6/01/2022). A tubular shaped conductor 4,300 metres in length with a keel extending to at least 600 metres depth over its central section is interpreted in 3D Audio Magneto-telluric (3D-AMT) data. The full lateral extent of the tubular brine target lies within a sub-basin indicated in gravity data and the target’s central keel coincides with the deepest part of the basin (refer ASX release 14/10/2021). Interpretations of 2D Shallow Seismic Reflection (SSR) data acquired along a 7 kilometre long traverse running east-west across the centre of the project area include reflectors pulling up towards the eastern and western ends of the traverse suggesting sedimentary layers sag downwards in the central portion of the project area which would be consistent with an interpreted basin structure from gravity data (refer to Figures 3 and 4 and ASX release 6/01/2022). Figure 3.  Alkali Lake North project : Shallow Seismic Reflection survey. The SSR traverse line in  this image is orientated Left is west,  Right is east  and located on Figure 2.  Note: depth to top of  Siebert decreases from the central part of the traverse to the east.  7 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Figure 4. Alkali Lake North.  Interpreted conductors and structure over 2D‐AMT data.    Note that the 2D‐AMT traverse extends further west than the SSR traverse shown in Figure 3.  The concurrent presence of extensive AMT conductivity anomalies and shallow seismic reflectors located within a basin structure indicated in gravity data and captured within the project area are strong indicators of the presence of a substantial brine aquifer system located within the Alkali Lake North project. The project was expanded to include investigations for lithium-clay in the 2023 financial year. Lithium-clay targets comprise clay sediments/tuffs of the Siebert Formation. In late 2022 and early 2023 Reedy Lagoon staked lode claims over ground abutting the eastern and northern sides of the ALN area targeting areas where the target host lithologies for a lithium bearing sediment/clay are interpreted to extend under shallow cover (refer ASX release 28/04/2023). Siebert Formation sediments are mapped outcropping 300 hundred metres to the east of the expanded project area are interpreted to extend into the Reedy Lagoon claims under shallow alluvial cover. The next phase of exploration will prioritise drilling to test the lode claims for the presence of Siebert Formation sediments and for lithium within those sediments. Further exploration planned to investigate the lithium-brine targets includes additional 3D-AMT survey over areas not yet covered in order to acquire data to aid drill target selection for testing the extensive flat lying aquifers interpreted in the 2D-AMT and SSR data across the project area. Drill testing for lithium bearing brine in the large tubular shaped target located in the eastern side of the project is also planned. However, exploration for lithium-rich clay is significantly quicker and less costly than exploration for lithium in brine. For this reason drilling at the lithium-clay targets is being pioritised. 8 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Gold Burracoppin Gold RLC 100% E70/4941, E70/5467, E70/5544 (241 km2) Western Australia Reedy Lagoon is targeting gold mineralisation at Burracoppin in the vicinity of its magnetite deposit (part of the iron project) located 260 kilometres east of Perth in Western Australia. The project is 60 kilometres north of the Tampia gold mine and 30 kilometres southwest from the Edna May gold mine (both owned by Ramelius Resources Limited). Figure 5.  Burracoppin Gold Project.  Yandina Shear Zone, project tenure and location over  regional geology.    The focus of exploration includes a structural feature, the Yandina Shear Zone, and areas adjacent to it. Most of the 30 kilometre strike length of the Yandina Shear Zone within the project area has seen very little exploration. Exploration using soil sampling along traverse lines and low detection gold assay (lower detection limit 0.1 ppb Au) is generating encouraging results. 9 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 . Current results have identified prospect areas shown on Figure 6 at Lady Janet, Windmills, Shear Luck and Zebra. Infill soil sampling conducted during the 2023 financial year advanced the Shear Luck and Zebra prospects. Figure 6.  Overview of soil sample lines; location of  the Lady Janet,  Windmills, Shear Luck and Zebra  gold prospects and the Yandina Shear Zone. Lady Janet Prospect At Lady Janet, gold assays from soil samples indicate a contiguous zone extending 1,200 metres located to the east of the Yandina Shear Zone within which samples on 7 adjacent traverses at 200 metre separations reported with at least 5 ppb gold (refer Figures 6 & 7). The gold assay values show a clear drop to less than 1.2 ppb gold along the eastern ends of the traverse lines suggesting the results may be related to underlying geology and lend support to the exploration method in this environment. 10 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Reedy Lagoon’s initial sampling at the Lady Janet had two purposes: one being to recover results from our sampling to assist our understanding of the responses recovered, the other to follow up old workings at Lady Janet (refer ASX release 23/12/2020). The sampling achieved success on both counts. Results from the sampling have identified a gold anomaly showing strong correlation with elements of the Yandina Shear Zone along strike from the Lady Janet Mine. The results give encouragement that ongoing work at the prospect may be assisted by detailed magnetic data identifying structural targets for drilling. Figure 7.  Lady Janet prospect ‐ soil sample results over  regional magnetics. Mapped trace of Yandina Fault  Zone is shown passing  through the sample traverses.   Windmills prospect The Windmills Prospect was initiated in 2021 when geochemical data recovered from soil samples on a traverse in an area devoid of any known past sampling identified an auriferous zone 800 metres wide and follow-up sampling recovered results that extended the auriferous zone to measure at least 1,400 metres by 400 metres (refer Figures 6 & 8 and ASX release 28/09/2022). The prospect is located about 1.5 kilometres east from the mapped location of the Yandina Shear Zone and the auriferous zone is elongated in a direction parallel to it. Figure 8.  Windmills prospect ‐ soil sample results over regional  magnetics.   11 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Shear Luck prospect The Shear Luck prospect is located in the southwest part of the project area about 6 kilometres from the southern boundary (refer to Figures 6 & 9). Infill soil sampling conducted during the 2023 financial year recovered gold levels of at least 5 ppb forming an anomalous gold zone of at least 1,000 metres length along the Yandina Shear Zone. The infill sampling followed-up anomalous gold results recovered last year. Two exploratory traverses had recovered anomalous gold highlighting a section of the Yandina Shear Zone coincident with a magnetic anomaly likely related to a mapped occurrence of metamorphosed banded iron-formation. The new gold assay results highlight the potential for this structural setting to be favourable for gold mineralisation and provide focus for further investigation (refer to ASX release 3/07/2023).    Figure 9. Shear Luck prospect. Soil sample gold assay results over regional magnetics.  12                       Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Zebra prospect The Zebra prospect is located about 4 kilometres east from the mapped location of the Yandina Shear Zone. The longer axis of the anomalous gold zone is approximately parallel to the Shear Zone (refer to Figure 6). Infill soil sampling conducted during the 2023 financial year recovered gold levels of at least 5 ppb along 8 adjacent E-W soil traverse lines for a N-S distance of 1,400 metres (refer to Figure 10). Additional sampling is required to investigate for north and south extensions to the anomalous gold zone identified in the current data. Figure 10. Zebra prospect. Soil sample gold assay results over regional magnetics. Figure 10. Zebra prospect. Soil sample gold assay results over regional magnetics.  Work planned. Next steps under consideration or planned include:  additional infill and extension sampling at both Shear Luck and Zebra to better constrain the surface gold anomaly extent;  additional assay, including multi-element, to investigate for both gold and lithium path-finder elements in samples already collected and  geophysical surveys to acquire data to aid interpreting structural targets to assist in planning drill programs. The relationship between regional scale magnetic data and gold anomalism in the 4 prospect areas identified give confidence that detailed magnetic data may enable structural targets to be identified for drill testing. 13     Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Iron Burracoppin Iron Western Australia RLC 100% MINING, BIOMASSING and SMELTING to produce GREEN HIGH PURITY PIG IRON. The Burracoppin Iron project plans to produce iron from the Burracoppin magnetite deposit by mining and processing the ore into an iron concentrate for smelting into pig iron using carbon from biomass. The plan incorporates HIsmelt technology which is well suited to processing the coarse grained high- purity iron concentrate that the Burracoppin magnetite mineralisation can produce. The planned smelt reactor produces High Purity Pig Iron (“HPPI”) at a rate of 1 million tonnes per annum (“mtpa”) upgradable to 2 mtpa. A pig iron production rate of 1 mtpa would require about 1.6 mtpa iron concentrate (3.2 mtpa for the higher rate). The requirement for 1.6 mtpa iron concentrate is well matched to the likely scale of mining operations that may prove possible at Burracoppin and the available public access infrastructure. The steps required to achieve annual production of 1Mtpa Green High Purity Pig Iron include establishing the following:  Mining - Burracoppin Magnetite  Biomassing for Carbon Cycling  Smelting - HIsmelt  Production - High Purity Pig Iron The project aims to be a low‐cost producer of green high purity pig iron.   Burracoppin Magnetite Deposit Western Australia RLC 100% E70/4941 (58 km2) Figure 11.    14 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 The Burracoppin magnetite deposit is located half-way between Perth and Kalgoorlie near the town of Burracoppin on the Great Eastern Highway, east of Merredin. The Trans-Australian Railway passes over the north-western extension of the deposit providing heavy-haul goods service and access to ports (refer to Figure 8). Metallurgical testwork conducted on core samples from 3 holes drilled into the Burracoppin magnetite deposit has identified mineralisation well suited to HIsmelt. The testwork to date indicates the Burracoppin mineralisation can produce an iron concentrate of at least 67% Fe and low impurities at a grind size of 80% passing 150 micron (refer ASX releases: 18/01/2013 and 17/11/2014). Results from a study by CSIRO using advanced modelling of the magnetic field associated with the deposit have been used by Reedy Lagoon to determine an Exploration Target of 240 to 300 million tonnes at 20 to 25 Wt% iron at Burracoppin and are being used to assist planning the Company’s drilling to establish the presence of sufficient magnetite to support the planned pig iron production (refer ASX release 29/04/2022). The Exploration Target stated above is a product of research which, whilst based on robust physics, is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource. Further drilling and metallurgical testwork is planned to establish Indicated Resources which, if achieved, will enable financials for the mining and production of iron concentrate for the planned smelter to be estimated. Figure 12.  CSIRO’s MagResource model of the Burracoppin magnetite deposit shown beneath land  surface imaged from GoogleEarth.   15 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 During the 2023 financial year reviews of potential development options were undertaken. One option includes progressing the project by initial production for sale of Direct Reduction Magnetite Concentrate (“DR Magnetite Concentrate”). DR Magnetite Concentrate typically requires less than 2% total silica and alumina and greater than 70% Fe. The metallurgical work to date indicates the Burracoppin mineralisation may produce such a concentrate at the 45 micron grind size usually required for pelletising. DR Magnetite Concentrate would be marketed primarily to be processed into pellets to make direct reduced iron for Electric Arc Furnaces. Development of the project to produce green high purity pig iron using HiSmelt and +67% Fe concentrate (at +100 micron) with no pelletising stage remains the preferred option (including because of its potentially lower net GHG1 emissions), but the production and marketing of DR Magnetite Concentrate as an intermediary stage in the project’s development could expand RLC’s market options while allowing progression in the future to the production of green pig iron. Note 1: Green House Gas (“GHG”) emissions include carbon dioxide, methane and nitrous oxide Biomassing – Carbon Capture Studies have identified the potential for locally grown biomass to produce all the carbon required for the planned smelting of Burracoppin magnetite into pig iron (refer to ASX release 19/03/2021). Biomass includes grass, wood, crops and certain "waste" products otherwise destined for landfill. Biomass has been used as a fuel but we intend harvesting the carbon it contains by processing it into biochar. The biochar will then be used to replace coal as the source of carbon required to smelt magnetite into pig iron. Our net operation will be smelting magnetite into metal which will release carbon dioxide into the air and cropping biomass to extract carbon dioxide from the air. The project will have greenhouse (including carbon dioxide) emissions additional to those from the smelting operation, including from harvesting and processing biomass, mining and transport. These additional emissions in total will be significantly less than those from the smelting operation and it is anticipated that they could be mitigated by biomass/biochar production in excess of the smelter requirements and / or by purchasing carbon credits. Our Iron Project will encompass carbon capture through agriculture and carbon release through industry: a cycle - what is taken out is put back in. It is intended that the biomass business will enable the project to produce pig iron with net zero carbon dioxide emissions together with an alternative crop for wheat farmers in the Western Australian Wheatbelt. NOTE: It is expected that it may take 5 to 10 years to achieve the production rate of 0.8Mtpa biochar required for the planned production of 1Mtpa HPPI (refer ASX 19/03/2021). Alternative options may include cropping biomass in other parts of Australia (higher growth rates) and by purchasing biochar. 16 Reedy Lagoon Corporation Limited Review of operations 30 June 2023 Smelting – Green High Purity Pig Iron HIsmelt technology + Magnetite + Biochar = Green High Purity Pig Iron. In the event that Steps 1 (Mining), and 2 (Biomassing) are achieved then the following objectives and scenarios would be pursued: HIsmelt is a proven technology that was initially developed in Australia before being purchased by Molong Petroleum Machinery Ltd and developed commercially in China. HIsmelt smelts iron ore into High Purity Pig Iron ("HPPI") with lower environmental emissions than the conventional blast furnace technology and can produce "green" pig iron via using sustainably produced biochar as the reductant instead of coal (refer to ASX releases 09/02/2021 and 19/03/2021). HIsmelt is an innovative smelting process capable of using the coarse Burracoppin concentrate as direct feed thus significantly reducing process costs at the mine site and adverse emissions at the smelter site (as neither sintering or pelletising of the concentrate is required). The HIsmelt smelt process produces a net excess of electricity, which will be "green" electricity when using biochar as the reductant instead of coal. This green electricity may be able to be counted as mitigating carbon emissions. The excess electricity (estimated at 20MW during smelting operations) could potentially be used to produce green hydrogen for use in a first step in the smelt reaction in order to further reduce carbon emissions (refer to ASX release 19/03/2021). Geof Fethers Managing Director Competent Person’s Statements:   The information in this report other than information in the section headed “Lithium” as it relates to exploration  results and geology was compiled by Mr Geoffrey Fethers who is a Member of the Australasian Institute of Mining  and Metallurgy. Mr Fethers is a director of Reedy Lagoon Corporation Limited and a Competent Person.  Mr  Fethers  has  sufficient  experience  which  is  relevant  to  the  style  of  mineralisation  and  type  of  deposit  under  consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012  Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr  Fethers consents to the inclusion in the report of the matters based on the information in the form and context  in which it appears.  The information in the Exploration section headed “Lithium” of this report as it relates to exploration results and  geology was compiled by Mr Geoff Balfe who is a Member of the Australasian Institute of Mining and Metallurgy.  Mr Balfe is a consultant to Reedy Lagoon Corporation Limited and a Competent Person.  Mr Balfe has sufficient  experience which is relevant to the style of mineralisation and type of deposit under consideration and to the  activity  which  he  is  undertaking  to  qualify  as  a  Competent  Person  as  defined  in  the  2012  Edition  of  the  'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Balfe consents  to the inclusion in the report of the matters based on the information in the form and context in which it appears.  Where Exploration Results have been reported in earlier RLC ASX Releases referenced in this report, those releases  are  available  to  view  on  https://www.reedylagoon.com.au/investors/asx‐announcements/.  The  company  confirms that it is not aware of any new information or data that materially affects the information included in  those earlier releases. The company confirms that the form and context in which the Competent Person’s findings  are presented have not been materially modified from the original market announcement.  17 Reedy Lagoon Corporation Limited Tenement Schedule 30 June 2023 Tenement Schedule Tenements held at 28 September 2023: Located in Australia Tenement E70/4941 Burracoppin (WA) E70/5467 Burracoppin (WA) E70/5544 Burracoppin (WA) Date of grant Status Minimum Annual Expenditure Commitment $ Company Interest (direct or indirect) Current 11 Feb 2019 20,000 100% 1, & 2 Current 22 Jan 2021 28,000 100% 1, & 2 Area (km2) 58 81 102 Current 23 Mar 2021 35,000 100% 1, & 2 Located in USA Tenements (all Placer Claims and Lode Claims located in Nevada) 3 & 4 Claim Name Claim Numbers Alkali Lake North Project WH Claims WH­1 to WH­7 WH­8 to WH­29 WH­30 to WH­51 WH­52 to WH­63 WH­64 to WH72 WH­73 to WH94 WH­95 to WH­115 WH­116 to WH­123 WH­124 to WH­128 WH­129 to WH­334 AC Claims AC­1 to AC­63 AC­64 to AC­157 Clayton Valley Project CV Claims CV­1 to CV­112 Corresponding BLM NMC Number Total Claims Total Area NV101828616 to NV101828622 NV101830001 to NV101830022 NV101571222 to NV101571243 NV101572484 to NV101572495 NV101572601 to NV101572609 NV101573822 to NV101573843 NV101573822 to NV101573843 NV101576089 to NV101576096 NV101576201 NV101576205 NV105269236 to NV105269441 NV105815722 NV105815784 NV105829725 NV105829818 to to to 7 22 22 12 9 22 21 8 5 206 63 94 NMC 1176204 to NMC 1176315 112 18 2,596 ha 1,312 ha 906 ha Reedy Lagoon Corporation Limited Tenement Schedule 30 June 2023 Notes to the tenement schedule: 1. E70/4941, E70/5467 and E70/5544 are 100% owned by RLC through its wholly owned subsidiary, Bullamine Magnetite Pty Ltd. The 3 tenements have each been granted for a 5 year term commencing at date of grant. 2. The Statutory expenditure requirement for Australian tenements is subject to negotiation with the relevant state department, and expenditure commitments may be varied between tenements, or reduced subject to reduction of exploration area and/or relinquishment of non-prospective tenements. Expenditure requirements commence at grant and apply for each 12 month period following the grant date. 3. The Placer and Lode Claims in the lithium projects in Nevada are owned 100% by RLC through its wholly owned subsidiary, Sierra Lithium LLC. 4. Annual Land Fees comprising maintenance fees payable to the BLM and Esmeralda County are payable in respect of the Claims. All Land Fees were paid up to 31 August 2024. There is no minimum exploration expenditure requirement for Claims located in Nevada, USA. 5. NV is the County serial number. 19 Reedy Lagoon Corporation Limited Directors' report 30 June 2023 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Reedy Lagoon Corporation Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2023. Directors The following persons were directors of Reedy Lagoon Corporation Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Jonathan M. Hamer Geoffrey H. Fethers Adrian C. Griffin Principal activities During the financial year the principal continuing activities of the consolidated entity consisted of exploration for minerals in Australia and the United States of America. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations The loss for the consolidated entity after providing for income tax amounted to $772,560 (30 June 2022: $1,387,442 (Loss)). Refer to the separate review of operations that comes before this directors' report. Significant changes in the state of affairs There were no significant changes in the state of affairs of the consolidated entity during the financial year. Matters subsequent to the end of the financial year On 26 July 2023, the RLC announced a non-renounceable pro rata entitlement offer to eligible holders of RLC shares on a 1 for 3 basis at 0.7 cents per new RLC share, together with a related offer under which those holders could apply for shares in addition to their entitlement. On 29 August 2023, RLC issued 49,963,988 shares to shareholders who had subscribed $349,748 under the terms of the Offer. No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. Impact of COVID 19 Pandemic Restrictions imposed by governments during the COVID pandemic retarded progress on the Company’s projects but otherwise the pandemic had limited effect on the Company’s operations At the date of annual report, an estimate of the future effects of the COVID-19 pandemic on the group cannot be made, as the impact will depend on the magnitude and duration of the economic downturn, with the full range of possible effects unknown. Likely developments and expected results of operations Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity. At the date of this report, there are no future developments of the Company which warrant disclosure. Environmental regulation The consolidated entity's operations are subject to environmental regulations in relation to its exploration activities under State legislation in Australia and Federal legislation in USA. The directors are not aware of any breaches of environmental regulations during the period covered by this report. The directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. For the period 1 July 2022 to 30 June 2023 the directors have assessed that there are no current reporting requirements. Information on directors Name: Title: Age: Qualifications: Experience and expertise: Jonathan M. Hamer Chairman – Non-Executive 68 BA, LLB. Jonathan Hamer is a former partner of King & Wood Mallesons where he practised in the areas of corporate and finance law. Jonathan was appointed as a non-executive director of Reedy Lagoon on 9 May 2007 and has served on the board as chairman since. Other current directorships: Former directorships (last 3 years): Interests in shares: Interests in options: Nil Nil 19,968,511 fully paid ordinary shares 600,000 options 20 Reedy Lagoon Corporation Limited Directors' report 30 June 2023 Name: Title: Age: Qualifications: Experience and expertise: Geoffrey H. Fethers Managing Director 66 B.Sc.(Hons), M AusIMM Geof Fethers is a geologist with more than 30 years exploration experience. He was employed by De Beers Australia Exploration Limited (formerly Stockdale Prospecting Limited) from 1980 to 1985. Geof founded Reedy Lagoon on 24 September 1986 and has managed operations since inception. Other current directorships: Former directorships (last 3 years): Interests in shares: Interests in options: Nil Nil 57,662,667 fully paid ordinary shares 500,000 options Name: Title: Age: Qualifications: Experience and expertise: Adrian C. Griffin Director - Non-Executive 70 B.Sc.(Hons), M AusIMM Adrian Griffin has accumulated over 40 years’ experience in the resource sector. During that time he has held directorships of many private and listed resource companies and overseen the operation of large, integrated mining and processing facilities. He is currently a technical advisor to Lithium Australia Limited, a diversified battery materials company. Adrian was a director of Reedy Lagoon from 9 May 2007 until resigning on 27 November 2009 to act as technical director of Ferrum Crescent, an iron-ore developer in South Africa. He re-joined Reedy Lagoon as a director on 30 June 2014. Adrian was also a founding director of Northern Minerals Ltd and Parkway Corporate Limited, Battery Future Acquisition Corporation and recently appointed a director of Charger Metals NL. He has been involved in developing a number of lithium extraction technologies, high-performance cathode materials for lithium ion batteries, and recycling of battery materials. Other current directorships: Former directorships (last 3 years): Special responsibilities: Interests in shares: Interests in options: Charger Metals NL (ASX:CHR) appointed 26 November 2021 Battery Future Acquisition Corporation (NYSE: BFAC.U) appointed 18 April 2021 Northern Minerals Ltd (ASX:NTU) 22 July 2006 to 24 November 2020 Lithium Australia Ltd (ASX:LIT) 31 January 2011 to 31 May 2022 Parkway Corporate Ltd (ASX:PWN) 12 November 2010 to 19 September 2022 Nil 36,192,291 fully paid ordinary shares 300,000 options Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Former directorships (last 3 years) quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. ‘Interests in shares and options’ quoted above are as at the date of this report. Company secretary Geoffrey H. Fethers is the Company's secretary. Details of his qualifications and experience are disclosed in the information on directors section above. Meetings of directors The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2023, and the number of meetings attended by each director were: Jonathan M. Hamer Geoffrey H. Fethers Adrian C. Griffin Held: represents the number of meetings held during the time the director held office. Full Board Attended 7 7 7 Held 7 7 7 21 Reedy Lagoon Corporation Limited Directors' report 30 June 2023 Remuneration report (audited) This remuneration report outlines the Director and Executive remuneration arrangements of the Company in accordance with the Corporations Act 2001 and its Regulations. It also provides the remuneration disclosures required by paragraphs AUS25.4 and AUS 25.7.2 of AASB 124 Related Party Disclosures which have been transferred to the Remuneration Report in accordance with the Corporations Regulation 2M 6.04. This report outlines the remuneration arrangements in place for the Directors (both Executive and Non-Executive) and Executives of the Company. This report is audited as the entity has transferred the disclosures from the financial statements. For the purposes of this report the term ‘Senior Executive‘ encompasses the Managing Director, Executive Directors and Secretary of the Company. The remuneration report is set out under the following main headings: ● ● ● ● ● Principles used to determine the nature and amount of remuneration Details of remuneration Service agreements Share-based compensation Additional disclosures relating to key management personnel Principles used to determine the nature and amount of remuneration Currently, the Company does not have a separate remuneration committee. Because of the size of the Board and the operations of the Company, the Directors are of the view that there is no need for a separate remuneration committee. The Board as a whole reviews the remuneration packages and policies applicable to the Chairman, Senior Executives and Non-Executive Directors on an annual basis. Remuneration levels are set to attract or retain, as appropriate, qualified and experienced Directors and Senior Executives. From time to time and as required, the Board will seek independent professional advice on the appropriateness of remuneration packages. The current nature and amount of remuneration payable to Chairman, Executives and Non-Executive Directors is not dependent upon the satisfaction of a performance condition. Instead part of the remuneration takes the form of options which will have value if the Company’s share price increases. Use of remuneration consultants The Company did not make use of remuneration consultants during the 2023 financial year Voting and comments made at the Company's 25 November 2022 Annual General Meeting ('AGM') At the 25 November 2022 AGM, 99.16% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2022. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. Details of remuneration Amounts of remuneration Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables and the sub-section: Service Agreements below. The key management personnel of the consolidated entity consisted of the following directors of Reedy Lagoon Corporation Limited: ● ● ● J Hamer G Fethers A Griffin Short-term benefits Post- employment benefits Long-term benefits Share-based payments Cash salary and fees Annual Leave Payment in respect of prior period * Super- annuation Long service leave Equity-settled Total 2023 $ $ $ $ $ $ $ Non-Executive Directors: J Hamer A Griffin 36,199 20,000 - - 33,333 16,667 Executive Directors: G Fethers 45,430 101,629 (3,696) (3,696) 60,583 110,583 3,801 - 27,500 31,301 - - (2,422) (2,422) 1,932 644 3,219 5,795 75,265 37,311 130,614 243,190 * There has been no increase in remuneration rates to directors in the report period. The payments totaling $110,583 to directors were in respect of contracted amounts previously not paid and which arose as follows: Directors agreed to not receive or be entitled to receive potions of their contracted remuneration for the period commencing 1 March 2022 on the basis that amounts not receivable from that date would become payable if and only if (1) the board agreed to make payment; (2) the Company is solvent at the time of payment; and (3) the Company would remain solvent after payment. This was agreed by the directors in order to reduce overheads, increase available funding for exploration and preserve cash pending raising additional funds. 22 Reedy Lagoon Corporation Limited Directors' report 30 June 2023 Details of remuneration (continued) The directors proposed at the annual general meeting held on 25 November 2022 ("AGM") that some or all of these conditional payments in respect of the 10 month period from 1 March 2022 to 31 December 2022 to become payable, but only on the further condition that any amounts paid (after allowing for tax on such amounts which the director may request be paid free of this further condition) are applied by the Directors to subscribe for new fully paid ordinary shares in the Company (“Shares”) at an issue price equal to the 5 day VWAP on the day prior to issue (“the Scheme”). Under the Scheme any amount paid to a director (other than amounts in respect of tax requested by that director to be free of the subscription requirement) would be returned to the Company as new share capital issued at market. Shareholders approved the Scheme at the AGM, each of the directors elected to receive the payment under the Scheme and subscribed in aggregate $110,583 for 9,292,689 fully paid shares in RLC at market ($0.0119 per share) on 15 December 2022. Short-term benefits Post- employment benefits Long-term benefits Share-based payments Cash salary and fees Annual Leave Payment in respect of prior period * Super- annuation Long service leave Equity-settled Total 2022 $ $ $ $ $ $ $ Non-Executive Directors: J Hamer A Griffin 51,364 28,333 - - 100,000 50,000 Executive Directors: G Fethers 77,850 157,547 20,300 20,300 216,892 366,892 5,303 - 25,000 30,303 - - 3,996 3,996 4,500 1,500 7,500 13,500 161,167 79,833 351,538 592,538 The proportion of remuneration linked to performance and the fixed proportion are as follows: Name Non-Executive Directors: J Hamer A Griffin Executive Directors: G Fethers Fixed remuneration 2023 2022 At risk - STI At risk - LTI 2023 2022 2023 2022 97% 98% 97% 98% 98% 98% - - - - - - 3% 2% 2% 3% 2% 2% Service agreements Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows: Name: Title: Agreement commenced: 1 May 2007 Details: G Fethers Managing Director Mr G Fethers is the Company’s Executive Managing Director under a contract of employment which commenced on 1 May 2007. Under the contract Mr Fethers is entitled to $132,000 per annum plus statutory superannuation and options under the terms of the Directors Options Scheme. The contract does not have any fixed term and may be terminated by the Company or Mr Fethers on reasonable notice. No payments or retirement benefits are payable on termination. Name: Title: Agreement commenced: 1 May 2007 Details: J Hamer Chairman - Non-Executive Mr J Hamer is employed as the Company’s Non-executive Chairman. His appointment as a Director commenced on 9 May 2007 with agreed director fees payable at an annual rate of $40,000 plus options under the terms of the Directors Options Scheme. His annual rate was increased from $40,000 to $80,000 commencing 1 January 2018. There is no fixed term and no set retirement benefits are payable on termination. Name: Title: Agreement commenced: 30 June 2014 Details: Mr Adrian Griffin Director Mr A Griffin is employed as a Non-executive Director. His appointment as a Director commenced on 30 June 2014 with agreed director fees payable at an annual rate of $40,000 plus options under the terms of the Directors Options Scheme. There is no fixed term and no set retirement benefits are payable on termination. Key management personnel have no entitlement to termination payments, other than accrued leave balances, in the event of removal for misconduct. 23 Reedy Lagoon Corporation Limited Directors' report 30 June 2023 Share-based compensation Issue of shares There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2023. No shares were issued to any director in lieu of cash payable for fees/salary/super during the year ended 30 June 2023. Options The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Grant date Vesting date and exercisable date Expiry date Exercise price Fair value per option at grant date 15 December 2022 15 December 2022 31 December 2025 $0.0152 $0.0064 Options granted carry no dividend or voting rights. The number of options over ordinary shares granted to and vested by directors and other key management personnel as part of compensation during the year ended 30 June 2023 are set out below: Name J Hamer G Fethers A Griffin Number of options granted during the year 2023 300,000 500,000 100,000 Number of options granted during the year 2022 300,000 500,000 100,000 Number of options vested during the year 2023 300,000 500,000 100,000 Number of options vested during the year 2022 300,000 500,000 100,000 Additional disclosures relating to key management personnel Shareholding The number of shares in the Company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Ordinary shares G Fethers J Hamer A Griffin Balance at the start of Received in lieu of Held on Balance at the end of the year remuneration Additions appointment the year 52,571,659 17,167,391 34,791,730 104,530,780 - - - - 5,091,008 2,801,120 1,400,561 9,292,689 - - - - 57,662,667 19,968,511 36,192,291 113,823,469 Option holding The number of options over ordinary shares in the Company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below: Options over ordinary shares G Fethers J Hamer A Griffin Balance at the start of the year - 300,000 300,000 600,000 Granted Exercised Expired / Forfeited 500,000 300,000 100,000 900,000 - - - - (100,000) (100,000) Balance at the end of the year 500,000 600,000 300,000 1,400,000 This concludes the remuneration report, which has been audited. Shares under option Unissued ordinary shares of Reedy Lagoon Corporation Limited under option at the date of this report are as follows: Grant date 23 December 2020 23 December 2021 15 December 2022 Expiry date 31 December 2023 31 December 2024 31 December 2025 Exercise price $0.0147 $0.0546 $0.0152 Number under option 100,000 400,000 900,000 1,400,000 No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate. 24 Reedy Lagoon Corporation Limited Directors' report 30 June 2023 Shares issued on the exercise of options No ordinary shares of Reedy Lagoon Corporation Limited were issued on the exercise of options during the year ended 30 June 2023 and up to the date of this report. Indemnity and insurance of officers During the financial year, the Company paid a premium in respect of a contract insuring the directors of the Company (as named above) and all executive officers of the Company and of any related body corporate against a liability incurred in such capacity of 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 financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer. Proceedings on behalf of the company No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. Non-audit services Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 17 to the financial statements. The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 17 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons: ● ● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. Officers of the Company who are former directors of Connect National Audit Pty Ltd There are no officers of the Company who are former directors of Connect National Audit Pty Ltd. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001. On behalf of the directors G.H. Fethers Managing Director 28 September 2023 Melbourne 25 AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 As lead auditor for the audit of Reedy Lagoon Corporation Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been: (a) (b) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Reedy Lagoon Corporation Limited and controlled entities. George Georgiou FCA Managing Director Connect National Audit Pty Ltd ASIC Authorised Audit Company No.: 521888 Melbourne, Victoria Date: 28 September 2023 Connect National Audit Pty Ltd is an Authorised Audit Company Head Office: Level 14, 333 Collins St, Melbourne VIC 3000 ABN 43 605 713 040 Gold Coast Office: Level 9, Wyndham Corporate Centre, 1 Corporate Court, BUNDALL, QUEENSLAND, 4217 Sydney Office: Level 5, 20 Bond Street, Sydney NSW 2000 Liability limited by a scheme approved under Professional Standards Legislation w: www.connectaudit.com.au Reedy Lagoon Corporation Limited Statement of profit or loss and other comprehensive income For the year ended 30 June 2023 Revenue Expenses Administration expenses Employee benefits expense Exploration expenditure Share based payments Exchange gain and losses Capital raising expenses Impairment of goodwill on business combination Other expenses Loss before income tax expense Income tax expense Loss after income tax expense for the year attributable to the owners of Reedy Lagoon Corporation Limited Items that may be reclassified subsequently to profit or loss Foreign Currency Translation Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the owners of Reedy Lagoon Corporation Limited Note Consolidated 2023 $ 2022 $ 1,664 99 (144,100) (222,941) (357,661) (5,795) (4,989) - - (38,738) (229,262) (551,601) (604,513) (13,500) 41,583 - - (30,248) (772,560) (1,387,442) 5 - - (772,560) (1,387,442) - - - - (772,560) (1,387,442) Cents Cents Basic earnings per share Diluted earnings per share 25 25 (0.137) (0.137) (0.261) (0.261) The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes 27 Reedy Lagoon Corporation Limited Statement of financial position As at 30 June 2023 Assets Current assets Cash and cash equivalents Trade and other receivables Other Total current assets Non-current assets Deposits & bonds Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Employee benefits Provision for site restoration Provision for contingent liability Total current liabilities Non-current liabilities Employee benefits Subordinated Loan Total non-current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity Note Consolidated 2023 $ 2022 $ 6 7 8 9 10 11 20 12 13 206,591 4,012 4,345 214,948 8,189 8,189 551,988 64,987 85,571 702,546 7,881 - 7,881 223,137 710,427 13,547 183,390 10,000 - 206,937 - 200,000 200,000 13,742 182,405 10,000 36,290 242,437 - - - 406,937 242,437 (183,800) 467,990 23,445,242 (8,480) (23,620,562) (183,800) 23,334,659 (18,376) (22,848,293) 467,990 The above statement of financial position should be read in conjunction with the accompanying notes 28 1,629,282 53,420 13,500 - (36,757) - 467,990 Total deficiency in equity $ 467,990 Reedy Lagoon Corporation Limited Statement of changes in equity For the year ended 30 June 2023 Consolidated Balance at 1 July 2021 Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Issued capital $ 21,632,780 Exchange Reserves $ 11,490 Options Reserves $ 12,568 Accumulated losses $ (21,460,851) Total deficiency in equity $ 195,987 - - - - - - (1,387,442) (1,387,442) - - (1,387,442) (1,387,442) - - Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 12) Excercise of options Share-based payments Lapse of Options Foreign currency translation 1,629,282 72,597 - - - - - - - (36,757) - (19,177) 13,500 - - - - - - - Balance at 30 June 2022 23,334,659 (25,267) 6,891 (22,848,293) Consolidated Balance at 1 July 2022 Loss after income tax expense for theyear Other comprehensive income for the year, net of tax Total comprehensive income for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 12) Excercise of options Share-based payments Lapse of Options Foreign currency translation Issued capital $ 23,334,659 Exchange Reserves $ (25,267) Options Reserves $ 6,891 Accumulated losses $ (22,848,293) - - - 110,583 - - - - - - - - - 5,795 (291) - (772,560) (772,560) - - (772,560) (772,560) - - - 291 - 110,583 - 5,795 - 4,392 - - - - - - 4,392 Balance at 30 June 2023 23,445,242 (20,875) 12,395 (23,620,562) (183,800) The above statement of changes in equity should be read in conjunction with the accompanying notes 29 Reedy Lagoon Corporation Limited Statement of cash flows For the year ended 30 June 2023 Cash flows from operating activities Operating receipts Payments to suppliers and employees Payments for exploration activities Interest received Net cash used in operating activities Cash flows from investing activities Proceeds from deposits and bonds refunds Net cash from investing activities Cash flows from financing activities Proceeds from issue of shares, net of issue costs Proceeds from exercise of share options Proceeds from Loans Net cash from financing activities Net (decrease) / increase in cash and cash equivalents Impact of exchange rates on foreign cash balances Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year Note 24 9 12 6 Consolidated 2023 $ 1,664 (430,820) (225,919) - 2022 $ - (756,153) (738,443) 99 (655,075) (1,494,497) - - - - 110,583 - 200,000 310,583 (344,492) (905) 551,988 206,591 1,629,282 53,420 - 1,682,702 188,205 3,845 359,938 551,988 The above statement of cash flows should be read in conjunction with the accompanying notes 30 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 1. General information The financial statements cover Reedy Lagoon Corporation Limited as a consolidated entity consisting of Reedy Lagoon Corporation Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Reedy Lagoon Corporation Limited's functional and presentation currency. Reedy Lagoon Corporation Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Level 44, 600 Bourke Street Melbourne Victoria 3000 A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 September 2023. The directors have the power to amend and reissue the financial statements. Note 2. Significant accounting policies The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. Going concern This financial report has been prepared on a going concern basis. The Company has sufficient funds to continue its current activities which include studies developing new lithium project opportunities in the US, interpretation of the recent results from soil sampling at the Burracoppin gold project and planning for drilling at the Burracoppin magnetite deposit. The Company plans to fund additional exploration including drilling at its existing projects by raising capital by issuing securities or through joint venture under project farm out agreements. The Directors have assessed the Company’s current financial position and are of the view that application of the going concern basis of accounting is appropriate. Comparatives The comparative figures have been classified in certain circumstances to provide a more meaningful representation of the financial statements. Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB'). Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial instruments. Critical accounting estimates The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 3. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 21. 31 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 2. Significant accounting policies (continued) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Reedy Lagoon Corporation Limited ('company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. Reedy Lagoon Corporation Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'. Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. Foreign currency translation The financial statements are presented in Australian dollars, which is Reedy Lagoon Corporation Limited's functional and presentation currency. Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity. The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. Exploration, Evaluation and Development Expenditure Expenditure incurred on the acquisition of exploration properties and exploration, evaluation and development costs, including acquisition of Nevada Lithium Pty Ltd are written off as incurred where the activities in the areas of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. At the date of this report insufficient data has been recovered to permit an assessment of the existence of economically recoverable reserves at any of the Company’s projects. The Company has accordingly expensed all its expenditure relating to exploration during the report period. Once it is determined that the costs can be recouped through sale or successful development and exploitation of the area of interest then the on-going costs are accumulated and carried forward for each area of interest. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. When production commences, carried forward exploration, evaluation and development costs are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. Each area of interest is also reviewed annually and accumulated costs written off to the extent that they will not be recoverable in the future. Restoration costs are provided for at the time of the activities that give rise to the need for restoration. If this occurs prior to commencement of production, the costs are included in deferred exploration and development expenditure. If it occurs after commencement of production, restoration costs are provided for and charged to the statement of financial performance as an expense. 32 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 2. Significant accounting policies (continued) Revenue recognition The consolidated entity recognises revenue as follows: Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Other revenue Other revenue is recognised when it is received or when the right to receive payment is established, less allowance for doubtful receivables. Income tax The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: ● ● When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. Deferred tax assets and liabilities are always classified as non-current. Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Trade and other receivables Other receivables are recognised at amortised cost, less any allowance for expected credit losses. 33 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 2. Significant accounting policies (continued) Trade and other payables These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. Provisions Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost. Employee benefits Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Other long-term employee benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black- Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: ● ● during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability. Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. 34 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 2. Significant accounting policies (continued) If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of Reedy Lagoon Corporation Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Goods and Services Tax ('GST') Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2023. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. Note 3. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Share-based payment transactions Equity-settled share-based payments are measured at fair value of the equity instrument at the grant date. Fair value is measured by the use of either a Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. Recovery of deferred tax assets Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Management has determined not to recognise the deferred tax asset, given that the group has experienced losses, on a historical basis. 35 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 3. Critical accounting judgements, estimates and assumptions (continued) Employee benefits provision As discussed in note 2, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account. Exploration expenditures The consolidated entity expenses expenditures relating to exploration where the activities in the areas of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. At the date of this report insufficient data has been recovered to permit an assessment of the existence of economically recoverable reserves at any of the Company’s projects. The Company has accordingly expensed all its expenditure relating to exploration during the report period. Provision for restoration Significant estimates and assumptions are made in determining this provision as there are a number of factors that will affect the ultimate liability. These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases/decreases and changes in discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision at balance date represents management’s best estimate of the present value of the future restoration costs required. Note 4. Operating segments Identification of reportable operating segments The Company is organised into one operating segments: mineral exploration. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. Note 5. Income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 25% (2022: 25%) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Capital allowances share issue costs Non deductible equity settled benefits expense Other non-deductible (deductible) expenses Non deductible overseas exploration expenditure Current year tax losses not recognised Income tax expense Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 25% Consolidated 2023 $ 2022 $ (772,560) (1,387,442) (193,140) (346,861) (3,444) 1,449 8,019 58,063 (129,053) 129,053 (21,029) 3,375 (2,600) 102,068 (265,047) 265,047 - - 10,321,586 9,805,374 2,580,397 2,451,344 The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed. The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not been recognised in the statement of financial position as the recovery of this benefit is uncertain. The potential future income tax benefit will only be obtained if: a) The Company derives future assessable income of a nature and amount sufficient to enable the benefit to be realised; b) The Company continues to comply with the conditions for deductibility imposed by the law; and c) No changes in tax legislation adversely affect the Company in realising the benefit. 36 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 5. Income tax expense Income Tax Rate The tax rate used in the above reconciliation is the corporate tax rate of 25% payable by base rate entities for the 2022 and future income years. The base rate entity tax rate applies where the aggregated turnover of the entity is less than $50 million and less than 80% of assessable income is base rate entity passive income. The rate used is the one that is expected to apply when the deferred tax assets of the entity are realised and the deferred tax liabilities of the entity are settled. The corporate tax rate has been reduced when compared with the previous year, which also used a rate of 25%. Note 6. Current assets - cash and cash equivalents Cash at bank Note 7. Current assets - trade and other receivables GST receivable Other Receivable Note 8. Current assets - other Prepayments Note 9. Non-current assets - other Security deposits Consolidated 2023 $ 2022 $ 206,591 551,988 Consolidated 2023 $ 2022 $ 4,012 - 4,012 14,471 50,516 64,987 Consolidated 2023 $ 2022 $ 4,345 85,571 Consolidated 2023 $ 2022 $ 8,189 7,881 The security deposits are monies held in respect of rehabilitation works required on the Company’s tenements located in the USA. Note 10. Current liabilities - trade and other payables Other payables and accruals Refer to note 15 for further information on financial instruments. Note 11. Current liabilities - employee benefits Annual leave Long Service Leave 37 Consolidated 2023 $ 2022 $ 13,547 13,742 Consolidated 2023 $ 2022 $ 143,791 39,599 183,390 141,905 40,500 182,405 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 12. Equity - issued capital Ordinary shares - fully paid 566,719,601 557,426,912 23,445,242 23,334,659 2023 shares 2022 shares 2023 $ 2022 $ Consolidated Movements in ordinary share capital Details Balance Issue of shares Less Share issue costs Director subscriptions Excercise of options Excercise of options Excercise of options Issue of shares Balance Director subscriptions Balance Date Shares Issue price $ 30 June 2021 3 September 2021 3 September 2021 3 December 2021 3 December 2021 31 December 2021 11 March 2022 3 June 2022 30 June 2022 470,026,166 70,000,000 5,331,064 2,400,000 100,000 500,000 9,069,682 557,426,912 $0.0160 $0.0404 $0.0049 to $0.0147 $0.0116 $0.0546 $0.0400 21,632,780 1,120,000 (68,880) 215,375 36,132 1,665 34,800 362,787 23,334,659 15 December 2022 9,292,689 $0.0119 110,583 30 June 2023 566,719,601 23,445,242 Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Share buy-back There is no current on-market share buy-back. Capital risk management RLC’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern and exploit the mineral assets under its control in order to provide future returns for shareholders and benefits for other stakeholders. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. The Company continuously reviews the capital structure to ensure:- • sufficient funds are available to implement its exploration expenditure programs in accordance with forecasted needs; and • sufficient funds for the other operational needs of the Company is maintained. The capital risk management policy remains unchanged from the 30 June 2022 annual report. Note 13. Equity - reserves Foreign currency reserve Share-based payments reserve Consolidated 2023 $ (20,875) 12,395 (8,480) 2022 $ (25,267) 6,891 (18,376) Foreign currency reserve The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations. Share-based payments 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 services. 38 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 13. Equity - reserves (continued) Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Consolidated Balance at 1 July 2021 Foreign currency translation Lapse of options Option excercise Share based payments Balance at 30 June 2022 Foreign currency translation Lapse of options Option excercise Share based payment Balance at 30 June 2023 Note 14. Equity - dividends Share based payments $ Foreign currency $ 12,568 - - (19,177) 13,500 6,891 - (291) - 5,795 12,395 11,490 (36,757) - (25,267) 4,392 - - - (20,875) Total $ 24,058 (36,757) - (19,177) 13,500 (18,376) 4,392 (291) - 5,795 (8,480) There were no dividends paid, recommended or declared during the current or previous financial year. Note 15. Financial instruments Financial risk management objectives The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk. Risk management is carried out by the managing director under policies approved by the Board of Directors ('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. The managing director identifies, evaluates and hedges financial risks within the consolidated entity's operating units. The managing director reports to the Board on a regular basis. Market risk Foreign currency risk The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations. Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. Price risk The consolidated entity is not exposed to any significant price risk. Interest rate risk The consolidated entity is not exposed to significant interest rate risk. Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The consolidated entity does not hold any collateral. The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward-looking information that is available. The consolidated entity trade and other receivables consist of GST receivable and interest receivable. For this reason the consolidated entity is not exposed to significant credit risk. Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year. 39 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 15. Financial instruments (continued) Liquidity risk Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) to pay debts as and when they become due and payable. The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. Remaining contractual maturities The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. Consolidated - 2023 Non-derivatives Non-interest bearing Trade other payables Subordinated Loan Total non-derivatives Consolidated - 2022 Non-derivatives Non-interest bearing Trade other payables Total non-derivatives Weighted average interest rate % 1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years $ $ $ $ - - 13,547 - - - 13,547 - - 200,000 200,000 Weighted % 1 year or less $ Between 1 $ Between 2 $ Over 5 years $ - 13,742 13,742 - - - - Remaining contractual maturities $ 13,547 200,000 213,547 Remaining $ 13,742 13,742 - - - - - The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above. Fair value of financial instruments Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. Note 16. Key management personnel disclosures Compensation The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below: Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments Note 17. Remuneration of auditors Consolidated 2023 $ 2022 $ 208,516 31,301 (2,422) 5,795 243,190 177,847 30,303 3,996 13,500 225,646 During the financial year the following fees were paid or payable for services provided by Connect National Audit Pty Ltd, the auditor of the Company: Audit services - Connect National Audit Pty Ltd Audit or review of the financial statements Other services - Connect National Audit Pty Ltd Tax and compliance services 40 Consolidated 2023 $ 2022 $ 16,000 16,000 - - 16,000 16,000 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 17. Remuneration of auditors (continued) It is the Company’s policy to engage the external auditor to provide services additional to their audit duties where the external auditor’s experience and expertise with the Company are important and it is logical and efficient for them to provide those services. The provision of non- audit services during the year by the external auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001. Note 18. Contingent liabilities Reedy Lagoon’s wholly-owned US subsidiary, Sierra Lithium LLC, had previously recognised a provision for contingent liability in relation to tax penalty notice for its 2020 financial year tax return. The return has been lodged and the penalty has been abated. The provision for contingent liability for the tax penalty has been de-recognised in the statement of comprehensive income for the current period. The Company is not aware of any other contingent liabilities. Note 19. Exploration expenditure commitments Projects located in North America The consolidated entity held 446 Placer Claims and 157 Lode Claims at 30 June 2023 in connection with its Alkali Lake North and Clayton Valley Lithium Brine projects located in Nevada, USA. Annual Land Fees are payable to the Bureau of Land Management (“BLM”) and Esmeralda County for these claims with payment required prior to 1 September each year. The Annual Land Fees payable in respect of the 446 Placer Claims and 157 Lode Claims held at the date of this report for the period 1 September 2023 to 31 August 2024 amounted to US$108,317. At the date of this report all Land Fees in respect of the 446 Placer Claims and 157 Lode Claims held at 30 June 2023 were paid up to 31 August 2024. There is no minimum exploration expenditure requirement for Claims (Placer and Lode) located in Nevada, USA. Projects located in Australia The consolidated entity held three tenements: E70/4941, E70/5467 and E70/5544, located in Western Australia at the date of this report. Ongoing annual exploration expenditure is required to maintain title to the tenements. Tenement expenditure will be determined by the Company and is dependent upon exploration results and available cash resources. The statutory expenditure requirement is subject to negotiation with the relevant state department, and expenditure commitments may be reduced subject to reduction of exploration area and/or relinquishment of non- prospective tenements. Unless the Minister determines otherwise, if the minimum annual expenditure on a tenement is not satisfied the licence may be forfeited. The combined minimum annual expenditures for the Australian tenements is $93,000. No provision has been made in the accounts for exploration commitments. Note 20. Related party transactions Parent entity Reedy Lagoon Corporation Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 22. Key management personnel Disclosures relating to key management personnel are set out in note 16 and the remuneration report included in the directors' report. Transactions with related parties There were no transactions with related parties during the current and previous financial year. Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date. Loans to/from related parties Subordinated Loan Consolidated 2023 $ 2022 $ 200,000 - During the report year a director provided $200,000 to RLC by way of interest-free subordinated loans repayable on demand but only if RLC is able to make repayment and remain solvent (that is, the loan is effectively subordinated to all other creditors). The Director has agreed that he will not at any time prior to September 2025 call for repayment of any part of the $200,000 lent by him to the Company if that repayment would jeopardise the ability of the Company to continue to trade or meet its other liabilities as they fall due. 41 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 21. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Loss after income tax Total comprehensive loss Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Share-based payments reserve Accumulated losses Total equity Parent 2023 $ 2022 $ (560,202) (980,475) (560,202) (980,475) Parent 2023 $ 2022 $ 200,578 534,677 3,766,210 4,009,244 196,937 196,937 196,147 196,147 23,445,242 12,395 (20,088,364) 23,334,659 6,891 (19,528,453) 3,369,273 3,813,097 Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30 June 2022. Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022. Significant accounting policies The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for the following: ● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. Note 22. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 2: Name Bullamine Magnetite Pty Ltd Nevada Lithium Pty Ltd Sierra Lithium LLC Note 23. Events after the reporting period Principal place of business / Country of incorporation Australia Australia USA Ownership interest 2023 % 100.00% 100.00% 100.00% 2022 % 100.00% 100.00% 100.00% On 26 July 2023, the RLC announced a non-renounceable pro rata entitlement offer to eligible holders of RLC shares on a 1 for 3 basis at 0.7 cents per new RLC share, together with a related offer under which those holders could apply for shares in addition to their entitlement. On 29 August 2023, RLC issued 49,963,988 shares to shareholders who had subscribed $349,748 under the terms of the Offer. No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years. 42 Reedy Lagoon Corporation Limited Notes to the financial statements 30 June 2023 Note 24. Reconciliation of loss after income tax to net cash used in operating activities Loss after income tax expense for the year Adjustments for: Realised FX (gains)/losses Share-based payments Change in operating assets and liabilities: Decrease in trade and other receivables Decrease/(increase) in other operating assets Decrease in trade and other payables Increase in employee benefits Decrease in other provisions Net cash used in operating activities Note 25. Earnings per share Loss after income tax attributable to the owners of Reedy Lagoon Corporation Limited Consolidated 2023 $ 2022 $ (772,560) (1,387,442) 5,297 5,795 (41,906) 13,500 142,202 - (36,794) 985 - (140,437) - 37,492 24,296 - (655,075) (1,494,497) Consolidated 2023 $ 2022 $ (772,560) (1,387,442) Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 562,442,177 532,095,770 Weighted average number of ordinary shares used in calculating diluted earnings per share 562,442,177 532,095,770 Basic earnings per share Diluted earnings per share Cents Cents (0.137) (0.137) (0.261) (0.261) The rights to options held by option holders have not been included in the weighted average number of ordinary shares for the purposes of calculating diluted EPS as they do not meet the requirements for inclusion in AASB 133 ‘Earnings per Share’. The rights to options are non- dilutive as the Company has generated a loss for the financial year. 43 Reedy Lagoon Corporation Limited Directors' declaration 30 June 2023 In the directors' opinion: ● ● ● ● the attached financial statements and notes comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 'Interim Financial Reporting', the Corporations Regulations 2001 and other mandatory professional reporting requirements; the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 2 to the financial statements; the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. The directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors G.H. Fethers Managing Director 28 September 2023 Melbourne 44 Independent Auditor’s Report To the Members of Reedy Lagoon Corporation Limited Report on the Audit of the Financial Report Opinion We have audited the accompanying financial report of Reedy Lagoon Corporation Limited and its controlled entities (the “Consolidated Entity”), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of cash flows and the consolidated statement of changes in equity for the financial year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the company as set out on page 43. In our opinion, the financial report of Reedy Lagoon Corporation Limited and its controlled entities is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Consolidated Entity in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Consolidated Entity, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern Without modifying the opinion expressed above, we draw attention to Note 2 “Significant Accounting Policies – Going Concern” which indicates the company incurred a loss for the period ended 30 June 2023 of $772,560 and operating cash outflows of $655,076. Further, the company’s ability to continue the exploration and development of its mining tenements, continue to assess new projects and meet operational expenditure at current levels is dependent upon future capital raising. These conditions along with other matters as set forth in Note 2, indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern and therefore, the company may be unable to realise its assets and discharge its liabilities in the normal course of business. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Connect National Audit Pty Ltd is an Authorised Audit Company Head Office: Level 14, 333 Collins St, Melbourne VIC 3000 ABN 43 605 713 040 Gold Coast Office: Level 9, Wyndham Corporate Centre, 1 Corporate Court, BUNDALL, QUEENSLAND, 4217 Sydney Office: Level 5, 20 Bond Street, Sydney NSW 2000 Liability limited by a scheme approved under Professional Standards Legislation w: www.connectaudit.com.au Key Audit Matter How our audit addressed the key audit matter Accounting Treatment of Exploration and Evaluation Expenses We focus on the accounting treatment of exploration and evaluation expenses as this represents a significant expense of the consolidated entity and that the recognition of this amount is significantly affected by management’s judgement. We reviewed the consolidated entity’s accounting policy specifying which expenditures are recognised as exploration and evaluation expenditures and its consistent application of the relevant accounting standard and accounting policy. The consolidated entity has incurred significant exploration and evaluation expenditures. The accounting treatment of these expenditures (whether as capital or expense) can have a significant impact on the financial report. This is particularly relevant as this consolidated entity is in an exploration stage with no production activities. As such it is necessary to assess whether the facts and circumstances existed to suggest that these expenditures were recognised in accordance with AASB 6 para Aus7.2b (ii) and the consolidated entity’s accounting policy. We tested samples of the expenditures to ensure that these expenditures are associated with finding specific mineral resources We evaluated whether the exploration and evaluation expenditures are expected to be recouped, either through successful development and exploitation or through sales. We enquired with management and evaluated where the activities in the areas of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. We also considered the appropriateness of the related disclosure in Notes 2 and 3 to the financial statements. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view and have determined that the basis of preparation described in Note 1 to the financial report is appropriate to meet the requirements of the Corporations Act 2001 and is appropriate to meet the needs of the members. The directors’ responsibility also includes such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In the basis of preparation, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the consolidated financial statements comply with International Financial Reporting Standards. In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Consolidated Entity or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/Home.aspx. This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 22 to 24 of the directors’ report for the financial year ended 30 June 2023. In our opinion the Remuneration Report of Reedy Lagoon Corporation Limited for the financial year ended 30 June 2023, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Consolidated Entity are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Connect National Audit Pty Ltd ASIC Authorised Audit Company No.: 521888 George Georgiou FCA Managing Director Melbourne, VIC 3000 Date: 28 September 2023 Reedy Lagoon Corporation Limited Shareholder information 30 June 2023 The shareholder information set out below was applicable as at 27 September 2023. Distribution of quoted equitable securities Analysis of number of equitable security holders by size of holding: 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Holding less than a marketable parcel Equity security holders Twenty largest quoted equity security holders The names of the twenty largest security holders of quoted equity securities are listed below: Total shares issued: 616,683,589 Chromite Pty Ltd (Spinel A/C) Citycastle Pty Ltd Needmore Investments Pty Ltd Mr Adrian C. Griffin Mr Jonathan M. Hamer Park Road SF Pty Ltd (Park Road Super Fund A/C) Jagen Pty Ltd Sked Pty Ltd Mr Geoffrey H. Fethers Pyrope Holdings Pty Ltd (Chromite Staff S/Fund A/C) M & K Korkidas Pty Ltd A C Griffin & J D Norman (Global Super A/C) Wifam Investments Pty Ltd (Wischer Family S/F A/C) Sked Pty Ltd (Super Fund A/C) Mr Johnny Tai Kwong Yue & Mrs Chan Ying Yue Mr Mark Burnell Tromso Pty Limited Superhero Securities Limited Megacube Pty Ltd BNP Paribas Nominees Pty Ltd (IB AU Noms retailclient DRP) Top 20 shareholders Other shareholders TOTAL: Number of holders of ordinary shares 84 30 65 1,006 594 1,779 1,046 Ordinary shares Number held % of total shares Issued 45,656,988 42,503,280 33,000,000 28,531,925 23,214,874 22,500,000 20,038,623 18,500,735 16,557,260 13,897,724 13,087,861 7,660,366 7,425,000 5,801,518 5,740,976 5,453,944 5,000,000 3,289,645 3,095,213 3,049,363 7.40 6.89 5.35 4.63 3.76 3.65 3.25 3.00 2.68 2.25 2.12 1.24 1.20 0.94 0.93 0.88 0.81 0.53 0.50 0.49 324,005,295 292,678,294 52.54 47.46 616,683,589 100.00 48 Reedy Lagoon Corporation Limited Shareholder information 30 June 2023 Substantial holders Substantial holders in the Company as at 27 September 2023 are set out below: Chromite Pty Ltd Chromite Pty Ltd Geoffrey H. Fethers Pyrope Holdings Pty Ltd Ranview Pty Ltd Sked Pty Ltd City Castle Pty Ltd Sked Pty Ltd Sked Pty Ltd Traders Macquarie Pty Ltd Mr Adrian C. Griffin Mr Adrian C. Griffin Mr A. C. Griffin & Ms J. D. Norman Needmore Investments Pty Ltd Voting rights The voting rights attached to ordinary shares are set out below: Ordinary shares Number held % of total shares issued 45,656,988 16,557,260 13,897,724 771,589 76,883,561 42,503,280 18,500,735 2,141,518 2,345,948 65,491,481 28,531,925 7,660,366 36,192,291 33,000,000 12.47 10.62 5.87 5.35 Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. There are no other classes of equity securities. Options on issue Unlisted Unlisted Unlisted Expiry Date Exercise Price Number 31 December 2023 31 December 2024 31 December 2025 1.47 cents 5.46 cents 1.52 cents 100,000 400,000 900,000 49 Reedy Lagoon Corporation Limited Corporate directory 30 June 2023 Directors Contact details Jonathan M. Hamer Chairman, Non-Executive Director Geoffrey H. Fethers Managing Director and Company Secretary Adrian C. Griffin Non-Executive Director Phone : 03 8420 6280 Fax : 03 8420 6299 Email : info@reedylagoon.com.au Company secretary Geoffrey H. Fethers Share register Auditor Link Market Services Limited (ABN 54 063 214 537) Tower 4, 727 Collins Street Melbourne, Victoria 3008 Telephone : 1300 554 474 www.linkmarketservices.com.au Connect National Audit Pty Ltd Suite 3211, Level 14, 333 Collins Street Melbourne Victoria 3000 www.connectaudit.com.au Stock exchange listing Reedy Lagoon Corporation Limited shares are listed on the Australian Securities Exchange Website www.reedylagoon.com.au (ASX code: RLC) Corporate Governance Statement Refer to www.reedylagoon.com.au/about-us/corporate-governance/ 50