Resolution Minerals Limited
Annual Report 2023

Plain-text annual report

2 0 2 3 ANNUAL REPORT ACN 617 789 732 CORPORATE INFORMATION This Annual Report covers Resolution Minerals Ltd (“Resolution Minerals”, “Resolution” “RML” or the “Company”). The financial report is presented in Australian currency. The Company is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Resolution Minerals Ltd Level 4, 29-31 King William Street ADELAIDE SA 5000 Directors Duncan Chessell NON-EXECUTIVE CHAIR Christopher McFadden MANAGING DIRECTOR Paul Kitto NON-EXECUTIVE TECHNICAL DIRECTOR CFO/Company Secretary Jaroslaw (Jarek) Kopias Registered & Principal Office Level 4, 29-31 King William Street ADELAIDE SA 5000 Telephone: +61 (0) 414 804 055 Postal Address Level 4, 29-31 King William Street ADELAIDE SA 5000 Auditors Grant Thornton Audit Pty Ltd Level 3, 170 Frome Road ADELAIDE SA 5000 Solicitors Piper Alderman Lawyers Level 16, 70 Franklin Street ADELAIDE SA 5000 Home Stock Exchange Australian Securities Exchange 20 Bridge Street, SYDNEY NSW 2000 ASX Codes RML – fully paid ordinary shares RMLOB – quoted options exercise price $0.12 and expiry 30 September 2023 RMLO – quoted options exercise price $0.015 and expiry 31 July 2025 Share Registry Automic GPO Box 5193 SYDNEY NSW 2001 Telephone: +61 2 9698 5414 2 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTCONTENTS CORPORATE INFORMATION CHAIR’S LETTER REVIEW OF OPERATIONS MINERAL RESOURCE STATEMENT 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 AUDIT REPORT ASX ADDITIONAL INFORMATION 2 4 5 15 16 17 31 32 33 34 35 36 54 55 59 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 3 CHAIR’S LETTER Resolution Minerals’ DNA is early-stage exploration, and while More recently, we staked the Allegra Nickel Project in Alaska. that hasn’t changed, the Company has positioned itself to This project is located along strike from Alaska Energy Metals’ leverage the emerging super-cycle for New Energy Metals, such Eureka Nickel Prospect and has provided RML with a solid as copper, high-purity silica sands, manganese, uranium and ground position in an emerging nickel hotspot. lithium in the transition to a carbon-neutral economy. In the underexplored South Nicholson Basin, we have In this context, we have been working diligently over the past commenced our first drilling program in collaboration with our year to expand our New Energy Metals Projects portfolio and JV partner, BHP, at the Benmara Battery Metals Project. simultaneously working to divest assets that don’t fit the strategy or meet technical merit criteria. On the corporate side, we appointed Chris McFadden as the new Managing Director. Chris has over 25 years of exploration We identified the George Project in South Australia because of and mining experience and has brought new energy to the its prospectivity for uranium. Uranium offers a clean, affordable, company. With Chris and the exploration team in place, the and reliable baseload power source, likely to become a critical board restructuring complete and robust shareholder support part of the solution for a net-zero emissions future. During from North America, I firmly believe the company is well- our initial project review, the exploration team identified the positioned for success in the year ahead. near-surface Etadunna High Purity Silica Sand Prospect. This lesser-known industrial mineral plays a significant role in manufacturing high-quality solar panels and offers us the potential to become a producer in the short term. We acquired a 5% stake in Midwest Lithium, a company that is soon to IPO and has obtained a large holding in the Black Hills Region of South Dakota – an area with a rich history of lithium- spodumene production yet relatively under-explored using modern techniques. On behalf of the RML team, I want to express gratitude for your support, and I look forward to the ongoing pursuit of a significant discovery. Duncan Chessell Chair Resolution Minerals 4 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTREVIEW OF OPERATIONS Figure 1 Drilling at the Wollogorang Project (October 2022). 2022/23 has been another productive year for At the time of writing the Resolution team’s exploration activities Resolution Minerals. The Company has undertaken over the past year included: exploration on several of its existing projects as • Commencing a major drilling campaign at the Benmara well as expanding its portfolio of New Energy Metals projects. Low-cost licence applications were granted for the George Silica Sand - Uranium Project in South Australia as well as for the Allegra Nickel Project in Alaska. A seed capital investment Project in the Northern Territory in conjunction with the BHP Group pursuant to the exploration and farm-in agreement executed with OZ Minerals Limited. • Pursuing an agreement with the Traditional Owners of the land that hosts the George Project in South Australia to gain the necessary clearances to commence a sampling was also made in Midwest Lithium, a private USA- programme to assess the High Purity Silica Sand potential of based hard rock lithium exploration company that that project. is focused on the prospective Black Hills region of • Undertaking a drilling program at the Wollogorang Project South Dakota. and announcing plans to seek buyers for the project. The company has subsequently announced the sale of the project to NT Minerals Ltd. • Completing a drilling programme in conjunction with a regional geophysics and surface sampling programme at the 64North Project in Alaska. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 5 REVIEW OF OPERATIONS, continued Figure 2 Resolution’s projects (September 2023) NEW ENERGY METALS PROJECTS Resolution is currently focussed on developing a portfolio of quality, New Energy Metals projects with commodities required to meet future global demands for a carbon-neutral economy. RML has a number of projects prospective for metals such as copper, nickel, high-purity silica sand, cobalt, manganese, lead, zinc, uranium and holds ~5% stake in Midwest Lithium – all commodities in high demand to meet the challenges of the global energy transition and the production of electric vehicles, wind turbines and solar panels. 6 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTREVIEW OF OPERATIONS, continued Figure 3 Location map of Resolution Minerals’ projects in the Northern Territory. These projects encompass some of Australia’s most prospective, under-explored terrain for battery and base metals. The projects are in the South Nicholson Basin. The region plays host to several significant base metal deposits including the McArthur River Mine, Walford Creek Deposit and the Century Mine. Figure 4 Benmara drilling. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 7 REVIEW OF OPERATIONS, continued BENMARA PROJECT, NORTHERN TERRITORY Copper, lead, zinc, uranium OVERVIEW Resolution Minerals holds a ground position of over 3,000km2 on the northern edge of the South Nicholson Basin, one of Australia’s most under- explored sedimentary basins. The Benmara project is cut by several fault systems, which cross-cut sedimentary packages, analogous to host rocks of the world-class McArthur River Mine, Walford Creek Deposit, and several other significant deposits in the region. The Project is fully funded through a Farm-in agreement with the BHP Group. OWNERSHIP Resolution has de-risked the Benmara project by entering into an earn-in and joint venture arrangement with OZ Minerals Limited (now part of the BHP Group following a takeover of OZ Minerals Limited by the BHP Group) whereby the BHP Group will sole fund exploration, up to $4M over five years, to earn a 51% interest in Benmara. Resolution may retain a 49% interest by electing to participate upon BHP earning a 51% interest. If Resolution elects not to participate, BHP has the option to earn a 75% interest, by sole-funding and delivering a Positive Final Investment Decision to Mine. At a minimum spend of $1M/year, BHP has a further 5 years to complete their earn-in. 8 Figure 5 Location map of Benmara Project and the Fish River and Bauhinia Fault zones. • Resolution was awarded a $150,000 Geophysical Drilling Collaboration (GDC) Grant by the Resourcing the Territory initiative for stratigraphic diamond drilling (ASX Announcement 07/07/2023). • Drill targeting was finalised in mid-July 2023 (ASX Announcement 18/07/2023) and drilling commenced in late July 2023. The planned 2,000m diamond drilling program was completed in late September 2023. EXPLORATION ACTIVITIES • In August 2022, additional tenements were acquired from Cedar Resources expanding the Benmara project footprint to over 3,000km2 (ASX Announcement 19/08/2022). • OZ Minerals completed it’s due diligence for the Farm-in and JV Agreement after environmental and heritage approvals were granted (ASX Annoucement 08/09/2022). • In preparation for the 2023 drilling season the Resolution team completed a major desktop review of the project, including geophysical data reprocessing and 3D inversion modelling. RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTREVIEW OF OPERATIONS, continued WOLLOGORANG PROJECT, NORTHERN TERRITORY Copper, cobalt OVERVIEW The Wollogorang project covers 3,825km2 of the highly prospective McArthur Basin which is known to OWNERSHIP The Wollogorang Project is 100%-owned EXPLORATION ACTIVITIES • A heritage survey was completed by Resolution. In March 2023, RML in Q3 2022, with no restrictions announced that it would seek to on access. This was followed by contain sedimentary hosted battery monetise the Wollogorang Project to significant new track work in Q4, metals such as copper, cobalt and hard focus funds on its other New Energy 2022. rock uranium. Other explorers active in Metals Projects. In September 2023 the area include Teck, BHP, Rio Tinto, RML announced that it has reached NT Minerals and South 32. The project agreement with NT Minerals Ltd for the is positioned on Geoscience Australia’s sale of its 100% interest in the project newly identified base metal corridor – on for $250,000 comprised of $50,000 which 90% of world’s largest sediment cash and $200,000 worth of shares hosted base metal deposits reside in NT Minerals Ltd. The transaction is • Drilling commenced Q4, 2022 (ASX Announcement 06/10/2022). Only 50% (3000m) of the planned drilling program was completed due to the late season start and the onset of wet season. (Hoggard et al., 2020). expected to complete before the end of • No significant mineralisation September 2023. was encountered. In March 2023 OZ Minerals opted to withdraw from the Farm-in and JV Agreement (ASX Release 14/03/2023). The project contains proven mineralisation with the Stanton Cobalt Deposit: 942kt @ 0.13% Co, 0.06% Ni, 0.12% Cu (RML announcement 9/4/18) and a number of other copper prospects in the tenement package. A VTEM survey flown in 2021 identified 40 conductors highlighting the sediment hosted copper potential of the project. Figure 6 Drilling at Wollogorang Project. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 9 REVIEW OF OPERATIONS, continued CARRARA RANGE PROJECT, NORTHERN TERRITORY Manganese, copper, lead, zinc, cobalt OVERVIEW The Carrara Range Project covers 1,271km2 of terrain prospective for sediment hosted battery metals and iron- EXPLORATION ACTIVITIES • Resolution applied to the Northern • A helicopter reconnaissance field Land Council (NLC) to progress trip was conducted in Q3, 2023 to Aboriginal Freehold Land tenement progress work on the granted tenure ore. The area is underexplored and only application to grant stage. Field work located outside of the Aboriginal recently (2020), Geoscience Australia for the greater project (including Freehold Land targeting manganese geologists identified a promising high- granted tenure) was delayed until within the Plain Creek Formation. grade manganese mineral occurrence at the outcome was known. The grant surface within RML’s tenure. process for three applications in OWNERSHIP RML acquired the Carrara Range project freehold aboriginal land EL32578, EL32619 and EL32621 was unsuccessful on this occasion. from Cientifica Pty Ltd in February 2022 The applications are still valid but and now holds a 100% unencumbered in moratorium for 5 years until interest in the tenements: EL32622, Resolution has the right to negotiate EL32620, EL32577, EL32621, EL32619 grant. This in no way affects the three and EL32578. granted ELs. Figure 7 Field work at Carrara Range Project. 10 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTREVIEW OF OPERATIONS, continued GEORGE PROJECT, SOUTH AUSTRALIA High purity silica sand, uranium OVERVIEW The George Project covers 2,839km2 in central South Australia. Historical exploration indicates that it is prospective for high-purity silica sand (HPSS), used in applications including the manufacture of solar panels, as well as uranium, which is a critical mineral in the transition to carbon neutral energy. OWNERSHIP Resolution was granted the ground in February 2023 and owns 100% of the George Project. EXPLORATION ACTIVITIES • A reconnaissance trip was undertaken in Q2, 2022 to meet landowners, assess access and visit and validate known uranium and silica sands prospects. • Resolution is currently progressing heritage access, which requires a Native Title Mining Agreement (NTMA) before any high impact exploration can be undertaken e.g. drilling. Environmental approvals are also progressing in the background. • A study has been commissioned by an independent consultant to assess the economic viability of the silica sands prospect as part of a scoping study. Figure 8 Location of the George Project and nearby uranium deposits. Figure 9 Field work at George Project. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 11 REVIEW OF OPERATIONS, continued ALLEGRA PROJECT, ALASKA Nickel Figure 10 Location of the Allegra Project and nearby Eureka Zone (TSX.V: AEMC). OVERVIEW The Allegra Project covers 295km2 and is situated within the underexplored Wrangellia Terrane of central Alaska, along strike from Alaska Energy Metals’ Nikolai Project, Eureka Zone. The Eureka Zone is a low grade, high tonnage, strike extensive (>15km) disseminated nickel-copper-PGE sulphide prospect, hosted in the Nikolai Greenstone. Alaska Energy Metals is currently undertaking ~CA$6.5m resource drilling program, which aims to define a NI 43- 101/JORC compliant Resource. Other significant prospective nickel claim blocks in the region are held by Skolai Exploration LLC, a Domestic Limited Liability Company linked to KoBold Metals, a company that utilises machine learning and artificial intelligence for mineral exploration. Principal investors in KoBold Metals include Breakthrough Energy Ventures, a climate and technology fund backed by Microsoft’s Bill Gates, Bloomberg founder Michael Bloomberg and Amazon’s Jeff Bezos. OWNERSHIP Resolution was an early mover, staking claims in open ground in this relatively unexplored region. It now owns 100% of the Allegra Project. EXPLORATION ACTIVITIES • In June / July 2023, a senior RML staff geologist conducted a reconnaissance trip to assess access conditions, collect preliminary surface samples and visit the Anchorage core library to view historical drill core from the project area. • A desktop review is currently underway, which will incorporate results from initial fieldwork and surface sampling (ASX Announcement 21/08/2023). 12 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTREVIEW OF OPERATIONS, continued 64NORTH PROJECT, ALASKA Gold, copper Figure 11 Deposit sizes stated as Endowment (Resources & Reserves + Historic Production) *sourced from Company websites. If a party fails to fund their share of an agreed budget, then the interest of that non-contributing partner is diluted in accordance with an agreed formula. OVERVIEW The 64North Project lies in the highly OWNERSHIP On 17 October 2019, Resolution signed prospective Tintina Gold Province, which a binding term sheet with Millrock hosts over 100 Moz of gold across a Resources Inc (now known as Alaskan 2,000km east-west arc from the Yukon Energy Metals Corp) (AEMC) to acquire, Territory in Canada to the west coast of Alaska. The 64North Project is a 357km2 land package prospective for Pogo and via joint venture earn-in, up to 80% of the 64North Project in Alaska. AEMC is an Alaskan based nickel exploration Fort Knox style gold as well as copper- company listed on the TSX-V as AEMC. gold porphyry deposits. The project surrounds Northern Star’s Pogo Gold Mine (Figure 11), a world-class high- grade mine which has a total endowment of over 12 million ounces of gold. On 25 January 2023, Resolution announced that it had met the expenditure requirements to earn a 51% interest in the 64North project (ASX Release 25/01/2023) and that it would manage and operate the project as the majority interest holder on a co- funding basis. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 13 REVIEW OF OPERATIONS, continued EXPLORATION ACTIVITIES • In August 2022 Resolution Minerals completed a 2324m diamond drilling program testing the Tourmaline Ridge prospect. The best drill intersection was 22TR005 1m @ 6.7g/t Au from 93m (ASX Announcement 12/12/2022). • A helicopter-supported ELF-EM survey was completed at East Pogo and Divide in conjunction with regional mapping and surface sampling enhancing the potential in both areas (ASX Announcement 23/02/2023). • Resolution reached the 51% Earn-In milestone on the 64North Project in Q1, 2023 (ASX Announcement 25/01/2023). • An Independent Geologists Review was completed in Q1, 2023 ranked the East Pogo Prospects as the highest priority targets on the 64North Project (ASX Announcement 23/02/2023). • Follow-up independent geochemical and geophysical consultants were commission to review the East Pogo area in detail (Q2, 2023). A structural review was also completed. All the new information was used to derive new drill targets. • In June / July 2023, a senior RML staff geologist conducted a reconnaissance trip to validate the new drill targets at East Pogo (ASX Announcement 21/08/2023). 14 Figure 12 64 North drilling. Figure 13 The 64North Project Prospects map 26 September 2021; RML claims in blue, others in pink, yellow polygons are surface projections of the Pogo Gold Mine Deposits. RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTMINERAL RESOURCE STATEMENT At 30 June 2022 and 30 June 2023 (unchanged) STANTON COBALT MINERAL RESOURCE, NORTHERN TERRITORY WEATHERING TONNAGE (tonnes) COBALT (ppm) NICKEL (ppm) COPPER (ppm) Inferred Oxide 8,000 Transition 242,000 Indicated Oxide 406,000 Transition 286,000 TOTAL 942,000 500 800 1,200 1,800 1,300 300 400 500 900 600 2,100 800 1,600 900 1,200 The Staton Mineral Resource was sold subsequent to the end of the financial year as announced on 6 September 2023. The information in this release that relates to the Estimation and Reporting of Mineral Resources at 30 June 2022 and 30 June 2023 is based on, and fairly represents, information and supporting documentation compiled by Dr Graeme McDonald. Dr McDonald acts as an independent consultant to Resolution Minerals Ltd on the Stanton Deposit Mineral Resource estimation. Dr McDonald is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience with the style of mineralisation, deposit type under consideration and to the activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (The JORC Code). Dr McDonald consents to the inclusion in this report of the contained technical information relating to the Mineral Resource Estimation in the form and context in which it appears. The information in this report that relates to Exploration Results is based on information compiled by Mr Duncan Chessell who is a Member of the Australasian Institute of Mining and Metallurgy(MAusIMM). Mr Duncan Chessell holds shares, options and performance rights in and is a Director of the Company and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. The information in this report that relates to Exploration Results is based on data compiled by Ms Christine Lawley who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM) and a Registered Professional Geoscientist (RPGEO) in field of Mineral Exploration with the Australian Institute of Geoscientists (MAIG). Ms Christine Lawley holds shares, options and performance rights in and is a full-time employee of the Company and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Duncan Chessell and Ms Christine Lawley consent to the inclusion in the report of the matters based on his information in the form in which it is appears and confirms that the data reported as foreign estimates are an accurate representation of the available data and studies of the material mining project. The Company is not aware of any new information or data that materially affects the information as cross referenced in this report. Additional details including JORC 2012 reporting tables, where applicable can be found in the following relevant announcements lodged with the ASX and the Company is not aware of any new data or information that materially affects the information included in the announcements listed in this Annual Report and that all material assumptions and technical parameters underpinning the resource estimate continue to apply and have not materially changed. The Stanton Project Mineral Resource Estimate at 30 June 2022 has remained unchanged as at 30 June 2023. The information related to the Stanton Project Mineral Resource Estimate at 30 June 2022 and 30 June 2023 was detailed in the market announcement released as “Stanton Resource Upgrade Increases Contained Cobalt” on 9 April 2018. Resolution Minerals confirms that it is not aware of any new information or data that materially affects the information included in that announcement and that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. Resolution Minerals relies on drilling results from accredited laboratories in providing assay results used to estimate Mineral Resources. The Company ensures that all Mineral Resource estimates are subject to appropriate levels of governance and internal controls. Exploration results are collected and managed by an independent competent qualified geologist. All data collection activities are conducted to industry standards based on a framework of quality assurance and quality control protocols covering all aspects of sample collection, topographical and geophysical surveys, drilling, sample preparation, physical and chemical analysis and data and sample management. Mineral Resource estimates are prepared by qualified independent Competent Persons. If there is a material change in the estimate of a Mineral Resource, the estimate and supporting documentation in question is reviewed by a suitable qualified independent Competent Persons. The Company reports its Mineral Resources on an annual basis in accordance with JORC Code 2012. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 15 TENEMENT SCHEDULE At 30 June 2023 TENEMENT NAME* TENEMENT NUMBER STATUS EQUITY Australia, Northern Territory WOLLOGORANG Karns** Selby** Stanton / Running Creek** Calvert** Sandy Creek** Camel Creek** Madulgina Creek** BENMARA Pandanus Benmara Murphy Paradise Bore Boxer Murphy CARRARA RANGE Carrara Carrara Carrara Australia, South Australia GEORGE Strzelecki Dulkaninna Clayton Etadunna USA, Alaska 64North Allegra EL30496 EL30590 EL31272 EL31546 EL31548 EL31549 EL31550 EL31287 EL32228 EL32229 EL32849 EL32850 EL32883 EL32577 EL32620 EL32622 EL6838 EL6839 EL6840 EL6905 Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 658 Alaska State Claims Granted 201 Alaska State Claims Granted 51%*** 100% * Resolution holds other tenements under application subject to grant. ** Subject to binding sales agreement (ASX Announcement 6/09/2023) *** 64North Project – Resolution holds a 51% interest in a joint venture with Alaska Energy Metals Corporation (formerly Millrock Resources Inc.) (TSXV:AEMC) and is the operator of the project. 16 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDIRECTORS’ REPORT The Directors of Resolution Minerals He is a Graduate of the Australian Ltd have pleasure in submitting their Institute of Company Directors, Member OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES report on the Group for the year ended of the Australasian Institute of Mining None 30 June 2023. DIRECTORS The names and details of Directors in office at any time during the reporting period are: DUNCAN CHESSELL BSc, GAICD, MAusIMM, MAIG Non-Executive Chair (appointed 6 March 2017) (appointed as Non-Executive Chair 21 November 2022) EXPERIENCE AND EXPERTISE Mr Chessell is a geologist with over 20 years’ experience in business and in oil, gas and mineral exploration. He was Managing Director of Endeavour Group from 2010 to 2016 making new gold discoveries in the Gawler Craton, conducting precious and base metals exploration in South Australia and project generation in Papua New Guinea. & Metallurgy and Member of Australian Institute of Geoscientists. He was co-founder and Chair of project generator OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS Coolabah Group, the project vendor None of the Wollogorang Project (Northern Territory) on which Resolution Minerals undertook its IPO in 2017 (as Northern Cobalt Limited). He was the founding Chair of the Himalayan Development INTEREST IN SHARES 8,885,005 Ordinary Shares held directly and by entities in which Mr Chessell has a beneficial interest. Foundation Australia Inc, a not-for-profit INTEREST IN OPTIONS AND RIGHTS entity delivering assistance to the people of Nepal. He is currently CEO of Copper Search Ltd (ASX:CUS). Mr Chessell also has a decade of international business experience in adventure tourism in New Zealand, Australia, Papua New Guinea and the Himalaya. He is also a triple Mt Everest summiteer and leader of numerous adventures including ‘world firsts’ in Antarctica and has guided the “Seven Summits” – the highest peak on each continent. 35,715 quoted options with exercise price of $0.12 and expiry of 30 September 2023 (RMLOB). 2,442,503 quoted options with exercise price of $0.015 and expiry of 31 July 2025 (RMLO) 6,250,000 unquoted performance rights subject to KPI based vesting conditions and various expiry dates. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 17 DIRECTORS’ REPORT, continued CHRISTOPHER McFADDEN Managing Director (appointed 22 May 2022) EXPERIENCE AND EXPERTISE Mr McFadden is a lawyer with over 25 years’ experience in exploration and mining. He is currently the Chairman of OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES NexGen Energy Limited (ASX:NXG) (TSX:NXE) (NYSE:NXE) Iso Energy Ltd (TSX-V:ISO) OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS NexGen Energy Limited (NexGen) and a Director of IsoEnergy Limited (ISO). Chris None is the co-founder of each of NexGen, ISO INTEREST IN SHARES West Africa for Newcrest Mining Ltd (2015-2019), and prior to that was CEO of Ampella Mining Ltd (2008-2014) when Ampella was acquired by Centamin PLC. Paul led Ampella in discovering and growing the 3.25 million oz gold resource at the Batie West Project in Burkina Faso. Paul holds a PhD (geology) in structural and geochemistry from the world renowned, Centre for Ore Deposit and Earth Sciences (CODES) at the University and NxGold Limited (now Consolidated None of Tasmania. Uranium Limited). These companies are all listed on the Toronto Stock Exchange and NexGen is also listed on the ASX and New York Stock Exchange (NYSE). He was previously Manager, Business Development at Newcrest Mining Limited, and before that was Head of Commercial, Strategy and Corporate Development for Tigers Realm Coal Limited. Prior to his time with Tigers Realm, he was a Commercial General Manager at Rio Tinto Limited where he had a career of 12 years spanning legal and commercial roles. INTEREST IN OPTIONS, RIGHTS AND PERFORMANCE SHARES OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES On 25 July 2023, 57,550,000 unquoted Tietto Minerals Limited (ASX:TIE) from performance rights subject to KPI based 22 January 2019. vesting conditions, were issued. DR PAUL KITTO PhD (Geology) Non-Executive Technical Director EXPERIENCE AND EXPERTISE Dr Paul Kitto has more than thirty years’ experience in the mining industry and an impressive track record including Meteoric Resources NL (ASX:MEI) from 16 October 2019. Peako Limited (ASX:PKO) from 20 September 2021. OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS None INTEREST IN SHARES Through his career in the resources numerous multi-million ounce gold sector, Mr McFadden has developed discoveries in Africa, Australia 1,000,000 Ordinary Shares held directly and by entities in which Mr Kitto has a strong skills in leading project evaluation and Papua New Guinea. Paul has beneficial interest and development teams and has extensive experience across a range a strong track record in executing of commodities and deposit types, major transactions. He has extensive predominantly associated with gold and INTEREST IN OPTIONS, RIGHTS AND PERFORMANCE SHARES experience in dealing with governments, base metals. traditional owners and other stakeholders, as well as wide experience in the capital market. Mr McFadden is a strong and empathic leader and has significant experience in managing early- stage exploration portfolios. Paul currently holds board positions on ASX Listed Tietto Minerals (TIE), Meteoric Resources (MEI) and Peako (PKO). Paul has held significant roles over a 30-year career in the industry, the most recent being Exploration Manager, 1,000,000 quoted options with exercise price of $0.015 and expiry of 31 July 2025 (RMLO) 5,000,000 unquoted performance rights subject to KPI based vesting conditions and various expiry dates. 18 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDIRECTORS’ REPORT, continued CRAIG FARROW FCA, LLB Non-Executive Chair (former) (appointed 17 August 2020, resigned 21 November 2022) STEVEN GROVES Managing Director (former) (appointed 1 July 2022, resigned 7 November 2022) EXPERIENCE AND EXPERTISE ANDREW SHEARER BSc (Geology), Hons (Geophysics), MBA Non-Executive Director (former) (appointed 6 March 2017, resigned 28 September 2022) EXPERIENCE AND EXPERTISE Mr Groves brings over 27 years’ of EXPERIENCE AND EXPERTISE Mr Farrow brings to Resolution a strong geological and corporate experience in Mr Shearer holds a BSc degree in commercial background spanning the mining industry and has led teams in geology with Honours in geophysics multiple industry sectors over a 30 plus both Australia and Africa exploring a wide and an MBA. He has been involved in year career. Mr Farrow was a founding range of commodities from discovery the mining and finance industries for director of telecommunications business through to development. He has a more than 25 years. Establishing his M2 Group, Chair since 2006, was Bachelor of Applied Geology (Honours) career in the resources industry as a instrumental in the merger between Vocus and a Master’s of Economic Geology geologist and geophysicist, in technical Communications and M2 Group Ltd in from CODES-SRC at the University and senior management roles with the 2016 and continuing as Deputy Chair of of Tasmania and is a member of the South Australian Government, Mount Vocus until February 2018 (ASX:VOC). Australian Institute of Geoscientists Isa Mines Limited, and Glengarry He has also served as Chair of ASX listed (AIG) and the Society of Economic Resources Limited. Andrew then moved Companies Bulletproof Group (ASX:BPF) Geologists (SEG). and Murray River Organics (ASX:MRG) and multiple unlisted board roles as both a non-executive Director and Chair. OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES None OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS Most recently he was one of the founding directors of Sultan Resources (ASX:SLZ) and led the company as Managing Director since their successful listing in 2018. Mr Groves also recently has held the role of Technical Director of Si6 Metals (ASX:Si6) and also occupied a variety of exploration and management roles with companies such as BHP Bulletproof Group (ASX:BPF) and Murray Billiton (ASX:BHP), Newmont Mining River Organics (ASX:MRG) (NYSE:NEM) and A-Cap Resources INTEREST IN SHARES (ASX:ACB). 4,554,286 Ordinary Shares held directly and by an entity in which Mr Farrow OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES has a beneficial interest at the date of None to the corporate and finance sectors in Resource Analyst roles with PAC Partners Pty Ltd, Phillip Capital, Austock and Taylor Collison. Where he covered small to midcap resource stocks across a broad suite of commodities. Andrew provides Resolution with experience in the financial services industry combined with his technical experience and understanding of capital markets. OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES Investigator Resources Limited (ASX:IVR) from 14 July 2020. Osmond Resources Limited (ASX:OSM) from 15 September 2021. his resignation. INTEREST IN OPTIONS AND RIGHTS OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS At the date of Mr Farrow’s resignation None 214,286 quoted options with exercise price of $0.12 and expiry of 30 September 2023 (RMLOB). INTEREST IN SHARES None At the date of Mr Farrow’s resignation 2,000,000 quoted options with exercise INTEREST IN OPTIONS, RIGHTS AND PERFORMANCE SHARES price of $0.015 and expiry of 31 July 2025 None (RMLO) Okapi Resources Limited (ASX:OKR) and Andromeda Metals Limited (ASX:ADN). INTEREST IN SHARES 2,839,412 Ordinary Shares held by an entity in which Mr Shearer has a beneficial interest at the date of his resignation. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 19 DIRECTORS’ REPORT, continued INTEREST IN OPTIONS AND RIGHTS At the date of Mr Shearer’s resignation INTEREST IN OPTIONS, RIGHTS AND PERFORMANCE SHARES 42,270 quoted options with exercise price At the date of Mr Holcombe’s resignation of $0.12 and expiry of 30 September 2023 4,484,027 unquoted performance rights (RMLOB). subject to KPI based vesting conditions. At the date of Mr Shearer’s resignation Mr. Holcombe exercised 1,484,027 1,919,706 quoted options with exercise unquoted performance rights at the price of $0.015 and expiry of 31 July 2025 date of his resignation. As a result, at (RMLO) MARK HOLCOMBE Executive Director of Corporate Development (former) (appointed 14 September 2022, resigned 8 May 2023) EXPERIENCE AND EXPERTISE Mr Holcombe brings over 30 years of experience in corporate and investment banking, corporate development and asset management. He has significant experience in M&A advisory, corporate restructurings and public and private debt and equity financings and investments in the natural resources sector. Mr Holcombe has an extensive the date of Mr Holcombe’s resignation 3,000,000 unquoted performance rights subject to KPI based vesting conditions were held. The Board have elected to extend the vesting conditions post Mr. Holcombe’s resignation and therefore the service condition is not applicable due to the election made by the board on 8 May 2023. COMPANY SECRETARY Jaroslaw (Jarek) Kopias BCom, CPA, AGIA, ACG (CS, CGP) Company Secretary / Chief Financial Officer (appointed 6 March 2017) global network, focusing on the battery Mr Kopias is a Certified Practising materials and precious metals sectors. Accountant and Chartered Secretary. One of his current roles is as a senior Mr Kopias has 25 years’ industry advisor to Nebari Holdings, which experience in a wide range of financial provides global financial solutions to the and secretarial roles within the resources resource sector. OTHER CURRENT DIRECTORSHIPS OF LISTED COMPANIES None OTHER DIRECTORSHIPS HELD IN LISTED COMPANIES IN THE LAST THREE YEARS None INTEREST IN SHARES industry. As an accountant, Mr Kopias worked in numerous financial roles for companies, specialising in the resource sector – including 5 years at WMC Resources Limited’s (now BHP) Olympic Dam operations, 5 years at Newmont Mining Corporation - Australia’s corporate office and 5 years at oil and gas producer and explorer, Stuart Petroleum Limited (prior to its merger with Senex 18,317,690 Ordinary Shares held by Energy Limited). an entity through which Mr Holcombe has a beneficial interest at the date of his resignation. He is currently the Company Secretary of Core Lithium Ltd (ASX: CXO), Iron Road Ltd (ASX: IRD), iTech Minerals Ltd (ASX:ITM), Austral Resources Australia Ltd (ASX:AR1) and Copper Search Limited (ASX:CUS). Mr Kopias has held similar roles with other ASX entities in the past and has other business interests with numerous unlisted public and private entities. PRINCIPAL ACTIVITIES Resolution Minerals’ ongoing principal activities are the exploration for gold and nickel in Alaska (USA), battery metals in the Northern Territory and both uranium and silica sand in South Australia. OPERATING AND FINANCIAL REVIEW The net loss of the Group for the year after providing for income tax amounted to $8,823,845 (2022: $1,003,371) primarily due to increased impairment expense resulting from the write down of the Wollogorang Project and increased number of staff including MD and additional geologists. During the year, the Group raised a further $3.8 million primarily through share placements and a rights issue to progress its existing and newly acquired exploration tenements. The risks associated with the projects disclosed below are those common to exploration activities generally. Exploration targets are conceptual in nature such that there has been insufficient exploration to define a Mineral Resource and that it is uncertain if further exploration will result in the determination of a Mineral Resource. The main environmental and sustainability risks that Resolution Minerals currently faces are through ground disturbance when undertaking drilling or sampling activities. The 20 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDIRECTORS’ REPORT, continued Group’s approach to exploration through environmental, heritage and other clearances allows these risks to be minimised. Benmara Project During the year, the Group continued exploration at the Benmara Project in the Northern Territory. A drilling campaign The financial impact of the projects was commenced in conjunction with the listed below is a requirement for BHP Group pursuant to an exploration further expenditure where successful and farm-in agreement originally exploration leads to follow-up activities. executed with OZ Minerals Limited. All exploration activities may be funded by the Group’s own cash reserves or through joint venture arrangements. Further technical detail on each of the prospects listed below is in the Review of Operations in the Annual Report. 64 North Project The 64North Project in Alaska has been The future strategy at the Benmara project is for Resolution to continue exploration with its project partner. Carrara Range Project Early-stage exploration was continued at the Carrara Range project on the three granted tenements. The Group applied to the Northern Lanc Council (NLC) the focus of exploration efforts since to progress Aboriginal Freehold Land October 2019 when the company entered tenement application (three)  to grant into a binding agreement to earn-in stage. The application was unsuccessful to the project. The 64North Project on this occasion. surrounds the world-class Pogo Gold Mine, owned and operated by Northern Star Resources Ltd (ASX: NST)  in the highly prospective Tintina Gold Province in Alaska.  Resolution has earned a 51% interest in the 64North Project and completed year 3 earn-in requirements. The future strategy at the Carrara Range Project is to continue exploration activities on the most prospective targets on the three granted tenements.  Wollogorang Project Resolution completed a drilling Resolution completed a significant program at the Wollogorang Project SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There have been no significant changes in the state of affairs of the Group that occurred during the reporting period that have not otherwise been disclosed in this report or the financial statements. DIVIDENDS There were no dividends paid or declared during the reporting period or to the date of this report. EVENTS ARISING SINCE THE END OF THE REPORTING YEAR No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years other than those described below. On 25 July 2023, Managing Director Chris McFadden was issued 57,550,000 unquoted performance rights subject to KPI vesting conditions as approved by shareholders. drilling programme and reconnaissance and announced on 6 September 2023 On 6 September 2023, the Group signed sampling and ground geophysics at the signing of a binding agreement with the 64North Project. An Independent NT Minerals Limited (ASX: NTM) for Geologists Review was also undertaken. its sale. The future strategy for the 64North Project is to continue exploration activities on the most prospective targets. George Project During the year, the Group acquired the George Project (silica sand and uranium) in South Australia and the Allegra Project (nickel) in Alaska and commenced preliminary exploration activities. The future strategy at the George a binding agreement for the sale of its wholly-owned Wollogorang Project located within the McArthur Basin in the Northern Territory to NT Minerals Limited (ASX: NTM). The consideration for the sale of the project is $250,000 made up of $50,000 cash and $200,000 worth of shares in NT Minerals Limited (ASX: NTM). LIKELY DEVELOPMENTS The Group continues its exploration and Allegra projects is for Resolution program focussed on battery metals to continue exploration activity and and gold and will assess other follow up any success with drilling and complementary projects. field programmes. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 21 DIRECTORS’ REPORT, continued DIRECTORS’ MEETINGS The number of Directors’ meetings held during the reporting period and the number of meetings attended by each Director is as follows: DIRECTORS DC Chessell CW McFadden PA Kitto CL Farrow SR Groves AN Shearer M Holcombe BOARD MEETINGS AUDIT AND RISK COMMITTEE MEETINGS REMUNERATION COMMITTEE MEETINGS A 18 2 18 10 10 9 8 E 18 2 18 10 10 9 10 A 0 0 0 0 0 0 0 E 0 0 0 0 0 0 0 A 1 0 1 0 0 0 0 E 1 0 1 0 0 0 0 A = Attended E = Entitled to attend UNISSUED SHARES UNDER OPTION Unissued ordinary Shares of Resolution Minerals under option at the date of this report are: DATE OPTIONS GRANTED 12 November 20211 5 May 20233 Total unquoted options 21 September 2020 14 July 20222 Total quoted options Total options on issue EXPIRY DATE EXERCISE PRICE OF OPTIONS NUMBER UNDER OPTION 16 December 2023 30 June 2026 30 September 2023 31 July 2025 $0.03 $0.008 $0.12 $0.015 79,484,111 82,521,949 162,006,060 74,634,643 624,508,035 699,142,678 861,148,738 1 Options were issued on 12 November 2021, 3 December 2021, 20 December 2021 and 4 February 2022. 2 Options were issued on 14 July 2022, 21 July 2022 and 20 September 2022. 3 Options were issued on 05 May 2023. During July and September 2022, the Company issued 624,508,035 quoted options as part of a rights issue, attaching to a share placement and as broker fees. These options do not entitle the holders to participate in any share issue of the Company or any other body corporate. 22 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDIRECTORS’ REPORT, continued PERFORMANCE RIGHTS Unissued ordinary Shares of Resolution Minerals subject to vesting and exercise of performance rights at the date of this report are: DATE RIGHTS GRANTED 27 November 2019 1 February 2021 12 November 2021 1 April 2022 1 April 2022 1 July 2022 1 July 2022 1 July 2022 1 July 2022 21 November 2022 21 November 2022 1 March 2023 25 July 2023 25 July 2023 Total rights on issue KPI VESTING 31 December 2024 Vested 31 December 2023 31 December 2022 31 March 2025 30 June 2023 31 May 2023 1 March 2024 1 March 2025 31 December 2024 31 December 2025 31 December 2023 1 August 2024 1 August 2025 EXPIRY DATE NUMBER OF RIGHTS 31 December 2027 31 December 2025 11 November 2026 31 December 2025 31 March 2027 30 June 2027 31 May 2026 1 March 2027 1 March 2027 21 November 2027 21 November 2027 31 December 2026 31 August 2027 31 August 2028 2,000,000 300,000 2,500,000 2,514,700 6,000,000 3,000,000 1,880,000 1,000,000 1,000,000 6,000,000 3,000,000 14,320,000 35,550,000 22,000,000 101,064,700 During the year, unquoted performance rights with performance based vesting conditions were issued as remuneration under the Company’s Performance Share Plan as follows: • • • 6,750,000 rights to officers of the Company 13,750,000 rights to the former and current Managing Director 13,540,000 rights to employees and consultants These rights do not entitle the holders to participate in any share issue of the Company or any other body corporate. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 23 DIRECTORS’ REPORT, continued REMUNERATION REPORT (AUDITED) For the year ended 30 June 2023 The Directors of Resolution Minerals management personnel are remunerated on a consultancy or salary basis based on Ltd present the Remuneration Report services provided by each person. The Board annually reviews the packages of key in accordance with the Corporations management personnel by reference to the Group’s performance and comparable Act 2001 (Cth) and the Corporations information from industry sectors and other listed companies in similar industries. Regulations 2001 (Cth). • The Board may exercise discretion in relation to approving incentives, bonuses, The Remuneration Report is set out options and performance rights. The policy is designed to attract the highest under the following main headings: calibre of key management personnel and reward them for performance that A Principles used to determine the results in long-term growth in shareholder wealth. nature and amount of remuneration • Key management personnel are also entitled to participate in the Company’s Share Option Plan and Performance Share Plan as disclosed to shareholders in the Company’s 2023 General Meeting held on 25 July 2023 and announced to the ASX. • The Board policy is to remunerate non-executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to approval by shareholders (currently $400,000). Fees for non-executive Directors are not linked to the performance of the Group, except in relation to share price based performance rights. However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company and are able to participate in the Company’s Share Option Plan and Performance Share Plan, which may exist from time to time. During the reporting period, performance reviews of senior executives were not conducted. There were no remuneration consultants used by the Group during the period. Consequences of performance on shareholder wealth In considering the Group’s performance and benefits for shareholder wealth, the Board will have regard to a number of key performance metrics such as profitability, shareholders’ equity and the Company’s share price. The following table shows the results of key performance indicators of the Group for the past 5 years: YEAR 2023 2022 2021 2020 2019 PROFIT/(LOSS) AFTER TAX $ EARNINGS PER SHARE ($) SHARE PRICE AT 30 JUNE (8,760,320) (1,003,371) (983,485) (1,281,967) (1,370,357) (0.84) (0.16) (0.30) (1.02) (2.55) 0.004 0.008 0.021 0.086 0.033 B Details of remuneration C Service agreements D Share-based remuneration E Other information A PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION The Group’s remuneration policy has been designed to align objectives of key management personnel with objectives of shareholders and the business, by providing a fixed remuneration component and offering specific long- term incentives through the issue of options and / or performance rights. The Board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel and Directors to run and manage the Group. The key management personnel of the Group are the Board of Directors, Company Secretary and Executive Officers. The Board’s policy for determining the nature and amount of remuneration for its members and key management personnel of the Group is as follows: • The remuneration policy, setting the terms and conditions for the key management personnel, was developed by the Board. All key 24 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDIRECTORS’ REPORT, continued REMUNERATION REPORT (AUDITED), continued Performance based remuneration The remuneration policy has been tailored to increase goal congruence between shareholders, directors and other key management personnel. Currently, this is facilitated through the issue of options and/or performance rights to key management personnel to encourage the alignment of personal and shareholder interests. The Group believes this policy will be effective in increasing shareholder wealth. Voting and comments made at the Company’s 2022 Annual General Meeting Resolution Minerals received 98% “yes” votes on its remuneration report for the 2022 financial year. The Group did not receive any specific feedback at the AGM on its remuneration report. B DETAILS OF REMUNERATION Details of the nature and amount of each element of the remuneration of the Group’s key management personnel (KMP) are shown below: Director and other key management personnel remuneration 2023 SHORT TERM BENEFITS POST-EMPLOYMENT BENEFITS SHARE-BASED PAYMENTS1 SALARY AND FEES $ CONTRACT PAYMENTS $ OTHER BENEFITS $ SUPERANNUATION $ OPTIONS / RIGHTS $ TOTAL $ AT RISK1 % Non-executive directors D Chessell P Kitto C Farrow2 A Shearer3 Executive directors C McFadden4 S Groves5 M Holcombe6 59,859 36,199 23,500 9,050 27,500 142,186 137,591 101,718 24,978 - 15,000 - - - Other key management personnel J Kopias7 Total - 435,885 120,594 262,290 - - - - - - - - - 1,900 6,424 - 950 2,887 14,253 - - 26,414 17,857 9,162 12,397 - - 24,750 82,023 18,445 164,634 181,334 76,763 35,897 25,000 30,387 181,189 219,614 139,039 889,223 10 12 35 - - 14 37 13 1 Represents share based payments linked to performance conditions. 2 Mr Farrow resigned as director on 21 November 2022. 3 Mr Shearer resigned as director on 29 September 2022. 4 Mr McFadden was appointed as director on 22 May 2023. 5 Mr Groves was appointed as director on 1 July 2022 and resigned on 7 November 2022. 6 Mr Holcombe was appointed as director on 14 September 2022 and resigned on 5 May 2023. 7 Contract payments are made to Kopias Consulting – an entity associated with Mr Kopias. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 25 DIRECTORS’ REPORT, continued REMUNERATION REPORT (AUDITED), continued 2022 SHORT TERM BENEFITS POST-EMPLOYMENT BENEFITS SHARE-BASED PAYMENTS8 SALARY AND FEES $ CONTRACT PAYMENTS $ OTHER BENEFITS $ SUPERANNUATION $ OPTIONS / RIGHTS $ TOTAL $ AT RISK8 % Non-executive Directors C Farrow P Kitto9 A Shearer 60,000 24,667 36,364 Executive Directors D Chessell 256,844 Other key management personnel - - - - J Kopias10 Total - 377,875 113,525 113,525 - - - - - - - - 3,636 9,424 - 9,424 69,424 24,667 49,424 20,554 52,036 329,424 - 24,190 9,424 80,308 122,949 595,898 13 - 23 13 8 8 Represents share based payments linked to performance conditions. 9 Dr Kitto was appointed Director on 2 March 2022. The payments to Dr Kitto include amounts for additional exertion in undertaking technical reviews. 10 Contract payments are made to Kopias Consulting – an entity associated with Mr Kopias. C SERVICE AGREEMENTS Remuneration and other terms of employment for the Executive Directors and other KMP are formalised in service agreements. The major provisions of the agreements relating to remuneration are set out below: NAME BASE REMUNERATION UNIT OF MEASURE TERM OF AGREEMENT NOTICE PERIOD TERMINATION BENEFITS C McFadden Managing Director J Kopias CFO & Company Secretary $325,000 Salaried employee Indefinite Three months Three months variable hourly rate contract Indefinite One month None 26 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDIRECTORS’ REPORT, continued REMUNERATION REPORT (AUDITED), continued D SHARE-BASED REMUNERATION Details of performance rights convertible to ordinary shares in the Company that were granted as remuneration to each KMP during the year are set out below. All performance rights refer to a right to convert one right to one ordinary share in the Company, under the terms of the performance rights. Details of performance rights convertible to ordinary shares in the Company that were granted as remuneration to each KMP during the year are set out below: GRANTED 2023 D Chessell P Kitto M Holcombe S Groves P Kitto P Kitto P Kitto M Holcombe M Holcombe J Kopias Total NUMBER GRANTED GRANT DATE FAIR VALUE AT GRANT DATE FIRST VESTING DATE1 LAST VESTING DATE 3,000,0002 3,000,0002 3,000,0002 10,500,0003 1,000,0004 1,000,0005 1,000,0006 7,517,6907 1,484,0277 3,000,0002 34,501,717 21/11/2022 21/11/2022 21/11/2022 01/07/2022 01/07/2022 01/07/2022 07/07/2022 21/11/2022 05/05/2023 21/11/2022 PER RIGHT FULL VALUE $ $0.0065 $0.0065 $0.0079 $0.0090 $0.0011 $0.0025 $0.0034 $0.0090 $0.0060 $0.0072 19,500 19,500 19,500 94,500 1,060 2,460 3,400 67,659 8,904 21,600 31 December 2024 21/11/2027 31 December 2024 21/11/2027 31 December 2024 21/11/2027 30 June 2023 1 March 2023 1 March 2024 1 March 2025 30/06/2027 01/03/2027 01/03/2027 01/03/2027 21 November 2022 21/11/2025 5 May 2023 21/11/2025 31 December 2024 21/11/2027 1 Meeting criteria of the KPI listed below determines vesting of rights. 2 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 140% of the 5 day VWAP prior to the 2022 AGM at any time in the period to 31 December 2024 for a period of at least 1 month. 3 The vesting of the performance rights subject to KPI’s and assessment of meeting each KPI unrelated to market-based conditions must be determined by the Board by 31 March 2024 for the year to 31 December 2023 and, if vested, the Performance Rights will expire on 30 June 2027. 4 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 3.6 cents per share for a period of at least 1 month to 28 February 2023 and the Director remaining a director of the company after 28 February 2023. 5 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 5.4 cents per share for a period of at least 1 month to 28 February 2024 and the Director remaining a director of the company after 28 February 2024. 6 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 7.2 cents per share for a period of at least 1 month to 28 February 2025 and the Director remaining a director of the company after 28 February 2025. 7 The performance rights subject to KPI’s and assessment of meeting each KPI will vest upon introducing one or more potential acquisition opportunities to the Company which acquisitions the Company proceeds with (M&A Fee) - an amount equal to 4% of the transaction value. Introducing one or more potential investors to the Company, who subsequently invest in the Company (Capital Raising Fee) - an amount equal to 6% of the proceeds received. All unvested Performance Rights will lapse within 3 months of the officer ceasing to be engaged by the Company. Share holdings of key management personnel The number of ordinary shares of Resolution Minerals Ltd held, directly, indirectly or beneficially, by each Director and Company Secretary, including their personally-related entities as at reporting date: DIRECTORS AND COMPANY SECRETARY HELD AT 30 JUNE 2022 MOVEMENT DURING YEAR OPTIONS / RIGHTS EXERCISED HELD AT 30 JUNE 2023 D Chessell1 P Kitto1 A Shearer2 C Farrow2 J Kopias1 Total 2,885,005 - 1,839,412 2,554,286 1,767,143 9,045,846 6,000,000 1,000,000 (1,839,412) (2,554,286) 1,000,000 3,606,302 - - - - - - 8,885,005 1,000,000 - - 2,767,143 12,652,148 1 Movement represents participation in share placement/s and/or on market purchase. 2 Movement represents resignation as director. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 27 DIRECTORS’ REPORT, continued REMUNERATION REPORT (AUDITED), continued Option holdings of key management personnel The number of quoted options over ordinary shares in Resolution Minerals Ltd held, directly, indirectly or beneficially, by each specified Director and Company Secretary, including their personally-related entities as at reporting date, is as follows: QUOTED OPTIONS – Exercise price of $0.12 and expiry of 30 September 2023 (RMLOB) DIRECTORS AND COMPANY SECRETARY HELD AT 30 JUNE 2022 GRANTED DURING YEAR C Farrow D Chessell A Shearer Total 214,286 35,715 42,270 292,271 - - - - DISPOSED DURING YEAR1 (214,286) - (42,270) (256,556) 1 Movement represents resignation as director. QUOTED OPTIONS – Exercise price of $0.015 and expiry of 31 July 2025 (RMLO) DIRECTORS AND COMPANY SECRETARY D Chessell P Kitto J Kopias Total HELD AT 30 JUNE 2022 - - - - GRANTED DURING YEAR1 2,442,503 1,000,000 7,148,572 10,591,075 DISPOSED DURING YEAR EXERCISED - - - - 1 Movement represents participation placement and/or rights issue. Performance rights holdings of key management personnel EXERCISED HELD AT 30 JUNE 2023 VESTED AND EXERCISABLE AT 30 JUNE 2023 - 35,715 - 35,715, - 35,715 - 35,715 HELD AT 30 JUNE 2023 2,442,503 1,000,000 7,148,572 VESTED AND EXERCISABLE AT 30 JUNE 2023 2,442,503 1,000,000 7,148,572 10,591,075 10,591,075 KEY MANAGEMENT PERSONNEL D Chessell3 P Kitto3 C Farrow1 S Groves1 A Shearer1 M Holcombe1 J Kopias3 Total EXERCISED HELD AT 30 JUNE 2022 5,750,000 - 1,750,000 ACQUIRED DURING YEAR2 3,000,000 6,000,000 DISPOSED DURING YEAR (2,500,000) (1,000,000) - (1,750,000) - 10,500,000 (10,500,000) 1,750,000 - (1,750,000) - 12,001,717 (3,000,000) (9,001,717) HELD AT 30 JUNE 2023 6,250,000 5,000,000 - - - - 1,750,000 3,000,000 (500,000) - 4,250,000 11,000,000 34,501,717 (21,000,000) (9,001,717) 15,500,000 VESTED AND EXERCISABLE AT 30 JUNE 2023 - - - - - - - - - - - - - - - - - - - - - 1 Movement represents resignation as director. 2 Represents issue of performance rights as remuneration as approved at the 2022 AGM and 2023 General Meeting under the Company’s Performance Share Plan. 3 Disposal related to lapse of unvested performance rights 28 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDIRECTORS’ REPORT, continued Performance share holdings of key management personnel DIRECTORS Class A D Chessell A Shearer Class B D Chessell A Shearer Total HELD AT 30 JUNE 2022 ACQUIRED DURING YEAR DISPOSED DURING YEAR1 EXERCISED HELD AT 30 JUNE 2023 VESTED AND EXERCISABLE AT 30 JUNE 2023 1,800,000 800,000 658,125 325,000 3,583,125 - - - - - (1,800,000) (800,000) (658,125) (325,000) (3,583,125) - - - - - - - - - - - - - - - 1 All performance shares lapsed in accordance with the terms of the securities. E OTHER INFORMATION Transactions with key management personnel Transactions with key management personnel are made on normal commercial terms and conditions and at market rates. Outstanding balances are unsecured and are repayable in cash. RELATED PARTY RELATIONSHIP TO KEY MANAGEMENT PERSONNEL/DIRECTOR SERVICES PROVIDED Magill Consulting1/2 A business of which D Chessell is a Director Consulting Fees5 Magill Consulting3 A business of which D Chessell is a Director Vehicle hire / Sale of Motor Vehicle Kopias Consulting4 A business of which J Kopias is a Director Consulting Fees5 Valas Investments A business of which A Shearer is a Director Consulting Fees5 2023 $ 101,718 (19,280) 120,594 15,000 2022 $ 5,679 - 113,061 - 1 During the year Duncan Chessell was performing duties of the Managing Director whilst the position was vacant. 2 The total amount of fees due to Magill Consulting as at 30 June 2023 was $11,233. 3 Vehicle hire was charged to Resolution and a motor vehicle was sold to Magill Consulting. 4 The total amount of fees due to Kopias Consulting as at 30 June 2023 was $9,888. 5 Consulting fees have been outlined in the table above. END OF AUDITED REMUNERATION REPORT 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 29 DIRECTORS’ REPORT, continued ENVIRONMENTAL LEGISLATION The Directors believe that the Group has, in all material respects, complied with all particular and significant environmental regulations relevant to its operations. The Group’s operations are subject to various environmental regulations under the Commonwealth and State Laws of Australia and Alaska, USA. The majority of its activities involve low level disturbance associated with exploration drilling programs. Approvals, licences, hearings and other regulatory requirements are performed, as required, by the Group’s management for each permit or lease in which the Group has an interest. INDEMNITIES GIVEN AND INSURANCE PREMIUMS PAID TO AUDITORS AND OFFICERS During the reporting year, the Company paid a premium to insure officers of the Company. The officers of the Company covered by the insurance policy include all officers. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Company, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else to cause detriment to the Company. Details of the amount of the premium paid in respect of the insurance policies is not disclosed as such disclosure is prohibited under the terms of the contract. The Company has not otherwise, during or since the end of the reporting period, except to the extent permitted by law, 30 indemnified, or agreed to indemnity any current or former officer or auditor of the Company against a liability incurred as such by an officer or auditor. NON-AUDIT SERVICES During the reporting period Grant Thornton performed certain other services in addition to its statutory duties. The Board has considered the non-audit services provided during the reporting period by the auditor and is satisfied that the provision of those non-audit services is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 (Cth) for the following reasons: The non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision- making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards. Details of the amounts paid to the auditors of the Group and its related practices for audit and non-audit services provided during the reporting period are set out in note 14 to the Financial Statements. A copy of the Auditor’s Independence Declaration as required under s307C of the Corporations Act 2001 (Cth) is included on page 31 of this Annual Report and forms part of this Directors’ Report. ROUNDING OF AMOUNTS The Group is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to ‘rounding-off’. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest dollar. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 (Cth) for leave 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. CORPORATE GOVERNANCE The Board has adopted the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations – 4th Edition (ASX Recommendations). The Board continually monitors and reviews its existing and required policies, charters and procedures with a view to ensuring its compliance with the ASX Recommendations to the extent deemed appropriate for the size of the Company and its development status. A summary of the Company’s ongoing corporate governance practices is set out annually in the Company’s Corporate Governance Statement and can be found on the Company’s website at www.resolutionminerals.com. Signed in accordance with a resolution of the Directors. Duncan Chessell Chair Adelaide 28 September 2023 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTAUDITOR’S INDEPENDENCE DECLARATION Grant Thornton Audit Pty Ltd Grant Thornton House Level 3 170 Frome Street Adelaide SA 5000 GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 Auditor’s Independence Declaration To the Directors of Resolution Minerals Limited In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Resolution Minerals Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been: a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b no contraventions of any applicable code of professional conduct in relation to the audit. GRANT THORNTON AUDIT PTY LTD Chartered Accountants I S Kemp Partner – Audit & Assurance Adelaide, 28 September 2023 www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. #10529425v2w 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 31 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2023 Interest income Other income Broker and investor relations Employee benefits expense Share based payments Exploration expense Impairment expense Depreciation Gain/(loss) on sale of assets Other expenses Loss before tax Income tax (expense) / benefit Loss for the year from continuing operations attributable to owners of the parent Foreign currency (loss) / gain attributable to owners of the parent Changes in the fair value of equity investments at fair value through other comprehensive income Total comprehensive loss for the year attributable to owners of the parent Earnings per share from continuing operations Basic and diluted loss – cents per share This statement should be read in conjunction with the notes to the financial statements. NOTES 6 2 3 4 30 JUNE 2023 $ 32,549 360,758 (95,357) (1,037,425) (29,397) (341,478) (7,107,993) (31,687) 25,216 (599,031) (8,823,845) 30 JUNE 2022 $ 1,265 98,681 (93,523) (420,894) (109,263) (50,752) (1,964) (32,117) (1,206) (393,598) (1,003,371) - - (8,823,845) (1,003,371) 31,027 1,660,634 5,570 - (7,132,184) (997,801) (0.85) (0.16) 32 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTSTATEMENT OF FINANCIAL POSITION As at 30 June 2023 ASSETS Current assets Cash and cash equivalents Asset held for sale Other assets Total current assets Non-current assets Exploration and evaluation expenditure Plant and equipment Right of use asset Investments Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Trade and other payables Employee provisions Lease liabilities Total current liabilities Non-current liabilities Employee provisions Lease liabilities Total non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY NOTES 5 6(b) 6(a) 7 8a 9 10 8b 8b 11 12 30 JUNE 2023 $ 30 JUNE 2022 $ 1,309,038 250,000 100,121 1,659,159 2,292,438 - 130,172 2,422,610 18,288,855 22,947,079 138,238 27,510 2,459,019 20,913,622 22,572,781 262,844 57,522 - 23,267,445 25,690,055 384,495 52,611 31,875 468,981 8,820 - 8,820 477,801 687,645 39,162 26,057 752,864 - 31,875 31,875 784,739 22,094,980 24,905,316 32,614,902 3,003,541 (13,523,463) 22,094,980 29,365,765 851,207 (5,311,656) 24,905,316 This statement should be read in conjunction with the notes to the financial statements. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 33 STATEMENT OF CHANGES IN EQUITY For the year 30 June 2023 2023 Opening balance Share placements and SPP Fair value of shares issued for project acquisition Fair value of broker fee shares Option / rights exercise Fair value of options issued Issue costs Lapse of options / rights Fair value of performance rights issued Transactions with owners Comprehensive income: Total profit or loss for the reporting year Foreign currency movements Fair value movements in FVOCI investments Total other comprehensive income for the reporting year ISSUED CAPITAL $ SHARE BASED PAYMENTS RESERVE $ RESERVES $ ACCUMULATED LOSSES $ TOTAL EQUITY $ 29,365,765 828,359 22,848 (5,311,656) 24,905,316 2,935,219 340,000 37,222 128,063 - (191,367) - - 3,249,137 - - - - - - - (128,063) 928,832 - (637,870) 297,774 460,673 - - - - - - - - - - - - - - - - - - - - 637,870 2,935,219 340,000 37,222 - 928,832 (191,367) - - 297,774 637,870 4,347,680 (8,823,845) (8,823,845) 31,027 (25,832) 5,195 1,660,634 - 1,660,634 1,691,661 (8,849,677) (7,158,016) Balance 30 June 2023 32,614,902 1,289,032 1,714,509 (13,523,463) 22,094,980 2022 Opening balance Share placements Option exercise Fair value of shares issued for project acquisition Issue costs Lapse of options / rights Fair value of performance rights issued ISSUED CAPITAL $ SHARE BASED PAYMENTS RESERVE $ RESERVES $ ACCUMULATED LOSSES $ TOTAL EQUITY $ 23,558,922 1,509,844 17,278 (4,996,570) 20,089,474 5,568,794 127,748 453,000 (342,699) - (127,748) - - - - (688,285) 134,548 - - - - - - - - - - 688,285 5,568,794 - 453,000 (342,699) - - 134,548 688,285 5,813,643 Transactions with owners 5,806,843 (681,485) Comprehensive income: Total profit or loss for the reporting year Foreign currency reserve Total other comprehensive income for the reporting year - - - - - - (1,003,371) (1,003,371) - 5,570 (1,003,371) (997,801) 5,570 5,570 Balance 30 June 2022 29,365,765 828,359 22,848 (5,311,656) 24,905,316 This statement should be read in conjunction with the notes to the financial statements. 34 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTSTATEMENT OF CASH FLOWS For the year ended 30 June 2023 Operating activities Interest received Other receipts Exploration expense Payments to suppliers and employees Net cash used in operating activities Investing activities Investment in Midwest Lithium Payments for capitalised exploration expenditure Receipts from joint operation partner Payments for plant and equipment Proceeds from sale of plant and equipment Net cash used in investing activities Financing activities Proceeds from issue of share capital Proceeds from issue of options Payments for capital raising costs Subscriptions received in advance Net cash from financing activities NOTES 11 30 JUNE 2023 $ 32,901 360,758 (341,478) (1,391,115) (1,338,934) (798,385) (4,867,167) 2,288,886 (13,476) 70,455 30 JUNE 2022 $ 1,265 - (50,752) (884,156) (933,643) - (4,060,987) 364,108 (213,704) 53,866 (3,319,687) (3,856,717) 2,935,219 820,458 (80,456) - 3,675,221 5,568,794 - (297,994) 60,000 5,330,800 Net change in cash and cash equivalents (983,400) 540,440 Cash and cash equivalents, beginning of the year Cash and cash equivalents, end of year 5 (a) 2,292,438 1,309,038 1,751,998 2,292,438 This statement should be read in conjunction with the notes to the financial statements. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 35 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2023 1 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES This general purpose financial statements of the Group have been prepared in accordance with the requirements of the Corporations Act 2001 (Cth), Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. Compliance with Australian Accounting Standards results in full compliance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Resolution Minerals Ltd is a listed public company, registered and domiciled in Australia. Resolution Minerals Ltd is a for profit entity for the purpose of preparing the financial statements. The financial statements for the year ended 30 June 2023 were approved and authorised by the Board of Directors on 28 September 2023. The Financial Report has been prepared on an accruals basis, and is based on historical costs, modified by the measurement at fair value of selected on-current assets, financial assets and financial liabilities. Comparatives Comparative information for 2022 is for the full year commencing on 1 July 2021. The significant policies which have been adopted in the preparation of this financial report are summarised below. a) Principles of consolidation Subsidiaries The Group financial statements consolidate those of the parent company and all of its subsidiary undertakings drawn up to 30 June 2023. Subsidiaries are all entities (including structured entities) over which the Group control. The Group controls an 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 fully transferred to the Group. They are deconsolidated from the date that control ceases. All subsidiaries have a reporting date of 30 June. A list of controlled entities is contained in note 18 to the Financial Statements. All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted, where necessary, to ensure consistency with the accounting policies adopted by the Group. Profit or loss of subsidiaries acquired or disposed of during the reporting period are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non- controlling interests based on their respective ownership interests. Joint arrangements Under AASB11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. The Group currently has a joint arrangement in relation to its 64North Project in Alaska, USA. The Group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated into the financial statements under the appropriate headings. Details of the joint operations are set out in note 6. b) Operating segments An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. This includes start-up operations which are yet to earn revenues. Management will also consider other factors in determining operating segments such as the existence of a line manager and the level of segment information presented to the Board of Directors. Operating segments have been identified based on the information provided to the chief operating decision makers – being the Board. The Group aggregates two or more operating segments when they have similar economic characteristics, and the segments are similar in the nature of the minerals targeted. Operating segments that meet the quantitative criteria, as prescribed by AASB 8, are reported separately. However, an operating segment that does not meet the quantitative criteria is still reported separately where information about the segment would be useful to users of the financial statements. The Directors have considered the requirements of AASB 8 – Operating Segments and the internal reports that are reviewed by the Board in allocating resources have determined that there are two separately identifiable segments based on the level of expenditure, namely the Group’s US based operations and Australian based operations. c) Finance income and expense Finance income comprises interest income on funds invested, gains on disposal of financial assets and changes in fair value of financial assets held at fair value through profit or loss. Finance expenses comprise changes in the fair value of financial assets held at fair value through profit or loss and impairment losses on financial assets. Interest income is recognised as it accrues in profit or loss, using the effective interest rate method. All income is stated net of goods and services tax (GST). 36 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT d) Exploration and evaluation expenditure Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that right of tenure is current and those costs are expected to be recouped through the successful development of the area (or, alternatively by its sale) or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and operations in relation to the area are continuing. Accumulated costs, in relation to an abandoned area, are written off in full against profit in the period in which the decision to abandon the area is made. e) Financial instruments Recognition, initial measurement and derecognition Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument, and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires. Classification and subsequent measurement of financial assets Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable). For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition: » » » » amortised cost fair value through profit or loss (FVPL) equity instruments at fair value through other comprehensive income (FVOCI) debt instruments at fair value through other comprehensive income (FVOCI) All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items. Classifications are determined by both: » » The entity’s business model for managing the financial asset The contractual cash flow characteristics of the financial assets Subsequent measurement financial assets FINANCIAL ASSETS AT AMORTISED COST Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL): » » they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVPL) Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVPL. IMPAIRMENT OF FINANCIAL ASSETS AASB 9’s impairment requirements use forward looking information to recognize expected credit losses – the ‘expected credit losses (ECL) model’. Instruments in scope of these requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. The Group considers a range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. In applying this forward-looking approach, a distinction is made between: a) financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk (‘Stage 1’) and b) financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not low (‘Stage 2’). c) ‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category. Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument. CL ASSIFICATION AND MEASUREMENT OF FINANCIAL LIABILITIES The Group’s financial liabilities include borrowings and trade and other payables. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments). All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 37 f) Other financial assets Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided. Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off. Financial assets at fair value through other comprehensive income Upon initial recognition, the Group can elect to classify irrevocably its equity instruments as equity instruments designed at fair value through OCI when they meet the definition of equity under AASB 132 Financial Instruments: Presentation, and are not held for trading. The classification is determined on an instrument-by- instrument basis. Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment. The Group elected to classify irrevocably its unlisted entity investments under this category. Impairment of financial assets For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset’s carrying value with a corresponding expense through profit or loss. Fair value hierarchy Certain accounting policies and disclosures require the measurement of fair value, for both financial and nonfinancial assets and liabilities. The Group uses observable data as much as possible when measuring the fair value of an asset or liability. Fair values of assets or liabilities are categorised into different levels in the fair value hierarchy based on the lowest input used in the valuation techniques as follows: » » » Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) Level 3: inputs for the asset or liability that is not based on observable market data (unobservable inputs) g) Impairment of assets At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to profit or loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. h) Assets held for sale Assets classified as “held for sale” are measured at the lower of their carrying amount immediately prior to their classification as held for sale and their fair value less costs to sell. Assets classified as held for sale are not subject to depreciation or amortisation. i) Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the reporting period which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently amortised cost using the effective interest rate method. Trade and other payables are stated at amortised cost. j) Income tax Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity. Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation Office (ATO) and other fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax assets and liabilities are offset only when the Group has a right and intention to set-off current tax assets and liabilities from the same taxation authority. Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income (such as the revaluation of land) or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively. 38 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT The Company and its wholly-owned Australian resident subsidiaries have formed a tax-consolidated group. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements. k) Cash and cash equivalents Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. l) Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition. Depreciation is provided on plant and equipment. Depreciation is calculated on a straight line basis so as to write off the cost of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. Estimated useful lives of 3-6 years are used in the calculation of depreciation for plant and equipment. m) Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. Diluted 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 tax effect and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. n) Share-based payments The Group has provided payment to related parties in the form of share-based compensation, whereby related parties render services in exchange for shares or rights over shares (‘equity-settled transactions’). The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they are granted. The fair value of share options is determined using a Black and Scholes methodology depending on the nature of the option terms. The fair value in relation to performance rights is calculated using a Monte Carlo simulation. The Black and Scholes option pricing model 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. The Monte Carlo simulation used in pricing the performance rights takes into account the target share price resulting from meeting the KPI, the term of the right, the share price at grant date and expected price volatility of the underlying share and the risk free interest rate for the term of the option. The fair value of the options and performance rights granted is adjusted to reflect market vesting conditions, but excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options and performance rights that are expected to become exercisable / vested. At each reporting date, the entity revises its estimates of the number of options and performance rights that are expected to become exercisable / vested. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant parties become fully entitled to the award (‘vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the directors of the Group, will ultimately vest. This opinion is formed based on the best available information at reporting date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification. Equity-settled share-based payments to other parties are measured at the fair value of goods and services received, except where the fair value cannot be estimated reliably, in which the transaction is measured at the fair value of the equity instruments granted on the date the goods or services are received. o) Employee benefits Short-term employee benefits are current liabilities included in employee benefits, measured at the undiscounted amount that the Group expects to pay as a result on the unused entitlement. Annual leave is included in ‘other long-term benefit’ and discounted when calculating the leave liability as the Group does not expect all annual leave for all employees to be used wholly within 12 months of the end of the reporting period. Annual leave liability is still presented as a current liability for presentation purposes under AASB 101 Presentation of Financial Statements. p) Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and financing activities, which are disclosed as operating cash flows. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 39 q) Leases At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-of-use asset and a corresponding lease liability is recognised by the Group where the Group is a lessee. However, all contracts that are classified as short-term leases (lease with remaining lease term of 12 months or less) and leases of low-value assets are recognised as an operating expense on a straight-line basis over the term of the lease. Initially, the lease liability is measured at the present value of the lease payments still to be paid at the commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily determined, the Group uses the incremental borrowing rate. Lease payments included in the measurement of the lease liability are as follows: » » » » » » fixed lease payments less any lease incentives; variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date; the amount expected to be payable by the lessee under residual value guarantees; the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; lease payments under extension options if lessee is reasonably certain to exercise the options; and payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. Subsequently, the lease liability is measured by a reduction to the carrying amount of any payments made and an increase to reflect any interest on the lease liability. The right-of-use assets is an initial measurement of the corresponding lease liability less any incentives and initial direct costs. Subsequently, the measurement is the cost less accumulated depreciation (and impairment if applicable). Right-of-use assets are depreciated over the lease term or useful life of the underlying asset whichever is the shortest. Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset. r) Critical accounting estimates and judgements The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends of economic data, obtained both externally and within the Group. i) Key estimates – impairment The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. ii) Key judgements – exploration and evaluation expenditure The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which this determination is made. In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be written off, profits and net assets will be reduced in the period in which this determination is made. iii) Share-based payment transactions The Group measures the cost of equity-settled transactions with management and other parties by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined by the Board of Directors with reference to quoted market prices or using the Black-Scholes valuation method taking into account the terms and conditions upon which the equity instruments were granted. The fair value of performance rights is calculated using a Monte Carlo simulation. The assumptions in relation to the valuation of the equity instruments are detailed in note 12 and note 17. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity. iv) Unlisted investment valuation As disclosed in note 9, determination of the fair value of the investment in Midwest Lithium AG has been based on the published share price quotation included in Midwest Lithium Limited’s initial public offering prospectus. This is deemed to be a Level 3 input in the determination of the investments fair value, as it is based on unobservable market data. s) Adoption of the new and revised accounting standards In the current year, there are no new and/or revised Standards and Interpretations adopted in these Financial Statements affecting presentation or disclosure and the reported result or financial position. t) Recently issued accounting standards to be applied in future accounting periods There are no accounting standards that have not been early adopted for the year ended 30 June 2023 but will be applicable to the Group in future reporting periods. 40 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT 2 OTHER EXPENSES Compliance Office expenses Legal, insurance and registry Loss on foreign currency Other expenses Total other expenses 3 INCOME TAX BENEFIT / (LOSS) 2023 $ 135,074 140,494 153,224 (16,515) 186,754 599,031 2022 $ 98,868 126,925 90,982 609 76,214 393,598 2023 $ 2022 $ a) The components of income tax expense comprise: Current income tax expense / (benefit) - - b) The prima facie tax loss before income tax is reconciled to the income tax (benefit) / expense as follows: Net gain / (loss) for Resolution Minerals Ltd Income tax rate Prima facie tax benefit on loss from activities before income tax Non-deductible amounts Tax effect of temporary differences not brought to account Deferred tax asset not realised as criteria not met Income tax expense c) Deferred tax assets have not been recognised in respect of the following: Total tax losses Deferred tax asset not recognised (8,823,845) (1,003,371) 25% (2,205,961) 91,669 1,632,691 481,601 - 13,646,533 3,411,633 25% (250,843) 30,816 (397,752) 617,779 - 12,509,969 3,127,492 A net deferred tax asset of $3,411,633 (2022: $3,127,492) has not been recognised as it is not probable that within the immediate future that taxable profits will be available against which temporary differences and tax losses can be utilised. The Group is subject to income taxes in Australia. Significant judgement is required in determining the provision of income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based on the Group’s understanding of the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. The Group’s subsidiary, Resolution Minerals Alaska Inc, is subject to income taxes in the USA based on the expenditures on the 64North project. 4 EARNINGS PER SHARE The weighted average number of shares for the purpose of diluted earnings per share can be reconciled to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows: Weighted average number of shares used in basic earnings per share Weighted average number of shares used in diluted earnings per share 2023 # 1,041,735,300 1,041,735,300 2022 # 614,219,378 614,219,378 Profit / (loss) per share – basic and basic (cents) (0.85) (0.16) There were 904,663,438 options, performance rights and performance shares outstanding at the end of the year (2022: 203,653,754) that have not been taken into account in calculating diluted EPS due to their effect being anti-dilutive. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 41 5 CASH AND CASH EQUIVALENTS Cash and cash equivalents include the following: Cash at bank and in hand Cash and cash equivalents a) Reconciliation of cash at the end of the period. 2023 $ 1,309,038 1,309,038 2022 $ 2,292,438 2,292,438 The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flows as follows: Cash and cash equivalents 1,309,038 2,292,438 6a EXPLORATION AND EVALUATION EXPENDITURE Opening balance Expenditure on exploration during the year Acquisition of projects Exploration expenditure impaired (i) Cash contributions from joint operations Transferred assets held for sale (6b) Closing balance Expenditure is capitalised as follows: Group owned assets Joint operations Total exploration and evaluation expenditure 2023 $ 22,947,079 4,350,392 349,505 (7,107,993) (2,000,128) (250,000) 18,288,855 1,910,383 16,378,472 18,288,855 2022 $ 19,261,092 3,666,346 453,000 (1,964) (431,395) 22,947,079 8,651,382 14,295,697 22,947,079 The acquisition of projects includes the fair value of share based payments of $340,000 in total represented by $250,000 being the value of 17,361,112 shares as the acquisition price for the Murphy Project (EL 32229, EL 31287 and EL32883) in the Northern Territory and $90,000 being the value of 10,000,000 shares in the stage 3 earn-in for the 64 North Project. The Group, through its US based subsidiary company, has now earned a 51% interest in the 64 North Project. (i) Impairment Impairment for the wholly owned Wollogorang Project during the year has occurred where the Group have concluded that capitalised expenditure is unlikely to be recovered by sale or future exploration. At each reporting date the Group reviews the carrying values of its exploration and evaluation assets to determine whether there is any indication that those assets have been impaired. During the year indicators of impairment were identified on certain exploration and evaluation assets in accordance with AASB 6 Exploration for and Evaluation of Mineral Resources. As a result of this review, an impairment loss of $7,107,993 (2022: $1,964) has been recognised in relation to areas of interest where the Group have concluded that no further work will be completed, and consequently the capitalised expenditure is unlikely to be wholly recovered by sale or future exploration. 64North Project – Entire project earn-in summary STAGE Commence earn-in – commenced in September 2019 Stage 1 by 31 Jan 2021 Stage 2 within a further 12 months of electing to earn such further interest Stage 3 within a further 12 months of electing to earn such further interest RML% INTEREST 0% 30% 42% EXPENDITURE REQUIREMENT US$ RML SHARE MILESTONE MILLROCK CASH PAYMENT US$ TRIGGER Completed Completed Completed $900,000 n/a $100,000 51% Completed $2,350,000 10,000,000 $100,000 Stage 4 within a further 12 months of electing to electing to earn such further interest 60% Undertake exploration $2,350,000 10,000,000 $100,000 42 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT 64North Project best block interest STAGE Bankable feasibility study (BFS) First production Total RML% INTEREST 70% 80% 80% TRIGGER EXPENDITURE REQUIREMENT US$ Complete BFS BFS expenditure Commence production Loan carry Sole fund RML SHARE MILESTONE n/a n/a MILLROCK PAYMENT US$ $3,000,000 n/a $3,000,000 The Group, through its US based subsidiary company, has earned a 51% interest (Stage 3) in the project during the year. The earn-in terms were revised as summarised above and announced on the ASX on 9 February 2021 and updated on 31 January 2022. 6b ASSETS CLASSIFIED AS HELD FOR SALE The wholly owned Wollogorang Project has been actively marketed with sales discussions well advanced as at 30 June 2023. As a result, an exploration asset has consequently been written down to the expected value of the sales proceeds (fair value less costs to sell). The excess carrying value of the exploration & evaluation asset has been impaired prior to the asset being classified into assets held for sale. Assets classified as held for sale Carrying value in selected exploration & evaluation asset Exploration asset impaired prior to transfer to assets classified as held for sale Assets classified as held for sale 7 PLANT & EQUIPMENT Gross carrying amount Additions Disposals Accumulated depreciation Disposals Depreciation expense Net carrying amount 2023 $ 2022 $ 7,357,993 (7,107,993) 250,000 2023 $ 411,767 12,992 (75,102) 349,657 (148,923) 29,864 (92,360) (211,419) 138,238 - - - 2022 $ 309,966 264,662 (162,861) 411,767 (183,694) 104,299 (69,528) (148,923) 262,844 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 43 8a RIGHT OF USE ASSETS The Group leases an office space for the purposes of running of operations. The lease agreement has a two year lease period commitment. i) AASB 16 related amounts recognised in the balance sheet 2023 $ 2022 $ Right of use assets Leased office – Keswick Accumulated depreciation Leased office – Magill Accumulated depreciation Total right of use asset Movement in carrying amounts: Leased office: Opening balance Addition to right-of-use asset Depreciation expense Net carrying amount ii) AASB 16 related amounts recognised in the statement of profit or loss Depreciation charge related to right-of-use assets Interest expense on lease liabilities 8b LEASE LIABILITY Lease liability – current Lease liability – non-current Total lease liability 9 OTHER FINANCIAL ASSETS Unlisted ordinary shares 60,022 (32,512) 27,510 - - - 27,510 57,522 - (30,011) 27,510 30,011 693 2023 $ 31,875 - 31,875 30 JUNE 2023 $ 2,459,019 Reconciliation Reconciliation of the fair values at the beginning and end of the current and previous financial period are set out below: Opening fair value Additions – Consideration for 819,673 shares Revaluation Disposals Closing fair value - 798,385 1,660,634 - 2,459,019 60,023 (2,501) 57,522 14,540 (14,540) - 57,522 - 74,563 (17,041) 57,522 17,041 119 2022 $ 26,057 31,875 57,932 30 JUNE 2022 $ - - - - - During the period the Group invested approximately a 5% stake into Midwest Lithium AG, a US-based mining entity operating as a lithium and battery metals explorer in the Black Hills region of South Dakota, USA. All financial assets designated at fair value through other comprehensive income utilise Level 3 unobservable prices. Subsequent to year end, in preparation for Midwest Lithium Limited’s (“MLL”) initial public offering, the shareholders of MLAG received 12 shares in MLL in exchange for each MLAG share. The Group has relied upon published price quotations within the initial public offering prospectus for MLL. The judgements and estimates made in determining the fair values of the financial assets that are recognised and measured at fair value in the financial statements are outlined below. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial assets into the three levels prescribed under the accounting standards. The Group uses its judgement to select a variety of methods and make assumptions that are mainly based on specific conditions pertaining to the unlisted investment existing at the end of each reporting period. As a result, the unlisted investments has been valued with reference to unobservable data under Level 3 inputs of the fair value hierarchy. As described above the Group has relied upon published price quotations within the initial public offering prospectus for MLL to determine the fair value of the financial asset. 44 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT RECURRING FAIR VALUE MEASUREMENTS AT 30 JUNE 2023 LEVEL 1 $’000 LEVEL 2 $’000 Financial assets at fair value through other comprehensive income (FVOCI) Total - - - - LEVEL 3 $’000 2,459 2,459 TOTAL $’000 2,459 2,459 Sensitivity analysis The fair value measure of the unlisted investment is sensitive to changes in the observable inputs which may result in a significantly higher or lower fair value measurement. The following tables demonstrate the sensitivity to a reasonably possible change in significant unobservable inputs, with all other variables held constant. UNLISTED INVESTMENT IN MIDWEST LITHIUM Increase in traded price by 10% Decrease in traded price by 10% 10 TRADE AND OTHER PAYABLES Trade creditors Payroll liabilities Accrued expenses – 64North Project, Alaska JV Cash Calls Accrued expenses – other Total trade and other payables 30 JUNE 2023 $ 2,704,921 2,235,472 2023 $ 125,621 23,405 - 119,664 115,805 384,495 30 JUNE 2022 $ - - 2022 $ 135,615 38,856 435,767 - 77,407 687,645 All amounts are short term and the carrying values are considered to be a reasonable approximation of fair value. 11 ISSUED CAPITAL a) Issued and paid up capital Fully paid ordinary shares b) Movements in fully paid shares Balance as 30 June 2021 Fair value of shares issued for the acquisition of projects Share placements, SPP and option exercise Option and rights exercise (including fair value of options and rights exercised) Capital raising costs Balance at 30 June 2022 Fair value of shares issued for the acquisition of projects Fair value of shares issued for brokers fees Share and option placements Option and rights exercise (including fair value of options and rights exercised) Capital raising costs Balance at 30 June 2023 2023 $ 2022 $ 32,614,902 32,614,902 29,365,765 29,365,765 NUMBER $ 447,679,614 25,243,762 347,534,871 3,825,000 - 824,283,247 27,361,112 3,101,833 390,043,898 12,501,717 - 1,257,291,807 23,558,922 453,000 5,568,794 127,748 (342,699) 29,365,765 340,000 37,222 2,935,219 128,063 (191,367) 32,614,902 The share capital of Resolution Minerals Ltd consists only of fully paid ordinary shares. All shares are eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of Resolution Minerals Ltd. The shares do not have a par value and the Company does not have a limited amount of authorised capital. In the event of winding up the Company, ordinary shareholders rank after all creditors and are fully entitled to any proceeds of liquidation. c) Capital management Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure accordingly. The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group’s capital is shown as issued capital in the statement of financial position. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 45 12 RESERVES Share based payments are in line with the Resolution Minerals Ltd remuneration policy. Listed below are summaries of options and performance rights granted: NUMBER OF OPTIONS 158,984,770 79,359,111 (70,950,127) 167,393,754 54,187,263 652,967,721 - (13,400,000) 861,148,738 $ 1,385,450 - (663,001) 722,449 108,375 820,458 - (530,107) 1,121,175 NUMBER OF RIGHTS 11,400,000 18,660,000 (3,825,000) (3,275,000) 22,960,000 51,701,717 (12,501,717) (18,645,300) 43,514,700 2023 $ 297,774 108,375 (128,063) (107,763) (530,107) (359,784) (549,793) 297,772 (268,375) 29,397 WEIGHTED AVERAGE EXERCISE PRICE $0.07 $0.03 $0.25 $0.06 $0.015 $0.018 - $0.08 $0.02 $ 124,394 134,547 (127,748) (25,284) 105,909 297,774 (128,063) (107,763) 167,857 2022 $ 134,548 - (127,748) (25,284) (663,001) (681,485) (663,001) (27,498) 107,049 109,263 Share option reserve Balance at 30 June 2021 Granted – shareholders Lapsed Balance at 30 June 2022 Granted – broker remuneration Granted – shareholders Exercised Lapsed Balance at 30 June 2023 All options vested upon issue. Performance rights reserve Balance at 1 July 2021 Granted – KMP, employees and consultants Exercised Lapsed Balance at 30 June 2022 Granted – KMP, employees and consultants Exercised Lapsed Balance at 30 June 2023 Reconciliation of share based payments reserve movements Rights issued to directors / employees / contractors Options issued to brokers as remuneration Options / rights exercised Lapsed performance rights Lapsed options Total share based payments Options / rights recognised in equity Net share based payments recognised in statement of financial position Share based payment classified as employee benefit expense in profit or loss Net share based payment expense in profit or loss 46 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTDuring the 2022/23 year: » » » » » » » 54,187,263 quoted options were issued as broker remuneration. The quoted options have an exercise price of $0.015 and expiry of 31 July 2025. The fair value fair of the unquoted options is $108,375; 570,320,772 quoted options were issued to investors; 82,521,949 unquoted options were issued to investors; 13,400,000 unquoted options forfeited in accordance with the terms of those securities; 51,701,717 unquoted performance rights with KPI based vesting criteria were issued to KMP, employees and consultants; 12,501,717 unquoted performance rights were exercised; and 18,645,300 unquoted performance rights lapsed in accordance with the terms of those securities. During the 2021/22 year: » » » » » 79,359,111 unquoted options were issued to investors; 70,950,127 quoted and unquoted options lapsed in accordance with the terms of those securities; 18,660,000 unquoted performance rights with KPI based vesting criteria were granted to KMP, employees and consultants; 3,825,000 unquoted performance rights were exercised; and 3,275,000 unquoted performance rights lapsed in accordance with the terms of those securities. Movements in each class of reserve during the current financial year are set out below: Reconciliation reserves Opening balance Foreign currency movements Gain on the revaluation of financial assets at fair value through other comprehensive income Balance 30 June 2023 2023 $ 22,848 31,027 1,660,634 1,714,509 2022 $ - - - - Nature and purpose of reserves The reserves is used to record foreign currency translation movements/differences arising from the translation of the financial statements of subsidiaries which do not have a functional currency of Australian Dollars. The reserve is also used to record exchange gains and losses on hedges of the net investment in foreign operations. In addition, the reserve maintains the revaluation movements in the financial asset investment of Midwest Lithium AG. 13 RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES Operating activities Loss after tax Share based payments Depreciation Exploration costs expensed Impairment expense Net change in working capital Net cash used in operating activities 2023 $ 2022 $ (8,823,845) 297,772 31,687 341,478 7,107,993 (294,019) (1,338,934) (1,003,371) 109,263 32,117 50,752 1,964 (124,368) (933,643) 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 47 14 AUDITOR REMUNERATION Audit services Auditors of Resolution Minerals Ltd – Grant Thornton Audit and review of Financial Reports Audit services remuneration Other services Auditors of Resolution Minerals Ltd – Grant Thornton Taxation compliance Total other services remuneration Total remuneration received by Grant Thornton 15 COMMITMENTS AND CONTINGENCIES 2023 $ 2022 $ 78,018 78,018 42,000 42,000 7,477 8,800 7,477 85,495 8,800 50,800 In order to maintain rights of tenure to exploration permits, the Group has certain obligations to perform minimum exploration work and expend minimum amounts of money. The Group’s exploration licence tenements are renewable on an annual basis at various renewal dates throughout the year and the amount of each expenditure covenant is set by the relevant state’s Minister at the time of each renewal grant. The Group’s exploration commitments are related to the Carrara Range project (acquired during the year) and are detailed below: Within one year Within two years to five years 16 RELATED PARTY TRANSACTIONS The Company’s related party transactions include its key management personnel. a) Transactions with key management personnel Short-term benefits Post-employment benefits Share based payments Total remuneration 2023 $ 382,000 1,020,000 1,402,000 2023 $ 698,175 26,414 164,634 889,223 Transactions with key management personnel representing outstanding balances are unsecured and are repayable in cash. RELATED PARTY Magill Consulting1/2 Magill Consulting3 Kopias Consulting4 Valas Investments RELATIONSHIP TO KEY MANAGEMENT PERSONNEL/DIRECTOR A business of which D Chessell is a Director A business of which D Chessell is a Director A business of which J Kopias is a Director A business of which A Shearer is a Director SERVICES PROVIDED 2023 $ Consulting fees / vehicle hire 107,438 Sale of motor vehicle (25,000) Consulting Fees 120,594 113,061 Consulting Fees 15,000 - 1 During the year Duncan Chessell was performing duties of the Managing Director whilst the position was vacant. 2 The total amount of fees due to Magill Consulting as at 30 June 2023 was $11,233. 3 A motor vehicle was sold to Magill Consulting. 4 The total amount of fees due to Kopias Consulting as at 30 June 2023 was $9,888. 48 2022 $ 151,000 644,000 795,000 2022 $ 491,400 24,190 80,308 595,898 2022 $ 5,679 - RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT 17 EMPLOYEE REMUNERATION a) Employee benefits expense Expenses recognised for employee benefits are analysed below: Salaries / contract payments for Directors and employees Share based payments – Director and employee options Defined contribution superannuation expense Other employee expenses Less: Transfer to exploration assets 2023 $ 2022 $ 1,420,750 268,375 89,906 74,542 (816,148) 1,037,425 1,075,545 107,049 60,583 58,737 (761,804) 540,110 b) Share based employee remuneration As at 30 June 2023 the Group maintained a share option plan and performance share plan for employee and director remuneration. During the year there were 50,541,717 performance rights granted as KMP, employee and consultant remuneration. The table below outlines the inputs used in the Monte Carlo fair value calculation for the performance rights: Exercise price Right life Underlying share price Expected share price volatility Risk free interest rate Weighted average fair value per right Weighted average contractual life RANGE OF VALUES Nil 4.6 years to 5.0 years $0.009 109% to 110% 3.24% to 3.3% $0.006 4.9 years Details of rights issued to KMP are provided in the table below. All unvested Performance Rights will lapse within 3 months of the officer ceasing to be engaged by the Company. GRANTED NUMBER GRANTED GRANT DATE FAIR VALUE AT GRANT DATE FIRST VESTING DATE1 LAST VESTING DATE 2023 D Chessell P Kitto M Holcombe S Groves P Kitto P Kitto P Kitto M Holcombe M Holcombe J Kopias Total 3,000,0002 3,000,0002 3,000,0002 10,500,0003 1,000,0004 1,000,0005 1,000,0006 7,517,6907 1,484,0277 3,000,0002 34,501,717 PER RIGHT FULL VALUE $ 21/11/2022 21/11/2022 21/11/2022 01/07/2022 01/07/2022 01/07/2022 07/07/2022 21/11/2022 05/05/2023 21/11/2022 $0.0065 $0.0065 $0.0079 $0.0090 $0.0011 $0.0025 $0.0034 $0.0090 $0.0060 $0.0072 19,500 31 December 2024 21/11/2027 19,500 31 December 2024 21/11/2027 19,500 31 December 2024 21/11/2027 94,500 30 June 2023 30/06/2027 1,060 2,460 3,400 1 March 2023 01/03/2027 1 March 2024 01/03/2027 1 March 2025 01/03/2027 67,659 21 November 2022 21/11/2025 8,904 5 May 2023 21/11/2025 21,600 31 December 2024 21/11/2027 1 Meeting criteria of the KPI listed below determines vesting of rights. 2 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 140% of the 5 day VWAP prior to the 2022 AGM at any time in the period to 31 December 2024 for a period of at least 1 month. 3 The vesting of the performance rights subject to KPI’s and assessment of meeting each KPI unrelated to market-based conditions must be determined by the Board by 31 March 2024 for the year to 31 December 2023 and, if vested, the Performance Rights will expire on 30 June 2027. 4 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 3.6 cents per share for a period of at least 1 month to 28 February 2023 and the Director remaining a director of the company after 28 February 2023. 5 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 5.4 cents per share for a period of at least 1 month to 28 February 2024 and the Director remaining a director of the company after 28 February 2024. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 49 6 The performance rights subject to market-based conditions will vest upon the company’s share price exceeding a VWAP equal to 7.2 cents per share for a period of at least 1 month to 28 February 2025 and the Director remaining a director of the company after 28 February 2025. 7 The performance rights subject to KPI’s and assessment of meeting each KPI will vest upon introducing one or more potential acquisition opportunities to the Company which acquisitions the Company proceeds with (M&A Fee) - an amount equal to 4% of the transaction value. Introducing one or more potential investors to the Company, who subsequently invest in the Company (Capital Raising Fee) - an amount equal to 6% of the proceeds received. Fair value of options granted The fair value at grant date of the Director options has been determined using the Black Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the non-tradeable nature of the option, 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. Fair value of performance rights granted The fair value at grant date of the Director, KMP and employee performance rights has been determined using a Monte Carlo pricing model that takes into account the term of the right, the impact of dilution, the impact of the KPI on the underlying share price, the non-tradeable nature of the right, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk- free interest rate for the term of the right. 18 INVESTMENTS IN CONTROLLED ENTITIES Controlled entities The Company has the following subsidiaries: NAME OF SUBSIDIARY Mangrove Resources Pty Ltd Xavier Resources Pty Ltd Curie Resources Pty Ltd Resolution Minerals Gold LLC N23 LLC Resolution Minerals Alaska Inc COUNTRY OF INCORPORATION Australia Australia Australia USA USA USA CLASS OF SHARES Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary PERCENTAGE HELD 2022 PERCENTAGE HELD 2023 100% 100% 100% 100% 100% 100% 19 FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT The Group’s financial instruments consist mainly of deposits with banks and accounts receivable and payable. The total for each category of financial instruments are as follows: Financial assets Cash and cash equivalents Other assets Investments Financial liabilities Trade payables Lease liabilities NOTE 5 9 10 8b 2023 $ 1,309,038 100,121 2,459,019 3,868,178 384,495 31,875 416,370 100% 100% 100% 100% 100% 100% 2022 $ 2,292,438 130,172 - 2,422,610 687,645 57,932 745,577 Financial risk management policy Risk management is carried out by the Managing Director under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as interest rate and credit risk. a) Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate working capital is maintained for the coming months. Upcoming capital needs and the timing of raisings are assessed by the board. Financial liabilities are expected to be settled within 12 months. 50 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT b) Interest rate risk The Group’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result in changes in market interest rates. Cash is the only asset affected by interest rate risk as cash is the Group’s only financial asset exposed to fluctuating interest rates. The Group is exposed to interest rate risk on cash balances and term deposits held in interest bearing accounts. The Board constantly monitors its interest rate exposure and attempts to maximise interest income by using a mixture of fixed and variable interest rates, whilst ensuring sufficient funds are available for the Group’s operating activities. The Group’s net exposure to interest rate risk at 30 June 2023 would not have a material effect on the results. c) Sensitivity analysis INTEREST RATE The Group has performed a sensitivity analysis relating to its exposure to interest rate risk at reporting date. This sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks. 2023 Interest rate 2022 Interest rate SENSITIVITY* +1.65% -1.65% SENSITIVITY* EFFECT ON: PROFIT $ +31,008 -31,008 EFFECT ON: PROFIT $ EFFECT ON: EQUITY $ +31,008 -31,008 EFFECT ON: EQUITY $ + 1.65% - 1.65% +33,441 -33,441 +33,441 -33,441 * The method used to arrive at the possible change of 165 basis points (2022: 165 basis points) was based on the analysis of the absolute nominal change of the Reserve Bank of Australia (RBA) monthly issued cash rate. Historical rates indicate that for the past five financial years, interest rate movements ranged between 0 to 165 basis points. It is considered that 165 basis points a ‘reasonably possible’ estimate as it accommodates for the maximum variations inherent in the interest rate movement over the past five years. The fair values of all financial assets and liabilities of the Group approximate their carrying values. d) Foreign exchange risk Foreign exchange risk arises from the possibility that the Group might encounter fluctuations in the exchange rate from the time a contract is executed to the time of settlement. The Group manages foreign exchange risk by monitoring forecast foreign cash flows and ensuring that where appropriate foreign currency is purchased to meet future foreign cash flow needs. The Group does not actively hedge currency and assesses the appropriateness of future foreign currency contracts on a case by case basis. e) Net fair values of financial assets and financial liabilities Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying values of all financial assets and liabilities of the Group approximate their fair values. 20 PARENT ENTITY INFORMATION Information relating to Resolution Minerals Ltd (the parent entity). Statement of financial position Current assets Total assets Current and total liabilities Issued capital Retained losses Share based payments reserve Total equity Statement of profit of loss and other comprehensive income Loss for the year Total comprehensive loss for the year 2023 $ 2022 $ 1,262,893 21,857,459 346,024 32,614,902 13,438,376 1,289,030 21,511,435 8,345,340 8,345,340 1,954,363 24,779,661 316,444 29,365,765 5,480,638 828,359 24,712,486 971,126 971,126 All contingent liabilities and contractual commitments disclosed elsewhere in this report are entered into by the parent entity. There are no guarantees entered into in relation to debts of subsidiaries. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 51 21 SEGMENT PARENT ENTITY INFORMATION Contributions by business segment based on geographical location are: 1 Exploration Australia: Wollogorang, Benmara, Carrara Range and George Projects – base metals, manganese, silica and uranium exploration. 2 Exploration USA: 64North and Allegra Projects – gold and nickel exploration. 3 Unallocated corporate expenditure. EXPLORATION AUSTRALIA $ EXPLORATION USA $ UNALLOCATED $ 2023 Income Interest income Other income Expenses Exploration expense Impairment expense Total expenses Profit / (loss) before tax Balance sheet Exploration and evaluation All other assets Total assets Total liabilities Net assets 2022 Income Interest income Other income Expenses Exploration expense Impairment expense Depreciation Total expenses - - (341,478) (7,107,993) - (7,449,471) 1,910,383 250,000 2,160,383 17,651 2,142,732 EXPLORATION AUSTRALIA $ - - (48,277) (1,964) - - - - - - - - 16,378,472 - 16,378,472 (1,021) 16,379,493 EXPLORATION USA $ - - (2,476) - - - TOTAL $ 32,549 360,758 (341,478) (7,107,993) (1,767,681) (8,823,845) 18,288,855 3,669,171 21,958,026 477,801 21,480,225 TOTAL $ 1,265 42,039 (50,753) (1,964) 32,117 (1,026,075) (1,003,371) - 22,947,079 2,742,975 25,690,054 784,738 24,905,316 32,549 360,758 - - (1,767,681) (1,374,374) - 3,419,171 3,419,171 461,171 2,958,000 UNALLOCATED $ 1,265 42,039 - - 32,117 (1,026,075) (950,654) - - 2,742,975 2,742,975 218,611 2,524,364 Profit / (Loss) before tax (50,241) (2,476) Balance sheet Restricted cash - - Exploration and evaluation 8,651,382 14,295,697 All other assets Total assets Total liabilities Net assets - 8,651,382 97,832 8,553,550 - 14,295,697 468,295 13,827,402 52 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT22 PERFORMANCE SHARES The following disclosure is a condition of the Company’s admission to ASX. On 4 September 2017 the Company issued 13,175,000 class A and class B performance shares as detailed in the table below: CLASS OF PERFORMANCE SHARES GRANT DATE EXPIRY DATE EXERCISE PRICE OF SHARES NUMBER ON ISSUE Class A Class B Total performance shares 4 September 2017 4 September 2022 4 September 2017 4 September 2022 $Nil $Nil 9,600,000 3,575,000 13,175,000 There were no performance shares converted during the reporting period and no vesting conditions were met during the reporting period. Each performance share is convertible into one ordinary share upon vesting. All Performance Shares expired during the reporting period as the milestones noted below were not met. (Conversion on achievement of Class A Milestone) Each Class A Performance Share will convert into a Share on a one for one basis upon the earlier of: i) ii) the Company announcing to ASX the delineation of an Inferred (or higher category) Mineral Resource in accordance with the JORC Code containing at least 6,000 tonnes Cobalt equivalent, at a grade of 0.12% Cobalt equivalent or greater (reported in accordance with clause 50 of the JORC Code), on the Tenements (Class A Resource Estimate Milestone); or the Company selling or transferring (directly or indirectly) for value of at least $5 million to a third party (being any person or entity other than a wholly-owned subsidiary of the Company) 100% of the shares of Mangrove, or 100% of the Company’s legal or beneficial interest in the Tenements (Class A Disposal Milestone), within 5 years after Completion (each a Class A Milestone). (Conversion on achievement of Class B Milestone) Each Class B Performance Share will convert into a Share on a one for one basis upon the earlier of: i) ii) the Company announcing to ASX the delineation of an Inferred (or higher category) Mineral Resource in accordance with the JORC Code containing at least 15,000 tonnes Cobalt equivalent, at a grade of 0.12% Cobalt equivalent or higher (reported in accordance with clause 50 of the JORC Code), on the Tenements (Class B Resource Milestone); or the Company selling or transferring (directly or indirectly) for value of at least $20 million to a third party (being any person or entity other than a wholly-owned subsidiary of the Company) 100% of the shares of Mangrove, or 100% of the Company’s legal or beneficial interest in the Tenements, (Class B Disposal Milestone), within 5 years after Completion (each a Class B Milestone). 23 GOING CONCERN BASIS OF ACCOUNTING The financial report has been prepared on the basis of a going concern. During the year ended 30 June 2023 the Group recorded a net cash outflow from operating and investing activities of $4,598,621 and an operating loss of $8,823,845. These conditions give rise to a material uncertainty that may cast significant doubt upon the Group’s ability to continue as a going concern. The ability of the Group to continue to pay its debts as and when they fall due is dependent upon the entity successfully continuing the development of its exploration assets and raising additional funds which may be from a variety of means inclusive of, but not limited to issue of new equity, debt, asset sales or entering into joint venture arrangements on mineral properties. The Directors believe it is appropriate to prepare these accounts on a going concern basis because Directors will not commit to expenditure unless sufficient funding has been sourced. If additional capital is not obtained, the going concern basis may not be appropriate, with the result that the group may have to realise its assets and extinguish its liabilities, other than in the ordinary course of business and at amounts different from those stated in the financial report. No allowance for such circumstances has been made in the financial report. 24 EVENTS ARISING SINCE THE END OF THE REPORTING PERIOD No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in subsequent financial years other than those described below. On 25 July 2023, Managing Director Chris McFadden was issued 57,550,000 unquoted performance rights subject to KPI vesting conditions as approved by shareholders. On 6 September 2023, the Group signed a binding agreement for the sale of its wholly-owned Wollogorang Project located within the McArthur Basin in the Northern Territory to NT Minerals Limited (ASX: NTM). The consideration for the sale of the project is $250,000 made up of $50,000 cash and $200,000 worth of shares in NT Minerals Limited (ASX: NTM). 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 53 DIRECTORS’ DECLARATION In the opinion of the Directors of Resolution Minerals Ltd: a) the consolidated financial statements and notes of Resolution Minerals Ltd are in accordance with the Corporations Act 2001 (Cth), including: i) giving a true and fair view of its financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 (Cth); and b) there are reasonable grounds to believe that Resolution Minerals Ltd will be able to pay its debts when they become due and payable. Note 1 confirms that the consolidated financial statements comply with International Financial Reporting Standards. Signed in accordance with a resolution of the Directors: Duncan Chessell Chair Adelaide 28 September 2023 54 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTINDEPENDENT AUDIT REPORT Grant Thornton Audit Pty Ltd Grant Thornton House Level 3 170 Frome Street Adelaide SA 5000 GPO Box 1270 Adelaide SA 5001 T +61 8 8372 6666 Independent Auditor’s Report To the Members of Resolution Minerals Limited Report on the audit of the financial report Qualified Opinion We have audited the financial report of Resolution Minerals Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, except for the effects of the matters described below in the Basis for Qualified Opinion section of our report, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the year ended on that date; and b complying with Australian Accounting Standards and the Corporations Regulations 2001. www.grantthornton.com.au ACN-130 913 594 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389. ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards Legislation. #10580143v6w 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 55 INDEPENDENT AUDIT REPORT, continued Basis for qualified opinion As disclosed in note 9, the Group's investment in Midwest Lithium AG is carried at fair value through other comprehensive income. The fair value of the investment has been determined using the expected share price included in Midwest Lithium Limited’s initial public offering prospectus. As the initial public offering had not been finalised at the date of approval of the financial statements, we were unable to obtain appropriate audit evidence to determine the fair value of the investment. As such the carrying value of the investment of $2,459,019 and increase in fair value recorded through other comprehensive income of $1,660,634 may not be accurate. Our audit report has been qualified as a result of this limitation of scope. We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion. Material uncertainty related to going concern We draw attention to Note 23 in the financial statements, which indicates that the Group incurred a net loss of $8,823,845 during the year ended 30 June 2023, and as of that date, the Group’s net cash outflow from operating and investing activities of $4,658,621. As stated in Note 23, these events or conditions, along with other matters as set forth in Note 23, indicate that a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. 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. In addition to the matter described in the Material Uncertainty related to Going Concern and the Basis for Qualified Opinion section we have determined the matters described below to be the key audit matters to be communicated in our report. Key audit matter How our audit addressed the key audit matter Exploration and evaluation assets - Notes 1(d), 1(r)(ii) & 6 At 30 June 2023 the carrying value of exploration and evaluation assets was $18,288,855. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group is required to assess at each reporting date if there are any indicators of impairment which may suggest the carrying value is in excess of the recoverable value. The process undertaken by management to assess whether there are any impairment indicators in each area of interest involves an element of management judgement. Our procedures included, amongst others: • Reviewing management’s area of interest considerations against AASB 6; • Conducting a detailed review of management’s assessment of trigger events prepared in accordance with AASB 6, including; − Tracing projects to exploration licenses and statutory registers to determine whether a right of tenure existed; Grant Thornton Audit Pty Ltd 2 56 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTINDEPENDENT AUDIT REPORT, continued Key audit matter How our audit addressed the key audit matter Exploration and evaluation assets - Notes 1(d), 1(r)(ii) & 6 This area is a key audit matter due to the significant judgement involved in determining the existence of impairment indicators − Enquiring management regarding their intentions to carry out exploration and evaluation activity in the relevant exploration area, including reviewing management’s budgeted expenditure; − Understanding whether any data exists to suggest that the carrying value of these exploration and evaluation assets are unlikely to be recovered through development or sale; • Assessing the accuracy of any impairment recorded for the year as it pertained to exploration interests; • Evaluating the competence, capabilities and objectivity of management’s experts in the evaluation of potential impairment indicators; and Reviewing the appropriateness of the related financial statement disclosures. Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group’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 Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. Grant Thornton Audit Pty Ltd 3 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 57 INDEPENDENT AUDIT REPORT, continued 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/auditors_responsibilities/ar1_2020.pdf.This description forms part of our auditor’s report. Report on the remuneration report Opinion on the remuneration report We have audited the Remuneration Report included in pages 11 to 15 of the Directors’ report for the year ended 30 June 2023. In our opinion, the Remuneration Report of Resolution Minerals Limited, for the year ended 30 June 2023 complies with section 300A of the Corporations Act 2001. Responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. GRANT THORNTON AUDIT PTY LTD Chartered Accountants I S Kemp Partner – Audit & Assurance Adelaide, 28 September 2023 58 Grant Thornton Audit Pty Ltd 4 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT ASX ADDITIONAL INFORMATION Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below. This information is effective as at 31 August 2023. The Company is listed on the Australian Securities Exchange. There are no securities subject to voluntary escrow or ASX restriction as at 31 August 2023. There is no current on-market buy-back. SUBSTANTIAL SHAREHOLDERS There are no substantial shareholders of the Company at 31 August 2023. VOTING RIGHTS Ordinary shares Performance rights Options 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. No voting rights. No voting rights. DISTRIBUTION OF EQUITY BY SECURITY HOLDERS HOLDING QUOTED ORDINARY SHARES RML QUOTED OPTIONS 30 SEPT 2023 $0.12 RMLOB QUOTED OPTIONS 31 JULY 2025 $0.015 RMLO UNQUOTED PERFORMANCE RIGHTS UNQUOTED OPTIONS 15 DEC 2023 $0.03 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over # 130 293 202 915 823 % 0.00 0.06 0.14 3.38 96.42 Number of holders 2,3631 # 1 1 0 88 97 187 % 0.00 0.00 0.00 6.36 93.64 # 10 28 20 144 228 430 % 0.00 0.01 0.03 0.99 98.97 - - - - 14 14 1 1 - 47 128 175 Securities on issue 1,257,291,807 100.00 74,634,643 100.00 624,508,035 100.00 101,064,7002 79,484,111 1 There were 1,436 holders of less than a marketable parcel of ordinary shares ($500 amounts to 100,000 shares at $0.005). 2 Performance Rights were issued under the Company’s Performance Share Plan. 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 59 ASX ADDITIONAL INFORMATION, continued TWENTY LARGEST HOLDERS OF ORDINARY SHARES – RML BNP Paribas Nominees Pty Ltd Mr Menachem Mendel Rogatsky Mr Moshe Mordechai Schreiber Constr LLC Mr Shneur Zalman Rogatsky BNP Paribas Nominees Pty Ltd ACF Clearstream Acuity Capital Investment Management Pty Ltd Citicorp Nominees Pty Limited Mr Shalom D Rogatsky Mr Nico Civelli Mrs Hui Ying Chen Mr Fazel Kabir Mosaddiq Ms Michelle Jane Braham Mr Junlong Liang ASB Nominees Limited <123619 A/C> Strategic Energy Resources Limited Mesh Bk LLC Ekiran Mekiran Pty Ltd Mr Jacob Steven Menzie 3-29 KWS P/L <3-29 KWS Unit A/C> Total ordinary shares on issue NO. OF SHARES HELD % HELD 72,479,191 57,725,000 54,931,840 51,460,000 48,647,700 38,576,495 32,005,599 28,971,173 21,679,796 19,988,498 19,000,000 16,274,658 15,488,750 15,147,111 14,902,288 13,273,778 13,000,000 12,901,544 12,000,770 11,685,021 5.76 4.59 4.37 4.09 3.87 3.07 2.55 2.30 1.72 1.59 1.51 1.29 1.23 1.20 1.19 1.06 1.03 1.03 0.95 0.93 570,139,212 1,257,291,807 45.35 100.00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 60 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORTASX ADDITIONAL INFORMATION, continued TWENTY LARGEST HOLDERS OF QUOTED OPTIONS – RMLOB ($0.12 / 30 September 2023) NO. OF OPTIONS HELD % HELD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Palisades Goldcorp Ltd Merrill Lynch (Australia) Nominees Pty Limited Coldaw Pty Ltd Mr Peter Hendry Mr Edward O’Brien & Mrs Naomi O’Brien Strut Pty Ltd Mr Sean Anthony Faherty Prosperity Fund Pty Ltd Ms Susan Lavertu Mrs Maria Rontziokos & Mr Fotios Rontziokos Taycol Nominees Pty Ltd <211 A/C> Mr Bill Rontziokos & Miss Georgina Vardakas Mr Edwin Charles Laurence Parker & Ms Christine Melissa Ireland Mr Gary Colman & Mrs Jacqueline Colman PAC Partners Securities Pty Ltd Mr Craig Russell Stranger Mineraria Toro Pty Ltd HSBC Custody Nominees (Australia) Limited - A/C 2 Mr Gary Mark Colman Parry Capital Management Limited Total quoted options on issue 12,428,571 7,857,143 6,276,367 5,000,000 4,099,067 2,500,000 1,750,000 1,688,363 1,677,143 1,500,000 1,325,000 850,000 784,539 691,390 675,000 625,000 625,000 571,429 527,397 500,000 16.65 10.53 8.41 6.70 5.49 3.35 2.34 2.26 2.25 2.01 1.78 1.14 1.05 0.93 0.90 0.84 0.84 0.77 0.71 0.67 51,951,409 74,634,643 69.62 100.00 2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 61 TWENTY LARGEST HOLDERS OF QUOTED OPTIONS – RMLO ($0.015 / 31 July 2025) NO. OF OPTIONS HELD % HELD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 M & K Korkidas Pty Ltd Mr Menachem Mendel Rogatsky Dealaccess Pty Ltd Constr LLC Mr David Wayne Austin & Mrs Christina Yit Ling Austin Mr Jason Tang Mr David John Rawlings JL And RA Roberts Pty Ltd PAC Partners Securities Pty Ltd SP Capital Fund Pty Ltd Mr Craig Russell Stranger Dosh Finance Australia Pty Ltd Mr Errol Bome & Mrs Melanie Bome Ace Drafting Pty Ltd Mr Dominic Dirupo Mr MD Muntasir Billah Emerging Equities Pty Ltd Mr Muhammad Taher Uddin Challney Technology Ventures Pty Ltd Mr Christopher Lindsay Bollam Total quoted options on issue 32,195,945 30,000,000 26,617,061 22,452,476 20,100,000 18,000,000 16,943,661 14,000,002 12,064,863 12,000,000 10,522,697 10,000,000 10,000,000 10,000,000 9,562,500 9,535,000 9,394,152 9,236,034 9,066,666 8,655,982 5.16 4.80 4.26 3.60 3.22 2.88 2.71 2.24 1.93 1.92 1.68 1.60 1.60 1.60 1.53 1.53 1.50 1.48 1.45 1.39 300,347,039 624,508,035 48.09 100.00 62 RESOLUTION MINERALS LTD | 2023 ANNUAL REPORT2 0 2 3 A N N U A L R E P O R T | R E S O L U T I O N M I N E R A L S LT D 63 

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