Rex Minerals Limited Annual Report 2021

Plain-text annual report

COPPER SA I GOLD NEVADA A B N 12 124 960 523 ANNUAL REPORT A B N 1 2 1 2 4 9 6 0 5 2 3 ANNUAL REPORT CORPORATE DIRECTORY DIRECTORS Mr Ian Smith (Non-Executive Chairman) Mr Richard Laufmann (CEO and Managing Director) Ms Amber Rivamonte (Executive Director) Mr Ron Douglas (Non-Executive Director) Mr Greg Robinson (Non-Executive Director) SHARE REGISTRARS Computershare Investor Services Pty Limited Yarra Falls 452 Johnston Street Abbotsford, Victoria 3067 Telephone: +61 (0) 3 9415 4000 (investors) 1300 850 505 (investors within Australia) COMPANY SECRETARY Ms Kay Donehue PRINCIPAL and REGISTERED OFFICE 68 St Vincent Highway Pine Point, South Australia 5571 CONTACT DETAILS Rex Minerals Ltd PO Box 3435 Rundle Mall, South Australia 5000 Telephone: 1300 822 161 (Australia) Telephone: +61 3 9068 3077 (International) Email: rex@rexminerals.com.au Website: www.rexminerals.com.au OPERATION LOCATIONS HOG RANCH NEVADA USA AUDITORS KPMG Australia 151 Pirie Street Adelaide, South Australia 5000 BANKERS ANZ Banking Group Limited Level 21, 11 Waymouth Street Adelaide, South Australia 5000 Ord Minnett Limited Level 22, 35 Collins Street Melbourne, Victoria 3000 LEGAL ADVISORS Baker McKenzie Level 19, 181 William Street Melbourne, Victoria 3000 HILLSIDE SOUTH AUSTRALIA ANNUAL REPORT 30 JUNE TABLE OF CONTENTS LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER REVIEW OF OPERATIONS DIRECTORS’ REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION LEAD AUDITOR’S INDEPENDENCE DECLARATION INDEPENDENT AUDITOR’S REPORT ADDITIONAL SHAREHOLDER INFORMATION 2 3-12 13-25 27 28 29 30 31-47 48 49 50-52 54 A B N 12 124 960 523 1 REX MINERALS LTD LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER A B N 12 124 960 523 Dear Fellow Shareholder, The past year has seen a turning point for the Company – and we expect momentum to accelerate over the coming 12 months. Let us reﬂect on some key achievements: T 1300 822 161 (Australia) T +61 3 9068 3077 (International) P PO Box 3435 Rundle Mall South Australia 5000 E rex@rexminerals.com.au W www.rexminerals.com.au (cid:129) At Hillside, we nearly doubled the Ore Reserves, from 500,000 to 1 million tonnes of copper; (cid:129) At Hog Ranch, we grew the Mineral Resources from 1.4 to 2.2 million ounces of gold; and (cid:129) We now have more cash at bank than the entire market capitalisation of the Company 12 months ago. Rex owns a very signiﬁcant copper-gold development in South Australia and an emerging gold project in Nevada. Both are company-making assets. Our ongoing drive to evolve, progress and adapt will lead to continued optimisation of the Company’s vision, purpose and associated capabilities. The vision now acknowledges the signiﬁcant role of copper as a critical mineral in the global shift towards new technologies required for a low-carbon economy. This will be driven by a renewed purpose. Underpinned by our values, the Company’s commitment to people, communities and the environment will continue to demonstrate the ethical and transparent way we do business. The solution to the challenge of climate change relies heavily on increased electriﬁcation which will increase greatly the demand for copper. Such metals are strategically crucial. Our Hillside Project will aid a better future. Regarding COVID-19, the mining industry has been at the forefront in demonstrating how things can progress even as restrictions place added burdens and challenges. Our team is well versed in operating in such an environment. For Rex, our objectives for the next year are clear. Build our team, begin pre-development and ﬁnalise ﬁnancing of the Hillside Project, and continue to reveal the value of Hog Ranch. Our most sincere thanks go to the retiring directors for their contribution to the journey and the management who have steered a path for the Company. We are sincerely grateful to all investors who have demonstrated vital support thus far. Now it is time to deliver the next tier of progress for Rex as we optimise the value that can be brought to all our communities and stakeholders. Yours sincerely, Mr Ian Smith Chairman Mr Richard Laufmann Chief Executive Ofﬁcer REX MINERALS LTD REVIEW OF OPERATIONS for the year ended 30 June 2021 CORPORATE Rex Minerals Ltd (Rex or the Company) is an investment in copper and gold in two world-class locations. The Hillside Copper-Gold Project (Hillside) and the Hog Ranch Gold Property (Hog Ranch) are each signiﬁcant assets in their own right. They are underpinned by a strong demand outlook and healthy commodity price forecasts. In an extended, and perhaps heightened period of ongoing uncertainty, the COVID-19 disruption has been severe and without doubt, continues to reshape the future. Global travel remains unlikely, and domestically, interstate travel has not opened up as hoped and continues to hamper our capacity to execute our work plans. Despite the challenges, Rex has been active and maintained our ﬁeld program at Hog Ranch, signiﬁcantly improved the metrics at Hillside and rebuilt the Board to drive the Company into its next and deﬁning phase of development. This year has been signiﬁcant for the Company with achievement of the following milestones. SHARE PRICE CHART 1 e r a h s r e p $ A 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 - 30 Apr 2021 March 2021 Quarterly Report +278%1 5 Nov 2020 Geophysics identifies high-grade targets at Hog Ranch 22 Apr 2021 Rex back drilling at Hog Ranch 16 Apr 2021 Rex raises A$9.5M 21 Dec 2020 Hog Ranch gold results & big hits at Krista 24 Jul 2020 SA Gov approves Hillside PEPR 28 Jul 2020 Hillside feasibility costing update 19 Oct 2020 Hog Ranch drilling results at Bells 3 Sep 2020 Rex raises A$10.0M 23 Mar 2021 Hog Ranch gold Resource increases from 1.4Moz to 2.3Moz3 25 May 2021 Rex repays loan facility 20 Jul 2021 Hillside Ore Reserve approx. doubled3 1 Jun 2021 Board succession to lead company into new era 3 Aug 2021 Rex raises A $50.0M4 Jun 2020 Sep 2020 Dec 2020 Mar 2021 Jun 2021 KEY MILESTONES1 3 SA government approval of Hillside PEPR2 July 2020 3 Hillside feasibility costing update July 2020 3 $10M placement completed September 2020 3 Successful drilling results at Bells October 2020 3 High-grade discovery at Krista December 2020 3 SA Mining Act amendments Bill gazetted January 2021 3 Hog Ranch Mineral Resources upgrade3 March 2021 3 $9.5M placement completed April 2021 3 Loan facility fully repaid May 2021 3 Board succession plan completed June 2021 3 Hillside Ore Reserves doubled to 988kt3 July 2021 3 $50M placement launched4 August 2021 1 From 30 June 2020 to 19 August 2021. 2 Program for Environment Protection and Rehabilitation. 3 Refer ASX Release – Hog Ranch Gold Resource increases to 2.2Moz dated 23 March 2021; Rex doubles Hillside Ore Reserves dated 20 July 2021. 4 Subject to completion of Tranche 2 which requires Rex shareholder approval at a General Meeting to be held in September 2021. 3 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 CORPORATE (CONTINUED) The milestones (shown on Page 3), including repayment of the Company’s $4.4 million loan facility, were achieved using the funds raised from two important capital raisings. A placement of $10 million, followed by a share purchase plan raising $0.87 million, completed in September 2020, and an additional $9.5 million in April 2021, placed to a handful of supportive institutions. Designed to drive the Company into its next phase of development, the Board succession plan was ﬁnalised on 1 June 2021 and comprised the following changes: (cid:129) Ian Smith assumed the role of Non-Executive Chairman; (cid:129) Greg Robinson was appointed as a Non-Executive Director and Chairman of the Audit Committee; (cid:129) Amber Rivamonte was appointed to the Board as Executive Director of Finance; (cid:129) Ron Douglas assumed the role of Chairman of the Remuneration Committee; and (cid:129) Chairman of seven years, David Carland, and Non-Executive Director for nine years, Alister Maitland, retired from the Board. These followed the earlier retirement of Non-Executive Director, Mitchell Hooke, on 20 October 2020. On 4 August 2021, the Company launched a $50 million two tranche placement. Tranche 1 raised $5.3 million and settled on 10 August 2021 with Tranche 2, subject to shareholder approval at a General Meeting to be held on 14 September 2021, to raise a further $44.7 million. The placement received strong support from existing institutional, professional and sophisticated shareholders as well as new institutional investors who were introduced to the Company’s share register. Proceeds from the $50 million placement will principally be used to fund Hillside pre-development activities including expanding the Project delivery team, commencing early site works and progressing ﬁnancing workstreams. Rex is targeting a ﬁnal investment decision (FID) for Stage 1 of Hillside in 4Q CY22 (see Figure 1), which is expected to coincide with a tightening copper market. PRELIMINARY WORK COMMENCEMENT OF OPERATIONS 2H CY21 1H CY22 2H CY22 1H CY23 2H CY23 1H CY24 2H CY24 Road Realignment Works Environmental Works Electrical Infrastructure Works Water Infrastructure Works Surface Civil Works Plant Construction Mining Works FID Target Equity Raising Funding workstreams to be progressed in parallel with pre-development activities Figure 1: Hillside Stage 1 indicative development schedule. Note: Schedule is indicative only and is subject to change. ANNUAL REPORT 2 0 2 1 4 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 CORPORATE (CONTINUED) Vision, purpose, values The Company’s transition to the next phase of development also encouraged it to review its vision, purpose and values, described further below. This transition also led the Company to revise its governance framework to include new policies on sustainable development; gender, diversity and inclusion; and people and culture in addition to its existing policy suite (refer below Sustainable development). The Company’s vision acknowledges the signiﬁcant role of copper as a critical mineral in the global shift towards new technologies required for a low-carbon economy. Our vision is to ‘produce the minerals needed for the world we all envision.’ The Company’s purpose sets out how it aims to realise its vision: ‘explore and mine responsibly to beneﬁt our stakeholders and contribute to a more sustainable world.’ The vision and purpose are underpinned by the Company’s values of responsibility, teamwork, respect, integrity and growth. These values reﬂect the Company’s commitment to the people, communities and environment associated with its activities, the ethical and transparent way it does business and the sustainable and positive impact it strives for. It is expected that the mission, purpose and values, will guide the Company’s progress, be the reference point for decision making and will inspire the Company’s people as it transitions to the next stage of development. Sustainable development From the commencement of the Company’s presence on the Yorke Peninsula in South Australia, location of Hillside, Rex has worked to understand the issues of importance to the local community and region more broadly, and to design Hillside to protect and promote those environment, social and economic values. The same approach is being taken at Hog Ranch in Nevada also. To that end, a signiﬁcant milestone was achieved during the year when the South Australian Government approved the Program for Environment Protection and Rehabilitation (PEPR) for Hillside. The PEPR sets out how the Project will mitigate its environmental and social impacts and manage development and operation of Hillside to achieve the outcomes sought by the Company and its stakeholders. This approval was the satisfying result of extensive design and feasibility optimisation, technical studies and approximately 600 separate stakeholder engagements regarding Hillside. In moving into the next phase of development, and also considering Hog Ranch, the Company is progressing its strategy for sustainable development. It includes: (cid:129) health and safety as its top priority; (cid:129) managing its material risks to, and impacts on, people and the environment; (cid:129) (cid:129) valuing diversity and promoting inclusivity; and supporting communities, where it operates, to build resilience and thrive. This strategy recognises the strong and experienced leadership of the Board and management team in Environmental, Social and Governance (ESG) risk management. They are supported by a governance framework that was strengthened during the year with the addition of new policies – on sustainable development, gender, diversity and inclusion, and people and culture – and revision of existing policies, to reﬂect the Company’s ambition, progress and contribution to a greener, more inclusive and equitable global future. Stakeholder expectations of mining companies’ ESG performance and the material landscape are evolving at an unprecedented rate. As a junior explorer and developer, Rex continues to navigate this landscape, identifying, assessing and mitigating risks to its business and responding to emerging areas of stakeholder interest. As the Company matures, it will continue to evolve its sustainable development strategy in setting out its sustainability commitments, aligned with relevant industry requirements and frameworks, including the UN Sustainable Development Goals, and establishing targets for its ESG performance. 5 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 CORPORATE (CONTINUED) Gender, diversity and inclusion This year, the Board established a stand-alone gender, diversity and inclusion policy. The Company achieved its measurable objectives for gender diversity: female representation of at least 20% of the total workforce; and inclusion of a credible and suitability experienced female candidate for nomination to the Board, who was subsequently appointed (Amber Rivamonte in the role of Executive Director of Finance). At 30 June 2021, women made up 20% of the Rex Board, 67% of senior executives and 31% of the total workforce of the Company. Climate change The Company understands that climate change is a signiﬁcant global challenge and that as a responsible citizen it must identify, assess, action and report its response to climate change challenges. Its approach to climate change – how it manages mitigation and adaptation to climate change impacts, both physical and transitional, as well as the opportunities and risks associated with the transition to a low-carbon future – is evolving as its projects progress. Its focus on copper as a critical mineral input to decarbonisation, electriﬁcation and green technologies sits at the core. Hillside will generate the equivalent of 2,206,853t of carbon dioxide (tCO2-e) throughout Stage 1’s projected 14-year operational life, 60% of which will come from electricity. Electricity will be sourced from the South Australian power grid which is 60% sourced from renewable energy. It will utilise existing infrastructure such as housing, highways, ports and water to minimise its additional carbon footprint associated with the construction of new infrastructure. Rex will explore the use of existing and potential renewable energy, to further reduce the Project’s carbon footprint, as appropriate opportunities arise. HILLSIDE PROJECT – SOUTH AUSTRALIA Rex is developing its 100% owned, ﬂagship copper-gold Hillside Project, located 165km (two hours) from Adelaide and 12km south of the Ardrossan township on the Yorke Peninsula, South Australia. Hillside is an Iron Oxide Copper Gold (IOCG) deposit, under shallow cover, in the Gawler Craton. Hillside is one of the largest undeveloped open pit copper projects in Australia and currently contains 2Mt of copper (Cu) and 1.4Moz of gold (Au). In July 2020, Hillside’s PEPR for Stage 1 of the Project was approved by the South Australian Government. Stage 1 has a 13-year mine life and recovers 468kt Cu from the 2Mt Mineral Resources. In July 2021, Rex doubled the Ore Reserves to 988kt Cu. SOUTH AUSTRALIA Prominent Hill Gawler Craton Olympic Dam Carrapateena HILLSIDE PROJECT Adelaide Hillside’s mining method is conventional open pit drill, blast, load and haul. The process ﬂowsheet is standard crush, single stage SAG grind and 3-stage ﬂotation circuit. The Project is in close proximity to sealed highways, ports, power and water, as well as a population base to staff the operation. This provides Hillside with substantial cost and capital efﬁciency advantages compared with equivalent projects. The Hillside Feasibility Study Costing Update (refer ASX Release 31 July 2020) for Stage 1, forecast a capex of $585 million (US$410 million). Rex believes there has never been a better time or stronger rationale for Australia and its States to champion investment in its people and assets and to future proof, indeed future prosper, the country through projects like Hillside. The Project, alongside other mining developments like it, will be the critical bedrock in the nation’s recovery from the COVID-19 pandemic and transition to a prosperous low-carbon economy. It will provide opportunities for wealth creation via local community jobs and business opportunities, government royalties and taxes, and shareholder returns. Locally, Hillside contributes to the South Australian Government’s plans in establishing the State as a world-leading copper precinct, via its Copper Strategy1. South Australia’s vision is to be the major contributor to Australia’s aspiration to become the world’s third largest copper producer, with the objective to more than triple South Australia’s copper production to 1Mtpa by 2030. 1Government of South Australia (2016). Department for Energy and Mining: South Australia’s Copper Strategy. Adelaide, South Australia. ANNUAL REPORT 2 0 2 1 6 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 HILLSIDE PROJECT – SOUTH AUSTRALIA (CONTINUED) Hillside Ore Reserves estimate With the current copper price and outlook well above Rex’s incentive price of US$3.50/lb the Company completed an updated Ore Reserves estimate for Hillside (refer ASX Release 20 July 2021). Figure 2 outlines Hillside’s contained copper Ore Reserves relative to a selection of Australian copper developers and producers. COMPANY RESERVES BY CONTAINED COPPER METAL HILLSIDE 1,200 1,000 ) T K ( U C 800 600 400 200 0 RXM SFR 29M HAV KGL VXR AIS Figure 2: Hillside relative to a selection of Australian copper developers and producers. The Ore Reserves estimate for the Hillside Project as at July 2021 is 181.6Mt @ 0.54% Cu and 0.14g/t Au, containing 988kt of copper metal and 823kozs of gold. The new Ore Reserves summary is presented in Table 1. Category Proved Probable Total Tonnes (Mt) 58 123 182 Copper (%) 0.52 0.56 0.54 Gold (g/t) 0.16 0.13 0.14 Contained Copper (kt) Contained Gold (koz) 301 687 988 308 515 823 Table 1: Hillside Ore Reserves – July 2021. Calculations have been rounded to the nearest Mt of ore, 0.01% Cu grade, 0.01g/t Au grade, 1,000t of Cu metal and 1,000ozs of Au metal. Some apparent errors may occur due to rounding. The July 2021 Ore Reserves represent an update to the previous Ore Reserves announced to the ASX on 26 May 2015. A comparison of this Ore Reserves estimate to the 2015 estimate is presented in Table 2. There has been no mining or depletion of the 2015 Ore Reserves since their estimation. Category Total May 2015 Total July 2021 Tonnes (Mt) 82 182 Copper (%) 0.62 0.54 Gold (g/t) 0.16 0.14 % Difference 122% (13%) (13%) Contained Copper (kt) Contained Gold (koz) 509 988 94% 432 823 90% Table 2: Comparison between the July 2021 Ore Reserves and the previous May 2015 Ore Reserves. Calculations have been rounded to the nearest Mt of ore, 0.01% Cu grade, 0.01g/t Au grade, 1,000t of Cu metal and 1,000ozs of Au metal. Some apparent errors may occur due to rounding. 7 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 HILLSIDE PROJECT – SOUTH AUSTRALIA (CONTINUED) Hillside Ore Reserves estimate (Continued) The Mineral Resources used as the basis for the Ore Reserves estimate were announced to the ASX on 25 May 2015. Measured and Indicated Resources have been converted to Proved and Probable Ore Reserves respectively, subject to mine design physicals and an economic evaluation. Ore Reserves were estimated by Rex from an updated mine design and mining schedule completed by AMC Consultants and mineral processing work completed by Wood. The Stage 2 mine plan extends from near-surface to a depth of 560m, which is shallow for IOCG deposits on the Gawler Craton. Rex believes that there is potential to increase the Mineral Resources and Ore Reserves down dip and along strike from the existing Mineral Resources as there has been limited drilling below 600m from surface and along strike from the Hillside orebody (see Figure 3). Figure 3: Long section of Hillside orebody upside – open at depth. SOUTH AUSTRALIAN TENEMENT SCHEDULE at 30 June 2021 South Australia Tenement EL6531 EL6497 EL6515 EL59811 EL6100 EL6136 EL6143 EL6189 EL6245 EL6455 ML6438 EML6439 MPL146 ANNUAL REPORT 2 0 2 1 8 Location Lease Status Area Type Current Area Date Moonta South Moonta South Moonta South Moonta South Moonta South Moonta South Moonta South Moonta South Moonta South Moonta South Hillside Hillside Hillside Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted Granted km2 km2 km2 km2 km2 km2 km2 km2 km2 km2 Ha Ha Ha 21 509 257 108 94 91 51 354 1,168 74 2,998 225 94 09/06/2022 27/07/2022 20/09/2022 22/06/2021 16/01/2023 19/03/2022 15/04/2022 01/08/2022 01/08/2022 04/11/2021 15/09/2035 15/09/2022 15/09/2035 1Renewal documentation submitted to the South Australian Government and currently being processed. REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 HOG RANCH – NEVADA, USA It has been an extremely successful year at Hog Ranch with the exploration effort indicating a much larger target portfolio than previously anticipated. This included a near doubling of the Mineral Resources. HOG RANCH RESOURCES ESTIMATE INFERRED INDICATED Figure 4: Hog Ranch new Resources estimate of 2.26Moz of gold, delivered 18 months following acquisition. Drilling results Drilling was undertaken at the Bells, Krista and Airport/Cameco Project locations with successful extensions to the previously deﬁned gold mineralisation identiﬁed at every location. Another key outcome from the recent drilling effort was the successful test of 3D induced polarisation (IP) targets in the Airport area. The interpretations from the 3D IP have assisted greatly in the identiﬁcation of new locations where gold mineralisation could exist. Drill holes HR21-010 and HR21-012 were both successful in conﬁrming signiﬁcant gold mineralisation on two new structures. Drill hole HR21-010 intersected 114.3m @ 0.64g/t gold including a higher-grade section of 36.6m @ 1.4g/t gold, and HR21-021 returned a signiﬁcant initial hit on a new structure of 56m @ 2.12g/t gold including higher grade intervals of 12.2m @ 3.86g/t gold and 4.6m @ 8.61g/t gold. A summary of the more noteworthy drill intersections returned over the year is shown in Table 3. Location Krista Krista Krista Bells Bells Airport Drill Hole Number HR20-023 HR20-025 HR20-026 HR20-030 HR21-001 HR21-008 including including New Discovery HR21-010 From (m) 0 83.8 0 0 18.3 7.6 18.3 89.9 94.5 including 143.3 New Discovery HR21-012 including including 54.9 57.9 88.4 To (m) 210.3 184.4 125.0 33.5 123.5 118.9 32.0 100.6 208.8 179.8 111.3 70.1 93.0 Down-hole Length (m) True Width (m) Average Gold Assay (g/t)) ~187 ~93 ~103 ~29 ~95 ~96 ~12 ~9 210.3 100.6 125.0 33.5 105.2 111.3 13.7 10.7 114.3 36.6 56.4 12.2 4.6 0.66 0.77 0.67 1.29 0.55 0.83 2.27 1.44 0.64 1.4 2.12 3.86 8.61 Table 3: Composited gold intersections from recent RC drilling at Hog Ranch. Estimated true widths are based on interpreted dip of gold mineralisation where surrounding drill hole information is available. In tandem with the drilling programs, further mapping from internationally experienced epithermal gold experts was undertaken at Hog Ranch. Key ﬁndings from the mapping are that there are several large-scale breccias at both Bells and further aﬁeld which appear to have an important inﬂuence on the emplacement and location of the gold mineralisation at Hog Ranch. 9 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 HOG RANCH – NEVADA, USA (CONTINUED) Drilling results (Continued) Both the historical drilling information and recent drilling results support this updated interpretation. This interpretation also opens the possibility for larger-scale and higher-grade gold mineralisation focussed around where these breccias are extending to greater depths beyond the current drilling information (see example from Bells in Figure 5). Figure 5: Cross section view at Bells, highlighting drilling results from holes HR21-001 and HR21-002 relative to the surrounding earlier Rex drilling and historical drilling information. Mineral Resources update On the back of the successful drilling campaigns, Rex updated the Mineral Resources estimate (refer ASX Release 23 March 2021) at Hog Ranch to 165Mt @ 0.43g/t gold for 2.26Mozs of contained gold. The Mineral Resources update included a substantial increase in the Indicated portion of the Mineral Resources, up from 180kozs to 560kozs of gold. Deposit Cut-off Grade (g/t) Tonnage (Mt) Grade (g/t) Gold (koz) Oxide Bells – Indicated Bells – Inferred Bells – Total Krista – Indicated Krista – Inferred Krista – Total Oxide Total 0.2 0.2 0.2 0.2 24 13 37 11 110 121 158 Sulphide 0.50 0.40 0.47 0.48 0.39 0.40 0.41 390 170 560 170 1,380 1,550 2,110 Deposit Cut-off Grade (g/t) Tonnage (Mt) Grade (g/t) Gold (koz) Cameco – Inferred Airport – Inferred Sulphide Total TOTAL 0.3 0.3 3.9 2.8 6.7 165 0.75 0.63 0.70 0.43 90 60 150 2,260 Table 4: Summary results for the updated Mineral Resources estimate at Hog Ranch. Reported tonnage and gold grades for both the Inferred and Indicated Mineral Resources estimates are rounded to two signiﬁcant ﬁgures. Some apparent errors may occur due to rounding. ANNUAL REPORT 2 0 2 1 10 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 HOG RANCH – NEVADA, USA (CONTINUED) New regional datasets and increased land position In late 2020, Rex completed a number of airborne surveys to cover the entire volcanic caldera at Hog Ranch. These new datasets, combined with all the historical mining and exploration information, have substantially increased the potential for Hog Ranch to host hydrothermal alteration and associated gold mineralisation over a much larger area than previously understood. As a result of these observations, Rex has expanded its land position to capture locations which have geological features consistent with large scale gold mineralisation. The expanded landholding at Hog Ranch has been broken down into project-based locations which deﬁne their own set of target types and overall exploration potential as shown in Figure 6. Figure 6: Summary of deﬁned project areas relative to new airborne magnetic and hyperspectral data. Note: the magnetic image is represented by the underlying colour sequence which covers Rex’s Mining Claim area and the hyperspectral data is shown on top of the magnetic imagery which is typically represented as small colour coded positions where speciﬁc hydrothermal clay minerals have been identiﬁed. NEVADA, USA TENEMENT SCHEDULE at 30 June 2021 As at 30 June 2021, the Hog Ranch Property is made up of 1,035 unpatented mining claims located in Washoe County, Nevada. Hog Ranch Minerals Inc directly owns 788 Mining Claims (see table below) and controls the remaining 247 Mining Claims through a mining lease with purchase option with Nevada Select Royalty Inc. Nevada, USA Lode Mining Claims Location Lease Status Area Type Total Area1 Date Certiﬁed NHR 1-30 Washoe County NHR 31-100 Washoe County NHR 101-232 Washoe County NHR 233-417 Washoe County NHR 418-434 Washoe County GL 1-104 GL 105-177 GL 178-354 Washoe County Washoe County Washoe Country Claimed Claimed Claimed Claimed Claimed Claimed Claimed Claimed 1Total Area comprises the area of each Lode Mining Claim, i.e. 1,500’ x 600’. Ft2 Ft2 Ft2 Ft2 Ft2 Ft2 Ft2 Ft2 27,000,000 10/08/2019 63,000,000 28/01/2020 118,800,000 10/07/2020 166,500,000 19/11/2020 15,300,000 30/04/2021 93,600,000 10/07/2020 65,700,000 19/11/2020 159,300,000 30/04/2021 11 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2021 SUPPLEMENTARY INFORMATION Forward-Looking Statements This Annual Report contains “forward-looking statements”. All statements other than those of historical facts included in this Annual Report are forward-looking statements. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, copper, gold and other metals price volatility, currency ﬂuctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, as well as political and operational risks and governmental regulation and judicial outcomes. The Company does not undertake any obligation to release publicly any revisions to any forward-looking statement. Compliance Statement With reference to previously reported Mineral Resources, Ore Reserves, Feasibility Studies and Scoping Studies the Company conﬁrms that it is not aware of any new information or data that materially affects the information included in the original market announcements as referenced. In the case of estimates of Mineral Resources and Ore Reserves that reference material assumptions and technical parameters underpinning the information, contained within this Annual Report, continue to apply and have not materially changed. The Company conﬁrms that the form and context in which the Competent Person’s ﬁndings are presented have not been materially modiﬁed from the original market announcement. The estimated Ore Reserves and Mineral Resources underpinning any production target have been prepared by a competent person in accordance with the requirements in Appendix 5A (JORC code). Competent Persons’ Statement The information in this report that relates to Exploration Results or Mineral Resources is based on, and fairly reﬂects, information compiled by Mr Steven Olsen who is a Member of the Australasian Institute of Mining and Metallurgy and is an employee of Rex Minerals Ltd. Mr Olsen has sufﬁcient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as deﬁned in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Olsen consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to mining and/or Ore Reserves is based on, and fairly reﬂects, information compiled by Mr Charles McHugh who is a Fellow of the Australasian Institute of Mining and Metallurgy and an employee of Rex Minerals Ltd. Mr McHugh has sufﬁcient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as deﬁned in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr McHugh consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to metallurgy is based on, and fairly reﬂects, information compiled by Mr John Burgess who is a Fellow of the Australasian Institute of Mining and Metallurgy and a consultant to Rex Minerals Ltd. Mr Burgess has sufﬁcient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as deﬁned in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Burgess consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Base Case Assumptions – Bells Project The Bells Scoping Study (2020) price assumptions are quoted in US dollars and gold US$1,550/oz. Base Case Assumptions – Hillside Project The Hillside Feasibility Study (2020) price assumptions for the Stage 1 life of the operation are copper US$3.00/lb; gold US$1,550/oz and exchange rate of AUD:USD $0.70. ANNUAL REPORT 2 0 2 1 12 DIRECTORS’ REPORT For the year ended 30 June 2021 A B N 12 124 960 523 13 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 The Directors present their report together with the consolidated ﬁnancial statements of the Group comprising of Rex Minerals Ltd (the Company) and its subsidiaries (the Group or Rex), for the ﬁnancial year ended 30 June 2021 and the auditors’ report thereon. DIRECTORS The following persons were Directors of the Company at the date of this report: Name, qualiﬁcations and independence status Mr Ian Smith Chairman Independent Non- Executive Director (B.E (Hons, Mining), B Fin Admin, FIEAust, FAusIMM) Mr Richard Laufmann Chief Executive Ofﬁcer and Managing Director (B.Eng (Mining), MAusIMM, MAICD) Experience, special responsibilities and other directorships Mr Ian Smith has been a Director since 18 February 2019 and was appointed Chairman on 1 June 2021. Mr Smith also serves as a member of the Company’s Audit Committee and its Remuneration Committee. Ian is a mining engineer with more than 40 years' experience in the mining and services sector. He has held some of the most senior positions in the Australian resources industry, most recently managing director and chief executive ofﬁcer of Orica. Prior to that, he was managing director and chief executive ofﬁcer of Newcrest, growing the business to what has become Australia's biggest, and globally one of the largest, gold mining companies. Ian is a Fellow of both the Australasian Institute of Mining and Metallurgy and the Institute of Engineers and a Non-Executive Director of Red River Resources Limited. In prior roles, Ian was global head of operational and technical excellence with Rio Tinto, London and managing director - Comalco Aluminium Smelting with Rio Tinto in Brisbane. He has technical, operational, ﬁnancial and strategic expertise, having also held senior and executive positions with WMC Resources, Pasminco and CRA. Ian is a past president of the Australian Mines & Metals Association and is a past chairman of the Minerals Council of Australia. Mr Richard Laufmann is a founding director of ASX-listed Rex Minerals, and was appointed Chief Executive Ofﬁcer and Managing Director in April 2015. Richard, a graduate of the WA School of Mines, is a mining engineer with broad experience in the resources sector – speciﬁcally in copper, gold and nickel – both corporately and operationally. Before becoming CEO of Rex, Richard was the CEO of ASX-listed Indophil Resources which had ownership in and management of one of the world’s largest undeveloped copper projects (Tampakan). This company operated in an extremely challenging commodity price and geo-political environment. Prior to Indophil, Richard was CEO of ASX-listed Ballarat Goldﬁelds. On joining, he recapitalised and led the company, through feasibility, ﬁnancing, construction and commissioning of the Ballarat Gold Mine. In early 2007, Ballarat was taken over by Lihir Gold. Previously, Richard was the General Manager of Gold for Western Mining Corporation (WMC), with some of the largest and most diverse surface and underground operations in the country. Richard is a past Chairman of the State Council of the Minerals Council of Australia (Victorian division) at the time the State Council merged into the national MCA. ANNUAL REPORT 2 0 2 1 14 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 Name, qualiﬁcations and independence status Experience, special responsibilities and other directorships Ms Amber Rivamonte Ms Amber Rivamonte was appointed a Director of Rex on 1 June 2021. Chief Financial Ofﬁcer and Executive Director of Finance (CPA; B.Bus(Acc); MAICD) Mr Ron Douglas Independent Non- Executive Director (B.Eng, FAIM, MAustIMM, MAICD) Mr Greg Robinson Independent Non- Executive Director (B.Sc(Hons); MBA; MAICD) Amber has over 25 years’ experience in the resources industry covering the ﬁelds of commercial, strategic and risk management, corporate governance and ﬁnancial management experience. Amber has a background in accounting and is a certiﬁed practicing accountant (CPA). She has previously held the dual role of chief ﬁnancial ofﬁcer and company secretary at Rex Minerals and Ballarat Goldﬁelds, as well as the role of company secretary at Indophil Resources and White Rock Minerals. She has also been a director of a number of companies in Australia and internationally. Amber’s experience covers all aspects of managing resources companies, from project acquisition, mergers, demergers, takeovers, schemes and various forms of fund raisings. Mr Ron Douglas has been a Director of Rex since 18 February 2019. He is Chairman of the Remuneration Committee and a member of the Audit Committee. Ron is an engineer by qualiﬁcation and has extensive experience leading owners’ teams for major projects located around the world. Ron is the Executive Vice President for Ausenco and he has over 35 years’ global experience in project delivery and resources sector management. His previous roles have included global head of projects and technology for Orica; executive general manager projects and studies for Newcrest; chief executive ofﬁcer of Australian Solomons Gold; managing director for Anglesey Aluminium Metal (part of Rio Tinto); and general manager for Rio Tinto’s aluminium and coal projects. Ron was formerly a non-executive chairman of Highlands Paciﬁc Limited. Ron is a Fellow of the Australian Institute of Management, a Member of the Australasian Institute of Mining and Metallurgy and a Member of Australian Institute of Company Directors. He has extensive and well-recognised expertise in industrials, minerals and metals, as well as oil and gas. Mr Greg Robinson was appointed a Director of Rex on 1 June 2021. He is Chairman of the Audit Committee and a member of the Remuneration Committee. Greg has extensive executive experience in the ﬁnance and resources industries. He is a Non-Executive Director of Incitec Pivot Limited, and is Deputy Chairman and Non-Executive Director of the Royal Automobile Club of Victoria (RACV). He is the former managing director & chief executive ofﬁcer of Newcrest Mining Limited and former chief executive ofﬁcer of Lattice Energy Limited. Prior to joining Newcrest, Mr Robinson was on the executive committee of and held senior executive roles in the Petroleum and Energy Division of BHP and was a director of Investment Banking at Merrill Lynch & Co and headed the Australia/Asia Paciﬁc resources team. Greg was previously a non-executive director of the World Gold Council, and a non- executive director of St Vincent’s Institute of Medical Research. The following persons were Directors of the Company at any time during the ﬁnancial year. There has been no new Directors appointed since the end of the ﬁnancial year to the date of this report. > Mr Ian Smith – appointed Non-Executive Chairman 1 June 2021. > Mr Richard Laufmann. > Mr Ron Douglas. > Ms Amber Rivamonte – appointed as Executive Director of Finance 1 June 2021. > Mr Greg Robinson – appointed as Non-Executive Director 1 June 2021. > Dr David Carland – Non-Executive Chairman retired 31 May 2021. > Mr Alister Maitland – Non-Executive Director retired 31 May 2021. > Mr Mitchell Hooke – Non-Executive Director retired 20 October 2020. 15 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 COMPANY SECRETARY Ms Kay Donehue (GradDipACG, GIA(Cert), AGIA, ICSA, AAICD, Chartered Secretary) Ms Donehue has over 25 years’ experience in the mining and banking industries, and most recently has focused extensively on company secretarial and governance roles in the mining sector. Kay was previously company secretary of Indophil Resources NL which was delisted from the ASX in 2015 following completion of a Scheme of Arrangement with its major shareholder. Kay is an Associate of the Governance Institute of Australia and holds a Graduate Diploma in Applied Corporate Governance. DIRECTORS’ MEETINGS The numbers of meetings of the Company’s Board of Directors and of each Board Committee held during the ﬁnancial year and the numbers of meetings attended by each Director were: Director Board Meetings Audit Committee Meetings Remuneration Committee Meetings Mr Ian Smith1,2 Mr Richard Laufmann1 Ms Amber Rivamonte1 Mr Ron Douglas1,2 Mr Greg Robinson2 Former Dr David Carland Mr Alister Maitland Mr Mitchell Hooke A 6 6 1 6 1 6 6 2 B 6 6 1 6 1 6 6 2 A 2 2 – 2 – 2 2 1 B 2 2 – 2 – 2 2 1 A 1 1 – 1 1 – – – B 1 1 – 1 1 – – – A – Number of meetings attended. B – Number of meetings held during the year whilst the Director held ofﬁce. 1 Director is not a member of the Committees but attend meetings as appropriate by invitation. 2 Director was appointed to the Committees effective 1 June 2021. CORPORATE GOVERNANCE STATEMENT Rex has adopted comprehensive systems of control and accountability as the basis for the administration and compliance of effective and practical corporate governance. These systems are reviewed regularly and revised if appropriate. The Board is committed to administering the Company’s policies and procedures with transparency and integrity, pursuing the genuine spirit of good corporate governance practice. To the extent they are applicable, Rex has adopted the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, 4th Edition. In addition, as the Company’s activities transform in size, nature and scope, additional corporate governance structures will be considered by the Board and assessed as to their relevance. In accordance with the ASX Principles and Recommendations and the ASX Listing Rules, the Corporate Governance Statement and a more detailed discussion of the Company’s approach can be found on its website: www.rexminerals.com.au. This Corporate Governance Statement is dated 30 June 2021 and was approved by the Board on 13 September 2021. ANNUAL REPORT 2 0 2 1 16 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 PRINCIPAL ACTIVITIES The Company’s vision is to “produce the minerals needed for the world we all envision”and our stated purpose to achieve this “is to explore and mine responsibly to beneﬁt our stakeholders and contribute to a more sustainable world”. During the year the principal activities of the Group consisted of exploration, evaluation and development. In pursuing these activities, we delivered on the work programs below: (cid:129) Following receipt of approval of Hillside’s PEPR we have begun ﬁnancing and pre-development plans for the Project. (cid:129) Progressed the exploration and development options at Hog Ranch, including: > Grew the shallow disseminated gold Mineral Resources; > Developed the portfolio of target zones; > Commenced regional drill target generation; and > Continued baseline environmental studies for permitting of the Bells Project. (cid:129) We continue to explore options for our highly prospective Iron Oxide Copper Gold (IOCG) tenements in South Australia. OPERATING AND FINANCIAL REVIEW The income statement shows a loss after tax of $8.8 million (2020: $5.2 million) for the year. The Group has no debt (2020: $4.4 million). As at 30 June 2021, the Group had a cash position of $9.7 million (2020: $3.0 million). Operating activities resulted in a net cash outﬂow for the year of $8.2 million (2020: outﬂow $4.8 million). SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no signiﬁcant changes in the state of affairs of the Group during the ﬁnancial year. DIVIDENDS PAID OR RECOMMENDED The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the date of this report. EVENTS SINCE THE END OF THE FINANCIAL YEAR On 4 August 2021, the Company launched a $50 million two tranche placement. Tranche 1 raised $5.3 million and settled on 10 August 2021 with Tranche 2, subject to shareholder approval at a General Meeting to be held on 14 September 2021, to raise a further $44.7 million. Other than mentioned above, no matters or circumstances have arisen since 30 June 2021 that have signiﬁcantly affected the Group’s operations, results or state of affairs. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Group is working towards development of the Hillside Project and continued minerals exploration on the tenements and mineral claims owned or controlled by the Group. Other than that which is disclosed throughout the Annual Report, further information about likely developments in the operations of the Group and the expected results of those operations in future ﬁnancial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Group. 17 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 ENVIRONMENTAL REGULATION The Group’s operations are subject to environmental regulation in respect of mineral tenements relating to exploration activities on those tenements. No breaches of any environmental requirements were recorded during the ﬁnancial year. INDEMNIFICATION AND INSURANCE OF OFFICERS The Company provides insurance to cover legal liability and expenses for the Directors and Executives of the Company. The Directors and Ofﬁcers Liability Insurance provides cover against all costs and expenses that may be incurred in defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against the Ofﬁcers in their capacity as Ofﬁcers. Disclosure of the nature of the liability cover and the amount of the premium is subject to a conﬁdentiality clause under the insurance policy. The Company has entered into an agreement with Directors and Executives to indemnify these individuals against any claims and related expenses, which arise as a result of their work in their respective capacities. The Company has not provided any insurance or indemnity for the auditor of the Company. NON-AUDIT SERVICES During the year, KPMG Australia (KPMG), the Group’s auditor, did not perform any services other than the audit and review of the ﬁnancial statements. Details of amounts paid to the auditor of the Group, KPMG and its related practices for audit services during the year, are set out below. 2021 2020 $ $ Audit and review of ﬁnancial statements 47,000 47,500 REMUNERATION REPORT – AUDITED The Directors present the Remuneration Report for the year ended 30 June 2021, outlining key aspects of the remuneration policy and framework and the remuneration awarded during the year. Principles of compensation Remuneration is referred to as compensation throughout this report. Key Management Personnel (KMP) comprise the Directors of the Company and senior Executives for the Group. KMP have authority and responsibility for planning, directing and controlling the activities of the Company and the Group. Compensation packages may include a mix of ﬁxed and variable compensation, and short-term and long-term performance-based incentives. Fixed compensation Fixed compensation consists of base compensation (which is calculated on a total cost), as well as leave entitlements and employer contributions to superannuation funds. Compensation levels are reviewed annually through a process that considers individual, segment and overall performance of the Group. Market research provides analysis and guidance for compensation. Performance linked compensation Performance linked compensation may include both short-term and long-term incentives, and is designed to reward senior executives for meeting or exceeding their ﬁnancial and personal objectives. The short-term incentive is an ‘at risk’ bonus provided in the form of cash, while the long-term incentive is provided as options over ordinary shares of the Company pursuant to the terms and conditions of the options. Non-Executive Directors are not eligible for performance linked compensation. ANNUAL REPORT 2 0 2 1 18 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 REMUNERATION REPORT – AUDITED (CONTINUED) Short-term incentive The short-term incentive (STI) is a discretionary bonus provided in the form of cash. At the end of the ﬁnancial year, the Board assesses the performance of the Group and individuals. The Board determines and approves the cash incentive to be paid to individuals. During the year, no STI cash bonuses were paid or payable. Long-term incentive The long-term incentive (LTI) is provided as options over ordinary shares of the Group and are issued at the discretion of the Board with conditions that the Board determines as appropriate at the time of issue. The Board believes the LTI is an important component of a comprehensive remuneration strategy. It aligns participants’ interests with those of shareholders by linking their overall total rewards to the long-term success of the Company and helps retain cash funds within the Company. The Board received shareholder approval for an Option Incentive Plan at the Annual General Meeting on 22 November 2018. The plan is administered by the Board which has the discretion to determine eligibility to participate in the plan. Consequences of performance on shareholder wealth The variable components of the Group’s Executives’ remuneration (the STI and LTI) seek to encourage alignment of management performance and shareholders’ interests by linking remuneration to the performance of the Group. Whilst the Remuneration Committee takes into consideration the indices detailed below, the Board acknowledges that as an exploration and development company, the use of such indices does not fully reﬂect the Group’s performance. Net loss attributable to equity holders of the parent (million) 2021 $ 8.8 2020 $ 5.2 2019 $ 5.1 2018 $ 5.2 2017 $ 0.8 Closing share price at ﬁnancial year’s end ($) 0.35 0.070 0.053 0.105 0.056 Service agreements In line with Group policy, the Group has entered into contracts with each of its Executives, and they are capable of termination on up to two months’ notice. The Group retains the right to terminate a contract immediately by making payment in lieu of notice. Where applicable, Executives are also entitled to receive (on termination of employment) their statutory entitlements of accrued annual and long service leave, together with any superannuation beneﬁts. Contracts provide for no additional entitlement on termination in the event of removal for misconduct or gross negligence. The employment or consultancy contract outlines the components of compensation paid to the Executives, and may be either based on an annual amount or daily rate. They do not prescribe how compensation levels are modiﬁed year to year. Compensation levels are reviewed each year to meet the principles of the compensation policy. Any STI is at the discretion of the Board. The Company has established an Option Incentive Plan, and the Board may invite Executive Ofﬁcers to participate under the terms and conditions of the plan as an LTI. Non-Executive Directors Total compensation for all Non-Executive Directors, last voted upon by shareholders at the 2011 AGM, is not to exceed $500,000 per annum and is set based on advice from external advisors with reference to fees paid to other Non-Executive Directors of comparable companies. The Chairman and Non-Executive Directors do not receive performance related remuneration, but subject to shareholder approval may receive options as part of their remuneration. Directors’ fees cover all main Board activities and membership of Board committees. 19 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 REMUNERATION REPORT – AUDITED (CONTINUED) Directors’ and Executive Ofﬁcers’ remuneration Details of the nature and amount of each major element of remuneration of Directors and Executive Ofﬁcers for 2021 are as follows: s u n o B f o n o i t r o p o r p n o i t a r e n u m e r e c n a m r o f r e p x i m n o i t a r e n u m e R d e t a l e r % e l b a i r a V I T L k s i r t a d e x i F l a t o T $ e l b a i r a V n o i t a r e n u m e r n o i t a r e n u m e r d e x i F d e s a b e r a h S s t n e m y a p m r e t - g n o L t s o P t n e m y o l p m e m r e t - t r o h S e u l a v r i a F ) d ( $ s n o i t p o e c i v r e s g n o L ) c ( e v a e l - r e p u S n o i t a u n n a $ $ h s a c I T S ) b ( s u n o b $ & y r a l a S ) a ( $ s e e f – – – – – – – – – % 2 1 % 3 1 % 8 2 % 8 2 % 6 % 8 8 % 7 8 % 2 7 % 2 7 % 4 9 5 6 0 , 9 7 5 1 4 , 5 7 3 0 6 , 7 5 1 7 , 9 5 1 7 , 9 8 2 1 , 2 – – 7 1 0 , 6 0 0 7 , 5 5 7 4 0 0 7 , 3 1 4 3 4 3 , 6 1 1 9 8 1 , 9 9 2 2 3 0 , 8 1 8 4 2 9 7 9 , 5 0 5 7 , 3 2 6 8 4 , 2 – – – % 0 0 1 5 7 3 , 0 0 1 % 0 0 1 5 2 2 , 0 6 % 0 0 1 3 6 9 , 9 1 – – – % 2 2 % 8 7 1 3 7 , 3 6 1 4 6 0 , 6 3 – – – – – 8 0 7 , 8 5 2 2 , 5 2 3 7 , 1 6 6 2 , 9 1 2 , 1 7 9 9 , 1 9 1 7 2 2 , 6 3 9 0 , 4 5 – – – – – – – – – 3 3 3 , 3 6 0 0 0 , 0 6 0 0 0 , 5 s r o t c e r i D e v i t u c e x E - n o N s a l g u o D n o R r M 1 h t i m S n a I r M 2 n o s n i b o R g e r G r M s r o t c e r i D e v i t u c e x E 8 2 6 , 7 6 2 3 2 4 , 8 7 2 O E C , n n a m f u a L d r a h c i R r M 3 O F C , e t n o m a v i R r e b m A s M 7 6 6 , 7 2 1 7 6 6 , 1 9 0 0 0 , 5 5 1 3 2 , 8 1 l a c o L , n e d e e L e i r e h C s M 4 h c n a R g o H – r o t c e r i D P M K r e h t O 5 n a m r i a h C , d n a l r a C d i v a D r D r e m r o F 5 d n a l t i a M r e t s i l A r M 6 e k o o H l l e h c t i M r M 9 4 9 , 6 6 9 : P M K n o i t a s n e p m o c l a t o T n o i t a r e n u m e r ’ s r e c ﬁ f O e v i t u c e x E d n a ’ s r o t c e r i D f o e l b a t e h t o t n o i t a l e r n i s e t o N e h t o t i d a p i r e n a t e r e h t s t n e s e r p e r e v o b a e h T . 1 2 0 2 e n u J 1 n o r o t c e r i D a s a i g n c n e m m o c e r o f e b , 1 2 0 2 y a M 1 3 o t t n e m e e r g a y c n a t l u s n o c a h g u o r h t d e g a g n e s a w e t n o m a v R s M i . t c a r t n o c t n e m y o p m e l r e h r e p s a h t n o m e n o s u p l y n a p m o c d e t a e r l P M K e h t s t n e s e r p e r e v o b a e h t d n a t n e m e e r g a y c n a t l u s n o c a h g u o r h t d e g a g n e s i n e d e e L s M . 1 2 0 2 y a M 1 3 e v i t c e f f e d e r i t e r h t o b d n a l t i a M r M d n a d n a l r a C r D . 0 2 0 2 r e b o t c O 0 2 e v i t c e f f e d e r i t e r e k o o H r M . y n a p m o c d e t a e r l P M K e h t o t i d a p i r e n a t e r . 1 2 0 2 e n u J 1 n o n a m r i a h C e m a c e b h t i m S r M . 1 2 0 2 e n u J 1 d e c n e m m o c n o s n b o R i r M . 1 . 2 . 3 . 4 . 5 . 6 l a u n n a d e u r c c a d n a y r a a s l h s a c s e d u c n l i t i , s r e c ﬁ f O e v i t u c e x E r o F . s d r a d n a t S g n i t n u o c c A n a i l a r t s u A h t i w e c n a d r o c c a n i d e r u s a e m P M K y b i d e v e c e r s t n u o m a e d u c n l i s e e f d n a y r a a S l ) a ( . n o l i t a s g e i l d e s a b - e t a t s h t i w e c n a d r o c c a n i s n o i t i d n o c i e c v r e s d e r i u q e r e h t s t e e m e e y o p m e l e h t f i h s a c n i i d a p e b l y n o l l i i w h c h w e v a e l i e c v r e s g n o l r o f l a u r c c a t e n e h t s t n e s e r p e R . r a e y l i a c n a n ﬁ 1 2 0 2 e h t o t n o i t a e r l n i l e b a y a p r o d e u r c c a e r e w s e s u n o b h s a c I T S o N l . ) e b a c i l p p a e r e h w ( s t n e m e l t i t n e e v a e l ) b ( ) c ( l s e o h c S - k c a B e h t l g n s u i t n a r g f o e t a d e h t t a l d e t a u c a c l s i s n o i t p o e h t f o e u a v l r i a f e h T ) d ( m o r f d o i r e p e h t r e v o l y n e v e d o i r e p g n i t r o p e r h c a e o t d e t a c o l l a d n a l e d o m g n c i r p i n o i t p o s n o i t p o e h t f o e u a v l r i a f f o n o i t r o p e h t s i d e s o c s d l i e u a v l e h T . e t a d g n i t s e v o t t n a r g . d o i r e p g n i t r o p e r h c a e n i e s n e p x e n a s a i d e s n g o c e r ANNUAL REPORT 2 0 2 1 20 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 REMUNERATION REPORT – AUDITED (CONTINUED) Directors’ and Executive Ofﬁcers’ remuneration Details of the nature and amount of each major element of remuneration of Directors and Executive Ofﬁcers for 2020 are as follows: s u n o B f o n o i t r o p o r p n o i t a r e n u m e r e c n a m r o f r e p x i m n o i t a r e n u m e R d e t a l e r % e l b a i r a V I T L k s i r t a d e x i F l a t o T $ e l b a i r a V n o i t a r e n u m e r n o i t a r e n u m e r d e x i F d e s a b e r a h S s t n e m y a p m r e t - g n o L t s o P t n e m y o l p m e m r e t - t r o h S e u l a v r i a F ) d ( $ s n o i t p o e c i v r e s g n o L ) c ( e v a e l - r e p u S n o i t a u n n a $ $ h s a c I T S ) b ( s u n o b $ & y r a l a S ) a ( s e e f $ – – – – – – – – – – – – % 3 1 % 3 1 % 0 0 1 0 0 5 , 9 0 1 % 0 0 1 0 0 7 , 5 6 % 0 0 1 0 0 7 , 5 6 % 7 8 % 7 8 2 4 4 , 5 7 2 4 4 , 5 7 – – – 2 4 7 , 9 2 4 7 , 9 – – – – – 0 0 5 , 9 0 0 7 , 5 0 0 7 , 5 0 0 7 , 5 0 0 7 , 5 – % 0 0 1 0 5 8 , 0 0 3 – 2 9 2 , 2 2 0 5 7 , 3 2 – % 2 % 0 0 1 2 1 6 , 6 9 – % 8 9 9 1 9 , 9 7 2 9 1 9 , 6 % 4 1 % 6 8 7 4 8 , 9 9 7 3 8 , 3 1 – – – – – – 2 1 0 , 9 6 1 , 1 0 4 2 , 0 4 2 9 2 , 2 2 0 5 0 , 6 5 – – – – – – – – – – 0 0 0 , 0 0 1 n a m r i a h C , d n a l r a C d i v a D r D s r o t c e r i D e v i t u c e x E - n o N 0 0 0 , 0 6 0 0 0 , 0 6 0 0 0 , 0 6 0 0 0 , 0 6 d n a l t i a M r e t s i l A r M e k o o H l l e h c t i M r M s a l g u o D n o R r M h t i m S n a I r M r o t c e r i D g n i g a n a M 8 0 8 , 4 5 2 O E C , n n a m f u a L d r a h c i R r M 0 0 0 , 3 7 2 1 O F C , e t n o m a v i R r e b m A s M 2 1 6 , 6 9 2 r o t c e r i D t c e j o r P , l l a H g e r G r M 0 1 0 , 6 8 l a c o L , n e d e e L e i r e h C s M 3 h c n a R g o H – r o t c e r i D 0 3 4 , 0 5 0 , 1 : P M K n o i t a s n e p m o c l a t o T P M K r e h t O e h t s t n e s e r p e r e v o b a e h t d n a t n e m e e r g a y c n a t l u s n o c a h g u o r h t d e g a g n e s i e t n o m a v R s M i . y n a p m o c d e t a e r l P M K e h t o t i d a p i r e n a t e r e v o b a e h t d n a , e t a r y l i a d a n o , t n e m e e r g a y c n a t l u s n o c a h g u o r h t d e g a g n e s i l l a H r M P M K g n e b i d e s a e c l l a H r M . y n a p m o c d e t a e r l P M K e h t o t i d a p t n u o m a e h t s t n e s e r p e r . 1 . 2 . 0 2 0 2 e n u J 0 3 t a l a u n n a d e u r c c a d n a y r a a s l h s a c s e d u c n l i t i , s r e c ﬁ f O e v i t u c e x E r o F . s d r a d n a t S g n i t n u o c c A n a i l a r t s u A h t i w e c n a d r o c c a n i d e r u s a e m P M K y b i d e v e c e r s t n u o m a e d u c n l i s e e f d n a y r a a S l ) a ( l . ) e b a c i l p p a e r e h w ( s t n e m e l t i t n e e v a e l . r a e y l i a c n a n ﬁ 0 2 0 2 e h t o t n o i t a e r l n i l e b a y a p r o d e u r c c a e r e w s e s u n o b h s a c I T S o N e h t f i h s a c n i i d a p e b l y n o l l i i w h c h w e v a e l i e c v r e s g n o l r o f l a u r c c a t e n e h t s t n e s e r p e R ) b ( ) c ( n o i t a r e n u m e r ’ s r e c ﬁ f O e v i t u c e x E d n a ’ s r o t c e r i D f o e l b a t e h t o t n o i t a l e r n i s e t o N 21 9 1 0 2 r e b m e c e D 1 g n c n e m m o c i , t n e m e e r g a y c n a t l u s n o c a h g u o r h t d e g a g n e s i n e d e e L s M . 3 . n o . y n a p m o c d e t a e r l P M K e h t o t i d a p i r e n a t e r e h t s t n e s e r p e r e v o b a e h t d n a l i t a s g e i l d e s a b - e t a t s h t i w e c n a d r o c c a n i s n o i t i d n o c i e c v r e s d e r i u q e r e h t s t e e m e e y o p m e l m o r f d o i r e p e h t r e v o l y n e v e d o i r e p g n i t r o p e r h c a e o t d e t a c o l l a d n a l e d o m g n c i r p i n o i t p o l s e o h c S - k c a B e h t l g n s u i t n a r g f o e t a d e h t t a l d e t a u c a c l s i s n o i t p o e h t f o e u a v l r i a f e h T ) d ( s n o i t p o e h t f o e u a v l r i a f f o n o i t r o p e h t s i d e s o c s d i l e u a v l e h T . e t a d g n i t s e v o t t n a r g . d o i r e p g n i t r o p e r h c a e n i e s n e p x e n a s a i d e s n g o c e r REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 REMUNERATION REPORT – AUDITED (CONTINUED) Shares under option All options refer to unquoted options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis under the terms and conditions of the Option Incentive Plan. The options do not entitle the holder to participate in any share issue of the Company. All options expire on the earlier of their expiry date or in the case of termination, as deﬁned in the terms and conditions of the plan. During the year, the Company issued 5.2 million options and issued 2.2 million ordinary shares as a result of the exercise of options (2.0 million to KMP and 0.2 million to other participants of the option plan), no options lapsed. At 30 June 2021, there were 17.1 million unquoted options over ordinary shares of the Company, 1.0 million at an exercise price of 8.4 cents, expiring 31 January 2023; 10.9 million at an exercise price of 7.0 cents expiring 29 February 2024; 5.0 million at an exercise price of 17.5 cents expiring 30 November 2024 and 0.2 million at an exercise price of 47.0 cents expiring 28 May 2025. Reconciliation of options, ordinary shares and consideration rights held by Key Management Personnel (KMP) Options The table below shows a reconciliation of unquoted options over ordinary shares in the Company held directly, indirectly or beneﬁcially by each KMP including their related parties, during the ﬁnancial year. The fair value of the options is calculated at the date of grant, using the Black-Scholes option pricing model and allocated to each reporting period evenly over the period from grant to vesting date. Name Mr Ian Smith Mr Ron Douglas Mr Greg Robinson Mr Richard Laufmann Held at 30 June 2020 Number of options granted 1,000,000 1,000,000 – – Number of options vested and exercisable 666,666 666,666 – – 200,000B 5,000,000A – – Ms Amber Rivamonte 1,500,000 Ms Cherie Leeden 3,000,000 Former Dr David Carland Mr Alister Maitland Mr Mitchell Hooke – – – – – – – – 500,000 1,000,000 – – – % of options vested Number of options exercised Held at 30 June 2021 66 66 – – 33 33 – – – 666,666 333,334 333,333 666,667 – – – 200,000 5,000,000 1,500,000 1,000,000 2,000,000 – – – – – – The fair value of the unlisted options granted has been measured independently at the date of the grant based upon the Black-Scholes option pricing model. The inputs used in the measurement of the fair value at grant date are as follows: A B 1 December 2020 28 May 2021 6.6 cents 17.5 cents 19.3 cents 47.0 cents 30 November 2024 28 May 2025 Grant date Fair value per option at grant date Exercise price per option Expiry date All options vest in three equal tranches. ANNUAL REPORT 2 0 2 1 22 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 REMUNERATION REPORT – AUDITED (CONTINUED) Reconciliation of options, ordinary shares and consideration rights held by Key Management Personnel (KMP) (Continued) Options (Continued) All options expire on the earlier of their expiry date or in the case of termination, as deﬁned in the Option Incentive Plan. On termination, in the event that a KMP is deemed to be a good leaver, then all unvested options will immediately vest. In the event that a KMP is deemed to be a bad leaver, the options (whether vested or unvested) expire shortly thereafter. The value of options in the Company granted, expensed, yet to vest (affecting future remuneration) and exercised are detailed below. Name Mr Ian Smith Mr Ron Douglas Value of options granted in year $1 Value of options expensed in year $2 Value of options yet to be expensed $3 Value of options exercised in year $4 – – 9,715 9,715 2,128 Mr Greg Robinson 38,600 Mr Richard Laufmann 330,000 116,343 Ms Amber Rivamonte Ms Cherie Leeden – – 18,032 36,064 5,723 5,723 36,472 213,657 10,749 21,499 79,000 43,667 – – – 140,000 1The value of options granted in the year is the total fair value of the options calculated at grant date. This amount is allocated to remuneration over the vesting period. 2The value of options expensed in the year is the portion of fair value of the options recognised as an expense in each reporting period as per the vesting conditions. 3The fair value of options yet to be expensed is the value yet to be allocated to remuneration as per the vesting period. 4The value of options exercised during the year is calculated as the market price of shares of the Company as at close of trading on the date the options were exercised after deducting the price paid to exercise the option. Shareholdings The table below shows a reconciliation of ordinary shares in the Company held, directly, indirectly or beneﬁcially by each KMP including their related parties, during the ﬁnancial year. Name Mr Ian Smith Mr Ron Douglas Mr Greg Robinson Mr Richard Laufmann Ms Amber Rivamonte Ms Cherie Leeden Former Dr David Carland Mr Alister Maitland Mr Mitchell Hooke Held at 30 June 2020 or date became KMP – – – 8,096,817 5,034,606 Received on exercise of option Acquired or sold during the year Held at 30 June 2021 or date ceased being KMP 666,666 333,333 – – – 181,819 – – 848,485 333,333 – 323,0761 8,419,893 1,292,3031 6,326,909 – 1,000,000 – 1,000,000 2,022,888 1,338,364 1,441,507 – – – 181,818 2,204,706 121,213 1,459,577 – 1,441,507 1Shares issued on the conversion of Hog Ranch Consideration Rights. 23 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 REMUNERATION REPORT – AUDITED (CONTINUED) Reconciliation of options, ordinary shares and consideration rights held by Key Management Personnel (KMP) (Continued) Hog Ranch Consideration Rights (HRCR) The table below shows a reconciliation of HRCR in the Company held, directly, indirectly or beneﬁcially by KMP including their related parties, during the ﬁnancial year. Name Held at 30 June 2020 Acquired during the year Converted during the year Held at 30 June 2021 Mr Richard Laufmann Ms Amber Rivamonte 1,292,303 5,169,210 – – 323,076 969,227 1,292,303 3,876,907 The Company issued 20 million HRCR (including to related parties) as part of the Hog Ranch acquisition in August 2019. The HRCR convert to Rex shares on the outcome of the following milestones: a. 5 million HRCR on announcement by Rex to the ASX by no later than 31 October 2024 on completion of an Inferred Mineral Resource in addition to any Indicated and Measured Mineral Resource in total of 2Moz or higher of contained gold as deﬁned by the 2012 JORC Code with respect to the Hog Ranch Property and has a minimum grade of 0.4 g/t of gold in addition to a minimum tonnage of 100 Mt; and b. 15 million HRCR on announcement by Rex to the ASX by no later than 31 October 2024 of the Board approving a decision to mine the Hog Ranch Property. The acquisition value of the Hog Ranch Property of $1.640 million was based on the fair value of the equity instruments issued as a consideration. The value was determined using the Black-Scholes model and considering the probability of each milestone being achieved. During the year, 5 million HRCR were converted to Rex shares on the achievement of milestone a. (the Mineral Resource milestone) above, as announced to the ASX on 23 March 2021. Loans from Directors In May 2021, the Company pre-paid the Loan Facility Agreement that it had entered into in February 2020. The Loan Facility Agreement was for a total amount of $4.400 million from a group of lenders (including four Directors), with a one off establishment fee of 2%, an interest rate of 10%, for a period of 24 months using the Company’s freehold land as security. Details of loans from Directors, including entities related to them, are set out below: Name Mr Ian Smith Balance at 1 July 2020 $ 517,397 Mr Richard Laufmann 1,034,795 Former Dr David Carland Mr Alister Maitland 517,397 258,699 Loan drawdown $ Est. Fee $ Interest charged $ Payments $ Balance at 30 June 2021 $ – – – – – – – – 82,603 (600,000) 165,205 (1,200,000) 82,603 (600,000) 41,301 (300,000) – – – – Other transactions with Key Management Personnel (KMP) KMP hold positions in other companies that result in them having control or signiﬁcant inﬂuence over those companies. During the year, KMP related companies transacted with the Group. The terms and conditions of these transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP companies. ANNUAL REPORT 2 0 2 1 24 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2021 Rounding The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 dated 24 March 2016 and in accordance with that Financial Instrument, amounts in the consolidated ﬁnancial statements and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated. All currencies are in Australian dollars unless stated otherwise. Lead Auditor’s Independence Declaration The lead auditor’s independence declaration is set out on page 49 and forms part of the Directors’ Report for the year ended 30 June 2021. Dated at Melbourne this 13th day of September 2021. Signed in accordance with a resolution of the Directors: Mr Richard Laufmann Chief Executive Ofﬁcer 25 CONSOLIDATED FINANCIAL STATEMENTS As at 30 June 2021 The notes on pages 31 to 47 are an integral part of the Consolidated Financial Statements. ANNUAL REPORT 2 0 2 1 26 REX MINERALS LTD CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2021 2020 Note $000 $000 Current assets Cash and cash equivalents 7 9,682 2,990 Trade and other receivables 145 41 Prepayments 53 47 Total current assets 9,880 3,078 Non-current assets Exploration and evaluation expenditure 9 3,243 3,243 Property, plant and equipment 10 14,279 14,339 Water infrastructure 4,076 4,076 Total non-current assets 21,598 21,658 Total assets 31,478 24,736 Current liabilities Trade and other payables 11 617 344 Employee beneﬁts 12 600 605 Borrowings 22(b) – 4,400 Total current liabilities 1,217 5,349 Non-current liabilities Employee beneﬁts 12 115 67 Provisions – 36 Total non-current liabilities 115 103 Total liabilities 1,332 5,452 Net assets 30,146 19,284 Equity Issued capital 13(a) 217,502 197,953 Reserves 13(d) 846 810 Accumulated losses (188,202) (179,479) Total equity 30,146 19,284 The notes on pages 31 to 47 are an integral part of these ﬁnancial statements. 27 REX MINERALS LTD CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2021 2020 Note $000 $000 Finance income 18 21 Government grants 55 123 Corporate and compliance (891) (1,017) Depreciation expense 10 (58) (64) Employee beneﬁts expense 14 (2,204) (2,037) Marketing expenses (273) (117) Exploration and evaluation (4,589) (1,786) Borrowing costs (731) (282) Foreign currency revaluation (117) – Gain on disposal of ﬁxed assets 11 – Loss before tax (8,779) (5,159) Income tax beneﬁt 15 – – Total loss for the period after tax (8,779) (5,159) Other comprehensive income – – Total comprehensive loss attributable to members of Rex Minerals Ltd (8,779) (5,159) Loss per share attributable to members of Rex Minerals Ltd Basic loss per share (cents) 16 (2.36) (1.70) Diluted loss per share (cents) 16 (2.36) (1.70) The notes on pages 31 to 47 are an integral part of these ﬁnancial statements. ANNUAL REPORT 2 0 2 1 28 REX MINERALS LTD CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June Share Share based Accumulated Total capital payments losses equity reserve Note $000 $000 $000 $000 Balance at 1 July 2020 197,953 810 (179,479) 19,284 Issue of ordinary shares 13(a) 20,539 – – 20,539 Cost of share issue (1,174) – – (1,174) Share based payments 13(d) – 276 – 276 Transfer from share based payments reserve 184 (240) 56 – Total comprehensive loss for the period – – (8,779) (8,779) Balance at 30 June 2021 217,502 846 (188,202) 30,146 Balance at 1 July 2019 196,269 360 (174,667) 21,962 Issue of ordinary shares 13(a) 1,684 – – 1,684 Share based payments 13(d) – 797 – 797 Transfer from share based payments reserve – (347) 347 – Total comprehensive loss for the period – – (5,159) (5,159) Balance at 30 June 2020 197,953 810 (179,479) 19,284 The notes on pages 31 to 47 are an integral part of these ﬁnancial statements. 29 REX MINERALS LTD CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2021 2020 Note $000 $000 Cash ﬂows from operating activities Cash paid to suppliers and employees (3,115) (3,023) Exploration and evaluation payments (4,246) (1,891) Interest received 19 26 Government grants 50 102 Net cash used in operating activities 17(a) (7,292) (4,786) Cash ﬂows from investing activities Acquisition of property, plant and equipment 10 (3) (2) Proceeds from the sale of property, plant and equipment 15 – Net cash used in investing activities 12 (2) Cash ﬂows from ﬁnancing activities Proceeds from issue of share capital 13 20,539 784 Payment of share issue costs (1,174) – Proceeds from borrowings 17(b) – 4,400 Payment of borrowing costs (884) (129) Repayment of borrowings (4,400) – Net cash from ﬁnancing activities 14,081 5,055 Net decrease in cash and cash equivalents 6,801 267 Cash and cash equivalents at beginning of the period 2,990 2,723 Effect of change in exchange rates (109) – Cash and cash equivalents at period end 7 9,682 2,990 The notes on pages 31 to 47 are an integral part of these ﬁnancial statements. ANNUAL REPORT 2 0 2 1 30 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS 1. REPORTING ENTITY Rex Minerals Ltd (the ‘Company’) is a company domiciled in Australia. The address of the Company’s registered ofﬁce is 68 St Vincent Highway, Pine Point South Australia 5571. These consolidated ﬁnancial statements comprise the Company and its subsidiaries (together referred to as the ‘Group’). The Group is a for proﬁt entity primarily involved in minerals exploration and evaluation in Australia and USA. 2. BASIS OF PREPARATION (a) Statement of compliance The consolidated ﬁnancial statements are general purpose ﬁnancial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated ﬁnancial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB). These consolidated ﬁnancial statements were approved by the Board of Directors on 13 September 2021. (b) Basis of measurement The Group ﬁnancial statements have been prepared on the historical cost basis. The Group ﬁnancial statements have been prepared on a going concern basis which contemplates the continuity of normal business activity and realisation of assets and the settlement of liabilities in the normal course of business. At 30 June 2021, the Group holds cash of $9.682 million and net current assets of $8.663 million. In August 2021, the Group announced a $50 million, two tranche placement. Tranche 1 raised $5.348 million and settled on 10 August 2021. Tranche 2 has binding commitments to raise a further $44.652 million and is conditional on shareholder approval at a General Meeting to be held on 14 September 2021. Directors are of the opinion that the Group is able to meet its obligations as they fall due for at least twelve months from the date of signing this ﬁnancial report and that the going concern basis of preparation is appropriate. (c) Functional and presentation currency These Group ﬁnancial statements are presented in Australian dollars, which is the functional currency of all entities domiciled in Australia, while the entity domiciled in the USA uses US dollars. The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191and in accordance with that Rounding Instrument, all ﬁnancial information is presented in Australian dollars and has been rounded to the nearest thousand, unless otherwise stated. (d) Use of estimates and judgements The preparation of ﬁnancial statements requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. In particular, information about signiﬁcant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most signiﬁcant effect on the amount recognised in the ﬁnancial statements are described in the following notes and their related accounting policies: (cid:129) note 9 (cid:129) note 10 (cid:129) note 18 Exploration – determining the fair value of the equity instruments issued on acquisition. Recoverable value of non-current assets – assessment of impairment indicators. Share based payments – key assumptions used in the valuation model. 31 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these Group ﬁnancial statements, and have been applied consistently by Group entities. The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to the Group and effective for the current annual reporting period. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. In assessing control, potential voting rights that currently are exercisable are taken into account. The ﬁnancial statements of subsidiaries are included in the Group ﬁnancial statements from the date that control commences until the date that control ceases. (ii) Transactions eliminated on consolidation Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the Group ﬁnancial statements. (b) Financial instruments All ﬁnancial assets and liabilities are initially recognised at the fair value of consideration paid or received, net of transaction costs as appropriate, and subsequently carried at fair value or amortised cost. Financial assets are not reclassiﬁed subsequent to their initial recognition unless the Group changes its business model for managing ﬁnancial assets, in which case all affected ﬁnancial assets are reclassiﬁed on the ﬁrst day of the ﬁrst reporting period following the change in the business model. A ﬁnancial asset is measured at amortised cost if it meets both of the following conditions: (cid:129) it is held within a business model whose objective is to hold assets to collect contractual cash ﬂows; and (cid:129) its contractual terms give rise on speciﬁed dates to cash ﬂows that are solely payments of principal and interest on the principal amount outstanding. (i) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. (ii) Trade and other payables Liabilities are recognised for amounts to be paid in the future for goods and services provided to the Group prior to the end of the reporting period and are stated at amortised cost. The amounts are unsecured and are usually paid within 30 days of recognition. (iii) Borrowings Borrowings are recognised for amounts to be paid in the future for funds advanced to the Group. Interest expense is recognised as it accrues in proﬁt or loss, using the effective interest method. (c) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment (PP&E) are measured at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. (ii) Subsequent costs The cost of replacing part of an item of PP&E is recognised in the carrying amount of the item if it is probable that the future economic beneﬁts embodied within the part will ﬂow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of PP&E are recognised in proﬁt or loss as incurred. ANNUAL REPORT 2 0 2 1 32 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) Property, plant and equipment (Continued) (iii) Depreciation Depreciation is recognised in the proﬁt or loss for items of PP&E on a straight-line basis over the estimated useful lives of each part of an item of PP&E. The estimated useful lives for the current and comparative periods are as follows: (cid:129) (cid:129) Plant and equipment Buildings 3 – 10 years. 10 – 20 years. Land is not depreciated. Water infrastructure will be depreciated over the life of the Hillside Project, upon commencement of production. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. (d) Exploration and evaluation expenditure Exploration and evaluation expenditure, excluding the costs of acquisition, is expensed within the proﬁt and loss as incurred. Costs incurred in acquiring rights, the entry premiums paid to gain access to areas of interest and amounts payable to third parties to acquire interests in existing projects are capitalised as incurred and assessed for impairment triggers annually. The ultimate recoupment of costs capitalised for exploration and evaluation is dependent on successful development and commercial exploitation or sale of the respective area of interest. (e) Impairment (i) Financial assets The Group recognises loss allowances for expected credit loss (ECLs) on ﬁnancial assets measured at amortised cost. Loss allowances for other receivables are always measured at an amount equal to lifetime ECLs. (ii) Non-ﬁnancial assets The carrying amounts of the Group’s non-ﬁnancial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash ﬂows are discounted to their present value using a pre-tax discount rate that reﬂects current market assessments of the time value of money and the risks speciﬁc to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate cash inﬂows from continuing use that are largely independent of the cash inﬂows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to beneﬁt from the synergies of the combination. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in proﬁt or loss. Impairment losses recognised in respect of cash-generating units are allocated ﬁrst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 33 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. (f) SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Employee beneﬁts (i) Wages, salaries and annual leave Liabilities for employee beneﬁts for wages, salaries and annual leave that are expected to be settled within 12 months of the reporting date represent obligations resulting from employee services provided to the reporting date, and are calculated at undiscounted amounts based on remuneration, wage and salary rates that the Company expects to pay as at reporting date including related on-costs such as workers compensation insurance and payroll tax. (ii) Long-term beneﬁts The Group’s obligation in respect of long service leave is measured as the present value of the future beneﬁt expected to be paid to employees that has been earned in return for their service in the current and prior periods. Consideration is given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using Australian corporate bond rates. (iii) Share based payments Equity-based compensation is recognised as an expense in respect of the services received. The fair value of options granted is recognised as an expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the participants become unconditionally entitled to the options. The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the options, the vesting and performance criteria, 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. (g) Tax (i) Income taxes Income tax expense comprises current and deferred tax. Income tax expense is recognised in proﬁt or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for ﬁnancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable proﬁt, and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities, will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable proﬁts will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax beneﬁt will be realised. Research and development beneﬁts are recognised in the year the beneﬁt is received. (ii) Tax consolidation The Company and its wholly-owned Australian resident entities are part of a tax consolidated group. As a consequence, all members of the tax consolidated group are taxed as a single entity. The head entity within the tax consolidated group is Rex Minerals Ltd. The tax consolidated group has entered into tax funding and tax sharing agreements. ANNUAL REPORT 2 0 2 1 34 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (g) Tax (Continued) (iii) Goods and services tax Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the Australian Taxation Ofﬁce (ATO) is included as a current asset or liability in the balance sheet. Cash ﬂows are included in the statement of cash ﬂows on a gross basis. The GST components of cash ﬂows arising from investing and ﬁnancing activities which are recoverable from, or payable to, the ATO are classiﬁed as operating cash ﬂows. (h) Finance income Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in proﬁt or loss, using the effective interest method. (i) Earnings/loss per share The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the proﬁt or loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is determined by adjusting the proﬁt or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. (j) Segment reporting The Group determines and presents operating segments based on the information that internally is provided to the CEO, who is the consolidated entity’s chief operating decision-maker. An operating segment is a component of the Group that engages in exploration activities which incurs expenses. An operating segment’s expenditures are reviewed regularly by the CEO to make decisions about resources to be allocated to the segment and to assess its performance. Segment expenditure that is reported to the CEO includes items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate and compliance expenditure. Segment capital expenditure is the total cost incurred during the period to acquire PP&E. (k) Restoration and rehabilitation provision Obligations to restore and rehabilitate certain areas of property may arise from time to time as a result of the Group’s activities. A provision for rehabilitation and restoration is recognised in respect of the estimated cost of rehabilitation, decommissioning and restoration of areas of disturbance existing at reporting date, but not yet rehabilitated. Rehabilitation activities include dismantling infrastructure, removal and treatment of waste material, and land rehabilitation, including recontouring, top-soiling and revegetation of the disturbed area. Provisions for the cost of the rehabilitation program are recognised at the time that environmental disturbance occurs (or is acquired). A corresponding asset is recognised in PP&E or exploration and evaluation assets only to the extent that it is probable that future economic beneﬁts associated with the rehabilitation, will ﬂow to the entity. Determining the cost of rehabilitation and restoration of the area of disturbance requires the use of signiﬁcant estimates and assumptions, including: the timing of the cash ﬂows and expected life of the relevant area of interest, the application of relevant environmental legislation, and the future expected costs of rehabilitation, decommissioning and restoration. Changes in the estimates and assumptions used to determine the cost of rehabilitation, decommissioning and restoration could have a material impact on the carrying value of the site restoration provision and related asset. The provision is updated based on the facts and circumstances at the reporting date. (l) Government grants The Company recognises unconditional government grants in proﬁt or loss when the grants become receivable. Grants that compensate the Company for expenses incurred are recognised in the proﬁt or loss in the periods in which the expenses are recognised. 35 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) New standards and interpretations not yet adopted A number of new standards are effective for annual periods beginning after 1 July 2021 and earlier application is permitted; however, the Group has not early adopted the new or amended standards in preparing these consolidated ﬁnancial statements and they are not expected to have a material effect on the Group’s ﬁnancial statements. 4. DETERMINATION OF FAIR VALUES A number of the Group’s accounting policies and disclosures require the determination of fair values for ﬁnancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes speciﬁc to that asset or liability. (a) Trade and other receivables The fair value of trade and other receivables is estimated as the present value of future cash ﬂows, discounted at the market rate of interest at the reporting date. (b) Non-derivative ﬁnancial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash ﬂows, discounted at the market rate of interest at the reporting date. (c) Share based payments The fair value of options granted to participants as compensation is independently measured using a Black- Scholes option pricing model. Measurement inputs include the exercise price of the options, the term of the options, the vesting and performance criteria, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share (based on an evaluation of the Company’s historical volatility), expected term of the instruments (based on historical experience and general option holder behaviour), the expected dividend yield and the risk-free interest rate (based on government bonds) for the term of the option. 5. FINANCIAL RISK MANAGEMENT (a) Capital Management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain an adequate capital base sufﬁcient to maintain future exploration and progress of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders or issue new shares. The Group’s focus has been to raise sufﬁcient funds through equity to fund exploration and evaluation activities and repayment of borrowings when they fall due. The Group encourages employees and contractors to be shareholders through the Option Incentive Plan. There were no changes in the Group’s approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. (b) Credit risk Credit risk is the risk of ﬁnancial loss to the Group if a customer or counter-party to a ﬁnancial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables and cash balances. (c) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its ﬁnancial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufﬁcient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. To this end, actual cash ﬂows and forecast future cash ﬂows are reported to and monitored by the Board on a periodic basis. ANNUAL REPORT 2 0 2 1 36 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 5. FINANCIAL RISK MANAGEMENT (CONTINUED) (d) Market risk Market risk is the risk that changes in market prices (such as foreign exchange rates), interest rates and equity prices that will affect the Group’s income or the value of its holdings of ﬁnancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. 6. SEGMENT REPORTING The Group has two reportable segments for the year ended 30 June 2021 which are the Group’s areas of focus. The area’s offer different exploration potential and are managed separately due to their physical locations. In South Australia, the Group has the Hillside Copper-Gold Project and also it’s highly prospective exploration portfolio; whilst in Nevada, USA the Group has the Hog Ranch Property, where the focus is on gold exploration in key project areas. For each reportable segment, the CEO reviews internal management reports on at least a quarterly basis, segment assets and liabilities are not reported to the CEO. South Australia Nevada, USA Unallocated Total 2021 $000 $000 $000 $000 Finance income – – 18 18 Government grants – – 55 55 Losses before tax (including depreciation and interest expense) 1,421 4,185 3,173 8,779 Depreciation 52 – 6 58 Interest expense – – 727 727 South Australia Nevada, USA Unallocated Total 2020 $000 $000 $000 $000 Finance income – – 21 21 Government grants – – 123 123 Losses before tax (including depreciation and interest expense) 930 1,869 2,360 5,159 Depreciation 57 – 7 64 Interest expense – – 153 153 7. CASH AND CASH EQUIVALENTS 2021 2020 $000 $000 Bank balances and short-term deposits 9,682 2,990 Cash and cash equivalents 9,682 2,990 The Group’s total cash and funds on deposit of $9.682 million (2020: $2.990 million) is exposed to interest rate risk and a sensitivity analysis for ﬁnancial assets and liabilities is disclosed in note 19. 37 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 8. DEFERRED TAX ASSETS (DTA) AND DEFERRED TAX LIABILITIES (DTL) 2021 2020 $000 $000 Exploration and evaluation assets (494) (494) Property, plant and equipment (49) (67) Provisions 214 193 Equity costs 323 71 Net DTA/(DTL) (6) (297) Tax losses recognised to the extent of the DTL 6 297 – – Tax losses do not expire under current tax legislation. A DTA has not been recognised in respect of these items because it is not probable within the immediate future, that taxable proﬁts will be available, against which the Company can utilise the beneﬁts. The DTA not recognised is $57.251 million (2020: $56.143 million). 9. EXPLORATION 2021 2020 $000 $000 Balance at 1 July 3,243 1,645 Additions – 1,598 Balance at 30 June 3,243 3,243 In August 2019, the Group acquired the Hog Ranch Project. The total acquisition value of $1.640 million was based on the fair value of the equity instruments issued as a consideration (comprising $0.900 million (10 million shares) and $0.740 million (20 million HRCR)). The value of the HRCR was determined using the Black-Scholes model (based on a share price of 8.2 cents on the issue date) and considering the probability of each milestone being achieved. The amount capitalised is the portion of that valuable attributed to exploration. 10. PROPERTY, PLANT AND EQUIPMENT Land and Plant and buildings equipment Total 2021 $000 $000 $000 Cost Balance at 1 July 2020 14,309 1,960 16,269 Additions – 3 3 Disposals – (91) (91) Balance at 30 June 2021 14,309 1,872 16,181 Depreciation Balance at 1 July 2020 81 1,849 1,930 Depreciation 9 49 58 Disposals – (86) (86) Balance at 30 June 2021 90 1,812 1,902 Carrying amounts At 1 July 2020 14,228 111 14,339 At 30 June 2021 14,219 60 14,279 ANNUAL REPORT 2 0 2 1 38 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 10. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Land and Plant and buildings equipment Total 2020 $000 $000 $000 Cost Balance at 1 July 2019 14,309 1,958 16,267 Additions – 2 2 Balance at 30 June 2020 14,309 1,960 16,269 Depreciation Balance at 1 July 2019 72 1,794 1,866 Depreciation 9 55 64 Balance at 30 June 2020 81 1,849 1,930 Carrying amounts At 1 July 2019 14,237 164 14,401 At 30 June 2020 14,228 111 14,339 As at 30 June 2021, land and buildings were no longer held as security for the loan facility (2020: $14.110 million). Refer to Note 22(b). 11. TRADE AND OTHER PAYABLES 2021 2020 $000 $000 Current Trade payables 57 13 Accrued expenses 560 331 Total current trade and other payables 617 344 Total trade and other payables 617 344 12. EMPLOYEE BENEFITS PROVISIONS 2021 2020 $000 $000 Current Annual leave 442 417 Long service leave 158 188 Total current employee beneﬁts provisions 600 605 Non-current Long service leave 115 67 Total non-current employee beneﬁts provisions 115 67 Total employee beneﬁts provisions 715 672 39 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 13. EQUITY (a) Movements in shares on issue: Date of Number of Issue issue shares price $ $000 Opening balance at 1 July 2020 309,674,882 197,953 Exercise of options 29/07/2020 666,666 0.084 56 Issue of shares 09/09/2020 60,606,062 0.165 10,000 Cost of share issue 09/09/2020 (597) Issue of shares 05/10/2020 5,289,976 0.165 873 Cost of share issue 05/10/2020 (19) Exercise of options 16/02/2021 333,333 0.084 28 Conversion of HRCR 23/03/2021 5,000,000 0.037 184 Exercise of options 23/03/2021 1,166,667 0.070 82 Issue of shares 23/04/2021 39,583,334 0.240 9,500 Cost of issue 23/04/2021 (558) Closing balance at 30 June 2021 422,320,920 217,502 Opening balance at 1 July 2019 287,234,215 196,269 Issue of shares 20/08/2019 9,353,849 0.090 842 Exercise of options 19/09/2019 250,000 0.063 16 Exercise of options 15/10/2019 100,000 0.063 6 Exercise of options 17/10/2019 1,000,000 0.063 63 Exercise of options 08/11/2019 340,000 0.063 22 Issue of shares 25/11/2019 646,151 0.090 58 Exercise of options 29/11/2019 10,750,667 0.063 677 Closing balance at 30 June 2020 309,674,882 197,953 (b) Movements in HRCR: Date of Number of Exercise Expiry issue rights price $ date Opening balance as at 1 July 2020 20,000,000 Conversion of HRCR 25/11/2019 (5,000,000) – 31/10/2024 Closing balance as at 30 June 2021 15,000,000 Date of Number of Exercise Expiry issue rights price $ date Opening balance as at 1 July 2019 – Issue of HRCR 25/11/2019 20,000,000 – 31/10/2024 Closing balance as at 30 June 2020 20,000,000 As announced to the ASX on 25 November 2019, the Company completed the acquisition of Hog Ranch Group Pty Ltd and issued 20 million HRCR which convert to Rex shares on the outcome of the following milestones: a. 5 million HRCR on announcement by Rex to the ASX by no later than 31 October 2024 on completion of an Inferred Mineral Resource in addition to any Indicated and Measured Mineral Resource in total of 2Moz or higher of contained gold as deﬁned by the 2012 JORC Code with respect to the Hog Ranch Property and has a minimum grade of 0.4 g/t of gold in addition to a minimum tonnage of 100 Mt; and b. 15 million HRCR on announcement by Rex to the ASX by no later than 31 October 2024 of the Board approving a decision to mine the Hog Ranch Property. During the year, 5 million HRCR were converted to Rex shares on the achievement of milestone a. (the Mineral Resource milestone) above, as announced to the ASX on 23 March 2021. ANNUAL REPORT 2 0 2 1 40 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 13. EQUITY (CONTINUED) (c) Movements in in options on issue: Date of Number of Exercise Expiry issue options price $ date Opening balance as at 1 July 2020 14,100,000 Exercise of options 14/02/2019 (666,666) 0.084 31/01/2023 Issue of options 1/12/2020 5,000,000 0.175 30/11/2024 Exercise of options 14/02/2019 (333,333) 0.084 31/01/2023 Exercise of options 6/03/2020 (1,166,667) 0.070 29/02/2024 Issue of options 28/05/2021 200,000 0.470 28/05/2025 Closing balance as at 30 June 2021 17,133,334 Date of Number of Exercise Expiry issue options price $ date Opening balance as at 1 July 2019 15,824,017 Exercise of options 30/11/2015 (250,000) 0.063 30/11/2019 Exercise of options 30/11/2015 (100,000) 0.063 30/11/2019 Exercise of options 30/11/2015 (1,000,000) 0.063 30/11/2019 Exercise of options 30/11/2015 (340,000) 0.063 30/11/2019 Exercise of options 30/11/2015 (10,750,667) 0.063 30/11/2019 Lapse of options 30/11/2015 (1,383,350) 0.063 30/11/2019 Issue of options 06/03/2020 12,100,000 0.070 29/02/2024 Closing balance as at 30 June 2020 14,100,000 (d) Movements in share based payment reserve: $000 Opening balance at 1 July 2020 810 Share based payments – options 276 Transfer from share based payments (240) Closing balance at 30 June 2021 846 Opening balance at 1 July 2019 360 Share based payments – options 84 Share based payments – HRCR 713 Transfer from share based payments (347) Closing balance at 30 June 2020 810 This share based payment reserve is used to recognise both the fair value of options issued to participants for options granted which have not been exercised and the fair value of the HRCR. 14. EMPLOYEE BENEFITS EXPENSE 2021 2020 $000 $000 Wages and salaries 1,956 1,972 Share based payments 204 56 Increase/(decrease) in liability for annual leave 25 (45) Increase/(decrease) in liability for long service leave 19 54 Total employee beneﬁts expense 2,204 2,037 41 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 15. INCOME TAX BENEFIT NUMERICAL RECONCILIATION BETWEEN TAX BENEFIT AND PRE-TAX ACCOUNTING LOSS 2021 2020 $000 $000 Loss before tax for the period (8,779) (5,159) Income tax beneﬁt using the corporation tax rate of 30% (2020: 30%) (2,634) (1,548) Non-deductible expenses 78 104 Other non-temporary differences – (13) Effect of jurisdictional tax variances 377 168 DTA not recognised – other jurisdiction 879 – Net effect of tax losses not recognised 1,300 1,289 Total income tax expense/(beneﬁt) on pre-tax net loss – – 16. LOSS PER SHARE 2021 2020 cents cents Loss per share Basic loss per share (2.36) (1.70) Diluted loss per share (2.36) (1.70) (a) Basic loss per share The calculation of basic loss per share at 30 June 2021 was based on the loss attributable to ordinary equity holders of $8.779 million (2020: $5.159 million) and a weighted average number of ordinary shares outstanding during the ﬁnancial year ended 30 June 2021 of 372,330,731 (2020: 304,017,870). (b) Diluted loss per share The calculation of diluted loss per share at 30 June 2021 is the same as basic loss per share. In accordance with AASB 133 Earnings per share, as potential ordinary shares may result in a situation where their conversion results in a decrease in the loss per share, no dilutive effect has been taken into account. Potential ordinary shares relating to the Option Incentive Plan totalled 17,133,334 at 30 June 2021. 17. RECONCILIATION OF CASH FLOWS (a) Reconciliation of net proﬁt to cash used in operating activities 2021 2020 Note $000 $000 Loss before tax for the period (8,779) (5,159) Adjustments for non-cash items: Depreciation 10 58 64 Share based payments 13(d) 276 84 Adjustments for other items: Borrowing costs 884 282 Other funds received – 15 Foreign currency revaluation 109 – Gain on disposal of property plant and equipment (11) – Operating loss before changes in working capital and provisions (7,463) (4,714) (Increase)/decrease in receivables and prepayments (110) (15) (Decrease)/increase in trade and other payables 273 (66) (Decrease)/increase in employee beneﬁts 44 9 (Decrease)/increase provisions (36) – Net cash used in operating activities (7,292) (4,786) ANNUAL REPORT 2 0 2 1 42 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 17. RECONCILIATION OF CASH FLOWS (CONTINUED) (b) Reconciliation of liabilities arising from ﬁnancing activities to ﬁnancing cash ﬂows 2021 2020 $000 $000 Opening balance at 1 July 4,400 – Proceeds from borrowings – 4,400 Repayment of borrowings (4,400) – Closing balance at 30 June – 4,400 18. SHARE BASED PAYMENTS (a) Description of share based payment arrangements During the ﬁnancial year ending 30 June 2021, 5 million options were granted to a Director on 1 December 2020, expiring 30 November 2024. Options are exercisable at a price of 17.5 cents each and options will vest in three equal tranches as follows: one third on 30 November 2021; one third on 30 November 2022 and one third on 30 November 2023. An additional 200,000 were granted on 28 May 2021, expiring 28 May 2025. Options are exercisable at a price of 47 cents each and options will vest in three equal tranches as follows: one third on 28 May 2022; one third on 28 May 2023 and one third on 28 May 2024. During the ﬁnancial year ending 30 June 2020, 12.1 million options were granted to employees on 6 March 2020, expiring 29 February 2024. Options are exercisable at a price of 7.0 cents each and options will vest in three equal tranches as follows: one third on 28 February 2021; one third on 28 February 2022 and one third on 28 February 2023. All options refer to unquoted options over ordinary shares of Rex Minerals Ltd, which are exercisable on a one-for-one basis under the terms and conditions of the Option Incentive Plan. The options do not entitle the holder to participate in any share issue of the Company. All options expire on the earlier of their expiry date or in the case of termination, as deﬁned in the Option Incentive Plan. (b) Measurement of fair values The fair value of the unlisted options granted in 2021 were measured independently at the date of grant based upon the Black-Scholes options pricing model. The inputs used in the measurement of the fair values at grant date are as follows: Grant date 1 December 2020 28 May 2021 Fair value at grant date (cents) 6.6 19.3 Exercise price (cents) 17.5 47.0 Expected volatility (percentage) 75 80 Option life (years) 3.5 3.5 Free interest rate (percentage) 0.13 0.28 (c) Option expense 2021 2020 $000 $000 Option expense 276 84 Total recognised as share based payments 276 84 (d) Outstanding options At 30 June 2021, there were 17,133,334 unlisted options outstanding, 1,333,334 at an exercise price of 8.4 cents, expiring 31 January 2023; 10,600,000 at an exercise price of 7.0 cents, expiring 29 February 2024; 5,000,000 at an exercise price of 17.5 cents, expiring 30 November 2024 and 200,000 at an exercise price of 47.0 cents, expiring 28 May 2025. 43 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 19. FINANCIAL INSTRUMENTS Exposure to credit risk and interest rate risks arise in the normal course of the Group’s business. (a) Credit risk Management monitors the exposure to credit risk on an ongoing basis through monitoring the Group’s counterparties. The Group does not require collateral in respect of ﬁnancial assets. At reporting date, cash is held with a number of reputable ﬁnancial institutions. The maximum exposure to credit risk is represented by the carrying amount of each ﬁnancial asset in the balance sheet. (b) Fair value The ﬁnancial assets and ﬁnancial liabilities included in assets and liabilities approximate their net fair values. (c) Liquidity risk The following are the contractual maturities of ﬁnancial liabilities. Carrying Contractual 1 year 1-2 Financial liabilities amount cash ﬂows or less years Group $000 $000 $000 $000 2021 Trade and other payables 617 (617) (617) – Borrowings – – – – 617 (617) (617) – 2020 Trade and other payables 344 (344) (344) – Borrowings 4,400 (4,400) (4,400) – 4,744 (4,744) (4,744) – (d) Interest rate risk The Group’s exposure to market interest rates relates primarily to the Group’s short-term deposits. At balance date, the Group had the following ﬁnancial assets exposed to interest rate risk: 2021 2020 $000 $000 Cash and cash equivalents 9,682 2,990 Total cash and cash equivalents 9,682 2,990 At balance date, the Group has no ﬁnancial liabilities exposed to variable interest rate risks. The following sensitivity analysis is based on the interest rate risk exposure in existence at the balance sheet date. At 30 June 2021, if interest rates had moved, as illustrated in the table below, with all other variables constant, proﬁt or loss and equity would have been affected as follows: Proﬁt or loss Equity higher/(lower) higher/(lower) 2021 2020 2021 2020 $000 $000 $000 $000 Group +1% (100 basis points) 97 30 – – – 1% (100 basis points) (97) (30) – – The movements in proﬁt or loss are due to higher/lower interest earnings on cash balances. The movements in equity are directly linked to movements in the Consolidated statement of proﬁt or loss and other comprehensive income. (e) Impairment losses None of the Group’s receivables are past due (2020: nil). ANNUAL REPORT 2 0 2 1 44 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 20. EXPLORATION EXPENDITURE COMMITMENTS In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements under the various exploration licences which are held. These obligations are expected to be fulﬁlled in the normal course of operations. Mining interests may be relinquished or joint ventured to reduce this amount. The South Australian Government has the authority to defer, waive or amend its minimum expenditure requirements. South Australia 2021 2020 $000 $000 Not later than one year 712 600 Later than one year but not later than ﬁve years 430 – Nevada, USA 2021 2020 $000 $000 Not later than one year 67 72 Later than one year but not later than ﬁve years 869 3,950 Later than ﬁve years 10,841 13,405 21. CONTINGENCIES The Directors are of the opinion that there are no matters for which provision is required in relation to any contingencies, as it is not probable that a future sacriﬁce of economic beneﬁt will be required, or the amount is not capable of reliable measurement. The Group’s bankers have provided guarantees amounting to $0.020 million to certain government bodies as security over the Group’s performance of rehabilitation obligations on certain tenements. Under the agreement, the Group has indemniﬁed the bank in relation to these guarantees. The guarantees are backed by deposits amounting to $0.020 million as at 30 June 2021 (2020: $0.020 million). 22. RELATED PARTIES (a) Parent and ultimate controlling party Ownership Interest Country of Incorporation 2021 2020 Parent entity Rex Minerals Ltd Australia Subsidiaries Rex Minerals (SA) Pty Ltd Australia 100% 100% Rex Minerals (Iron Ore) Pty Ltd Australia 100% 100% Rex Hillside (Property) Pty Ltd Australia 100% 100% Hog Ranch Group Pty Ltd Australia 100% 100% Hog Ranch USA Pty Ltd Australia 100% 100% Hog Ranch Minerals Incorporated USA 100% 100% CRHK01 Limited1 Hong Kong – 100% 1 Ceased business on 30 April 2020 and deregistered 9 April 2021. (b) Transactions with Key Management Personnel (KMP) (i) Loans to Directors There were no loans advanced to Directors for the year ending 30 June 2021. 45 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 22. RELATED PARTIES (CONTINUED) (b) Transactions with Key Management Personnel (KMP) (Continued) (ii) Loans from Directors During the year ended 30 June 2021, the Group repaid its Loan Facility and the associated interest in full. The Loan Facility Agreement was for a total amount of $4.400 million from a group of lenders (including four Directors), with a one off establishment fee of 2%, an interest rate of 10%, for a period of 12 months using the Group’s freehold land as security. The period was subsequently extended by 12 months to February 2022, all other terms remained the same. The balances in relation to the related parties’ portion is as follows: 2021 2020 $ $ Balance at 1 July 2,328,288 – Loan drawdown – 2,250,000 Establishment fee – 45,000 Interest charged 371,712 78,288 Amount paid (2,700,000) (45,000) Balance at 30 June – 2,328,288 (iii) KMP compensation KMP compensation comprised the following: 2021 2020 $ $ Short-term beneﬁts 966,949 1,050,430 Post-employment beneﬁts 54,093 56,050 Share based payments 191,997 22,292 Other long-term beneﬁts 6,227 40,240 1,219,266 1,169,012 Information regarding individual Directors’ and Executive Ofﬁcers’ compensation and some equity instrument disclosures as permitted by Corporations Regulations 2M.3.03 are provided in the Remuneration Report section of the Directors’ Report on pages 18 to 24. There have been no changes to KMP between 1 July 2021 and the date of this report. (iv) Other KMP transactions A number of KMP hold positions in other companies that result in them having control or signiﬁcant inﬂuence over those companies. During the year, KMP related companies transacted with the Group. The terms and conditions of these transactions were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related companies. Information regarding individual Directors’ and Executive Ofﬁcers’ compensation are provided in the Remuneration Report section of the Directors’ Report on pages 18 to 24. The aggregate value of transactions and outstanding balances related to KMP companies were as follows: Transaction values Balance payable year ended 30 June as at 30 June 2021 2020 2021 2020 Transaction $ $ $ $ IT services 1 54,337 75,727 – 9,000 Acquisition of Hog Ranch Group Pty Ltd – 521,239 – – 1 During the year, IT consulting services (2020: IT consulting) were independently provided by a company jointly controlled by the Chief Financial Ofﬁcer. The contract terms are based on normal market rates for this type of service and amounts are payable under normal market terms. ANNUAL REPORT 2 0 2 1 46 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 23. PARENT ENTITY DISCLOSURES As at, and throughout, the period ending 30 June 2021, the parent company of the Group was Rex Minerals Ltd. 2021 2020 $000 $000 Result of the parent entity Loss for the period (4,360) (3,297) Other comprehensive income – – Total comprehensive loss for the period (4,360) (3,297) Financial position of the parent entity at year end Current assets 9,772 3,078 Total assets 31,658 20,667 Current liabilities 1,041 5,334 Total liabilities 1,157 5,437 Total equity of the parent entity comprising of Share capital 217,502 197,953 Share based payments reserve 846 810 Accumulated losses (187,847) (183,533) Total equity 30,501 15,230 Parent entity contingencies The Parent entity’s contingencies are the same as the Group’s contingencies as detailed in Note 21. 24. SUBSEQUENT EVENTS On 4 August 2021, the Company launched a $50 million two tranche placement. Tranche 1 raised $5.3 million and settled on 10 August 2021 with Tranche 2, subject to shareholder approval at a General Meeting to be held on 14 September 2021, to raise a further $44.7 million. Other than mentioned above, there has not arisen in the interval between the end of the ﬁnancial year and the date of this report any item, transaction or event of a material nature likely, in the opinion of the Directors of the Company, to affect signiﬁcantly the operations of the Group, the results of those operations, or the state of affairs of the Group in future ﬁnancial years. 25. AUDITORS’ REMUNERATION 2021 2020 KPMG Australia $ $ Audit services 47,000 47,500 No non-audit services were provided in the current year. 47 REX MINERALS LTD DIRECTORS’ DECLARATION 1. In the opinion of the Directors of Rex Minerals Ltd (the Company): (a) the consolidated ﬁnancial statements and notes and the Remuneration Report in the Directors’ Report, set out on pages 18 to 24, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s ﬁnancial position as at 30 June 2021 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. (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 2. 3. The Directors have been given the declarations required by section 295A of the Corporations Act 2001from the Chief Executive Ofﬁcer and Chief Financial Ofﬁcer for the ﬁnancial year ended 30 June 2021. The Directors draw attention to Note 2 to the consolidated ﬁnancial statements, which includes a statement of compliance with International Financial Reporting Standards. Signed in accordance with a resolution of the Directors: Mr Richard Laufmann Chief Executive Ofﬁcer Dated this 13th day of September 2021. ANNUAL REPORT 2 0 2 1 48 https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf ADDITIONAL SHAREHOLDER INFORMATION For the year ended 30 June 2021 53 REX MINERALS LTD ADDITIONAL SHAREHOLDER INFORMATION Additional information required by the Australian Stock Exchange (ASX) Listing Rules and not shown elsewhere in this report is set out below and the information was applicable as at 19 August 2021. Distribution of ordinary shares The number of shareholders, by size of holding: Total % of Range Holders Units Issued Capital 1 – 1,000 612 240,728 0.05 1,001 – 5,000 1,441 4,193,387 0.95 5,001 – 10,000 854 6,782,583 1.54 10,001 – 100,000 1,931 69,169,889 15.72 100,001 – 999,999,999 576 359,761,636 81.74 Total 5,414 440,148,223 100.00 The number of shareholders holding less than a marketable parcel: 925 Twenty largest shareholders The names of the twenty largest shareholdings of quoted ordinary shares are: Number of % of Name Shares Held Issued Capital 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Grand South Development Limited 14,656,588 3.33 Curious Capital Group Pty Ltd (Curious Capital A/C) 7,608,470 1.73 Zero Nominees Pty Ltd 7,547,940 1.71 JP Morgan Nominees Australia Pty Limited 7,107,833 1.61 S & S Olsen Pty Ltd 6,628,909 1.51 United Overseas Service Management Ltd 6,622,390 1.50 CS Third Nominees Pty Limited (HSBC Cust Nom Au Ltd 13 A/C) 6,132,222 1.39 UBS Nominees Pty Ltd 5,856,156 1.33 Panjeta Investment Group Pty Ltd (Panjeta Family Group A/C) 5,600,000 1.27 Silver Rayne Pty Ltd 5,376,909 1.22 Stone Poneys Nominees Pty Ltd (Chapman Super Fund A/C) 5,332,540 1.21 Laufmann Longterm Investments Pty Ltd (Laufmann Super Fund A/C) 4,919,893 1.12 BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient DRP) 4,521,646 1.03 13. Citicorp Nominees Pty Ltd 4,095,089 0.93 14 BNP Paribas Noms Pty Ltd (DRP) 4,027,456 0.91 15. 16. BT Portfolio Services Limited (Warrell Holdings S/F A/C) 3,616,604 0.82 17. Mrs Natalie Laufmann 3,500,000 0.80 18. Mrs Vickie Jane Jones 3,476,594 0.79 HSBC Custody Nominees (Australia) Limited – A/C 2 3,439,498 0.78 19. ZW 2 Pty Ltd 3,300,000 0.75 20. Total 113,366,637 25.76 Substantial shareholders There is currently one substantial shareholder lodged with the Company: Ellerston Capital Limited 26,448,494 6.26 Voting rights On a show of hands, every shareholder of fully paid ordinary shares present in person or by proxy shall have one vote and upon a poll, each share shall have one vote. Stock exchange listing Rex Minerals Ltd is listed on the ASX. The Company’s ASX code is RXM. ANNUAL REPORT 2 0 2 1 54 REX MINERALS LTD NOTES 55 REX MINERALS LTD NOTES ANNUAL REPORT 2 0 2 1 56 ANNUAL REPORT A B N 12 124 960 523 Designed and Produced by Celtink Creative info@celtink.com STAY IN TOUCH A 68 St Vincent Highway, Pine Point, South Australia 5571 T 1300 822 161 (Australia) T +61 3 9068 3077 (International) P PO Box 3435, Rundle Mall, South Australia 5000 E rex@rexminerals.com.au W www.rexminerals.com.au ABN 12 124 960 523

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