Rex Minerals Limited Annual Report 2022

Plain-text annual report

ANNUAL REPORT COPPER SA I GOLD NEVADA A B N 1 2 1 2 4 9 6 0 5 2 3 N 1 2 1 2 4 9 6 0 5 2 3 A B ANNUAL REPORT CORPORATE DIRECTORY DIRECTORS Mr Ian Smith (Non-Executive Chairman) Mr Richard Laufmann (CEO and Managing Director) Ms Amber Rivamonte (Executive Director) Mr Greg Robinson (Non-Executive Director) Mr Andrew Seaton (Non-Executive Director) SHARE REGISTRARS d 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 (0)3 9068 3077 (International) Email: rex@rexminerals.com.au Website: www.rexminerals.com.au OPERATION LOCATIONS 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 HOG RANCH NEVADA USA HILLSIDE SOUTH AUSTRALIA ANNUAL REPORT 30 JUNE TABLE OF CONTENTS LETTER FROM THE CHAIRMAN 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 3-15 16-28 29 30 31 32 33-50 51 52 53-55 56 A B N 1 2 1 2 4 9 6 0 5 2 3 1 REX MINERALS LTD LETTER FROM THE CHAIRMAN For the year ended 30 June 2022 Dear Fellow Shareholder, Over the last year, we have signiﬁcantly advanced our stated objectives of building the size and capacity of the team working on Hillside while optimising the Project’s pre-development and ﬁnance proﬁle. The understanding of the regional context and potential upside of Hog Ranch has also been signiﬁcantly expanded. The many positives that have been delivered are within a context of ongoing pandemic impacts and a challenging macro environment. Not only have we retained the impressive talent pool that is resident within Rex Minerals, but we have also attracted additional experienced personnel to help place the Company and its Projects in a position where we can call on a quite unique team of mine builders and operators. Positive relations with local indigenous groups, surrounding land holders, regional communities and government agencies are at the forefront of how we go about our business and are ingrained in our core understanding of how we develop sustainable Projects that deliver positive outcomes for all stakeholders. The people we appoint are judged both on their professional experience and ability to further everyone’s interests in an open and transparent manner, with ongoing inclusive dialogue. I am happy to state that our representatives portray all of the positive attributes a modern progressive mining company should portray. Let us revisit some of the additional positives for Rex Minerals that complement our unique team and approach to doing business. The Hillside Copper-Gold Project in South Australia currently is Australia’s third largest copper Ore Reserve that recent drilling and geophysical works suggest has further upside. The Hog Ranch Gold Property in Nevada USA, currently has a Mineral Resource of 2.3 million ounces of gold that recent drilling and geochemical work also suggest further upside. Also, we have over $40 million cash at bank and zero debt. We have the team, approach and resources for the next stage. Each of our Projects has the ability to be a "company maker" in its own right, with Hillside pursuing an updated execution plan that accommodates the current environment through optimised plans for development and production. Our positive outlook would not be possible without the ongoing support of our Shareholders. We are extremely grateful for your sharing of our vision that our Projects present unique opportunities for the beneﬁt of all stakeholders. Thank you. Yours sincerely, Mr Ian Smith Chairman Photo 1 : Hillside Project Location. ANNUAL REPORT 2 0 2 2 l 2 REX MINERALS LTD REVIEW OF OPERATIONS For the year ended 30 June 2022 CORPORATE Rex Minerals Ltd (Rex or the Company) is an investment in copper and gold in two world-class locations. During the year in review, Rex raised a total of $50 million, via a two-tranche Placement from professional and sophisticated investors in Australia and overseas at 30.0c per share, following approval by shareholders. Proceeds from the Placement are being used to fund and advance the Hillside Copper-Gold Project (Hillside) and the Hog Ranch Gold Property (Hog Ranch). Hillside and Hog Ranch are each signiﬁcant assets in their own right. They are underpinned by a strong demand outlook and healthy commodity price forecasts, especially for copper. Taking a macro view, the recent transition to a global inﬂationary cycle with a possible trailing recessionary phase now dominates the global agenda. In addition, the COVID-19 disruption, both real and perceived, continues to impact almost every industry. Adding to this is an irreversible commitment to setting targets for energy transition. There can be no question that in a macro sense, we are at the dawn of a period of enormous structural adjustment. For the Company, these challenges have driven our focus on future- prooﬁng and implementing adjustments to deliver improved metrics at Hillside. Our plans are being reﬁned and updated whilst planning and building in the platform for the future we all envision. Photo 2 : Non-Executive Directors, Greg Robinson (L) and Andrew Seaton (R) at Hillside. The Rex Board is dynamic, active and ﬁt for purpose, comprising three Non-Executive, and two Executive Directors. A considerable number of changes have also taken place in the management team as we move towards a Hillside development decision. Key management, led by Jason Schell (EGM, SA), are being recruited in South Australia. Most of these people are local and they bring a depth of skills to our team. In addition, Peter Bird commenced in the role of EGM Investor Relations and Business Development on 1 March 2022. Key strategic partnerships, covering the two key operational and technical facets of the business being mining and processing have also been entered into. The involvement of Thiess and Ausenco ensures that the very best our industry has to offer are working with Rex to achieve our key milestones and manage our key risks. Key milestones are outlined below. KEY MILESTONES Doubled the Ore Reserves at Hillside to 1 million tonnes of copper Jul 2021 Discovered a new deposit at Hog Ranch Jul 2021 Exciting drilling results received from Hog Ranch Jul 2021-2022 Raised a total of $50 million via a two-tranche Placement Aug 2021 Commenced trading on the US-based OTCQB Venture Market Sep 2021 Proven coarse particle ﬂotation - a viable opportunity to increment Hillside production Oct 2021 Appointed key senior Executives and management team Nov 2021-2022 Andrew Seaton, a South Australian, joined the Board Dec 2021 Completed 3D seismic survey at Hillside Jun 2022 Established ofﬁces in both Adelaide and Ardrossan, South Australia Feb 2022 Partnered with Ausenco for engineering and design at Hillside Mar 2022 Section 49 approvals completed for the road and highway diversions at Hillside Jun 2022 Hog Ranch Plan of Operations for exploration submitted to regulator Aug 2022 Letter of Intent (LOI) signed with Thiess Mining Services Aug 2022 Completed a large-scale soil survey on the ground at Hog Ranch Aug 2022 3 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 CORPORATE (CONTINUED) In order to meet global decarbonisation commitments, professional and individual investors will need to recognise that a signiﬁcant and sustained investment needs to be made. Part of this investment is required in those companies, within the mining industry, who have commodities that can contribute positively to the decarbonisation process. As illustrated in Figure 1, Wood Mackenzie estimates that approximately US$400B is required to meet the 2030 targets “It all seems implausible at best, and impossible at worst1”. 90% REDUCTION 73% REDUCTION 130 120 110 100 90 80 70 60 50 40 30 20 10 0 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 Aluminium Lead ETO Requirement Copper Lithium AET 1.5 Requirement Gold Nickel Iron Ore Zinc Figure 1 : Metals and mining committed investment capex and requirements (US$bn). Vision, purpose, values 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: “to 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. 1Source – Wood Mackenzie Corporate Service. “Have Miners missed the boat to invest and get ahead of the energy transition” – 11 July 2022. ANNUAL REPORT 2 0 2 2 l 4 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 CORPORATE (CONTINUED) Sustainability Rex has always worked to understand the issues of importance for local communities and regions more broadly, where we operate. We designed Hillside from the outset to protect and promote the environment, social and economic values of the region. The same approach is being taken at Hog Ranch. 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 and revision of existing policies to reﬂect the Company’s ambition, progress and contribution to a greener, more inclusive and equitable global future. As a Company, we will continue to evolve, as will our strategy and execution, as we set out our sustainability commitments, aligned with relevant industry requirements and frameworks, including the UN Sustainable Development Goals, and establishing more deﬁned and rigorous targets for ESG performance. Hillside’s approved Mineral Lease and Program for Environment Protection and Rehabilitation (PEPR) set out the Project’s license conditions and the Company plans to mitigate its environmental and social impacts. This process has taken into consideration the needs of local stakeholders and outlines in detail how the Company will manage the development and operations of Hillside to achieve the outcomes sought by the Company and its stakeholders. In moving to development in South Australia, the Company is progressing its strategy for sustainable development which 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. At Hog Ranch, a different regulatory environment has seen us spend three years on extensive ﬂora, fauna and archaeological baseline studies to allow us to complete and submit an exploration Plan of Operations to the relevant regulatory body. OUR COMMITMENT Rex strongly believes in the contribution metals, hence mining, make to modern society, with the growth in renewable technologies further increasing the demand for metals such as copper. While mining also contributes signiﬁcantly to employment and State and National economics, responsible mining can provide sustainable beneﬁts for the communities in which it occurs. Rex is committed to working in partnership with the local stakeholders and communities to identify and achieve sustained community beneﬁts. Rex commits to being a responsible member of the communities in which we operate while delivering value to all stakeholders through: • maintaining an economically sustainable and responsible business • • • • open and inclusive stakeholder engagement contributing to the local, regional, state and national economy partnering with local stakeholders and communities to enhance community capacity, and contributing to local environmental sustainability. 5 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 CORPORATE (CONTINUED) Gender, diversity and inclusion The Board has established a stand-alone gender, diversity and inclusion policy. The Company achieved its measurable objectives for gender diversity of maintaining female representation of at least 25% of the total workforce including senior management. At 30 June 2022, female representation was 35% of the total workforce, with women comprising 20% of the Rex Board and 40% of senior Executives. Climate change The Company understands that climate change is a signiﬁcant global challenge and that as a responsible corporate citizen it must identify, assess, action and report its response to climate change challenges. Rex’s 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 our Projects progress. Our focus on copper as a critical mineral input to decarbonisation, electriﬁcation and green technologies sits at the core. 100,000 10,000 500 MOBILE PHONES LAPTOP COMPUTERS AIR CONDITIONING UNITS 50 CARS 10 HOMES At 6Mtpa process plant throughput, Hillside will generate the equivalent of 1,813,366t of carbon dioxide throughout Stage 1. This is made up of 48% liquid fuels, 50% electrical power (grid) and 1-2% explosives. This equates to approximately 3.6t of CO2 for every tonne of copper dispatched in concentrate. 1 TONNE OF COPPER IN ELECTRICAL SYSTEMS CAN DELIVER LIFETIME SAVINGS OF 100 TO 7,500 TONNES OF CO2 EMISSIONS AND €24,000 TO €2.4 MILLION. Electricity will be supplied from the South Australian power grid which currently runs at around 60% sourced from renewable energy. With an annualised copper production rate of at least 36ktpa, the positive impact of a project like Hillside can be illustrated in Figure 2. As each of these consumer staples, such as cars, become more energy efﬁcient, decarbonisation metals like copper have a very positive role to play. There is currently no “substitute” metal for copper, so it remains critical in this process. Figure 2 : Based on data from environdec, European Commission and Leonardo ENERGY. Hillside will, where possible, make extensive use of existing infrastructure. Included in this will be housing, highways and ports – hence minimising any signiﬁcant additional carbon footprint associated with the construction of new infrastructure. Rex is exploring 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 by road) 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 now the third largest copper Reserve in Australia, with a Resource that currently contains 2Mt of copper (Cu) and 1.4Moz of gold (Au). Hillside’s Stage 1 Feasibility and Development Plan, as reported in July 2020, is being updated and ﬁnalised in readiness for ﬁnancing and a Board approval for its Final Investment Decision (FID). SOUTH AUSTRALIA Prominent Hill Gawler Craton Olympic Dam Carrapateena HILLSIDE PROJECT Adelaide ANNUAL REPORT 2 0 2 2 l 6 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HILLSIDE PROJECT – SOUTH AUSTRALIA (CONTINUED) Hillside’s mining and processing is essentially low risk and conventional. Rex has partnered with Ausenco for the provision of engineering and design services in relation to Hillside. On the processing side, the basis for the updated 2022 Study is to maintain a start-up nominal plant feed rate of 6Mtpa, with primary crushing and stockpile reclaim capability for up to 8Mtpa. In the remainder of the processing plant, Ausenco has undertaken further equipment debottlenecking and updated design margins on mechanical equipment in order to achieve instantaneous volumetric ﬂowrates equivalent to 8Mtpa, allowing for future increases in plant throughput. Using this strategy, our plan for a Stage 1, beginning at 6Mtpa, can be signiﬁcantly increased to closer to 8Mtpa once the pre-strip and early stages of mining are underway. In addition, successful coarse particle ﬂotation test work earlier this year, demonstrated that our ore is very amenable to HydroFloat technology and offers us the opportunity to further increase annual copper production. We are factoring into our plans and designs the possibility of subsequently increasing throughput into Stage 2. Hence, the production rate could then move from around 8Mtpa to closer to 10Mtpa, whilst maintaining similar copper recoveries. All of these changes have potential to translate into numerous beneﬁts for Rex and Hillside, including increased mill capacity/production rate, reduction in grind power and energy savings per tonne, signiﬁcant improvement to the management of tailings and reduction in grind media. Combined, these design considerations signiﬁcantly contribute to future prooﬁng, and improvements to environmental, power and carbon efﬁciency. Aligned with Australia’s desire to pivot to a more environmentally sensitive and energy efﬁcient nation, the fact that we are in close proximity to sealed highways, ports, renewable power, as well as a population base, Hillside offers compelling national interest advantages compared with equivalent projects in far less attractive locations. We have engaged a client team to assist with arranging bank ﬁnance and concentrate marketing options, and we have signed a number of banking groups and potential offtake partners under Conﬁdentiality Agreements. Building a ﬁrst-class South Australian operational team is essential, and Rex has continued to build the owner’s team and its capacity to deliver the next phase of development. These appointments are crucial and coincide with the opening of our ofﬁces in Adelaide and Ardrossan. Key appointments include: Jason Schell, our new Executive General Manager, South Australia. Jason is a senior executive with extensive operational expertise across a career spanning over 30 years in mining and mineral processing (copper-gold-silver-uranium). Mike Roberts was appointed Chief Procurement Ofﬁcer in November 2021. Mike has joined to lead Rex’s pre-development program procurement requirements. Over the past 20 years, Mike has worked with large-scale complex organisations to maximise commercial outcomes and deliver sustainable business improvements. On 21 April 2022, Ron Douglas stepped down as a Director of Rex to focus on his role to drive the engineering, procurement and construction services for the process plant and associated infrastructure at Hillside. Photo 3 : Rex’s community ofﬁce located in Ardrossan, Yorke Peninsula. Graham Teale has also joined the Rex team. Graham has 45 years’ experience in mineral exploration, mining and as a research geologist. Photo 4 : Graham Teale at Hillside. Processing Rex has partnered with Ausenco for the provision of 2022 Deﬁnition Phase Study (DPS) services for the Hillside processing plant and associated infrastructure. The purpose of Ausenco’s 2022 DPS work is to update the capital and operating estimates with the current market costs for major equipment and materials. 7 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HILLSIDE PROJECT – SOUTH AUSTRALIA (CONTINUED) Mining Rex has concluded, following a tender evaluation, that a mining contractor model presents many beneﬁts including opportunities to: (cid:129) (cid:129) alleviate the tight schedule of long lead capital items such as excavators and haul trucks, and leverage experienced management and workforce with well-developed operational procedures. This is particularly important given the tight market for equipment and personnel that has been impacted by the COVID-19 pandemic. Rex is pleased to have secured a strategic alliance with Thiess by entering into a non-binding Letter of Intent (LOI) which will see the companies work together to deliver an optimal mining solution for Hillside. Thiess is an outstanding Mining Services partner and brings to the table a global scale capacity to execute, whilst mitigating critical risks for a growing mining company with a large-scale greenﬁeld development. Infrastructure Substantial progress has been made on the infrastructure work programs. Works commenced with the appointment of land valuers, specialist design engineers, surveyors, geotechnical engineers and the appointment of infrastructure project managers. Roads – Tonkin Consulting was engaged to complete the road realignment designs to comply with the South Australian Department for Infrastructure and Transport’s (DIT) current standards. This road design process has now been approved to the 100% design standard and has been signed off by DIT. The deposited plans of division were submitted to the Land Titles Ofﬁce and approved in early June, which satisﬁed the Section 49 approval requirement deadline of 30 June 2022. Electrical – Planning associated with Hillside’s power infrastructure has been conducted with ElectraNet (132kV infrastructure) to renew the Connections Enquiry Response documentation as a pre-requisite to establishing a Transmission Connection Agreement (TCA). The formal Master Term Sheet has been agreed. ElectraNet has completed the Planning Assessment Study in order to develop a scope for the Power System Simulator for Engineering (PSSE) facilities model. Proposals have been sought from independent consultants (on the ElectraNet prequaliﬁed list) to develop the facility model. Regular planning meetings are being held with SA PowerNetworks on infrastructure relocation and the provision of construction power and boreﬁeld power. Water – SA Water has authorised Rex to apply for a connection for a maximum of 56kl per day to be drawn from the existing main. SA Water provided several options to make sufﬁcient water available for the Hillside mine and the study and costing was produced in June 2022. Rex has also sought Reverse Osmosis plant solutions, using sea water, to provide sufﬁcient water for the process whilst maintaining the SA Water 56kl per day for site potable water use. Updated Hillside Ore Reserves estimate On 20 July 2021, Rex announced an expanded Ore Reserve based on a larger Stage 2 open pit, which effectively increases the total Ore Reserves at Hillside from 509kt copper (Cu) to 988kt Cu for an increase of 94%. The Ore Reserves estimate for the Hillside Project as at July 2021 is 181.6Mt @ 0.54% Cu and 0.14g/t gold (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. ANNUAL REPORT 2 0 2 2 l 8 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HILLSIDE PROJECT – SOUTH AUSTRALIA (CONTINUED) Updated Hillside Ore Reserves estimate (Continued) 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. 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. 9 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HILLSIDE PROJECT – SOUTH AUSTRALIA (CONTINUED) Expanded Geological Potential of Hillside Rex commenced in January 2022, a 3D seismic survey over the broader Hillside Project area which was designed to identify key geological features, particularly structures and some important host rocks, both surrounding and at greater depths to the current Mineral Resource and Open Pit designs. A range of features have been identiﬁed based on the results of the 3D seismic survey, many of which could imply expanded potential to the existing 2Mt copper Mineral Resource. The Resource drilling information has yet to close out the copper mineralisation and extensions to the important host rocks and structures at Hillside are considered likely to continue at depth (Figure 3). At shallow levels, down to 500m below the surface, the 3D seismic data match the existing geological interpretation and Mineral Resource which is also where the majority of the drilling information exists. Beyond 500m down to substantial depths of possibly over 1,300m, the 3D seismic data suggests that the host rock geological sequence and repeats to the controlling structures appear to exist. There is also some indication that important controlling structures are increasing in strength at deeper levels, beyond the existing drilling information (Figure 4). Further to the interpretation that ongoing extensions to the copper mineralisation appear to be likely at Hillside, there is also some evidence of a large body at depth which is potentially an important source for the metals that exist at Hillside (refer ASX Release 7 June 2022). Photo 5 : Winner AusIMM Adelaide Branch photo competition of iridescent chalcopyrite from Hillside, Dr Richard Lilly. Photo 6 : HiSeis team–Danni Denton, Maegs St Lawrence and Jude Watson–performing 3D seismic survey at Hillside. Figure 4 : Cross section at Hillside with interpreted information from the recent 3D seismic survey. ANNUAL REPORT 2 0 2 2 l 10 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HILLSIDE PROJECT – SOUTH AUSTRALIA (CONTINUED) Health, Safety, Environment (HSE) There were no incidents at Hillside involving people, property, or the environment during the reporting period. There were no complaints or grievances raised by the local community or other stakeholders during the reporting period. The Company has undertaken a number of activities which will ensure compliance with both our Mineral Lease and PEPR conditions including selection of environmental monitoring equipment to log air quality, noise, vibration and air overpressure data; working with local residents to establish a rainwater tank water monitoring system; and development of HSE requirements for our contractors. Rex is engaging with our local community. For example, the Company has recently placed a work experience student from the Ardrossan High School, who provided valuable assistance to a soil survey being undertaken at that time. We have also identiﬁed sustainable community partnerships to assist with native seed harvesting and plant propagation. Through our involvement with the Playford Trust in SA, we are working with our Scholarship student (Chemical Engineering) to complete kinetic test work using oxygen cells. We are also conducting a ﬁeld trial to establish a classiﬁcation system for subsoil that will maximise our rehabilitation outcomes. Key to all our activities is our continued work on promoting internal discussions and checks regarding the integration of sustainability principles and ESG in our design, and establishing methodologies to provide Project HSE updates to all relevant stakeholders. Community As we establish our development and operational presence in South Australia, both in Adelaide and Ardrossan, Rex remains the only ASX company to have its registered ofﬁce located on the Yorke Peninsula. This is a small but signiﬁcant outcome that speaks to the very essence of what nation building development is all about. This forward-facing presence will ramp up as development proceeds. Locally, Hillside will contribute signiﬁcantly to the SA Government’s plans in establishing the State as a world-leading copper precinct, via its Copper Strategy. One of our important engagement platforms is the ongoing community consultative group, “Hillside Mine Community Voice” (HMCV). This independently chaired group has been instrumental in working with Rex to consult and navigate our approvals through to the development phase. After many years of cooperation, an independent review of the group was conducted by South Australian-based strategic advisory group, Consentium. Following this review, in November 2021, HMCV members voted to adopt the recommendations and establish an interim committee to oversee the formation of a new community consultative group, to work with Rex as it enters the construction and development stage of the Hillside Mine. The HMCV Chair, Mr Phil Tyler, expressed his appreciation to the members – all volunteers – who spent many hours representing their local community organisations. He said: “Yorke Peninsula should be very proud of its dynamic community, and I am privileged to have been involved in leading the HMCV during this stage.” The interim committee has now been established with updated terms of reference. It has commenced the recruitment of new members for the Hillside Mine Community Consultative Committee (HMCCC). SOUTH AUSTRALIAN TENEMENT SCHEDULE at 30 June 2022 Location Lease Status Area Type Current Area Date South Australia Tenement EL65311 EL64971 EL6515 EL59811 EL61361 EL61431 EL6189 EL6245 EL6455 ML6438 EML64391 MPL146 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 km2 km2 km2 km2 km2 km2 km2 km2 km2 Ha Ha Ha 1Renewal documentation submitted to the South Australian Government and currently being processed. 21 509 257 68 91 51 328 1,091 74 2,998 225 94 09/06/2022 27/07/2022 20/09/2022 22/06/2022 19/03/2022 15/04/2022 01/08/2022 01/08/2022 04/11/2021 15/09/2035 15/09/2022 15/09/2035 11 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HOG RANCH – NEVADA, USA Drilling A number of drilling campaigns were completed during the ﬁnancial year at Hog Ranch at all three of the main project locations of Krista, Bells and Airport/Cameco. New discoveries were made at Airport in addition to further extensions to the gold mineralisation conﬁrmed at Bells and Krista. Drilling activities were delayed in 2021 due to a lack of drilling contractor availability. The long turnaround times at the Nevada laboratories have also had an impact on the drilling program over the course of the year, these have started to improve towards the end of the ﬁnancial year. Further work at Hog Ranch included several soil sampling test programs which were very successful in highlighting the potential for regional gold in soils, when combined with some key pathﬁnder elements, to show the likely position for further gold mineralisation. This has prompted Rex to commence a large regional soil sampling campaign over the entire 79km2 area of Mining Claims held by Rex at Hog Ranch (refer ASX Release 30 March 2022). Drilling Results Summary Results from an earlier 3D Induced Polarisation (IP) survey over the Airport area identiﬁed the potential for some structures that were interpreted away from the previously known gold mineralisation. Testing of a number of these potential structures resulted in the discovery of signiﬁcant gold mineralisation at two new locations from drill holes HR21- 010 and HR21-012 (Figure 7 and Figure 8). Refer ASX Releases 26 July 2021 and 27 August 2021. ANNUAL REPORT 2 0 2 2 l 12 Figure 5 : Local geology of the Cottonwood Creek Caldera. Figure 6 : New datasets show overlapping evidence for large-scale epithermal alteration. REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HOG RANCH – NEVADA, USA (CONTINUED) Drilling Results Summary (Continued) At both Bells and Krista, drill holes were completed which continue to identify extensions to the previously deﬁned gold mineralisation and, in some cases, show better gold grades than were otherwise indicated by the historical drill hole data (refer ASX Releases 2 March 2022 and 19 July 2021). Figure 7 : Plan view of the drilling completed at the Airport target area. Photo 7 : Simon Meldrum on site at Hog Ranch. Figure 8 : Airport Project cross section (see Figure 7 for relative location) highlighting the drilling results from a new discovery initially intersected in drill hole HR21-012. 13 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 HOG RANCH – NEVADA, USA (CONTINUED) Drilling Results Summary (Continued) A summary of the more noteworthy Hog Ranch drill intersections returned over the year is shown in Table 3. Location Krista Bells Airport Airport Airport Drill Hole Number HR22-018 including including HR21-023 including HR21-008 including including HR21-010 including HR21-012 including including From (m) 0 44.2 137.2 12.2 74.6 7.6 18.3 89.9 94.5 143.3 54.9 57.9 88.4 To (m) 147.8 89.9 141.7 141.7 103.6 118.9 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)) 147.8 45.7 4.5 129.5 29 111.3 13.7 10.7 114.3 36.6 56.4 12.2 4.6 ~104 ~32 ~3.2 ~116 ~26 ~96 ~12 ~9 ~51 ~11 ~4.1 0.62 1.06 2.42 0.55 0.98 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 keeping with our strategy of building capability in the management team James (Jim) Carver has joined the Company as Vice President of Exploration at Hog Ranch. Jim has over 35 years’ experience conducting successful exploration, discovery and development of gold deposits internationally and in the US. Jim left Marigold and SSR Mining as their Resource Manager (US) “for an opportunity to work with the Hog Ranch and Rex teams on this outstanding property.” NEVADA, USA TENEMENT SCHEDULE at 30 June 2022 As at 30 June 2022, 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 County 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 ANNUAL REPORT 2 0 2 2 l 14 REX MINERALS LTD REVIEW OF OPERATIONS (Continued) for the year ended 30 June 2022 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. 15 REX MINERALS LTD DIRECTORS’ REPORT For the year ended 30 June 2022 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 2022 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. He also serves as a member of the Audit Committee and the 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. 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 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 Goldﬁelds was taken over by Lihir Gold. Previously, Richard was the general manager of Gold for WMC Resources, 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 2 l 16 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 Name, qualiﬁcations and independence status Experience, special responsibilities and other directorships Ms Amber Rivamonte Ms Amber Rivamonte was appointed as an Executive Director on 1 June 2021. Chief Financial Ofﬁcer and Executive Director of Finance (CPA; B.Bus(Acc); MAICD) Mr Greg Robinson Independent Non- Executive Director (B.Sc(Hons); MBA; MAICD) Mr Andrew Seaton Independent Non- Executive Director (BE (Chem) Hons; Grad Dip Bus Admin; GAICD) 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). Ms Rivamonte 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 Greg Robinson was appointed as a Director 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) (Chairman of the Audit Committee). He is the former managing director & chief executive ofﬁcer of Newcrest Mining Limited (including six years as CFO & Finance Director)and former chief executive ofﬁcer of Lattice Energy Limited. Prior to joining Newcrest, Greg was on the executive committee of and held senior executive roles in the Petroleum and Energy Division of BHP (including ﬁve years as CFO) 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. Mr Andrew Seaton was appointed as a Director on 1 December 2021. He is Chairman of the Remuneration Committee and a member of the Audit Committee. Andrew has over 30 years’ business experience across a range of ﬁnance, engineering, project management, investment banking and senior executive roles. Andrew is currently the Managing Director and Chief Executive Ofﬁcer of Australian Naval Infrastructure, and a Non-Executive Director of Strike Energy Ltd, Homestart Finance Ltd and Hydrocarbon Dynamics Ltd. Andrew was previously CFO of Santos Limited, Australia’s largest producer of domestic natural gas and a key supplier of LNG into Asia. During his time with Santos, the company expanded its LNG portfolio to include interests in Darwin LNG, PNG LNG and Gladstone LNG. Prior to this he worked in investment banking with Merrill Lynch in Melbourne and New York across a broad range of advisory, M&A, equity and debt capital markets transactions, and with NAB in corporate and institutional banking. His early career included process engineering and project management roles across upstream oil and gas and petrochemicals. The following persons were Directors of the Company at any time during the ﬁnancial year. There have been no new Directors appointed since the end of the ﬁnancial year to the date of this report. Mr Ian Smith Mr Richard Laufmann Ms Amber Rivamonte Mr Greg Robinson Mr Andrew Seaton – appointed 1 December 2021 Mr Ron Douglas – retired 21 April 2022 17 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 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 Smith Mr Richard Laufmann1 Ms Amber Rivamonte1 Mr Greg Robinson Mr Andrew Seaton Former Mr Ron Douglas A 6 6 6 6 3 5 B 6 6 6 6 3 5 A 2 2 2 2 2 2 B 2 2 2 2 2 2 A 1 1 1 1 1 – B 1 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 attends meetings as appropriate by invitation. 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 2022 and was approved by the Board on 9 September 2022. 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) At Hillside: > > > > > (cid:129) At Hog Ranch: > > > > (cid:129) Continued to explore options for our highly prospective Iron Oxide Copper Gold (IOCG) tenements in South Australia. Continued with infrastructure development work programs Tendered and appointed Ausenco and Thiess to partner in the development Began the updated and ﬁnal feasibility costing for ﬁnancing Engaged marketing and ﬁnance specialists, and Opened new ofﬁces in Adelaide and Ardrossan to facilitate the growing team of new appointments. Completed three years of baseline studies Submitted an exploration Plan of Operations to the regulatory body Continued exploration activities on site, and Added depth to the exploration team. ANNUAL REPORT 2 0 2 2 l 18 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 OPERATING AND FINANCIAL REVIEW The income statement shows a loss after tax of $12.8 million (2021: $8.8 million) for the year. The Group has no debt. As at 30 June 2022, the Group had a cash position of $44.1 million (2021: $9.7 million). Operating activities resulted in a net cash outﬂow for the year of $12.4 million (2021: $7.3 million). Further information on operating and ﬁnancial performance is set out in the Operations Review. 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 No matters or circumstances have arisen since 30 June 2022 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 mining 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. ENVIRONMENTAL REGULATION The Group’s operations are subject to environmental regulation in respect of mineral tenements and mining claims relating to exploration activities on those areas. 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. 2022 2021 $ $ Audit and review of ﬁnancial statements 51,000 47,000 19 REX MINERALS LTD LETTER FROM THE REMUNERATION COMMITTEE CHAIRMAN For the year ended 30 June 2022 Dear Fellow Shareholder, On behalf of the Board, I am pleased to present the Remuneration Report for FY22, which outlines the remuneration for the Key Management Personnel (KMP), which includes the CEO, Executive Director, senior Executives and Non-Executive Directors of the Company. Commencing during FY22 and continuing in FY23, we are undertaking a process of maturing our remuneration policies and processes, whilst maintaining a “ﬁt for purpose” overlay in line with the current stage of Rex’s evolution. In the past, the Company has relied on a relatively simple remuneration structure, using an Option Incentive Plan in order to both conserve cash and minimise dilution. The Remuneration Committee’s objective is to ensure that our remuneration framework delivers outcomes which have a clear link to Company and individual performance, and which are consistent with our long-term strategy and values. We were pleased to again receive strong support and endorsement of our Remuneration Report at the 2021 Annual General Meeting, with 98% of votes in favour. Financial Year 2022 in review For a company operating in two countries – involved in exploration, permitting and pre-development, with limited cash – deﬁning, and setting ﬁnancial and performance targets is a complex challenge. Rex, is navigating this space amidst the volatility of international commodity and capital markets, coupled with COVID-19 restrictions and now the global inﬂationary pressures and supply disruptions. In this environment, our Hillside Project in South Australia, (which has the third largest copper Reserve in Australia) joins the modest list of future-facing metals identiﬁed as fundamentally crucial to development contributing to achieving progress in reaching global decarbonisation objectives and targets. Health, Safety and Environment (HSE) outcomes for the year were excellent. We can proudly report no lost time, medically treated nor signiﬁcant injuries or incidents, whilst operating remotely, running exploration drilling operations and numerous technical, geophysical and geotechnical programs. Environmentally, we have moved the bar on energy efﬁciency in Hillside’s plan and we continue to introduce carbon lowering and renewable synergies not previously envisioned. We will now begin to introduce measures to include HSE objectives more meaningfully into our remuneration objectives. Corporately, we raised equity funds to progress our pre-development works at Hillside and to continue our exploration for gold at Hog Ranch in Nevada. We have begun to employ key Executives at both Projects in line with their status and, in particular, to deliver the next phase of the Hillside Project. KMP changes for 2022 As Hillside moves closer to its Final Investment Decision (FID), we remain focused on delivery of the construction phase. As a result, there have been a number of changes and additions to the structure of the executive team during 2022. In light of the successful completion of the $50 million capital raising in September 2021, the remuneration structures for the CEO, the CFO and key new KMP have been reviewed by the Remuneration Committee. The changes are as follows: The CEO, Mr Richard Laufmann, had been employed on a 60% Full Time Equivalent (FTE) employment arrangement since his commencement as CEO in 2015. During this seven year period, he did not receive any increase in ﬁxed pay or any STI awards. Effective 1 September 2021, Mr Laufmann is now employed on a full-time basis, at the same 2015 FTE rate. To recognise his signiﬁcant time commitment above and beyond the 60% FTE arrangement over this period, and delivery of the milestone PEPR approval in July 2020, a one-off cash payment of $125k was paid to Mr Laufmann in June 2022. The CFO, Ms Amber Rivamonte, had been previously engaged on a part-time basis through a consulting company. For FY22 she was engaged as a full-time employee following her appointment to the Board in June 2021. Ms Rivamonte has also not received any salary review or STI awards in the preceding seven years, nor has she received any salary review following her appointment as an Executive Director. Mr Jason Schell, EGM, South Australia was appointed on 9 May 2022 to lead the South Australian business. Mr Peter Bird, EGM Investor Relations and Business Development commenced on 1 March 2022. Mr Andrew Seaton, Non-Executive Director and Chair of the Remuneration Committee, commenced on 1 December 2021. Mr Ron Douglas retired as Non-Executive Director effective 21 April 2022 to assume a leadership role in delivering the engineering and construction solution for the Hillside plant. ANNUAL REPORT 2 0 2 2 l 20 REX MINERALS LTD LETTER FROM THE REMUNERATION COMMITTEE CHAIRMAN (Continued) for the year ended 30 June 2022 Fixed Remuneration There were no changes to the structure of existing ﬁxed remuneration contracts during the year. New KMP were employed on market competitive contracts. Short Term Incentive No STI payments have been made to any KMP in the last seven years. In line with our objective to mature the Company’s remuneration framework, and with reference to external remuneration benchmarking analysis, we intend to adopt an evolved STI framework during FY23. Long Term Incentive There were no LTI awards under the Option Incentive Plan to existing executive KMP (including the CEO, CFO and Director Hog Ranch) during FY22. The EGM, South Australia and EGM IR and Business Development each received an LTI award under the Option Incentive Plan upon their commencement. 2022/2023 Evolution of Remuneration framework As we prepare to manage the transition from exploration to construction and subsequently production, we have given consideration to the overall remuneration framework required to both retain the current Executive team as well as attracting new Executives. The goal is to set the Company up for success whilst conserving cash ahead of the start of production. This balance is vitally important and nuanced. The Remuneration Committee has commenced work on establishing a reward framework that ensures Executive rewards reﬂect achievement, with the aim of delivering long-term shareholder value, through the following remuneration principles: (cid:129) Creating a strong link between performance and reward over the short and long-term (cid:129) Maintaining fair, consistent and equitable remuneration practices which align with the Company’s values and vision whilst remaining competitive with the market to attract the best potential candidates (cid:129) Ensuring that Executive remuneration is linked to the creation of shareholder value (cid:129) Recognising the calibre and skills of Executives and ensuring that they are rewarded for superior performance, and (cid:129) Retaining talented Executives, noting both the cyclical and competitive nature of the market. The Company will continue to seek guidance in the governance of remuneration strategy from a variety of sources, to remain transparent and consistent with industry standards, whilst ensuring what we implement is ﬁt for purpose. Mercer Consulting (Australia) Pty Ltd has been engaged as the Company’s independent Remuneration Adviser and has compiled a benchmarking survey for both executive and non-executive positions. Based on this frame of reference, the Company’s remuneration framework will be reviewed and adjusted during FY23 to ensure that we have an appropriate remuneration structure for the FID of the Hillside Project and beyond. I trust that the above summary outlines our thinking and key decision drivers as we navigate the coming year. Mr Andrew Seaton Chair of the Remuneration Committee 21 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 REMUNERATION REPORT – AUDITED The Directors present the Remuneration Report for the year ended 30 June 2022, 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. 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, a cash bonus was paid to the CEO only. No other 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 2021. 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) 2022 $ 12.8 2021 $ 8.8 2020 $ 5.2 2019 $ 5.1 2018 $ 5.2 Closing share price at ﬁnancial year’s end ($) 0.135 0.350 0.070 0.053 0.105 ANNUAL REPORT 2 0 2 2 l 22 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 REMUNERATION REPORT – AUDITED (CONTINUED) Service agreements In line with Group policy, the Group has entered into contracts with each of its Executives, details of which are outlined below: Component CEO description Senior Executive description Fixed Remuneration $444,167 Range between $314,000 and $477,500 FTE STI LTI At the discretion of the Board, no formal STI plan in place Range from no formal plan to up to 60% of base salary At discretion of the Board under terms and conditions of the Option Incentive Plan (approved by Shareholders at the 2021 AGM) Contract duration Ongoing contract Notice by individual/company 2 months Range between 2 months and 3 months Termination of employment (without cause) or by the individual 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. Entitlement to pro-rata STI for the year (under certain conditions). Unvested LTI will vest immediately if the individual is deemed a good leaver or will lapse if deemed a bad leaver Termination of employment (with cause) No additional entitlement on termination in the event of removal for misconduct or gross negligence. No eligibility for STI payments, unvested LTI will lapse Different contractual terms apply to the following individuals: Mr Bird’s contract included a three month probationary period at 60% FTE, then moved to 100% following completion of the probationary period. Mr Bird is also eligible for an STI bonus and in the event of a redundancy a payment of two months’ salary. Mr Schell’s contract provides for eligibility for an STI of up to 60% of his base salary in addition to a one-time completion bonus, on the achievement of certain milestones related to the Hillside Project. Mr Schell is also entitled to a payment of six months’ salary in the event of redundancy. Ms Leeden is engaged via a part-time consulting arrangement and is paid a monthly retainer at 40% FTE paid in USD and presented in AUD in this report. Ms Leeden has been awarded an LTI under the Company’s Option Incentive Plan and is not entitled to an STI or redundancy payment in her contract. Non-Executive Directors Total compensation for all Non-Executive Directors, as approved 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. 23 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 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 2022 are as follows: – – – % 7 1 – – – – – 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 ) c ( s n o i t p o $ e c i v r e s g n o L ) b ( e v a e l - r e p u S n o i t a u n n a $ $ h s a C s u n o b $ & y r a l a S ) a ( s e e f $ 3 2 7 , 5 1 1 3 2 7 , 5 3 1 4 , 8 8 1 8 2 , 0 5 3 1 4 , 2 2 1 8 7 , 1 1 – – – 0 0 0 , 0 1 0 0 5 , 1 0 0 5 , 3 – – – 0 0 0 , 0 0 1 0 0 5 , 4 6 0 0 0 , 5 3 s r o t c e r i D e v i t u c e x E - n o N 1 n o s n i b o R g e r G r M 2 n o t a e S w e r d n A r M h t i m S n a I r M s r o t c e r i D e v i t u c e x E ANNUAL REPORT 2 0 2 2 l 24 % 5 % 5 2 % 3 2 % 9 1 % 2 % 3 4 % 1 5 % 1 1 % 5 9 % 5 7 % 7 7 % 1 8 % 8 9 % 7 5 % 9 4 % 0 1 % 0 9 1 3 0 , 9 5 3 2 7 , 5 % 9 8 0 4 9 , 9 4 1 5 6 0 , 6 1 1 3 9 , 3 9 1 4 0 9 , 3 8 9 4 2 , 4 6 1 4 0 9 , 3 8 6 2 2 , 3 0 0 6 , 1 – – – 5 2 8 , 8 2 9 6 , 6 6 4 8 , 4 3 1 3 , 3 7 3 3 3 0 , 8 8 3 1 , 6 2 7 3 4 1 , 8 3 1 4 0 1 , 3 2 3 6 1 , 8 9 9 4 , 7 2 9 9 4 , 7 2 0 0 0 , 5 2 1 2 9 3 , 2 1 4 3 O E C , n n a m f u a L d r a h c i R r M – – – – – 8 1 6 , 9 2 3 3 O F C , e t n o m a v i R r e b m A s M 6 7 9 , 7 9 3 5 0 , 2 7 5 7 8 , 3 3 1 4 D B & R I M G E , d r i B r e t e P r M 6 h c n a R g o H – r o t c e r i D l a c o L , n e d e e L e i r e h C s M 5 A S M G E , l l e h c S n o s a J r M P M K r e h t O r e m r o F 2 6 4 , 8 4 7 s a l g u o D n o R r M s e e f l a n o i t i d d a i d e v e c e r . e m a s e h t i d e n a m e r d n a s e e f n o i t p m e x e C G S n a e s a b l a t o t i s h , r a e y r o f e h t O T A e h t m o r f l a v o r p p a t h g u o s n o s n b o R i r M f o s h t n o m e n n i r o f n o i t a u n n a r e p u s f o u e i l n i e e t t i m m o C n o i t a r e n u m e R e h t o t r e f e r i , d a p s t n u o m a e h t n i s t n e m e v o m n o s l i a t e d e r o m r o F . 1 2 0 2 r e b m e c e D 1 d e c n e m m o c n o t a e S r M , e m i t l l u f o t i g n v o m e r o f e b , s s a b i e m i t t r a p a n o y l l a i t i n i , 2 2 0 2 h c r a M 1 d e c n e m m o c d r i B r M . ) 0 2 e g a p ( r e t t e l n a m r i a h C . 2 2 0 2 y a M 9 d e c n e m m o c l l e h c S r M . 2 2 0 2 e n u J 1 e v i t c e f f e 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 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 . t r o p e r i s h t n i D U A n i d e t n e s e r p d n a y n a p m o c d e t a e r l P M K e h t o t D S U n i i d a p . 2 2 0 2 l i r p A 1 2 e v i t c e f f e d e r i t e r l s a g u o D r M . 1 . 2 . 3 . 4 . 5 . 6 . 7 e v a e l 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 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 . 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 l a u r c c a i e c v r e s t e n e h t s t n e s e r p e R d e r i u q e r e h t s t e e m 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 o t t n a r g 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 s i o t 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 e t a c o l l a d n a l e d o m g n c i r p i n a s a i d e s n g o c e r 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 . 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 ) b ( ) c ( 9 1 0 , 1 2 9 , 1 9 8 6 , 5 7 3 3 9 0 , 6 3 1 6 3 , 0 9 0 0 0 , 5 2 1 6 7 8 , 3 9 2 , 1 : 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 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 REMUNERATION REPORT – AUDITED (CONTINUED) Directors’ and Executive Ofﬁcers’ remuneration (Continued) 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 4 h c n a R g o H – r o t c e r i D l a c o L , n e d e e L e i r e h C s M P M K r e h t O 7 6 6 , 1 9 0 0 0 , 5 5 1 3 2 , 8 1 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 5 d n a l r a C d i v a D r D r e m r o F 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 . t r o p e r i s h t n i D U A n i d e t n e s e r p d n a y n a p m o c d e t a e r l P M K e h t o t D S U n i i d a p i r e n a t e r . 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 . 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 . 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 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 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 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 ( 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 ( 25 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 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 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 8.3 million options and issued 3.7 million ordinary shares as a result of the exercise of options (1.0 million to KMP and 2.7 million to other participants of the option plan), 0.5 million options lapsed. Options over ordinary shares of the Company at 30 June 2022: Date options granted 6 March 2020 1 December 2020 28 May 2021 26 November 2021 10 March 2022 26 April 2022 Expiry date Fair value grant date (cents) Issue price (cents) 29 February 2024 30 November 2024 28 May 2025 24 November 2025 2 March 2026 17 April 2026 2.38 6.6 19.3 11.6 12.8 12.4 7.0 17.5 47.0 33.0 25.3 30.0 Number of options 7,766,667 5,000,000 200,000 280,000 7,000,000 1,000,000 21,246,667 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 Greg Robinson Mr Andrew Seaton Mr Richard Laufmann Ms Amber Rivamonte Mr Peter Bird Mr Jason Schell Ms Cherie Leeden Former Mr Ron Douglas Held at 30 June 2021 Number of options granted Number of options vested and exercisable % of options vested Number of options exercised Held at 30 June 2022 or date ceased being KMP 333,334A 200,000D – – – 280,000E 333,334 66,000 – 5,000,000C 1,500,000B – – 1,650,000 1,000,000 – – 3,500,000F 3,500,000F 2,000,000B 666,667A – – – – 1,000,000 100 333,3341 – 33 – 33 66 – – 66 – – – – – – – 200,000 280,000 5,000,000 1,500,000 3,500,000 3,500,000 2,000,000 666,667 100 666,6671 1The options exercised were paid directly by the KMP at an exercise price of 8.4 cents. 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 C D E Grant date 14 Feb 2019 6 Mar 2020 1 Dec 2020 28 May 2021 26 Nov 2021 10 Mar 2022 Fair value per option at grant date 2.88 cents 2.38 cents 6.6 cents 19.3 cents 11.6 cents 12.8 cents Exercise price per option 8.4 cents 7.0 cents 17.5 cents 47.0 cents 33.0 cents 25.3 cents Expiry date 31 Jan 2023 29 Feb 2024 30 Nov 2024 28 May 2025 24 Nov 2025 2 Mar 2026 All options vest in three equal tranches. ANNUAL REPORT 2 0 2 2 l 26 – F REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 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 Greg Robinson Mr Andrew Seaton Mr Richard Laufmann Ms Amber Rivamonte Mr Peter Bird Mr Jason Schell Ms Cherie Leeden Former 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 – – 32,581 – – 448,350 448,350 – – 5,723 22,413 11,781 138,143 8,033 83,904 83,904 16,065 – 14,056 20,800 75,514 2,713 364,446 364,446 5,426 52,000 – – – – – – – 5,723 – 110,667 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 Greg Robinson Mr Andrew Seaton Mr Richard Laufmann Ms Amber Rivamonte Mr Peter Bird Mr Jason Schell Ms Cherie Leeden Former Mr Ron Douglas Held at 30 June 2021 or date became KMP Received on exercise of option Acquired or sold during the year Held at 30 June 2022 or date ceased being KMP 848,485 333,334 – – 8,419,893 6,326,909 – 542,034 1,000,000 – – – – – – – 518,181 1,958,334 500,000 – – – – – 1,700,000 1,958,334 500,000 8,419,893 6,326,909 – 542,034 1,000,000 333,333 666,667 333,334 1,333,334 Since 30 June 2022, Mr Greg Robinson has acquired 600,000 shares, bringing his total to 2,558,334 at the date of this report. 27 REX MINERALS LTD DIRECTORS’ REPORT (Continued) for the year ended 30 June 2022 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 2021 Acquired during the year Converted during the year Held at 30 June 2022 Mr Richard Laufmann Ms Amber Rivamonte 969,227 3,876,907 – – – – 969,227 3,876,907 The Company issued 20 million HRCR (including to related parties) as part consideration for the Hog Ranch acquisition in August 2019. The HRCR convert to Rex shares on the outcome of certain milestones. The following milestone remains outstanding: a. 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. 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, there were no transactions between KMP related companies and the Group. 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 52 and forms part of the Directors’ Report for the year ended 30 June 2022. Dated at Melbourne this 9th day of September 2022. Signed in accordance with a resolution of the Directors: Mr Richard Laufmann Chief Executive Ofﬁcer ANNUAL REPORT 2 0 2 2 l 28 REX MINERALS LTD CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2022 2021 Note $000 $000 Current assets Cash and cash equivalents 7 44,139 9,682 Trade and other receivables 411 145 Prepayments 1,019 53 Total current assets 45,569 9,880 Non-current assets Exploration and evaluation expenditure 9 3,243 3,243 Property, plant and equipment 10 14,263 14,279 Water infrastructure 4,076 4,076 Total non-current assets 21,582 21,598 Total assets 67,151 31,478 Current liabilities Trade and other payables 11 1,144 617 Employee beneﬁts 12 793 600 Total current liabilities 1,937 1,217 Non-current liabilities Employee beneﬁts 12 106 115 Total non-current liabilities 106 115 Total liabilities 2,043 1,332 Net assets 65,108 30,146 Equity Issued capital 13(a) 264,846 217,502 Reserves 13(d) 1,140 846 Accumulated losses (200,878) (188,202) Total equity 65,108 30,146 The notes on pages 33 to 50 are an integral part of these ﬁnancial statements. 29 REX MINERALS LTD CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2022 2021 Note $000 $000 Finance income 92 18 Government grants 92 55 Corporate and compliance (1,318) (891) Depreciation expense 10 (41) (58) Employee beneﬁts expense 14 (3,295) (2,204) Marketing expenses (220) (273) Exploration and evaluation (8,344) (4,589) Borrowing costs – (731) Foreign currency revaluation 257 (117) Gain on disposal of ﬁxed assets – 11 Loss before tax (12,777) (8,779) Income tax beneﬁt 15 – – Total loss for the period after tax (12,777) (8,779) Other comprehensive income – – Total comprehensive loss attributable to members of Rex Minerals Ltd (12,777) (8,779) Loss per share attributable to members of Rex Minerals Ltd Basic loss per share (cents) 16 (2.30) (2.36) Diluted loss per share (cents) 16 (2.30) (2.36) The notes on pages 33 to 50 are an integral part of these ﬁnancial statements. ANNUAL REPORT 2 0 2 2 l 30 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 2021 217,502 846 (188,202) 30,146 50,271 Issue of ordinary shares 13(a) 50,271 – – (2,927) Cost of share issue (2,927) – – 395 Share based payments 13(d) – 395 – Transfer from share based payments reserve – (101) 101 – Total comprehensive loss for the period – – (12,777) (12,777) Balance at 30 June 2022 264,846 1,140 (200,878) 65,108 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 The notes on pages 33 to 50 are an integral part of these ﬁnancial statements. 31 REX MINERALS LTD CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2022 2021 Note $000 $000 Cash ﬂows from operating activities Cash paid to suppliers and employees (4,342) (3,115) Exploration and evaluation payments (8,741) (4,246) Receipts from ATO (GST) 578 – Interest received 76 19 Government grants – 50 Net cash used in operating activities 17(a) (12,429) (7,292) Cash ﬂows from investing activities Acquisition of property, plant and equipment 10 (715) (3) Proceeds from the sale of property, plant and equipment – 15 Net cash used in investing activities (715) 12 Cash ﬂows from ﬁnancing activities Proceeds from issue of ordinary shares 13 50,271 20,539 Payment of costs of share issue 13 (2,927) (1,174) Payment of borrowing costs – (884) Repayment of borrowings 17(b) – (4,400) Net cash from ﬁnancing activities 47,344 14,081 Net decrease in cash and cash equivalents 34,200 6,801 Cash and cash equivalents at beginning of the period 9,682 2,990 Effect of change in exchange rates 257 (109) Cash and cash equivalents at period end 7 44,139 9,682 The notes on pages 33 to 50 are an integral part of these ﬁnancial statements. ANNUAL REPORT 2 0 2 2 l 32 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS 1. REPORTING ENTITY Rex Minerals Ltd (Rex or 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 9 September 2022. (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 2022, the Group holds cash of $44.139 million and net current assets of $43.632 million. 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 3(e) and 10 Recoverable value of non-current assets – assessment of impairment indicators, and (cid:129) note 3(f), 4 and 18 Share based payments – key assumptions used in the valuation model. 33 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 2 l 34 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. 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. 35 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 2 l 36 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. 37 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Prepayments The Company may make payments in advance to secure goods and/or services. These are recorded as prepayments in the balance sheet. Water Infrastructure represents a prepayment to SA Water for infrastructure upgrades which will be amortised to the proﬁt and loss over the life of future water contracts and recognised as water expense. (n) New standards and interpretations not yet adopted A number of new standards are effective for annual periods beginning after 1 July 2022 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 2 l 38 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 2022, which are the Group’s areas of focus. The areas 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 its highly prospective exploration portfolio; whilst in Nevada, USA the Group has the Hog Ranch Gold 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 2022 $000 $000 $000 $000 Finance income – – 92 92 Government grants – – 92 92 Losses before tax (including depreciation and interest expense) 6,655 2,781 3,341 12,777 Depreciation 35 – 6 41 Interest expense – – – – 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 7. CASH AND CASH EQUIVALENTS 2022 2021 $000 $000 Bank balances and short-term deposits 44,139 9,682 Cash and cash equivalents 44,139 9,682 The Group’s total cash and funds on deposit of $44.139 million (2021: $9.682 million) is exposed to interest rate risk and a sensitivity analysis for ﬁnancial assets and liabilities is disclosed in note 19. 39 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 8. DEFERRED TAX ASSETS (DTA) AND DEFERRED TAX LIABILITIES (DTL) 2022 2021 $000 $000 Exploration and evaluation assets (494) (494) Property, plant and equipment (45) (49) Provisions 191 214 Equity costs 926 323 Net DTA/(DTL) 578 (6) Tax losses recognised to the extent of the DTL – 6 Derecognition of DTA as not sufﬁciently certain (578) – – – 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 $60.392 million (2021: $57.251 million). 9. EXPLORATION 2022 2021 $000 $000 Balance at 1 July 3,243 3,243 Balance at 30 June 3,243 3,243 10. PROPERTY, PLANT AND EQUIPMENT Land and Plant and buildings equipment Total 2022 $000 $000 $000 Cost Balance at 1 July 2021 14,309 1,872 16,181 Additions – 25 25 Disposals – (3) (3) Balance at 30 June 2022 14,309 1,894 16,203 Depreciation Balance at 1 July 2021 90 1,812 1,902 Depreciation 10 31 41 Disposals – (3) (3) Balance at 30 June 2022 100 1,840 1,940 Carrying amounts At 1 July 2021 14,219 60 14,279 At 30 June 2022 14,209 54 14,263 Prepayments at 30 June 2022 includes $0.690 million which represents payments made to secure ﬁxed assets which are expected to be completed before 30 June 2023 (2021: nil). These payments are reﬂected as PP&E in the Consolidated statement of cash ﬂows. ANNUAL REPORT 2 0 2 2 l 40 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 10. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) 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 11. TRADE AND OTHER PAYABLES 2022 2021 $000 $000 Current Trade payables 14 57 Accrued expenses 1,130 560 Total current trade and other payables 1,144 617 Total trade and other payables 1,144 617 12. EMPLOYEE BENEFITS PROVISIONS 2022 2021 $000 $000 Current Annual leave 553 442 Long service leave 240 158 Total current employee beneﬁts provisions 793 600 Non-current Long service leave 106 115 Total non-current employee beneﬁts provisions 106 115 Total employee beneﬁts provisions 899 715 41 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 2021 422,320,920 217,502 Issue of Shares 11/08/2021 17,827,303 0.300 5,348 Cost of share issue 11/08/2021 (346) Issue of Shares 17/09/2021 148,839,364 0.300 44,652 Cost of share issue 17/09/2021 (2,581) Exercise of options 28/09/2021 333,333 0.084 28 Exercise of options 15/03/2022 666,668 0.084 56 Exercise of options 18/03/2022 2,000,000 0.070 140 Exercise of options 28/03/2022 666,666 0.070 47 Closing balance at 30 June 2022 592,654,254 264,846 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 (b) Movements in HRCR: Date of Number of Exercise Expiry issue rights price $ date Opening balance as at 1 July 2021 15,000,000 Closing balance as at 30 June 2022 15,000,000 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 As announced to the ASX on 25 November 2019, the Company issued 20 million HRCR as part consideration for the Hog Ranch acquisition in August 2019, 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 ended 30 June 2021, 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 2 l 42 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 2021 17,133,334 Exercise of options 14/02/2019 (333,333) 0.084 31/01/2023 Lapse of options 06/03/2020 (500,000) 0.070 29/02/2024 Issue of options 26/11/2021 280,000 0.330 24/11/2025 Issue of options 10/03/2022 7,000,000 0.253 02/03/2026 Exercise of options 14/02/2019 (666,668) 0.084 31/01/2023 Exercise of options 06/03/2020 (2,000,000) 0.070 29/02/2024 Exercise of options 06/03/2020 (666,666) 0.070 29/02/2024 Issue of options 26/04/2022 1,000,000 0.300 17/04/2026 Closing balance as at 30 June 2022 21,246,667 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 (d) Movements in share based payment reserve: $000 Opening balance at 1 July 2021 846 Share based payments – options 395 Transfer from share based payments (101) Closing balance at 30 June 2022 1,140 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 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 2022 2021 $000 $000 Wages and salaries 2,760 1,956 Share based payments 352 204 Increase/(decrease) in liability for annual leave 111 25 Increase/(decrease) in liability for long service leave 72 19 Total employee beneﬁts expense 3,295 2,204 43 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 15. INCOME TAX BENEFIT NUMERICAL RECONCILIATION BETWEEN TAX BENEFIT AND PRE-TAX ACCOUNTING LOSS 2022 2021 $000 $000 Loss before tax for the period (12,777) (8,779) Income tax beneﬁt using the corporation tax rate of 30% (2021: 30%) (3,833) (2,634) Non-deductible expenses 159 78 Effect of jurisdictional tax variances 250 377 DTA not recognised – other jurisdiction 583 879 Net effect of tax losses not recognised 2,841 1,300 Total income tax expense/(beneﬁt) on pre-tax net loss – – 16. LOSS PER SHARE 2022 2021 cents cents Loss per share Basic loss per share (2.30) (2.36) Diluted loss per share (2.30) (2.36) (a) Basic loss per share The calculation of basic loss per share at 30 June 2022 was based on the loss attributable to ordinary equity holders of $12.777 million (2021: $8.779 million) and a weighted average number of ordinary shares outstanding during the ﬁnancial year ended 30 June 2022 of 556,276,809 (2021: 372,330,731). (b) Diluted loss per share The calculation of diluted loss per share at 30 June 2022 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 21,246,667 at 30 June 2022. 17. RECONCILIATION OF CASH FLOWS (a) Reconciliation of net proﬁt to cash used in operating activities 2022 2021 Note $000 $000 Loss before tax for the period (12,777) (8,779) Adjustments for non-cash items: Depreciation 10 41 58 Share based payments 13(d) 395 276 Adjustments for other items: Borrowing costs – 884 Foreign currency revaluation (257) 109 Gain on disposal of property plant and equipment – (11) Operating loss before changes in working capital and provisions (12,598) (7,463) (Increase)/decrease in receivables and prepayments (541) (110) (Decrease)/increase in trade and other payables 527 273 (Decrease)/increase in employee beneﬁts 183 44 (Decrease)/increase provisions – (36) Net cash used in operating activities (12,429) (7,292) ANNUAL REPORT 2 0 2 2 l 44 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 2022 2021 $000 $000 Opening balance at 1 July – 4,400 Proceeds from borrowings – – Repayment of borrowings – (4,400) Closing balance at 30 June – – 18. SHARE BASED PAYMENTS (a) Description of share based payment arrangements During the ﬁnancial year ending 30 June 2022, the following options were issued: (cid:129) (cid:129) (cid:129) 0.28 million options were granted on 26 November 2021, expiring 24 November 2025. Options are exercisable at a price of 33.0 cents each and options will vest in three equal tranches as follows: one third on 1 December 2022; one third on 1 December 2023 and one third on 1 December 2024. 7 million were granted on 10 March 2022, expiring 2 March 2026. Options are exercisable at a price of 25.3 cents each and options will vest in three equal tranches as follows: one third on 10 March 2023; one third on 10 March 2024 and one third on 10 March 2025. 1 million were granted on 26 April 2022, expiring 17 April 2026. Options are exercisable at a price of 30.0 cents each and options will vest in three equal tranches as follows: one third on 17 April 2023; one third on 17 April 2024 and one third on 17 April 2025. 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. 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 during the year 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 26 November 2021 10 March 2022 26 April 2022 Fair value at grant date (cents) 11.6 12.8 12.4 Exercise price (cents) 33.0 25.3 30.0 Expected volatility (percentage) 76 75 72 Option life (years) 3.5 3.5 3.5 Free interest rate (percentage) 1.10 1.17 2.73 (c) Option expense 2022 2021 $000 $000 Option expense 395 276 Total recognised as share based payments 395 276 45 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 18. SHARE BASED PAYMENTS (CONTINUED) (d) Outstanding options Date options granted Expiry date Issue price (cents) Number of options 6 March 2020 29 February 2024 1 December 2020 30 November 2024 28 May 2021 28 May 2025 26 November 2021 24 November 2025 10 March 2022 26 April 2022 2 March 2026 17 April 2026 7.0 17.5 47.0 33.0 25.3 30.0 7,766,667 5,000,000 200,000 280,000 7,000,000 1,000,000 21,246,667 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 2022 Trade and other payables 1,144 (1,144) (1,144) – 1,144 (1,144) (1,144) – 2021 Trade and other payables 617 (617) (617) – 617 (617) (617) – (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: 2022 2021 $000 $000 Cash and cash equivalents 44,139 9,682 Total cash and cash equivalents 44,139 9,682 ANNUAL REPORT 2 0 2 2 l 46 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 19. FINANCIAL INSTRUMENTS (CONTINUED) (d) Interest rate risk (Continued) 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 2022, 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) 2022 2021 2022 2021 $000 $000 $000 $000 Group +1% (100 basis points) 441 97 – – – 1% (100 basis points) (441) (97) – – 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 (2021: nil). 20. COMMITMENTS (a) 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 2022 2021 $000 $000 Not later than one year 782 712 Later than one year but not later than ﬁve years – 430 Nevada, USA 2022 2021 $000 $000 Not later than one year 73 67 Later than one year but not later than ﬁve years 73 869 Later than ﬁve years 8,145 10,841 (b) Capital commitments During the year ended 30 June 2022, the Group has entered into certain capital expenditure commitments totalling $1.118 million as at 30 June 2022. The commitment is likely to be settled by 30 June 2023. 2022 2021 $000 $000 Not later than one year 1,118 – Later than one year but not later than ﬁve years – – 47 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 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 2022 (2021: $0.020 million). 22. RELATED PARTIES (a) Parent and ultimate controlling party Country of Ownership Interest Incorporation 2022 2021 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% (b) Transactions with Key Management Personnel (KMP) (i) Loans to Directors There were no loans advanced to Directors for the year ending 30 June 2022 (2021: nil). (ii) Loans from Directors There were no loans from Directors for the year ending 30 June 2022. 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 (subsequently extended) using the Group’s freehold land as security. The balances in relation to the related parties’ portion is as follows: 2022 2021 $ $ Balance at 1 July – 2,328,288 Interest charged – 371,712 Amount paid – (2,700,000) Balance at 30 June – – (iii) KMP compensation KMP compensation comprised the following: 2022 2021 $ $ Short-term beneﬁts 1,418,876 966,949 Post-employment beneﬁts 90,361 54,093 Share based payments 375,689 191,997 Other long-term beneﬁts 36,093 6,227 1,921,019 1,219,266 ANNUAL REPORT 2 0 2 2 l 48 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 22. RELATED PARTIES (CONTINUED) (iii) KMP compensation (Continued) 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 22 to 28. There have been no changes to KMP between 1 July 2022 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, no KMP related companies transacted with the Group. Information regarding individual Directors’ and Executive Ofﬁcers’ compensation are provided in the Remuneration Report section of the Directors’ Report on pages 22 to 28. During the year ended 30 June 2022, there were no transactions or outstanding balances related to KMP companies (2021: $54,337 related to IT consulting services were provided by a company jointly controlled by the Chief Financial Ofﬁcer; there were no outstanding balances as at 30 June 2021). 23. PARENT ENTITY DISCLOSURES As at, and throughout, the period ending 30 June 2022, the parent company of the Group was Rex Minerals Ltd. 2022 2021 $000 $000 Result of the parent entity Loss for the period (10,501) (4,360) Other comprehensive income – – Total comprehensive loss for the period (10,501) (4,360) Financial position of the parent entity at year end Current assets 44,473 9,772 Total assets 69,166 31,658 Current liabilities 1,322 1,041 Total liabilities 1,427 1,157 Total equity of the parent entity comprising of Share capital 264,846 217,502 Share based payments reserve 1,140 846 Accumulated losses (198,247) (187,847) Total equity 67,379 30,501 Parent entity contingencies The Parent entity’s contingencies are the same as the Group’s contingencies as detailed in Note 21. 49 REX MINERALS LTD NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 24. SUBSEQUENT EVENTS No item, transaction or event of a material nature or circumstances have arisen in the interval between the end of the ﬁnancial year and the date of this report, 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 2022 2021 KPMG Australia $ $ Audit services 51,000 47,000 No non-audit services were provided in the current year. ANNUAL REPORT 2 0 2 2 l 50 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 22 to 28, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s ﬁnancial position as at 30 June 2022 and of its performance for the ﬁnancial year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. (b) 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 2022. 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 9th day of September 2022. 51 Lead Auditor’s Independence Dec Section 307C of the Corporations claration under s Act 2001 To the Directors of Rex Minerals Limited I declare that, to the best of my knowledge and belief, in relation to th the financial year ended 30 June 2022 there have been: he audit of Rex Minerals Limited for i. ii. no contraventions of the auditor independence requirem Act 2001 in relation to the audit; and ments as set out in the C rp raations por or no contraventions of any applicable code of professiona l conduct in relation to the audit. Paul Cenko Partner Adelaide 9 September 2022 tran pailartsuAn a,MGPK w IMGPh Kti ogo a l r demare t a e amhec s ppr timi Llaonitnaernt eds uskra edov under ap hisner bermemnd a Eetavi tye b f ofmrif praed, singl h he i under cil ens nd dependent isesofrP dsrandat Slona s itals Legi t glMGPKhe edtimi lynapomc emm ber on. on of i loba by itasniagor ntara t gu ofsmrif i rllAee. l gMGPKhe ndependent ed. itasniga veres rsght loba or em m The K on. tailiffasmri f ber ae manMGP y bdeitm liylitibiaL nd ed ANNUAL REPORT 2 0 2 2 l 52 t Independent Auditor’s Report To the shareholders of Rex Minerals Limited R otidu aeh tn otrope trope Rlaicnani Fehf t O onnipi We have audited the Rex Minerals Limited (the Company). innancial Reportt of i al Fi r In our opinion, the accompanying Financial Report of the Company is in accordance with the C rp raations Act 2001, including: por or (cid:1) (cid:1) ’ giving a true and fair view of the rGrooup’ss financial position as at 30 June 2022 and of financial performance for the year ended on that date; and its complying with Austra iaan Accounting Staandardds t the Corp raations r por egul R and laations 2001. r ali r B orfsisa opi onni Fi The innanciaal Report i (cid:1) Consolidated stat 30 June 2022; comprises: ement of financial position as at (cid:1) Consolidated state comprehensive in changes in equity, flows for the year t ement of profit or loss and other ncome, Consolidated statement of and Consolidated statement of cash then ended; (cid:1) Notes including a summary of significant accounting policies; and (cid:1) Directors’ Declarat tion. The Group consists controlled at the year financial year. of the Company and the entities it end or from time to time during the We conducted our audit in accordance with Austraaliaan Auditing S evidence we have obtained is sufficient and appropriate to provide a tStaandardds. We believe that the audit a basis for our opinion. r r i Our responsibilities under those standards are further described in audit of the Financiaal Report section of our report. i n the Auditor’s responsibilities for the or f We are independent of the Group in accordance with the Cor requirements of the Accounting Pr feessional and Ethical Staandardds Pr feessional Acc taants (iincluding Independence Staa daardds) (the C the Financial Report in Australia. We have fulfilled our other ethica these requirements. t rndt ount of of r ( l r r rrpporaations Act 2001 and the ethical t Boardd’s APES f Ethics foor 0 C S Code) that are relevant to our audit of al responsibilities in accordance with ode of 110 f K sertatMtiduAey Key Audit Matters are those matters that, in our professional judgem audit of the Financial Report of the current period. ment, were of most significance in our This matter was addressed in the context of our audit of the Financ our opinion thereon, and we do not provide a separate opinion on th cial Report as a whole, and in forming is matter. tran pailartsuAn a,MGPK w IMGPh Kti l ogo a r demare t a e amhec s ppr timi Llaonitnaernt eds uskra under edov ap hisner bermemnd a Eetavi tye b praed, ens under cil isesofrP dsrandat Slona ndependent itals Legi on. ofmrif t glMGPKhe edtimi lynapomch singl he i emm ber loba by oitasniagor on of A ntara Aee. i rll t PKhe P l gMG ndependent ed. itasniga veres rsght or loba em m The K on. gu ofsmrif tailiffasmri f ber ae manMGP y bdeitm liylitibiaL nd ed i 53 roatcidnitenmraipmifotenmsesssA roatcidnitenmraipmifotenmsesssA ald olG-erppoCe dislliHe htrofsr and luibnd di .ngs Land and buildings $14.209m – Note 10 0 The key audit matter How the matter was addressed in our audit The assessment of whether indicators exist over the carrying value of Hillside Copper-Gold Project land and bui a key audit matter due to: im mpairment ue of the uildings is (cid:1) (cid:1) The significance of the balances financial statements, being 21% assets; and es to the % of total The significance of this determina ation and its effect on the scope and dept th of our work. im The presence of mpairment indicators would necessitate a det detailed analysis by the Group of the rec coverable value of the Hillside Copper-Gol d Project land and buildings. In assessing the presence of im mpairment indicators, we focused on the valuation of on of land and buildings obtained from the Group’ s external valuation expert and the existence e of any indicators of impairment since that dat e. Together with valuation specialist we i senior audit team members in assessin audit matter. e involved g this key (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Our procedures included: Considering the appropriateness of the Group’s assessment of impairment indicators against the requirements of the accounting standards. Evaluating the Group’s assessment of indicators of asset impairment at 30 June 2022 with reference to our knowledge of the Group, our industry experience and current market conditions. Comparing the carrying value of land and buildings to the Group’s external valuation expert fair value estimate. Assessing the scope, competence and objectivity of the Group's external valuation expert engaged to value the land and buildings. Involving a valuation specialist in assessing the methodology used in the valuation of land and buildings by the Group's external valuation expert and checking the data used to recent sale transactions of comparable land and observable trends. https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf O onitamornfIrhet Other Information is financial and non-financial information in Rex Minerals Limited’s annual repo is provided in addition to the Financial Report and the Auditor’s Report. The Directors are respons Other Information. orting which sible for the Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do an audit opinion or any form of assurance conclusion thereon, with the exception of the Remunera and our related assurance opinion. not express ation Report In connection with our audit of the Financial Report, our responsibility is to read the Other Info doing so, we consider whether the Other Information is materially inconsistent with the Financi our knowledge obtained in the audit, or otherwise appears to be materially misstated. ormation. In al Report or We are required to report if we conclude that there is a material misstatement of this Other Infor based on the work we have performed on the Other Information that we obtained prior to the Auditor’s Report we have nothing to report. mation, and date of this ANNUAL REPORT 2 0 2 2 l 54 trofsrotceriDe htfoesitilibisnopesR icannFie ht troepRal The Directors are responsible for: (cid:1) (cid:1) (cid:1) preparing the Financial Report that Staandards and the C rp raations Ac por t gives a true and fair view in accordance with Austraalian Accounting ct 2001; or t r r implementing necessary internal c and fair view and is free from mater ontrol to enable the preparation of a Financial Report that gives a true erial misstatement, whether due to fraud or error; and assessing the Group and Company going concern basis of accounting to going concern and using the goi the Group and Company or to ceas y’s ability to continue as a going concern and whether the use of the is appropriate. This includes disclosing, as applicable, matters related oing concern basis of accounting unless they either intend to liquidate se operations, or have no realistic alternative but to do so. A daue htrofesitilibisnopesrs’rotidu d icnanFie htfoti troepRal Our objective is: (cid:1) (cid:1) to obtain reasonable assurance about misstatement, whether due to fraud bout whether the Financial Report as a whole is free from material ud or error; and to issue an Auditor’s Report that inc ncludes our opinion. Reasonable assurance is a high leve accordance with Austraaliiaan Auditing St ilr el of assurance, but is not a guarantee that an audit conducted in ttaandardds will always detect a material misstatement when it exists. r Misstatements can arise from fraud or they could reasonably be expected to i Financial Report. error. They are considered material if, individually or in the aggregate, influence the economic decisions of users taken on the basis of the A further description of our responsibil Assuraance Staandardds Boardd website a r This description forms part of our Audit te ities for the audit of the Financial Report is located at the Auditing and at: https:///www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. tor’s Report. r r / R ope RnoitarenumeReh tn otrope o tr Opinion Directors’ responsibilities In our opinion, the Remuneration Report of Rex Minerals Limited for the year ended 30 June 2022, complies with Section 300A of the C rp raations Act 2001. por or The Directors of the Company are responsible for the prep presentation of the Remuneration Report in accordance w 300A of the C rp raations Act 2001. t por or paration and with Section Our responsibilities We have audited the Remuneration Report included in pag of the Directors’ report for the year ended 30 June 2022. ges 22 to 28 Our responsibility is to express an opinion on the Re i d b conducted in accordance wit Report, based on our audit c Auditing Staandardds. t d i di d d r emuneration h Austraalian r Paul Cenko Partner Adelaide 9 September 2022 55 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 31 July 2022. DISTRIBUTION OF ORDINARY SHARES The number of shareholders, by size of holding: Total % of Range Holders Units Issued Capital 1 – 1,000 606 229,100 0.04 1,001 – 5,000 1,604 4,775,063 0.81 5,001 – 10,000 970 7,770,977 1.31 10,001 – 100,000 2,260 83,123,076 14.03 100,001 – 999,999,999 663 496,756,038 83.81 Total 6,103 592,654,254 100.00 The number of shareholders holding less than a marketable parcel: 1,416 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. 13. 14. 15. JP Morgan Nominees Australia Pty Limited 48,260,373 8.14 Citicorp Nominees Pty Limited 23,043,203 3.89 UBS Nominees Pty Ltd 19,244,162 3.25 Grand South Development Limited 14,659,630 2.47 BNP Paribas Nominees Pty Ltd (IB AU Noms Retail client DRP) 10,595,204 1.79 HSBC Custody Nominees (Australia) Limited 8,457,126 1.43 Dr Steven G Rodwell 7,509,241 1.27 Mr Simon (Sui Hee) Lee 7,300,000 1.23 S & S Olsen Pty Ltd 6,628,909 1.12 Curious Capital Group Pty Ltd (Curious Capital A/C) 6,500,000 1.10 Panjeta Family Group Pty Ltd (Panjeta Family Group A/C) 5,600,000 0.94 Stone Poneys Nominees Pty Ltd (Chapman Super Fund A/C) 5,553,218 0.94 Silver Rayne Pty Ltd 5,376,909 0.91 National Nominees Limited 5,141,255 0.87 Laufmann Longterm Investments Pty Ltd (Laufmann Super Fund A/C) 4,919,893 0.83 16. Miss Belinda Lees 4,171,000 0.70 17. Mrs Vickie Jane Jones 4,126,594 0.70 BNP Paribas Noms Pty Ltd (DRP) 3,772,050 0.64 18. Piama Pty Ltd (Fena Superannuation Plan A/C) 3,600,000 0.61 19. 20. Mrs Natalie Laufmann 3,500,000 0.59 Total 201,458,767 33.99 SUBSTANTIAL SHAREHOLDERS There is currently one substantial shareholder lodged with the Company: United Super Pty Ltd 47,978,869 8.10 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 2 l 56 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 (0)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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