Annual Report for the year ended 30 June 2022 Saturn Metals Limited ABN: 43 619 488 498 CORPORATE DIRECTORY Directors Brett Lambert Ian Bamborough Andrew Venn Robert Tyson Adrian Goldstone Company Secretary Natasha Santi Non-Executive Chairman Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Registered Office & Principal Place of Business 9 Havelock Street WEST PERTH WA 6005 Telephone: + 61 (0)8 6234 1114 Email: Website: info@saturnmetals.com.au www.saturnmetals.com.au ABN: ACN: 43 619 488 498 619 488 498 Auditors BDO Audit (WA) Pty Ltd Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 Share Registry Link Market Services Limited Level 12 QV1 Building 250 St Georges Terrace PERTH WA 6000 Telephone: Facsimile: Website: +61 1300 554 474 +61 (0)2 9287 0303 www.linkmarketservices.com Stock Exchange Listing Securities of Saturn Metals Limited are listed on the Australian Securities Exchange (ASX) ASX Code: STN Saturn Metals Limited is a Company registered under the Corporations Act 2001 in the State of Western Australia on 2nd June 2017. CONTENTS CHAIRMAN’S LETTER ........................................................................................................................................... 2 REVIEW OF OPERATIONS ................................................................................................................................... 3 DIRECTORS’ REPORT ........................................................................................................................................ 15 REMUNERATION REPORT (AUDITED) .............................................................................................................. 20 AUDITOR’S INDEPENDENCE DECLARATION ................................................................................................... 32 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ................. 33 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................... 34 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................ 35 CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................. 36 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS .......................................................................... 37 DIRECTOR’S DECLARATION .............................................................................................................................. 56 INDEPENDENT AUDITOR’S REPORT ................................................................................................................ 57 SCHEDULE OF TENEMENTS.............................................................................................................................. 61 MINERAL RESOURCE ESTIMATION GOVERNANCE STATEMENT ................................................................. 62 COMPETENT PERSONS STATEMENT .............................................................................................................. 63 ADDITIONAL SHARHEOLDER INFORMATION .................................................................................................. 64 SATURN METALS LIMITED – ANNUAL REPORT 2022 1 CHAIRMAN’S LETTER Dear Shareholders, I am very pleased to present to you the 2022 Annual Report for Saturn Metals Limited. Throughout 2022, Saturn continued to actively progress both the development and exploration of its flagship Apollo Hill Gold Project in the north-eastern Goldfields of Western Australia. In addition, the first phase of exploration drilling was successfully completed on our Joint Venture at the West Wyalong Goldfield in New South Wales. During the year the Company engaged in an aggressive regional drilling campaign, completing over 50,000 metres of drilling across the broader Apollo Hill project area. This campaign was highly successful delivering numerous promising results which led to the development of several new satellite prospects including Erebus, Artemis, Hercules and Aphrodite. Exploration is ongoing with some highly encouraging anomalies and geological patterns emerging. In the second half of the financial year work focussed on updating the Apollo Hill Mineral Resource with a new Resource estimate released in May 2022. The Inferred and Indicated Mineral Resource at Apollo Hill now totals 1.47 million ounces of contained gold constrained within a single simple pit shell. Importantly, the portion of the Mineral Resource assigned the higher confidence Indicated classification increased to over 760,000 ounces. In addition, results returned from circa 5,000 metres of reverse circulation drilling within the Apollo Hill corridor identified additional mineralisation extending in both northerly and southerly directions from the Apollo Hill deposit, further demonstrating the potential for future resource expansion. As I foreshadowed this time last year, the Company has taken significant steps towards defining the pathway to gold production at Apollo Hill. An important element of this work during the year was the completion of two major metallurgical programs and a complementary process engineering study to assess the optimal processing route for Apollo Hill ore. These programs led to the 2022 Mineral Resource being modelled to reflect a bulk tonnage mining and heap leach processing scenario. Metallurgical test-work is ongoing to confirm and further optimise the mineral processing route. Additional project study work has also commenced towards delivery of a comprehensive preliminary economic assessment of Apollo Hill’s potential. To sustain the high level of field activity and progress pre-development studies, Saturn raised additional capital of $7.4 million (net of costs) through a placement of shares to institutional and sophisticated investors. At year end the Company retained a healthy cash balance of $7.1 million. In closing I would like to acknowledge the steadfast efforts of the Saturn Metals team who continue to drive the project forward with diligence, enthusiasm and passion. I also wish to thank Saturn’s shareholders for their continued support of the Company. Yours sincerely, Brett Lambert Chairman 2 SATURN METALS LIMITED – ANNUAL REPORT 2022 REVIEW OF OPERATIONS Company Profile Saturn Metals Limited (“Saturn”) was incorporated on 2 June 2017 for the purposes of gold exploration and development. Saturn listed on the Australian Securities Exchange on 9 March 2018. Saturn’s primary objective is to focus on mineral exploration and resource opportunities that have the potential to deliver growth for shareholders. Saturn’s vision is to create superior value for its shareholders by discovering, developing and monetising world-class gold deposits. Saturn’s management strategy is to: advance the Apollo Hill Gold Project through development, towards production; continue a successful exploration program in respect to the Apollo Hill camp towards rapidly growing the Resource base; conduct further exploration activities across the Apollo Hill strategic land package towards identifying and growing new higher-grade gold lode/vein exploration targets; and continue a cost-effective exploration program in respect to its other Australian opportunities and ventures. In addition, Saturn looks to expand its current project portfolio by seeking opportunities to: apply for additional tenements to complement the Project; or acquire, either by way of an asset, share purchase or joint venture, complementary projects. As at 30 June 2022: Shares on Issue: 129,899,177 Share Price: $0.28 Market Capitalisation: $36.4M Cash: $7.108M 1.47Moz 2022 Mineral Resource1 Plate 1 – Air Core Drill Rig Arriving at Apollo Hill, June 2022. 1 This document contains exploration results and historic exploration results as originally reported in fuller context in Saturn Metals Limited ASX Announcements - as published on the Company's website. Saturn Metals Limited confirms that it is not aware of any new information or data that materially affects the information on results noted. Details of the Mineral Resource breakdown by category are presented in Table 1a* (on page 62 of this document) along with the associated Competent Persons statement (page 63) and details of the original ASX report that this information was originally published in. SATURN METALS LIMITED – ANNUAL REPORT 2022 3 REVIEW OF OPERATIONS (Cont.) Growth at Apollo Hill Our flagship Apollo Hill Gold Project covering approximately 1000km2 of contiguous exploration and mining tenements is situated in the heart of the world-class Eastern Goldfields 650km NE of Perth, Western Australia. The Project is located approximately 60km by road from the gold mining and processing town of Leonora and sits in a central strategic position to established gold mining infrastructure (Figure 1). Figure 1 – Saturn’s Apollo Hill Gold Project – Regional setting, Infrastructure and Landscape. At the heart of our ground package, is the Company’s Apollo Hill deposit which occurs on a mineralised structure associated with the 5km long and 500m wide Apollo-Ra Shear Zone. This shear zone is a parallel component of the district prevalent, gold fertile, and highly prospective Keith-Kilkenny Fault system, in the gold prolific Norseman-Wiluna Greenstone Belt (Figure 1). The Apollo Hill deposit, which bears all the hallmarks of a major mineralised Archean lode gold system, is characterised by simple metallurgy (free-milling coarse gold with low cyanidation characteristics) and thick zones of mineralisation encompassed in a single, large deposit, with the potential for a low stripping ratio, efficient bulk mining process and an efficient heap leach recovery circuit. 4 SATURN METALS LIMITED – ANNUAL REPORT 2022 REVIEW OF OPERATIONS (Cont.) Work carried out at Apollo Hill during the year saw a significant resource upgrade published in May 2022. Apollo Hill Indicated and Inferred Mineral Resource of 76Mt @ 0.60g/t Au for 1,469,000oz1 reported above a cut-off grade of 0.23g/t Au and within an optimised pit shell under a bulk tonnage heap leach processing scenario (a) Refer page 63 This resource upgrade delivered a significant addition of 525,000 oz from the previous Mineral Resource, representing an increase of 56% in ounces. The robust Mineral Resource update was based on: • An additional 286 reverse circulation (RC) holes totalling 31,149m completed by Saturn within the model area since the previous Mineral Resource in January 2021; • Results from a heap leach focussed metallurgical testing program which contributed to lowering the economic cut-off grade; and • Consideration of low-cost bulk tonnage mining and heap leach processing scenarios 2. A total of 41Mt @ 0.58g/t Au for 760koz is classified as Indicated Mineral Resource representing 52% of the total Mineral Resource (a 204koz addition to the Indicated category from the previous Mineral Resource). Saturn has added 964,000oz to the Apollo Hill Mineral Resource in just over four years from ASX listing through 128,924m of RC and diamond drilling. That is over 7.5oz added for every metre drilled. The recent growth in the Apollo Hill Mineral Resource was driven by: • The discovery of additional shallower mineralisation in the Southern Apollo Hill corridor, extensional drilling beneath the previous resource shell, and infill drilling within the previous resource shell. • The results of metallurgical testing on high quality diamond core which have demonstrated the clear potential to achieve low processing costs through simple and scalable treatment options. These low unit operating costs have in turn led to lower cut-off grades which have brought additional mineralised material into the Whittle pit shells, improved strip ratios and provided potential for more efficient mining considerations and economies of scale. • Saturn’s improving knowledge of the geological controls at the deposit and refinements in the resource modelling techniques have continued to have a positive influence. The Apollo Hill Mineral Resource is now of a scale to warrant evaluation of mining and mineral processing options. 2 CPC Engineering, Perth. Preliminary Mineral Process Engineering Cost Study. SATURN METALS LIMITED – ANNUAL REPORT 2022 5 REVIEW OF OPERATIONS (Cont.) 3 6 e g a p r e f e R ) a ( . y h p a r g o p o t h t i w n o i t a s m i i t p o t i p d e t c e l e s d n a l e d o m e c r u o s e R l a r e n M i l l i H o l l o p A 2 2 0 2 y a M e h t f o s n o i t a t n e s e r p e R D 3 w e i v e u q i l b O – 2 e r u g F i 6 SATURN METALS LIMITED – ANNUAL REPORT 2022 REVIEW OF OPERATIONS (Cont.) Apollo Hill Resource – Drilling A push for extension of the Apollo Hill resource area was underpinned by reverse circulation (RC) drilling activities. RC step out drilling results reported at Apollo Hill during the year extended the deposit in multiple directions. Resource Extension – North Excellent high grade extensional RC intersections highlighted a 150m northern extension of the Apollo Hill mineralisation. Intersections returned during the year included (a) Refer page 63: • 7m @ 11.18 g/t Au from 172m including 3m @ 25.67 g/t Au from 172m and 3m @ 17.62 g/t Au from 160m – AHRC0813 • 25m @ 0.66 g/t Au from 11m – AHRC0821 Resource Extension – Ra-Tefnut Corridor On the Ra-Tefnut extensional corridor, thick and shallow RC intersections built width to the gold system, with several stacked lodes now evident. Significant intersections reported include (a) Refer page 63: • 10m @ 2.34 g/t Au from 136m including 5m @ 4.42 g/t Au from 140m – AHRC0768 • 22m @ 1.00 g/t Au from 154m – AHRC0789 • 14m @ 1.49 g/t Au from 104m including 6 m @ 3.01g/t Au from 112m – AHRC0782 • 18m @ 1.16 g/t Au from 37m and 10m @ 0.96 g/t Au from 58m – AHRC0786 • 4m @ 11.59 g/t Au from 112m – AHRC0758 Ra North Corridor – Another Push At the Ra North corridor, extensional RC results returned in the footwall position to Apollo Hill Main Lode highlighted the exploration opportunity to the north. Significant intersections included (a) Refer page 63: • 7m @ 1.49 g/t Au from 29m, 6m @ 1.63 g/t Au from 47m and 12m @ 1.37 g/t Au from 183m – AHRC0801 • 3m @ 1.74 g/t Au from 299m including 1m @ 4.06 g/t Au from 299m – AHRC0814 Plate 2 – Aerial view of Apollo Hill deposit currently 3km long and up to 800m wide. SATURN METALS LIMITED – ANNUAL REPORT 2022 7 REVIEW OF OPERATIONS (Cont.) Apollo Hill Resource – Metallurgy Early in the year, to prepare for the for the next Apollo Hill resource upgrade, Saturn commenced a program of metallurgical test work. Test work included the drilling of, and then submission of, 600m of large diameter (PQ and HQ sized) diamond drill cores to the laboratory for a series of metallurgical tests designed to evaluate the amenability of Apollo Hill mineralised material to bulk tonnage, low operating cost processing methods such as heap or vat leaching and also conventional milling options. Results from test work completed during the year showed clear potential to consider lower processing costs through simpler and scalable treatment options. Lower unit costs can in turn lead to lower cut-off grades, allowing the processing of additional mineralised material, improved stripping ratios, more efficient mining processes and economies of scale. Exceptional Overall Recovery from Free Milling Gold (a) Refer page 62 • Excellent overall gold recovery of 96.8% was obtained at typical commercial grind sizes (75 micron) in intermittent bottle roll tests (IBRT) and bulk leach extractable gold (BLEG) tests of RC samples for Apollo Hill’s major material types, and across the deposits full grade range. Excellent Recovery at Target Crush Sizes (a) Refer page 62 • An Apollo Hill composite sample derived from high quality diamond core, gave an excellent overall recovery of 81% from IBRT’s, preceded with gravity separation, using high pressure grinding roll (HPGR) crushing to 8mm P100 (targeted commercial fresh rock crush size). First Rate Recovery of Lower Grades Demonstrates Economic Potential (a) Refer page 62 • A strong average recovery of 77% was obtained at a ~8.6mm P100 average crush size in the IBRT’s for Apollo Hill’s major material types, across the deposit’s lower grade range (0.2g/t Au to 0.6g/t Au), using conventional stage crushing and HPGR sample subsets. Material was submitted from differing geographies, material types, grade ranges and rock types at Apollo Hill. Specific test programs conducted in site water focussed on: • Rock strength and crushing and grinding characteristics; • Agglomeration and permeability tests; • Leach testing via bottle roll for overall recovery at various crush and grind sizes; and • Bigger scale column leach testing to help assess leaching kinetics under conditions more closely reflecting full scale operations. Plate 3 – Heap Leach column tests underway at Bureau Veritas in Canning Vale (March-April 2022). 8 SATURN METALS LIMITED – ANNUAL REPORT 2022 REVIEW OF OPERATIONS (Cont.) Regional Exploration Activities Identify New Gold Systems During the year the Saturn continued a major regional drilling campaign following on from previous preparatory geophysical surveys and heritage clearance phases to further explore the Apollo Hill super structure and the regionally gold prospective, Keith Kilkenny Shear. 852 Air Core Drill Holes (AC) for 57,688m 33 Reverse Circulation Drill Holes (RC) for 6,967m Results and intersections returned throughout the year revealed a number of new gold systems, and further defined known systems, in proximity to the Apollo Hill 1.47Moz Au1 Mineral Resource, systems include the prospects labelled in Figure 3. The identification of multiple prospects (Figure 3) in proximity to our Apollo Hill Mineral Resource illustrates the potential for either a long-life, large-scale set of gold assets or perhaps more importantly the opportunity for another major discovery in the centre of the competitive and highly active Leonora district. Subsequent to year end, Saturn has continued work on exploration and validation of these exciting prospects with ongoing AC drilling. Figure 3 – Prospect locations in relation to the Apollo Hill Mineral Resource, Apollo Hill Super-Structure and Keith-Kilkenny Shear. (a) Refer page 63 SATURN METALS LIMITED – ANNUAL REPORT 2022 9 REVIEW OF OPERATIONS (Cont.) Significant results returned from regional prospects throughout the year include: Hercules – 15km south-east of the Apollo Hill Mineral Resource Regional exploration AC and RC discovered a significant zone of gold bearing mineralisation at Hercules (Figure 3 & Figure 4). Drilling increased the strike length of the Hercules mineralised zone to over 2km, with intersections returned during the year including (a) Refer page 63: • 20m @ 2.27g/t Au from 24m including 8m @ 5.17g/t Au from 24m – AHAC0925 • 4m @ 1.97g/t Au from 64m – AHAC1006 • 8m @ 1.06g/t Au from 28m – AHAC0865 • 4m @ 4.57g/t Au from 54m – AHRC0836 • 8m @ 1.06g/t Au from 28m – AHAC0865 Figure 4 – Plan of significant Air Core results at Hercules showing the gold trend – gold contours of Au gram metres from recent and historical drilling, merged geophysical and aerial image background. (a) Refer page 63 10 SATURN METALS LIMITED – ANNUAL REPORT 2022 REVIEW OF OPERATIONS (Cont.) Bob’s – 7km east of the Apollo Hill Mineral Resource Extensional RC and step out AC during the year confirmed Bob’s (Figure 3) is a large gold system. Results returned continued to build the understanding of the mineralisation along Bob’s 3.5km strike length, with higher grade gold vectors remaining open for additional drill targeting. Intersections returned during the year included (a) Refer page 63: • 5m @ 6.82g/t Au from 130m – AHRC0825 • 10m @ 2.96g/t Au from 126m – AHRC0834 • 3m @ 3.41g/t Au from 215m – AHRC0833 Plate 4 – AC Drilling at Bob’s Prospect. Aquarius – 25km south-east of the Apollo Hill Mineral Resource Several zones of coherent mineralisation, hidden under cover have been identified at Aquarius (Figure 3). Significant intersections returned include (a) Refer page 63: • 13m @ 1.32g/t Au from 56m including 4m @ 4.31g/t Au from 56m – AHAC0464 • 4m @ 1.86g/t Au from 64m within 9m @ 0.69g/t Au from 64m – AHAC0763 • 4m @ 1.26g/t Au from 72m within 12m @ 0.63g/t Au from 68m – AHAC0746 Artemis – 10km north-west of the Apollo Hill Mineral Resource Regional reconnaissance AC and follow up AC during the year discovered and lengthened the Artemis (Figure 3) system to 800m in strike length. Significant intersections returned during the year from the broad space drilling completed include (a) Refer page 63: • 4m @ 4.08g/t Au from 40m within 33m @ 0.73g/t Au from 24m – AHAC0672 • 4m @ 0.49g/t Au from 40m and 4m @ 0.53g/t Au from 60m – AHRC0880 SATURN METALS LIMITED – ANNUAL REPORT 2022 11 REVIEW OF OPERATIONS (Cont.) West Wyalong Farm-In Gold Joint Venture During the year, Saturn completed its maiden diamond drill program at its West Wyalong Gold Project in New South Wales. The initial focus of exploration was the 2 km long high-grade Mallee Bull Reef within the long forgotten West Wyalong Goldfield. No underground development or modern exploration is known to have occurred on the Mallee Bull Reef line since 1915 when a decline in production was synchronous with the onset of World War One. Saturn’s program is the first modern test of this excellent opportunity. Results from the first four exploratory diamond holes (2,085m) drilled at West Wyalong during the half year to test the Mallee Bull Reef structure (historically produced over 128,000 oz at 50g/t Au up to 1915 (a Bowman 1977, see Saturn ASX announcement dated 28 April 2020)) beneath old workings have: • • • further confirmed the extension of gold bearing quartz reef structures at depth beneath old workings; identified wide geological corridors with potential for multiple gold shoots; and developed the geological model for refinement of geological targeting work; and provided additional information on the extent and position of old workings. Geological information and assays returned from the drilling program improved the understanding of the reef structures and will be essential in the design and direction of the next phase of the exploration program. The best result returned from the drilling program was 0.7m @ 2.74g/t Au from 393.2m in hole WWDD0003 (Figure 4). Fieldwork is planned in the next year to explore quartz vein targets in the northern region of the project area. Figure 4 – Oblique 3D view - Long Section View of the Maiden West Wyalong Drill Program (adapted from d1-d4- GS1928/007 p61long-section). (a) Refer page 63 12 SATURN METALS LIMITED – ANNUAL REPORT 2022 REVIEW OF OPERATIONS (Cont.) Corporate Cash Position As at 30 June 2022 Saturn held $7.108m of cash. Capital Raising and Share Issues To support the Company’s activities Saturn raised additional capital during the year through the issue of shares: • • • • • 6 July 2021, the Group raised $39,600 by issuing 150,000 shares at 26.4 cents per share on the exercise of options held by Directors and employees; 15 November 2021, the Group raised $123,552 by issuing 468,000 shares at 26.4 cents per share on the exercise of options held by Directors and employees; 3 December 2021, the Group raised $6,189,956 (net of costs) by issuing 13,833,334 shares at 48 cents per share by placement to institutional and sophisticated investors; 6 December 2021, the Group raised $39,600 by issuing 150,000 shares at 26.4 cents per share on the exercise of options held by Directors and employees; and 23 March 2022, the Group raised $1,264,839 (net of costs) by issuing 2,833,333 shares at 48 cents per share by placement to institutional and sophisticated investors. Auditor BDO Audit (WA) Pty Ltd were appointed as the Company’s auditor effective from the annual general meeting of shareholders held on 24 November 2021. Company Values Saturn is committed to conducting its business activities in accordance with the below stated values. SATURN METALS LIMITED – ANNUAL REPORT 2022 13 REVIEW OF OPERATIONS (Cont.) Health and Safety Safety Saturn is focused on providing safe working environment for all its personal. Over the course of the year a total of 24,473 work hours were recorded at our Apollo Hill Gold Project. Of this, Saturn employees contributed 10,586 work hours and Saturn contractors contributed 13,887 work hours. Importantly during the year there were no lost time injuries recorded. Employee Assistance Program Saturn has engaged Lifeskills Australia to provide all personnel with access to an Employee Assistance Program (EAP). The aim of providing an EAP is to ensure all employees have access to a confidential counselling service which can help individuals deal with personal or work-related issues that may otherwise adversely affect their wellbeing. Community Engagement Heritage Surveys Saturn conducted heritage surveys with an anthropologist and representatives of traditional owner’s Nyalpa Pirniku in August 2021 and March 2022. These surveys were conducted to provide clearance to Saturn tenure for future work programs and project development. Local Suppliers The Company endeavors to engage local suppliers of good and services where available to support activities at its Apollo Hill Gold Project. During the year Saturn engaged with Menzies Mining Pty Ltd, a local company with ties to the Nyalpa Pirniku Native Title Claimants to provide earthworks services at Apollo Hill. Plate 5 – Menzies Mining and Saturn employees at Saturn site accommodation located at the Glenorn Station Homestead. Corporate Governance the intent of Saturn supports the ASX Corporate Governance Council’s Principles and Recommendations (4th Edition). Details of the corporate governance practices adopted by Saturn can be ‘Corporate Governance Statement 2022’ available on our website at www.saturnmetals.com.au/about/corporate-governance/ in our found 14 SATURN METALS LIMITED – ANNUAL REPORT 2022 DIRECTORS’ REPORT The Directors present their report together with the consolidated financial statements of the Group comprising of Saturn Metals Limited (“Saturn” the “Group” or the “Company”) and its subsidiary for the financial year ended 30 June 2022 and the auditor’s report thereon. Directors and Company Secretary The following persons were directors of Saturn during the whole of the financial year and up to the date of this report. Brett Lambert – Non-Executive Chairman Ian Bamborough – Managing Director Andrew Venn – Non-Executive Director Robert Tyson – Non-Executive Director Adrian Goldstone – Non-Executive Director The Company Secretary is Mrs Natasha Santi. Mrs Santi was appointed Company Secretary on 3 May 2021, after previously commencing as a full-time employee of Saturn on 11 January 2021. Mrs Santi previously had 9 years’ experience, as an employee of Boden Corporate Services Pty Ltd, providing company secretarial and accounting services to a range of ASX listed and unlisted companies, including serving as Company Secretary at Capricorn Metals Ltd from July 2012. In addition, from April 2017, Mrs Santi was a full-time employee at Capricorn Metals Ltd until her resignation as Company Secretary, February 2020. Principal Activities The principal activity of the Group is the exploration for economic deposits of precious metals. For the period of this report, the emphasis has been gold focused exploration and project development near Leonora, in Western Australia. Dividends Paid or Recommended No dividends were paid or proposed to be paid during the financial year (2021: Nil). Operating Results The loss for the Group for the financial year after providing for income tax amounted to $2,283,191 (2021: $1,959,350). Loss per share $0.02 (2021: $0.02). Financial Position The net assets of the Group for the year ended 30 June 2022 were $35,227,571 (2021: $29,452,890). Net assets have increased due to share issues completed during the year which raised $7,657,547, net of costs for further exploration activities. In addition, a further $6,123,789 was capitalised as exploration and evaluation costs. At 30 June 2022 the closing cash balance of the Group was $7,108,560 (2021: $8,155,144). Review of Operations During the 2022 financial year the Company progressed exploration and resource development across it’s Apollo Hill Gold Project by completing a total of: 44 Reverse Circulation (RC) Drill Holes for 9,915m of drilling; 859 Aircore (AC) Drill Holes for 58,030m of drilling, and; 5 Diamond (DD) Drill holes for 515m. SATURN METALS LIMITED – ANNUAL REPORT 2022 15 DIRECTORS’ REPORT (Cont.) In addition to significant work undertaken at Apollo Hill, Saturn completed its first exploration program in West Wyalong at its Gold joint venture in New South Wales. The program saw 151m of RC pre- collars completed and 4 DD holes totalling 1,632m. In preparation for the next Apollo Hill resource upgrade Saturn completed a program of metallurgical test work. Test work included the drilling of, and then submission of, 600m of large diameter (PQ and HQ sized) diamond drill cores to the laboratory for a series of metallurgical tests designed to evaluate the amenability of Apollo Hill mineralised material to bulk tonnage, low operating cost processing methods such as heap or vat leaching. In addition to the metallurgical test work, the Company commissioned a preliminary capital and operating costs study for large scale, bulk tonnage processing at Apollo Hill. The engineering firm engaged to conduct the study has significant experience in this style of operation and are the design engineers for a similar project currently recently constructed in Western Australia. The results of the study were used in support of the major upgrade to the Apollo Hill Resource completed May 2022 – the details of which can be found in the Company’s announcement to the ASX on 2 May 2022. Significant Changes in the State of Affairs Other than as set out below and elsewhere in the report, there were no significant changes to the state of affairs. Changes to Contributed Equity During the year the Group increased contributed equity by $7,657,547 through the issue of 17,434,667 shares in the Group as part of placements to institutional and sophisticated investors and the exercise of unquoted options held by Directors and employees. The details and timing of each raising were as follows: 6 July 2021, the Group raised $39,600 by issuing 150,000 shares at 26.4 cents per share on the exercise of options held by Directors and employees; 15 November 2021, the Group raised $123,552 by issuing 468,000 shares at 26.4 cents per share on the exercise of options held by Directors and employees; 3 December 2021, the Group raised $6,189,956 (net of costs) by issuing 13,833,334 shares at 48 cents per share by placement to institutional and sophisticated investors; 6 December 2021, the Group raised $39,600 by issuing 150,000 shares at 26.4 cents per share on the exercise of options held by Directors and employees; and 23 March 2022, the Group raised $1,264,839 (net of costs) by issuing 2,833,333 shares at 48 cents per share by placement to institutional and sophisticated investors. Details of changes in contributed equity is disclosed in Note 11 in the consolidated financial statements. The Directors are not aware of any other significant changes in the state of affairs of the Company occurring during the financial year, other than disclosed in this report. Events Occurring Subsequent to Balance Date There were no other matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years. Likely Developments and Expected Results It is the Board’s current intention that the Group will progress exploration and development on current projects. Exploration and development is inherently risky and there are no certainties that the Group will successfully achieve its objectives. 16 SATURN METALS LIMITED – ANNUAL REPORT 2022 DIRECTORS’ REPORT (Cont.) Information on Directors The names and particulars of the Group’s Directors during the financial year, and as at the date of this report are as follows: IAN BAMBOROUGH BSc(Hons), MSc, MBA, MAIG, GAICD Managing Director Experience and Expertise: Mr Bamborough is a geologist with more than 25 years leadership experience in the mining industry. Mr Bamborough developed his career with Newmont Mining Corporation and was more recently Managing Director of ASX listed Spectrum Rare Earths Limited. Mr Bamborough has previously served as a Director of the Northern Territory Mining Board, and currently holds directorships with private exploration and mining company, Reef Mining Pty Ltd. Mr Bamborough is also Vice chair of the Gold Industry Group of Australia. The Board does not consider Mr Bamborough to be an independent Director. Other current ASX listed company directorships: None. Former ASX listed company directorships in the last three years: None. First appointed as a Director: 19 September 2017 Interests in Shares, Rights and Options: Shares: Performance Rights: Options: 4,713,941 1,138,000 250,000 BRETT LAMBERT BAppSc (Mining Engineering) Non-Executive Chairman Experience and Expertise: Mr Lambert is a mining engineer and experienced company director. He has over 35 years’ involvement in the Australian and international resources industry encompassing exploration, mining operations, project development, business development and corporate administration. Mr Lambert commenced his professional career with Western Mining Corporation in Kalgoorlie and progressed to a Senior Management role. Since leaving WMC, Mr Lambert has held executive positions with a number of junior and mid-tier resource companies, including more than 10 years at CEO/managing director level. The Board considers that Mr Lambert is an independent Director. Other current ASX listed company directorships: Non-Executive Chairman of Mincor Resources NL (1 January 2017 to present). Non-Executive Director of Australian Potash Limited (9 May 2017 to present). Non-Executive Director of Musgrave Minerals Ltd (4 February 2021 to present). Non-Executive Chairman of Metal Hawk Limited (3 July 2019 to present) Former ASX listed company directorships in the last three years: Non-Executive Director of Metals X Limited (resigned 10 July 2020) Non-Executive Director of De Grey Mining Limited (resigned 22 July 2019). First appointed as a Director: 9 April 2020 Interests in Shares, Rights and Options: Shares: Performance Rights: Options: - - 700,000 SATURN METALS LIMITED – ANNUAL REPORT 2022 17 DIRECTORS’ REPORT (Cont.) ROBERT TYSON B.App Sc(Geol), GradDip Applied Finance(SIA) MAusIMM Non-Executive Director Experience and Expertise: Mr Tyson is a geologist with more than 25 years resources industry experience having worked in exploration and mining-related roles for companies including Cyprus Exploration Pty Ltd, Queensland Metals Corporation NL, Murchison Zinc Pty Ltd, Normandy Mining Ltd and Equigold NL. Mr Tyson is an Executive Director and founder of Peel Mining Limited,. The Board considers that Mr Tyson is an independent Director. Other current ASX listed company directorships: Executive Director – Technical of Peel Mining Limited (from 3 March 2022), Managing Director of Peel Mining Limited (20 April 2006 to 3 March 2022). Former ASX listed company directorships in the last three years: None. First appointed as a Director: 2 June 2017 Interests in Shares, Rights and Options: Shares: Performance Rights: Options: 1,360,000 - 750,000 ANDREW VENN BBus, GradDip Applied Finance, FFin Non-Executive Director Experience and Expertise: Mr Venn has over 20 years mining industry experience. Mr Venn has previously held senior positions across financing and operations for Argonaut Limited, Orica Mining Services, ICI Explosives and DDH1 Limited and is a Fellow of the Financial Services Institute of Australia. The Board considers that Mr Venn is an independent Director. Other current ASX listed company directorships: None. Former ASX listed company directorships in the last three years: None. First appointed as a Director: 29 September 2017 Interests in Shares, Rights and Options: Shares: Performance Rights: Options: 968,000 - 750,000 18 SATURN METALS LIMITED – ANNUAL REPORT 2022 DIRECTORS’ REPORT (Cont.) ADRIAN GOLDSTONE BSc, MSc (Hons) Non-Executive Director Experience and Expertise: Mr Goldstone has in excess of 35 years’ experience in the resources industry holding executive roles over much of that time and has more recently become involved in specialist investment and financing for the resources industry. He currently holds the position of Managing Director, Technical at Dundee Goodman Merchant Partners. He brings expertise and successful experience in Project Management and associated governance processes, environmental management, and social licence in the industry and has a strong focus on creative business solutions meeting the expectations of multiple stakeholders. The Board considers that Mr Goldstone is an independent Director. Other current ASX listed company directorships: Non-Executive Director of Big River Gold Limited (26 May 2021 to present). Former ASX listed company directorships in the last three years: Non-Executive Director of Zinc of Ireland NL (29 January 2019 to 30 November 2021). First appointed as a Director: 20 May 2021 Interests in Shares, Rights and Options: Shares: Performance Rights: Options: 14,500 - 500,000 Meetings of Directors The number of meetings of Director’s (including committees of Directors) held during the year ended 30 June 2022, and the number of meetings attended by each director was as follows: Director I Bamborough B Lambert R Tyson A Venn A Goldstone Directors Meetings B A 9 9 9 8 9 8 9 9 9 9 Audit & Risk Committee A 4 4 3 4 4 B 4 4 4 4 4 A = Number of meetings attended. B = Number of meetings held during the time the director held office or was a member of the committee. SATURN METALS LIMITED – ANNUAL REPORT 2022 19 REMUNERATION REPORT (AUDITED) The Directors present the Saturn Metals Limited 2022 remuneration report, outlining key details of the nature and amount of remuneration for each Key Management Personnel (“KMP”) awarded this year. The remuneration report is structured as follows: a) Key management personnel covered in this report b) Principles used to determine the nature and amount of remuneration c) Key personnel remuneration d) Service agreements e) Equity issued as part of remuneration f) Option holdings of key management personnel g) Performance rights holdings of key management personnel h) Share holdings of directors and key management personnel, and i) Additional information a) Key Management Personnel Covered In This Report Key Management Personnel Ian Bamborough Brett Lambert Robert Tyson Andrew Venn Adrian Goldstone Position Managing Director Non-Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Changes during the year - - - - - Note: Details of each director are set out on pages 17 – 19. There have been no changes to KMP since 30 June 2022 and to the date of this report. Principles Used To Determine The Nature And Amount Of Remuneration The objective of the remuneration framework of Saturn Metals Limited is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders. The Board believes that executive remuneration satisfies the following key criteria: competitiveness and reasonableness acceptability to shareholders performance linkage / alignment of executive compensation transparency capital management These criteria result in a framework which can be used to provide a mix of fixed and variable remuneration, and a blend of short and long-term incentives in line with the Group’s remuneration policy. Board and senior management The remuneration of the Managing Director will be decided by the Board, without the affected Executive Director participating in that decision-making process. 20 SATURN METALS LIMITED – ANNUAL REPORT 2022 REMUNERATION REPORT (AUDITED) (Cont.) The total maximum remuneration of Non-Executive Directors was initially set by the Constitution and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act and the ASX Listing Rules, as applicable. The current amount has been set at an amount not to exceed $300,000 per annum. The determination of Non-Executive Directors’ remuneration within that maximum is made by the Board having regard to the inputs and value to the Group of the respective contributions by each Non-Executive Director. In addition, a Director may be paid fees or other amounts (i.e. subject to any necessary Shareholder approval, non-cash remuneration such as Options) as the Directors determine where a Director performs special duties or otherwise performs services outside the scope of the ordinary duties of a Director. Directors are also entitled to be paid reasonable travelling, hotel and other expenses incurred by them respectively incurred in the performance of their duties as Directors. The Board reviews and approves the remuneration policy to enable the Group to attract and retain executives and Directors who will create value for Shareholders having consideration to the amount considered to be commensurate for a company of its size and level of activity as well as the relevant Directors’ time, commitment, and responsibility. The Board is also responsible for reviewing any employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed. Senior management are paid based on applicable market rates. Company Performance The following table shows the gross revenue, profits, dividends and share price at the end of the financial year for the past 5 years, ending 30 June: Revenue Net profit/(loss) Share price at year end Dividends paid 2018 $ 27,334 (857,320) 0.16 - 2019 $ 80,126 (1,187,119) 0.300 - 2020 $ 74,974 (1,476,067) 0.715 - 2021 $ 72,592 (1,959,350) 0.410 - 2022 $ 15,777 (2,283,191) 0.280 - Remuneration is not linked to past Group performance but rather towards generating future shareholder wealth through share price performance. The Board and management may be issued share options in the company on a periodic basis as a means to link executive rewards to shareholder value. SATURN METALS LIMITED – ANNUAL REPORT 2022 21 REMUNERATION REPORT (AUDITED) (Cont.) b) Key Management Personnel Remuneration Details of the remuneration expense recognized for each key management person of the Group during the current and previous financial year ending 30 June, is set out in the following table: Fixed Remuneration Variable Remuneration Short-Term Employment Benefits Cash salary & fees $ Post- Employment Benefits Super- annuation $ Long-Term Benefits Leave benefits $ Share Based Payments Options $ Performance Rights $ Total $ Perform- ance Related % 293,267 253,216 70,000 70,000 50,000 50,000 50,000 50,000 50,000 5,780 513,267 428,996 23,723 24,508 22,572 18,749 11,867 15,469 142,350 117,919 493,779 429,861 7,000 6,650 5,000 4,750 5,000 4,750 5,000 549 45,723 41,207 - - - - - - - 22,572 18,749 62,715 - 56,664 (10,522) 56,664 (10,522) 44,796 - 232,706 (5,575) - - (69,082) 44,314 (69,082) 44,314 - - 4,186 206,547 139,715 76,650 42,582 88,542 42,582 88,542 99,796 6,329 818,454 689,924 31% 31% 45% - Nil 38% Nil 38% 45% - Key Management Person Year Executive Director I Bamborough 2022 2021 Directors B Lambert R Tyson A Venn A Goldstone Total 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Note: • Options issued during the year are designed provide long-term incentives for Eligible Participants to deliver long-term shareholder returns (as disclosed on page 24). • Performance rights issued during the year are designed to provide short-term incentives to Directors to deliver short- and long-term shareholder returns (as disclosed on page 25). c) Service agreements Remuneration and other terms of employment for the Directors and key management personnel, except those of non-executive Directors are formalised in Employment Agreements or Letters of Offer. Details of the employment conditions for Directors and Key Management Personnel are set out below. The Company has entered into an Executive Service Agreement with Mr Ian Bamborough pursuant to which Mr Bamborough was appointed Managing Director of the Company on the following terms: a) The Managing Director is employed on a full time on basis; b) The Company will pay to the Managing Director for services rendered a salary of $300,000 (excluding superannuation) per annum; c) The Company will reimburse the Managing Director for all reasonable expenses (including travel and accommodation) incurred in the performance of his duties; d) The Company may terminate the executive services agreement without reason on three (3) months’ notice thereafter and immediately without notice in the event of serious misconduct; e) The Managing Director may terminate the executive services agreement at any time and without notice if the Company commits a serious breach of the executive service agreement or by giving three (3) months’ notice to the Company; and f) The Company has entered into a deed of insurance, indemnity and access with Mr Bamborough. The Company has taken out and will use its best endeavours to maintain appropriate directors’ and officers’ liability insurance. The above Executive Service Agreement otherwise contains terms and conditions which are considered standard for agreements of their nature, including those relating to confidentiality, non-disclosure and assignment. 22 SATURN METALS LIMITED – ANNUAL REPORT 2022 REMUNERATION REPORT (AUDITED) (Cont.) The Company has entered into an appointment letter with Mr Brett Lambert pursuant to which Mr Lambert was appointed Non-Executive Chairman of the Company on the following terms: a) Mr Lambert’s appointment commenced on 9 April 2020 and automatically ceases at the end of any meeting at which he is not re-elected as a Director by the shareholders of the Company or otherwise ceases in accordance with the Constitution; b) The Company will pay $70,000 per annum (excluding superannuation) to the Non-Executive Chairman monthly in arrears. Remuneration shall be subject to annual review by the Board of the Company and approval by the shareholders of the Company (if required); c) During the annual review the Board resolved to increase the remuneration from 1 July 2022 to $77,000 per annum. d) The Company will reimburse Mr Lambert for all reasonable expenses (including travel and accommodation) incurred in the performance of his duties where agreed by the Board; and e) The Company has entered into a deed of insurance, indemnity and access with Mr Lambert. The Company has taken out and will use its best endeavours to maintain appropriate directors’ and officers’ liability insurance. The appointment letter otherwise contains terms and conditions that are considered standard for agreements of this nature. The Company has entered into an appointment letter with Robert Tyson pursuant to which Mr Tyson was appointed Non-Executive Director of the Company on the following terms: a) Mr Tyson’s appointment commenced on 9 April 2020 and automatically ceases at the end of any meeting at which he is not re-elected as a Director by the shareholders of the Company or otherwise ceases in accordance with the Constitution; b) The Company will pay $50,000 per annum (excluding superannuation) to the Non-Executive Director monthly in arrears. Remuneration shall be subject to annual review by the Board of the Company and approval by the shareholders of the Company (if required); c) During the annual review the Board resolved to increase the remuneration from 1 July 2022 to $55,000 per annum. d) The Company will reimburse Mr Tyson for all reasonable expenses (including travel and accommodation) incurred in the performance of his duties where agreed by the Board; and e) The Company has entered into a deed of insurance, indemnity and access with Mr Tyson. The Company has taken out and will use its best endeavours to maintain appropriate directors’ and officers’ liability insurance. The appointment letter otherwise contains terms and conditions that are considered standard for agreements of this nature. The Company has entered into an appointment letter with Andrew Venn pursuant to which Mr Venn was appointed Non-Executive Director of the Company on the following terms: a) Mr Venn’s appointment commenced on 21 September 2017 and automatically ceases at the end of any meeting at which he is not re-elected as a Director by the shareholders of the Company or otherwise ceases in accordance with the Constitution; b) The Company will pay $50,000 per annum (excluding superannuation) to the Non-Executive Director monthly in arrears. Remuneration shall be subject to annual review by the Board of the Company and approval by the shareholders of the Company (if required); c) During the annual review the Board resolved to increase the remuneration from 1 July 2022 to $55,000 per annum. d) The Company will reimburse Mr Venn for all reasonable expenses (including travel and accommodation) incurred in the performance of his duties where agreed by the Board; and e) The Company has entered into a deed of insurance, indemnity and access with Mr Venn. The Company has also taken out and will use its best endeavours to maintain appropriate directors’ and officers’ liability insurance. SATURN METALS LIMITED – ANNUAL REPORT 2022 23 REMUNERATION REPORT (AUDITED) (Cont.) The appointment letter otherwise contains terms and conditions that are considered standard for agreements of this nature. The Company has entered into an appointment letter with Adrian Goldstone pursuant to which Mr Goldstone was appointed Non-Executive Director of the Company on the following terms: a) Mr Goldstone’s appointment commenced on 20 May 2021 and automatically ceases at the end of any meeting at which he is not re-elected as a Director by the shareholders of the Company or otherwise ceases in accordance with the Constitution; b) The Company will pay $50,000 per annum (excluding superannuation) to the Non-Executive Director monthly in arrears. Remuneration shall be subject to annual review by the Board of the Company and approval by the shareholders of the Company (if required); c) During the annual review the Board resolved to increase the remuneration from 1 July 2022 to $55,000 per annum. d) The Company will reimburse Mr Goldstone for all reasonable expenses (including travel and accommodation) incurred in the performance of his duties where agreed by the Board; and e) The Company has entered into a deed of insurance, indemnity and access with Mr Goldstone. The Company has taken out and will use its best endeavours to maintain appropriate directors’ and officers’ liability insurance. The appointment letter otherwise contains terms and conditions that are considered standard for agreements of this nature. d) Equity issued as part of remuneration (i) Options Options over shares in Saturn may be granted under the Company’s Incentive Option Plan which was created in September 2017 and approved by shareholders again in November 2021. The Incentive Option Plan is designed to provide long-term incentives for Eligible Participants to deliver long-term shareholder returns. Under the plan, the Board may from time to time, in its absolute discretion, make a written offer to any Eligible Participant to apply for Options, upon the terms set out in the Plan and upon such additional terms and conditions as the Board determines. An Option may be made subject to vesting conditions as determined by the Board in its discretion and as specified in the offer for the Option. Details of options over ordinary shares in the Company provided as remuneration to key management personnel of Saturn are set out below. When exercisable, each option is convertible into one ordinary share of Saturn. Further information on the options is set out in Note 20(a) to the consolidated financial statements. Key management person Executive Director I Bamborough Directors B Lambert R Tyson A Venn A Goldstone Fair Value at Grant Date Options Granted During Year Options Vested During Year 2022 $ 2021 $ 2022 Number 2021 Number 2022 Number 2021 Number - 139,366 99,547 99,547 99,547 - - - - - - 700,000 500,000 500,000 500,000 - - - - - 250,000 1,150,000 - 250,000 250,000 - - 150,000 150,000 - The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date to vesting date. Shares under option, provided as remuneration to key management personnel, and on issue as at the date of this report are set out in the following table. 24 SATURN METALS LIMITED – ANNUAL REPORT 2022 REMUNERATION REPORT (AUDITED) (Cont.) Total on Issue to Key Management Personnel 750,000 Grant Date 9 Dec 2019 24 Nov 2021 2,200,000 Date Vested & Number Exercisable Class A – Vesting measurement date 9 Dec 2021, 450,000 Class B – Vesting measurement date 9 Dec 2021, 300,000 Class A – Vesting measurement date 24 Nov 2022, Vesting Condition of continuous service to 24 Nov 2022, 1,100,000 Class B – Vesting measurement date 24 Nov 2023, Vesting Condition of continuous service to 24 Nov 2023, 1,100,000 Expiry Date Exercise Price Value per Option at Grant Date 8 Dec 2022 36.4 cents 21.1 cents 36.4 cents 21.9 cents 80.0 cents 19.90 cents 80.0 cents 19.90 cents 22 Nov 2024 Fair value of options granted during the period The fair value at grant date stated in the table above, for options granted during the year, was determined using the Black-Scholes valuation methodology and takes into account the following inputs: Exercise price Grant date Expiry date Share price at issue date Expected price volatility Expected dividend yield Risk-free interest rate $0.80 24 November 2021 22 November 2024 $0.56 68% 0% 0.985% (ii) Performance Rights Performance Rights in Saturn may be granted under the Incentive Performance Rights Plan which was approved by Shareholders at the 2021 Annual General Meeting. The Incentive Performance Rights Plan is designed to provide short-term incentives for Eligible Participants to deliver short- and long-term shareholder returns. A Performance Right may be made subject to vesting conditions as determined by the Board in its discretion and as specified in the offer for the Performance Right. A Performance Right will lapse upon the earlier to occur of: (i) an unauthorised dealing in the Performance Right; (ii) a vesting condition in relation to the Performance Right is not satisfied by its due date, or becomes incapable of satisfaction, unless the Board exercises its discretion to waive the vesting conditions and vest the Performance Right in the circumstances set out in paragraph; and (iii) unless the Board resolves, in its absolute discretion, to allow the unvested Performance Rights to remain unvested after the Relevant Person ceases to be an Eligible Participant. Details of performance rights provided as remuneration to key management personnel during the year, are set out below. When conditions attaching to the right are met, each performance right is convertible into one ordinary share of Saturn Metals Limited. Further information on the performance rights is set out in Note 20(b) to the consolidated financial statements. SATURN METALS LIMITED – ANNUAL REPORT 2022 25 REMUNERATION REPORT (AUDITED) (Cont.) Key management person Executive Directors I Bamborough Directors B Lambert R Tyson A Venn A Goldstone Fair Value at Grant Date 2022 $ 2021 $ Performance rights granted during year 2021 2022 Number Number Performance rights vested during year 2021 2022 Number Number 330,989 249,096 750,000 388,000 - - - - - - - - - - - - - - - - - - - - - - - - - - Performance rights provided as remuneration to key management personnel and on issue as at the date of this report are set out in the following table. Date Vested & Number Exercisable Expiry Date Exercise Price Grant Date Total on Issue to Key Management Personnel 26 Nov 2020 388,000 24 Nov 2021 750,000 Class A – Vesting measurement date 21 Dec 2022: 75% vest of achievement of various performance hurdles. Class B – Vesting measurement date 21 Dec 2022: 25% vest of achievement of market- based performance hurdles. Class A – Vesting measurement date 13 Dec 2024: 70% vest of achievement of a market- based performance hurdle. Class B –Vesting measurement date 13 Dec 2024: 30% vest of achievement of a performance hurdle. Fair value per Right at Grant Date 70.0 cents 26 Nov 2023 Nil 46.8 cents 36.8 cents 23 Nov 2024 Nil 56.0 cents Fair value of performance rights granted during the period The fair value of the rights is determined on the market price of the company’s shares at grant date, with an adjustment made to take into account the two-year vesting period. The Directors do not receive any dividends and are not entitled to vote in relation to the performance rights during the vesting period. Tranche 1 Performance Rights Company’s share price outperforms the S&P/ASX 300 Metals and Mining (Industry) Index (XMM) by 10% in absolute terms over the period commencing on the date of issue and ending on the second-year anniversary of the date of the issue. Both STN and XMM initial and final prices will be determined by the 20-day VWAPs. The fair value of the Tranche 1 Performance Rights is determined to be 36.8 cents per performance right. They were valued using a hybrid option pricing model which incorporates a Monte Carlo simulation. The model takes into consideration that the Rights will vest at the end of the performance period, given that the performance of the Company’s share price exceeds the Index by 10% on absolute terms over the performance period. Tranche 2 Performance Rights The holder must remain in continuous employment with the Company from the Issue Date as either Saturn staff, under an Executive Services Agreement or, Non-Executive Director or as an officially appointed officer. The fair value of the Tranche 2 Performance Rights is determined to be 56.0 cents per performance right. They were valued on a prorated basis as a result of the vesting conditions attached to these performance rights. The fair value at grant date is independently determined using a Black-Scholes option model that takes into account the exercise price, the term of the performance right, the share price at grant date. 26 SATURN METALS LIMITED – ANNUAL REPORT 2022 REMUNERATION REPORT (AUDITED) (Cont.) The model inputs were: Exercise price Grant date Performance measurement date Expiry date Share price at issue date Expected price volatility Expected dividend yield Risk-free interest rate Tranche 1 Nil 24 November 2021 24 November 2023 23 November 2024 $0.56 70% 0% 0.535% Tranche 2 Nil 24 November 2021 24 November 2023 23 November 2024 $0.56 70% 0% 0.535% e) Option holdings of key management personnel The following table shows a reconciliation of movements in options held by key management personnel during the year ended 30 June 2022. Balance at the start of the year Vested Unvested Key management person & Grant Date Executive Director I Bamborough Movements during the year Granted Vested Number % Balance at the end of the year Exercised Vested & exercisable Unvested 6 Dec 18 150,000 9 Dec 19 - - 250,000 - - - 250,000 - 100 (150,000) - - 250,000 - - Directors B Lambert R Tyson A Venn 24 Nov 21 - - 700,000 - - - - 700,000 6 Dec 18 150,000 9 Dec 19 24 Nov 21 - - 250,000 - - - - - 250,000 - 500,000 - 100 - (150,000) - - 6 Dec 18 150,000 9 Dec 19 24 Nov 21 - - 250,000 - - - - - 250,000 - 500,000 - 100 - (150,000) - - - 250,000 - - 250,000 - - - 500,000 - - 500,000 A Goldstone 24 Nov 21 Note: - - 450,000 750,000 2,200,000 750,000 500,000 - - - (450,000) - 750,000 500,000 2,200,000 • 450,000 options exercised during the were exercised at a price of $0.264 per share for a total value of $118,800. f) Performance rights holdings of key management personnel Movements in performance rights held by key management personnel during the year ended 30 June 2022, are set out in the following table. Key management person Executive Director I Bamborough Directors B Lambert R Tyson A Venn A Goldstone Balance at the start of the year Granted Lapsed Balance at end of the year Vested & exercisable Unvested 638,000 750,000 (250,000) 1,138,000 - 250,000 250,000 - 1,138,000 - - - - 750,000 - (250,000) (250,000) - (750,000) - - - - 1,138,000 - - - - - - 1,138,000 - - - - 1,138,000 SATURN METALS LIMITED – ANNUAL REPORT 2022 27 REMUNERATION REPORT (AUDITED) (Cont.) g) Share holdings of key management personnel Movements in shares held by key management personnel during the year ended 30 June 2022, are set out in the following table. Key management personnel Executive Director I Bamborough Directors B Lambert R Tyson A Venn A Goldstone Note: Balance at The start of the year Received during the year exercise of options Other changes during the year Closing balance 4,563,941(1) - 1,210,000 818,000 14,500 6,606,441 150,000 - 150,000 150,000 - 450,000 - - - - - - 4,713,941 - 1,360,000 968,000 14,500 7,056,441 (1) The balance as reported in the 2021 Annual Report was overstated by 100,000 shares. The opening balance has been corrected in the above table. h) Additional information Other transactions with key management personnel Mr Robert Tyson: Non-Executive Director, Mr Robert Tyson is an Executive Director of Peel Mining Limited (“Peel Mining”) (ASX:PEX). In previous years Peel Mining has held a significant shareholding in the Group however they held no shares at 30 June 2022 (Jun 2021: Nil%). Although Peel Mining Limited is no longer a shareholder of Saturn, its Executive Director, Mr Robert Tyson, is also one of the Group’s Non- Executive Directors. The Group previously engaged Peel Mining Limited in a non-exclusive basis to perform and provide administrative & management services through a service agreement to April 2021. Previously the Group made reimbursements for costs associated with management services to Peel Mining on an arm’s length commercial basis. The total of transactions with Peel Mining during the year was $Nil (2021: $183,502). There was no outstanding balance owing at year-end (2021: $Nil). Mr Andrew Venn: Non-Executive Director, Mr Andrew Venn previously held the position of Executive General Manager, Corporate Services at DDH1 Limited (previously Chief Operations officer of DDH1 Drilling Pty Ltd (“DDH1”). During the previous year the Group purchased drilling services from a subsidiary of DDH1 (Strike Drilling Pty Ltd) on arm’s length commercial basis. There were no transactions with DDH1 during the year ended 30 June 2022 (2021: $1,052,739). There was no outstanding balance owing at year- end (2021: $Nil). Loans with key management personnel: There are no loans between the Company and any key management personnel (2021: Nil). Cash bonuses No cash bonuses have been paid by the Group to directors during the financial year (2021: Nil). Share-based compensation: options & performance rights Other than options and performance rights granted under the Incentive Option & Performance Rights Plan as described in (d) above, there were no other options issued to, or exercised by Directors of Saturn or key management personnel during the year. Use of remuneration consultants During the year ended 30 June 2022, the Group did not employ the services of a remuneration consultant to review its existing remuneration policies and to provide recommendations in respect of both executive short-term and long-term incentive plan design. 28 SATURN METALS LIMITED – ANNUAL REPORT 2022 REMUNERATION REPORT (AUDITED) (Cont.) Indemnity and insurance of auditor The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium I respect of a contract to insure the auditor of the Company or any related entity. Voting and comments made at the Company’s Annual General Meeting Saturn Metals Limited received 99.55% of “yes” votes from votes received on its remuneration report for the 2021 financial year. The Company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. End of Audited Remuneration Report SATURN METALS LIMITED – ANNUAL REPORT 2022 29 DIRECTORS’ REPORT (Cont.) Shares under option Unissued ordinary shares of the Company under option at the date of this report are as follows: Grant date 9 December 2019 24 November 2021 13 December 2021 Expiry date 8 Dec 2022 22 November 2024 9 December 2025 Exercise price of options Number under option 36.4 cents 80.0 cents 63.0 cents 1,200,000 2,200,000 1,200,000 No option holder has any right under the options to participate in any other share issue of the Company. Shares issued on the exercise of options Date of Exercise 6 April 2021 6 July 2021 15 November 2021 6 December 2021 Issue price of shares 2021 2022 cents cents 20.0 cents - - 26.4 cents - 26.4 cents - 26.4 cents Number of shares issued 2022 Number - 150,000 468,000 150,000 2021 Number 4,000,000 - - - Shares issued on the conversion of performance rights There were no shares issued on the conversion of performance rights in the year ended 2022 (2021: Nil) Indemnification and Insurance of Directors and Officers During the financial year the Group paid a premium of $18,880 (2021: $19,213) to insure the Directors and officers of the Group. The policy indemnifies each Director and officer of the Group against certain liabilities arising in the course of their duties. Proceedings on behalf of the Group No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. The Group was not a party to any such proceedings during the year. Environmental Regulation The Group holds exploration licences and mining leases in Australia. These licences specify guidelines for environmental impacts in relation to exploration activities. The licence conditions provide for the full rehabilitation of the areas of exploration in accordance with the respective jurisdiction’s guidelines and standards. The Group is not aware of any significant breaches of the licence condition. Corporate Governance A summary of the Company’s corporate governance policies, practices and compliance with the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (4th Edition) will be provided at the same time as the 2022 Annual Report. Auditor BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001. Auditor’s Independence Declaration A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is included at Page 32. 30 SATURN METALS LIMITED – ANNUAL REPORT 2022 DIRECTORS’ REPORT (Cont.) Non-Audit Services The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group are important. The Board would ensure none of the services undermine the general principles relating to the auditor independence as set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards). Fees paid, and payable to the auditor for the year ended 30 June 2022 were $43,556 (2021: $36,500). This report is made in accordance with a resolution of the Board of Directors and signed for on behalf of the Board by: Ian Bamborough Managing Director Perth, Western Australia 29 September 2022 SATURN METALS LIMITED – ANNUAL REPORT 2022 31 Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 PO Box 700 West Perth WA 6872 Australia DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF SATURN METALS LIMITED As lead auditor of Saturn Metals Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Saturn Metals Limited and the entities it controlled during the period. Dean Just Director BDO Audit (WA) Pty Ltd Perth 29 September 2022 BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2022 Interest and other income Interest and other income Share-based remuneration Employee and Directors’ benefit expenses Administration expenses Finance costs Capitalised exploration expenditure expensed Expenses Note 2022 $ 2021 $ 15,777 15,777 72,592 72,592 20 13 13 9 (400,325) (1,045,504) (749,051) (8,035) (96,053) (260,470) (956,255) (667,109) (3,122) (144,986) (2,298,968) (2,031,942) Loss before income tax (2,283,191) (1,959,350) Income tax benefit (expense) 14 - - Loss after income tax (2,283,191) (1,959,350) Other comprehensive income - - Total comprehensive loss for the year attributable to the members of Saturn Metals Limited (2,283,191) (1,959,350) Earnings per share: Basic and diluted loss per share for the year attributable to the members of Saturn Metals Limited 22 (0.02) (0.02) The above statement should be read in conjunction with the accompanying notes. SATURN METALS LIMITED – ANNUAL REPORT 2022 33 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2022 Current Assets Cash and cash equivalents Trade and other receivables Other Current Assets Total Current Assets Non-Current Assets Trade and other receivables Property, plant & equipment Exploration & evaluation assets Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Lease liabilities Total Current Liabilities Non-Current Liabilities Lease Liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed equity Accumulated losses Option reserve Total Equity Note 2022 $ 2021 $ 5 6 7 9 10 8 8 11 12 12 7,108,560 8,155,144 62,610 112,652 100,460 76,349 7,283,822 8,331,953 42,974 355,520 42,974 348,614 28,379,483 22,255,694 28,777,977 22,647,282 36,061,799 30,979,235 622,808 117,870 740,678 1,328,714 62,966 1,391,680 93,550 93,550 134,665 134,665 834,228 1,526,345 35,227,571 29,452,890 40,922,956 33,265,409 (7,763,047) (5,479,856) 2,067,662 1,667,337 35,227,571 29,452,890 The above statement should be read in conjunction with the accompanying notes. 34 SATURN METALS LIMITED – ANNUAL REPORT 2022 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2022 Contributed Equity $ Accumulated Losses $ Note Share Based Payment Reserve $ Option Reserve $ Total Equity $ 19,882,745 (3,520,506) 997,967 - 17,360,206 - - (1,959,350) (1,959,350) 14,542,926 (751,362) - (408,900) - - - - - - - - 260,470 - - (1,959,350) (1,959,350) - 14,542,926 - - (751,362) 260,470 - 408,900 - 33,265,409 (5,479,856) 1,258,437 408,900 29,452,890 Balance at 30 June 2020 Loss for the year 12 Total comprehensive loss for the year Issue of share capital Share issue costs Share based payments 12 12 Issue of options 11 11 Balance at 30 June 2021 Loss for the year Total comprehensive loss for the year Issue of share capital Share issue costs 12 11 11 - - (2,283,191) (2,283,191) - - - - 400,325 - - - - - (2,283,191) (2,283,191) 8,202,752 (545,205) 400,325 - - - 8,202,752 (545,205) Share based payments 12 - Balance at 30 June 2022 40,922,956 (7,763,047) 1,658,762 408,900 35,227,571 The above statement should be read in conjunction with the accompanying notes. SATURN METALS LIMITED – ANNUAL REPORT 2022 35 CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2022 Cash flows from operating activities Payments to suppliers and employees Government COVID Grant Note 2022 $ 2021 $ (1,684,685) (1,419,508) - 50,000 Net cash outflow from operating activities 15 (1,684,685) (1,369,508) Cash flows from investing activities Payments for purchase of plant and equipment Payments for exploration expenditure Interest received Net cash outflow from investing activities Cash flows from financing activities Proceeds from issue of shares Transaction costs of issue of shares Payments for lease liabilities Security deposit paid (46,178) (94,596) (6,908,596) (9,259,625) 15,777 22,592 (6,938,997) (9,331,629) 8,202,752 14,542,926 (545,205) (80,449) - (751,362) (24,247) (42,974) Net cash inflow from financing activities 7,577,098 13,724,343 Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the start of year (1,046,584) 8,155,144 3,023,206 5,131,938 Cash and cash equivalents at the end of year 5 7,108,560 8,155,144 The above statement should be read in conjunction with the accompanying notes. 36 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Significant changes during the year There were no significant changes to adopted accounting policies during the year. The principal accounting policies adopted in the preparation of the financial report are set out in the notes below, including Note 24. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report includes the consolidated financial statements for the Group at the end of, or during the financial year ended 30 June 2022 and the comparative period. 2. Subsidiary companies The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance with the accounting policy described in Note 24(b): Name Titan Metals Pty Ltd 3. Interests in other entities Country of Incorporation Australia Class of Shares Ordinary 2022 % 100 2021 % 100 Equity holding In April 2020 Saturn entered into an unincorporated joint venture arrangement, through its wholly owned subsidiary Titan Metals Pty Ltd, with Mr Peter Goldner and Dr Angus Collins. Saturn can earn up to 85% in the project through four farm-in stages by spending a total of $1.9 million on exploration over approximately 4 years and by making a total of $195,000 in staged progress payments (cash and or shares). Saturn must keep the tenements in good standing. On Saturn earning an 85% interest an Incorporated Joint Venture will be formed, and the Joint Venture Partners have the option to contribute or dilute (subject to the pre-negotiated dilution formula in line with previous earn in stages) to a combined 1.5% royalty. On the Joint Venture Partners reverting to a royalty position Saturn must make an additional $50,000 progress payment. Saturn earns a transferrable interest in the tenement during the first three stages but does not maintain full commercial rights until having earned a 60% interest by spending a minimum of $900,000 on exploration and notifying the completion of each of the first three stages of the farm-in agreement. As at the time of this report, Titan Metals Pty Ltd has earnt a 20% interest (2021: Nil%) in the tenements under the agreement. The agreement does not constitute a Joint Arrangement under the Australian Accounting Standards. The Company accounts for its project expenditure through its wholly owned subsidiary and capitalises any appropriate expenditure in line with its policy on exploration and evaluation assets (Note 9). 4. Segment information Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief decision maker has been identified as the Board of Directors. Management has determined that Saturn only has one segment, being exploration for precious metals at its tenement package, south of Leonora, Western Australia. Whilst the Company’s 100% owned subsidiary, Titan Metals Pty Ltd, has entered into a farm-in arrangement for the exploration of precious metals at West Wyalong, NSW, at this early stage of the arrangement Management does not feel the transactions are material enough to qualify as an additional segment. SATURN METALS LIMITED – ANNUAL REPORT 2022 37 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 5. Cash & Cash Equivalents For statement of cash flows preparation purposes, cash and cash equivalents includes cash on hand and short-term deposits held at call (other than deposits used as cash backing for performance bonds) with financial institutions. Any bank overdrafts are shown within borrowings in the current liabilities on the consolidated statement of financial position. Cash at bank and in hand Refer to Note 16 for the policy on financial risk management. 6. Other Current Assets Prepaid insurance Other prepayments 7. Property, Plant & Equipment Plant and equipment 2022 $ 2021 $ 7,108,560 7,108,560 8,155,144 8,155,144 2022 $ 26,965 85,687 112,652 2021 $ 25,103 51,246 76,349 All assets acquired, including plant and equipment are initially recorded at their cost of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition. Plant and equipment include right-of use assets depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis as set out in Note 8. Depreciation on general plant and equipment is calculated using the straight-line method to allocate their cost or revalued amounts over their estimated useful lives from the time the asset is held ready for use as follows: 3-10 years - Plant 3-8 years - Vehicles - Office equipment 3-5 years - Computer software 3-5 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is impaired. An item of plant and equipment is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised. Impairment of assets At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs of disposal and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs of disposal and it does not generate cash inflows that are largely independent of those from 38 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) other assets or groups of assets, in which case, the recoverable amount is determined for the cash- generating unit to which the asset belongs. No impairment losses have been recognised for the year ending 30 June 2022 (2021: $nil). As at 30 June 2022 Equipment Software Plant & Cost or fair value Accumulated depreciation Net carrying amount $ 77,510 (26,691) 50,819 $ 40,512 (34,802) 5,710 Reconciliation for the year ended 30 June 2022 Equipment Software $ $ Plant & Furniture & Equipment $ 426,562 (148,773) 277,789 Furniture & Equipment $ Vehicles $ 44,991 (23,789) 21,202 Total $ 589,575 (234,055) 355,520 Vehicles $ Total $ Carrying amount at 1 July Additions Depreciation expense Net carrying amount at 30 June 26,763 34,664 (10,608) 50,819 13,812 - (8,102) 5,710 281,213 98,948 (102,372) 277,789 26,826 - (5,624) 21,202 348,614 133,612 (126,706) 355,520 As at 30 June 2021 Equipment Software Plant & Cost or fair value Accumulated depreciation Net carrying amount $ 42,846 (16,083) 26,763 $ 40,512 (26,700) 13,812 Plant & Reconciliation for the year ended 30 June 2021 Equipment Software $ $ Furniture & Equipment $ 327,614 (46,401) 281,213 Furniture & Equipment $ Vehicles $ 44,991 (18,165) 26,826 Total $ 455,963 (107,349) 348,614 Vehicles $ Total $ Carrying amount at 1 July Additions Depreciation expense Net carrying amount at 30 June 22,793 10,541 (6,571) 26,763 21,914 - (8,102) 13,812 16,789 301,580 (37,156) 281,213 32,449 - (5,623) 26,826 93,945 312,121 (57,452) 348,614 8. Leases Except for short-term leases and leases of low-value assets, rights-of-use assets, capitalised in Property, Plant & Equipment (Note 7) and corresponding lease liabilities are recognised in the statement of financial position. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis, while the lease liability is reduced by an allocation of each lease payment. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. (a) Amounts recognised in the statement of financial position: Right-of-use assets: Furniture & Equipment: Office space Equipment Station house accommodation Lease liabilities: Current Non-current SATURN METALS LIMITED – ANNUAL REPORT 2022 2022 $ 2021 $ 210,739 8,017 86,202 304,958 117,870 93,550 211,420 210,739 8,017 - 218,756 62,966 134,665 197,631 39 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) Additions to the right-of-use assets during the year was $86,202 (2021: $218,756). The total lease liabilities increased by $88,400 due to a new lease arrangement entered into during the period. During the year Saturn entered into a new lease arrangement for station house accommodation near the Group’s Leonora, Western Australia, tenement holdings. The lease has been entered into for an initial 2-year period commencing on 1 April 2022. (b) Amounts recognised in the statement of profit or loss: Depreciation charge of right-of-use assets: Office space Equipment Station house accommodation Interest expenses (included in finance costs) 2022 $ 68,352 2,676 10,775 81,803 8,035 8,035 2021 $ 25,632 892 - 26,524 3,122 3,122 The total cash outflow relating to leases during the year was $80,449 (2021: $24,247). 9. Exploration and evaluation assets All exploration and evaluation expenditure is capitalised under AASB 6 Exploration for and Evaluation of Mineral Resources. Mineral interest acquisition costs and exploration and evaluation expenditure incurred is accumulated and capitalised in relation to each identifiable area of interest. These costs are only carried forward to the extent that the Group’s right to tenure to that area of interest are current and either the costs are expected to be recouped through successful development and exploitation of the area of interest (alternatively by sale) or where areas of interest have not at reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active, and significant operations are being undertaken in relation to the area of interest. Amortisation is not charged on costs carried forward in respect of areas of interest in the exploration and evaluation phase or development phase until production commences. Details of critical accounting estimates and judgements in relation to exploration and evaluation assets are detailed in Note 24(f). At cost Reconciliation: Opening balance Exploration expenditure Exploration expenditure expensed Closing balance 2022 $ 2021 $ 28,379,483 22,255,694 22,255,694 6,219,842 (96,053) 28,379,483 12,624,645 9,776,035 (144,986) 22,255,694 The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful development and commercial exploitation, or alternatively the sale, of the respective areas of interest. 40 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 10. Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually payable within 30 days of invoice. The carrying amounts of trade and other payables are considered the same as their fair values, due to their short-term nature. Trade payables Accrued expenses & other payables 11. Contributed Equity Ordinary shares are classified as equity. 2022 $ 461,248 161,560 622,808 2021 $ 888,971 439,743 1,328,714 Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. If the entity acquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) are recognised directly in equity. (a) Share capital 2022 2021 Number of Shares $ Number of Shares $ Authorised & issued, ordinary shares fully paid 129,899,177 40,922,956 112,464,510 33,265,409 (b) Movements in ordinary share capital 2022 2021 Number of Shares Number of Shares $ $ Opening balance at 1 July 112,464,510 33,265,409 87,952,680 19,882,745 Shares issued: On exercise of options As a result of share placements Transferred to option revaluation reserve Transaction costs on share issues Closing balance at 30 June (c) Ordinary shares 768,000 202,752 4,000,000 800,000 16,666,667 8,000,000 20,511,830 13,742,926 (408,900) (751,362) 129,899,177 40,922,956 112,464,510 33,265,409 - (545,205) - - - - Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. (d) Options & performance rights Information relating to options and performance rights issued during the year is set out in Note 20. (e) Capital risk management In employing its capital, the Group seeks to ensure that it will be able to continue as a going concern and in time provide value to shareholders by way of increased market capitalisation and/or dividends. In the current stage of its development, the Group has invested its available capital in acquiring and exploring mining tenements. As is appropriate at this stage, the Group is funded entirely by equity. As SATURN METALS LIMITED – ANNUAL REPORT 2022 41 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) it moves forward to develop its tenements towards production, the Group will adjust its capital structure to support its operational and strategic objectives, by raising additional capital or taking on debt, as is seen to be appropriate from time to time given the overriding objective of creating shareholder value. In this regard, the Board will consider each step forward in the development of the Group on its merits and in the context of the then capital markets, in deciding how to structure funding arrangements. 12. Reserves and accumulated losses (a) Accumulated losses Opening balance Loss for the year Closing balance (b) Share-based payments reserve Opening balance Option expenses (Director options) Option expenses (Employee options) Options lapsed (Director options) Options lapsed (Employee options) Net Performance rights (Directors rights) Net Performance rights (Employee rights) Closing balance (c) Option reserve Opening balance Options issued to third party Closing balance Nature & Purpose of Reserve Share-based payments reserve: 2022 $ 5,479,856 2,283,191 7,763,047 1,258,437 232,706 88,049 - - 1,086 78,484 1,658,762 2021 $ 3,520,506 1,959,350 5,479,856 997,967 156,598 77,943 (162,173) (114,603) 206,547 96,158 1,258,437 408,900 - 408,900 - 408,900 408,900 The share-based payment reserve represents the fair value of equity benefits provided to Directors and employees as part of their remuneration for services provided to the Group paid for by the issue of equity. Reserve Movements Share options & reserve movements: Opening balance Options issued to Directors Options issued to Employees Exercised Lapsed Closing balance 2022 Number 1,968,000 2,200,000 1,200,000 (768,000) - 4,600,000 2021 Number 7,760,000 - - (4,000,000) (1,792,000) 1,968,000 2022 $ 839,988 232,706 88,049 - - 1,160,743 2021 $ 882,223 156,598 77,943 - (276,776) 839,988 42 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) Exercisable at 26.4 cents; vesting on or before 6 Dec 2021 Exercisable at 26.4 cents; vesting on or before 6 Dec 2021 Exercisable at 36.4 cents; vesting on or before 8 Dec 2022 Exercisable at 36.4 cents; vesting on or before 8 Dec 2022 Exercisable at 80.0 cents; vesting on or before 22 Nov 2022 Exercisable at 80.0 cents; vesting on or before 22 Nov 2023 Exercisable at 63.0 cents; vesting on or before 9 Dec 2022 Exercisable at 63.0 cents; vesting on or before 9 Dec 2023 Exercisable at 63.0 cents; vesting on or before 9 Dec 2024 Number 2022 - - 750,000 450,000 1,100,000 1,100,000 400,000 400,000 400,000 4,600,000 2021 450,000 318,000 750,000 450,000 - - - - - 1,968,000 The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value (Note 20(a)). Third party options & reserve movements: Opening balance Options issued to Third Party Options Expired Closing balance 2022 Number 1,892,500 - (1,892,500) - 2021 Number - 1,892,500 - 1,892,500 2022 $ 408,900 - - 408,900 2021 $ - 408,900 - 408,900 Exercisable at 70.0 cents; vesting on issue Number 2022 2021 1,892,500 1,892,500 - - Performance rights & reserve movements: Opening balance Performance Rights issued to Directors Performance Rights issued to Employees Lapsed Closing balance 2022 Number 1,769,000 750,000 1,007,000 (1,133,000) 2,393,000 2021 Number 1,200,000 388,000 375,000 (194,000) 1,769,000 2022 $ 418,449 267,336 204,874 (392,640) 498,019 2021 $ 115,744 206,547 108,959 (12,801) 418,449 The fair value of the rights is determined on the market price of the Group’s shares at grant date, with an adjustment made to take into account the one-year vesting period. The maximum value of the performance rights shares vested has been determined as the amount of the grant date fair value of the rights that is expensed. For the December 2021 grant, the maximum value vested for this grant was estimated based on the share price of the Group at grant date. The minimum value of performance rights shares vested is nil, as the shares will be forfeited if the vesting conditions are not met. The Directors do not receive any dividends and are not entitled to vote in relation to the performance rights during the vesting period (Note 20(b)). SATURN METALS LIMITED – ANNUAL REPORT 2022 43 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 13. Expenses Employees and Director’s benefit expenses: Employment costs Directors’ fees Recruitment costs Administration expenses: Corporate Depreciation Travel Insurance Office Other Administration 14. Income tax 2022 $ 2021 $ 759,859 220,000 65,645 1,045,504 432,560 126,706 30,988 54,543 57,320 46,934 749,051 706,824 175,780 73,651 956,255 469,971 57,452 10,423 39,437 47,906 41,920 667,109 The income tax expense (or benefit) for the period is the tax payable (or refundable) on the current period’s taxable income based on the notional income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised. A deferred income tax asset is not recognised where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable income or when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets are reviewed at each reporting date and reduced to the extent it is no longer probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted at the reporting date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit and loss for the year. The Group has total carried forward tax losses arising in Australia of $9,314,226 (2021: $6,937,421) available for offset against future assessable income of the Group. The deferred tax asset in respect of these losses has been used to offset a deferred tax liability. The net deferred tax asset attributable to the residual tax losses of $7,613,649 has not been brought to account until convincing evidence exists that assessable income will be earned of a nature and amount to enable such benefit to be realised. 44 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 15. Reconciliation of cash flows from operating activities to loss after income tax For statement of cash flows preparation purposes, cash and cash equivalents includes cash on hand and short-term deposits held at call (other than deposits used as cash backing for performance bonds) with financial institutions. Any bank overdrafts are shown within borrowings in the current liabilities on the consolidated statement of financial position. Cash flow from operating activities: Net cash outflow from operating activities Adjustments for: Share-based payments Depreciation Interest received and receivable Capitalised exploration expenditure expensed Interest paid on lease liabilities Change in operating assets and liabilities: Decrease in receivables Increase in other current assets Increase/(decrease) in payables Loss after income tax Non-cash investing activities: Additions of right-of-use assets Non-cash financing activities: Increase in lease liabilities 16. Financial Risk Management Overview 2022 $ 2021 $ (1,684,685) (1,369,508) (400,325) (126,706) 15,777 (96,053) (8,035) (260,470) (57,452) 22,592 (144,986) (3,122) 27,699 (2,996) (7,867) (2,283,191) (10,683) 49,852 (185,573) (1,959,350) 86,202 218,756 86,202 218,756 The Group is exposed to financial risks through the normal course of its business operations. The key risks impacting the Group’s financial instruments are considered to be, interest rate risk, liquidity risk, and credit risk. There is no foreign exchange risk or impact. The Group’s financial instruments exposed to these risks are cash and cash equivalents, trade receivables, trade payables and other payables. Credit risk Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables. Management assesses the credit quality of the counterparties by taking into account its financial position, past experience and other factors. For banks and financial institutions, management considers independent ratings and only dealing with banks licensed to operate in Australia. The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. Tax receivables and prepayments do not meet the definition of financial assets. Risk management: The Group limits its exposure to credit risk in relation to cash and cash equivalents and other financial assets by only utilising banks and financial institutions with acceptable credit ratings. The Group operates in the mining exploration sector and does not have trade receivables from customers. SATURN METALS LIMITED – ANNUAL REPORT 2022 45 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) Impairment losses: At 30 June 2022 the Group has not recognised any impairment losses (2021: $Nil). 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 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. The Group manages liquidity by maintaining adequate reserves by continuously monitoring forecast and actual cash flows ensuring there are appropriate plans in place to finance these future cash flows. Typically, the Group ensures it has sufficient cash on hand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. Financial Obligations: Trade and other payables less than 6 months Lease liabilities payable Interest rate risk 30 June 2022 $ 622,808 117,870 30 June 2021 $ 1,311,321 62,966 Interest rate risk is the risk that the Group’s financial position will be adversely affected by movements in interest rates, cash and cash equivalents at variable rates exposes the Group to cash flow interest rate risk. The Group is not exposed to fair value interest rate risk as all of its financial assets and liabilities are carried at amortised amount. At the reporting date there were no interest-bearing financial instruments (2021: $Nil) and there were no financial liabilities subject to variable interest (2021: $Nil). Cash flow sensitivity analysis for variable rate instruments of the Group: At 30 June 2022 if interest rates had changed +/- 100 basis points from year end rates with all other variables held constant, equity and post-tax loss would have been subject to no change as no short term cash deposits were held during the year (2021: $Nil lower/higher). Capital management The Directors’ objectives when managing capital are to ensure that the Group can fund its operations and continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders. Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is the current working capital position against the requirements of the Group to meet exploration programmes and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. 46 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) The working capital position of the Group were as follows: Cash and cash equivalents Trade and other receivables Lease liabilities Trade and other payables Working capital position Fair values Note 5 8 10 2022 $ 7,108,560 62,610 (117,870) (622,808) 6,430,492 2021 $ 8,155,144 100,460 (62,966) (1,328,714) 6,863,924 The carrying values of all financial assets and financial liabilities, as disclosed in the statement of financial position, approximate their fair values. 17. Contingencies & Commitments The Group had no contingent assets or liabilities as at 30 June 2022 (2021: $Nil). Exploration commitments Under the terms of mineral tenement licences held by the Group, minimum annual expenditure obligations are required to be expended during the forthcoming financial year in order for the tenements to maintain a status of good standing. This expenditure may be subject to variation from time to time in accordance with the relevant state department’s regulations. The Group may at any time relinquish tenements and as such avoid the requirement to meet applicable expenditure requirement or may seek exemptions from the relevant authority. Expenditure commitments within one year at the reporting date but not recognised as liabilities were $975,080 (2021: $763,080). Due to the uncertain nature of exploration and the fact that the Group may at any time relinquish tenements, it does not believe it to be appropriate to recognise these commitments post 12 months. The Group had no other exploration expenditure commitments, or other commitments greater than 12 months. 18. Events after the reporting period There were no other matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years. SATURN METALS LIMITED – ANNUAL REPORT 2022 47 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 19. Related Parties Compensation of key management personnel Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments Transactions with related parties 2022 $ 513,267 45,723 22,572 236,892 818,454 2021 $ 428,996 41,207 18,749 200,972 689,924 Mr Robert Tyson: Non-Executive Director, Mr Robert Tyson is an Executive Director of Peel Mining Limited (“Peel Mining”) (ASX:PEX). In previous years Peel Mining has held a significant shareholding in the Group however they held no shares at 30 June 2022 (Jun 2021: Nil%). Although Peel Mining Limited is no longer a shareholder of Saturn, its Executive Director, Mr Robert Tyson, is also one of the Group’s Non- Executive Directors. The Group previously engaged Peel Mining Limited in a non-exclusive basis to perform and provide administrative & management services through a service agreement to April 2021. Previously the Group made reimbursements for costs associated with management services to Peel Mining on an arm’s length commercial basis. The total of transactions with Peel Mining during the year was $Nil (2021: $183,502). There was no outstanding balance owing at year-end (2021: $Nil). Mr Andrew Venn: Non-Executive Director, Mr Andrew Venn previously held the position of Executive General Manager, Corporate Services at DDH1 Limited (previously Chief Operations officer of DDH1 Drilling Pty Ltd (“DDH1”). During the previous year the Group purchased drilling services from a subsidiary of DDH1 (Strike Drilling Pty Ltd). All transactions were on bona-fide arm’s length terms. There were no transactions with DDH1 during the year ended 30 June 2022 (2021: $1,052,739). There was no outstanding balance owing at year-end (2021: $Nil). Transactions with related parties Purchases of management services from associate Purchases of drilling services 2022 $ 2021 $ 183,502 1,052,739 1,236,241 - - - Other than as set out above, the Group had no other transactions with related parties. 48 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 20. Share–based payments Share-based compensation benefits to directors, employees and consultants are provided at the discretion of the Board. The fair value of options and performance rights 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 recipient becomes unconditionally entitled to the options or performance rights. The fair value at grant date is determined by using an appropriate model based on the vesting conditions attached to the options. The models used to determine fair value include a Black-Scholes model, or a hybrid employee share options pricing model. During the year the Group has granted performance rights and options to Directors and employees through its Performance Rights and Incentive Option Plan (Plan). Saturn’s Performance Rights and Incentive Option Plan was last approved by shareholders at the annual general meeting held 24 November 2021. Share based payments recognised during the financial year within the consolidated statement of profit or loss were as follows: Options issued Performance rights issued Performance rights reversed Options reversed The movements in share-based payments reserves were as follows: Balance at the beginning of the year Option expenses (Director options) Option expenses (Employee options) Options lapsed (Director options) Options lapsed (Employee options) Performance right expenses (Directors rights) Performance right expenses (Employee rights) Performance rights lapsed (Directors rights) Performance rights lapsed (Employee rights) Balance at the end of the year Details of the share-based payment reserve can be found in Note 12. 2022 $ 320,755 472,210 (392,640) - 400,325 1,258,437 232,706 88,049 - - 267,336 204,874 (266,250) (126,390) 1,658,762 2021 $ 234,541 315,506 (12,801) (276,776) 260,470 997,967 156,598 77,943 (162,173) (114,603) 206,547 108,959 - (12,801) 1,258,437 SATURN METALS LIMITED – ANNUAL REPORT 2022 49 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) (a) Options Details of options granted under the Plan is set out in the following table. Exercise Expiry Grant price date date $0.264 6 Dec 21 6 Dec 18 $0.264 6 Dec 21 6 Dec 18 $0.364 8 Dec 22 9 Dec 19 $0.364 8 Dec 22 9 Dec 19 $0.364 8 Dec 22 9 Dec 19 9 Dec 19 $0.364 8 Dec 22 24 Nov 21 22 Nov 24 $0.800 $0.630 13 Dec 21 9 Dec 25 Fair value per option at grant date $0.154 $0.154 $0.211 $0.219 $0.182 $0.198 $0.199 $0.173 Options Granted during the year Balance 1 July 2021 450,000 318,000 450,000 300,000 270,000 180,000 - - - - - - - 2,200,000 - 1,200,000 1,968,000 3,400,000 - - Vested & exercisable Balance 30 June 2022 Exercised during the year (450,000) (318,000) - - - - - 2,200,000 - 1,200,000 - - 450,000 450,000 300,000 300,000 270,000 270,000 180,000 180,000 - - (768,000) 4,600,000 1,200,000 The weighted average remaining contractual life of Options outstanding at the end of the period was 2.16 years (2021: 1.11 years). The weighted average exercise price of options outstanding at the end of the period was $0.64 (2021: $0.33). The weighted average fair value of options outstanding at the end of the period was $0.19 (2021: $0.18). Fair value of options granted during the year ended 30 June 2022: 2,200,000 options issued to Director’s vest in two tranches over a two-year period with 50% vesting 12 months from the grant date and 50% vesting 24 months from the grant date. 1,200,000 options issued to employee’s vest in three tranches, over a three-year period, with one third vesting at each of the 12 month, 24 month and 36 month anniversaries of the issue date. Exercise price Grant date Expiry date Share price at issue date Expected price volatility Expected dividend yield Risk-free interest rate Director $0.80 24 November 2021 22 November 2024 $0.56 68% 0% 0.985% Employee $0.63 13 December 2021 9 December 2025 $0.41 70% 0% 1.20% 50 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) (b) Performance Rights Details of performance rights granted under the Plan is set out in the following table. Performance Rights Converted during the year Expiry Grant date date 8 Dec 22 9 Dec 19 9 Dec 19 8 Dec 22 21 Dec 20 20 Dec 23 21 Dec 20 20 Dec 23 24 Nov 21 23 Nov 24 13 Dec 21 19 Dec 24 Granted during the year Balance 1 July 2021 - 750,000 - 383,000 - 388,000 - 248,000 750,000 - - 1,007,000 1,769,000 1,757,000 Lapsed during the year (750,000) (383,000) - - - - (1,133,000) - - - - - - - Balance 30 June 2022 - - 388,000 248,000 750,000 1,007,000 2,393,000 Vested & exercisable - - - - - - - Fair value of performance rights granted during the year ended 30 June 2022: Performance rights granted during the year were as follows. Grant Date 24 Nov 21 Director Performance Rights 13 Dec 21 Employee Performance Rights Type Tranche 1 (70%) 525,000 (60%) 604,200 Tranche 2 (30%) 225,000 (40%) 402,800 Total 750,000 1,007,000 Tranche 1 Performance Rights Company’s share price outperforms the S&P/ASX 300 Metals and Mining (Industry) Index (XMM) by 10% in absolute terms over the period commencing on the date of issue and ending on the second-year anniversary of the date of the issue. Both STN and XMM initial and final prices will be determined by the 20-day VWAPs. The fair value of the Tranche 1 Performance Rights is determined to be 36.8 cents per performance right issued to a Director and 36.8 cents per performance right issued to an employee. They were valued using a hybrid option pricing model which incorporates a Monte Carlo simulation. The model takes into consideration that the Rights will vest at the end of the performance period, given that the performance of the Company’s share price exceeds the Index by 10% on absolute terms over the performance period. The model inputs were: Exercise price Grant date Performance measurement date Expiry date Share price at issue date Expected price volatility Expected dividend yield Risk-free interest rate Tranche 2 Performance Rights Director Nil 24 November 2021 24 November 2023 23 November 2024 $0.56 70% 0% 0.535% Employee Nil 13 December 2021 20 December 2023 9 December 2024 $0.41 70% 0% 0.895% The holder must remain in continuous employment with the Company from the Issue Date as either Saturn staff, under an Executive Services Agreement or, Non-Executive Director or as an officially appointed officer. The fair value of the Tranche 2 Performance Rights is determined to be 56.0 cents per performance right issued to a Director and 41.0 cents per performance right issued to an employee. They were valued on a prorated basis as a result of the vesting conditions attached to these performance rights. The fair value at grant date is independently determined using a Black-Scholes option model that takes into account the exercise price, the term of the performance right, the share price at grant date. The model inputs were: SATURN METALS LIMITED – ANNUAL REPORT 2022 51 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) Exercise price Grant date Performance measurement date Expiry date Share price at issue date Expected price volatility Expected dividend yield Risk-free interest rate Director Nil 24 November 2021 24 November 2023 23 November 2024 $0.56 70% 0% 0.535% Employee Nil 13 December 2021 20 December 2023 9 December 2024 $0.41 70% 0% 0.895% (c) Acquisition – Share based payment The Group made no acquisitions using share-based payments during the year (2021: Nil) 21. Remuneration of Auditors Amounts paid or due and payable to the PricewaterhouseCoopers Auditing and reviewing financial reports Amounts paid or due and payable to the BDO Audit (WA) Pty Ltd Auditing and reviewing financial reports 2022 $ 2021 $ 5,100 36,500 38,456 43,556 - 36,500 There were no non-assurance services provided during the year ended 30 June 2022 (2021: $Nil). 22. Loss per share Basic loss per share is calculated by dividing the loss attributable to equity holders of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Basic loss per share from continuing operations attributable Loss equity holders of the Group to the ordinary 2022 $ 2021 $ (0.02) (0.02) Diluted loss per share Loss ordinary equity holders of the Group continuing from operations attributable to the (0.02) (0.02) Reconciliation of loss used in calculation of loss per share Loss from continuing operations attributable to the ordinary equity holders of the Group per share Weighted average number of shares used as the denominator Weighted average number of shares used in calculating basic loss per share (2,283,191) (1,959,350) Number of Number of Shares 2022 Shares 2021 121,677,257 104,675,486 Effect of dilutive securities Options and Performance Rights on issue at reporting date could potentially dilute earnings per share in the future. The effect in the current year is to reduce the loss per share hence they are considered anti-dilutive. 52 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 23. Parent Entity Statement of financial position Current assets Total assets Current liabilities Total liabilities Net assets Equity Issued capital Share based payments reserve Option reserve Accumulated losses Total equity Parent Entity 2022 $ 7,286,337 36,063,719 (740,678) (834,228) 35,229,491 40,922,955 1,658,762 408,900 (7,761,126) 35,229,491 2021 $ 8,355,538 30,917,258 (1,329,258) (1,463,908) 29,453,350 33,265,410 1,258,437 408,900 (5,479,396) 29,453,350 Statement of profit or loss and other comprehensive income Interest revenue Other income Comprehensive loss for the year Total comprehensive loss for the year 15,777 - (2,265,953) (2,281,730) 22,592 50,000 (2,031,499) (1,958,907) Commitments for the parent entity are the same as those for the consolidated entity and are set out in Note 17. The financial information for the parent entity, Saturn Metals Limited, has been prepared on the same basis as the consolidated financial statements. The parent entity has not entered into a deed of cross guarantee nor are there any contingent liabilities at year-end. SATURN METALS LIMITED – ANNUAL REPORT 2022 53 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) 24. Statement of Significant Accounting Policies The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report includes the consolidated financial statements for the Group during the financial years ended 30 June 2022 and the comparative period. (a) Basis of preparation These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001. Saturn Metals Limited is a for-profit entity for the purpose of preparing the consolidated financial statements. The presentation currency of these accounts is Australian Dollars (AUD). As at 30 June 2022, the Group made a net loss after tax of $2,283,191 (2021: $1,959,350). The ongoing capital requirements of the Group are dependent on the Group’s ability to raise funds in the future. The Directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash flows to meet all commitments and working capital requirements for the twelve-month period from the date of signing this financial report. Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the basis of preparation is appropriate. Compliance with IFRS The consolidated financial statements and notes of the Group comply with International Financial Reporting Standards (IFRS). Historical cost convention These consolidated financial statements have been prepared under the historical cost convention. (b) Principles of consolidation The consolidated financial statements are those of the consolidated entity, comprising Saturn Metals Limited (“the parent entity”) and entities controlled during the year and at reporting date (“Group”). A controlled entity is any entity that the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Information from the consolidated financial statements of the controlled entities is included from the date the parent company obtains control until such time as control ceases. Where there is a loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which the parent company has control. The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. All intercompany balances and transactions, including unrealised profits arising from intra-Group transactions, have been eliminated in full. Unrealised losses are eliminated except where costs cannot be recovered. Investments in subsidiaries are carried at cost in the parent entity. (c) Employee benefits Short-term obligations Liabilities for wages and salaries, including non-monetary benefits and leave entitlements that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to balance date and are measured at the amounts expected to be paid when the liabilities are settled. 54 SATURN METALS LIMITED – ANNUAL REPORT 2022 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.) (d) Goods and services tax Revenues, expenses and assets are recognised net of goods and services tax (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 item. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable is included as a current asset in the statement of financial position. 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 the taxation authority are classified as operating cash flows. (e) New standards and amendments Certain new accounting standards and interpretations have been published that are mandatory for the 30 June 2022 reporting period and have not been early adopted by the group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. (f) Critical accounting estimates and judgements The Directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. The Group makes estimates and judgements in applying the accounting policies. Share-based payment transactions The Group measures the cost of equity-settled share-based payment transactions by reference to the fair value of the equity instruments at the grant date. The fair value is determined by using an appropriate model based on the vesting conditions attached to the options. The models used to determine fair value include a Black-Scholes model, or a hybrid employee share options pricing model. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity. Impairment of capitalised exploration and evaluation expenditure Critical judgements in respect of accounting policies relate to exploration assets, where exploration expenditure is capitalised in certain circumstances. Recoverability of the carrying amount of any exploration assets is dependent on the successful development and commercial exploitation or sale of the respective areas of interest. It is the Group’s policy to capitalise costs relating to exploration and evaluation activities. The future recoverability of capitalised exploration and evaluation expenditure is dependent upon a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors that could impact future recoverability include the level of reserves and resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be reduced in the period in which the determination is made. SATURN METALS LIMITED – ANNUAL REPORT 2022 55 DIRECTOR’S DECLARATION The Board of Directors of Saturn Metals Limited declares that: (a) the consolidated financial statements, comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity and accompanying notes are in accordance with the Corporations Act 2001, and: (i) comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) give a true and fair view of the financial position as at 30 June 2022 and performance for the financial year ended on that date of the entity. (b) the Group has included in the notes to the consolidated financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards; (c) In the Directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable; and (d) the Board of Directors have been given the declaration by the chief executive officer and chief financial officer required by Section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by: Ian Bamborough Managing Director Perth, Western Australia 29 September 2022 56 SATURN METALS LIMITED – ANNUAL REPORT 2022 Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR’S REPORT To the members of Saturn Metals Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Saturn Metals Limited (the Company) and its subsidiary (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is 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 financial performance for the year ended on that date; and (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Accounting for capitalised exploration and evaluation expenditure Key audit matter How the matter was addressed in our audit The carrying value of the capitalised exploration and Our procedures included, but were not limited to: evaluation asset as at 30 June 2022 is disclosed in Note 9 of the financial report. (cid:127) Obtaining a schedule of the areas of interest held by the Group and assessing whether the As the carrying value of the capitalised exploration and rights to tenure of those areas of interest evaluation asset represents a significant asset of the remained current at balance date; Group, we considered it necessary to assess whether any facts or circumstances exist to suggest that the carrying amount of this asset may exceed its recoverable amount. (cid:127) Considering the status of the ongoing exploration programmes in the respective areas of interest by holding discussions with management, and reviewing the Group’s Judgement is applied in determining the treatment of exploration budgets, ASX announcements and exploration expenditure in accordance with Australian director’s minutes; Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources. In particular: (cid:127) Considering whether any area of interest had reached a stage where a reasonable Whether the conditions for capitalisation are assessment of economically recoverable satisfied; reserves existed; Which elements of exploration and evaluation (cid:127) Verifying, on a sample basis, exploration and expenditures qualify for recognition; Recognition and valuation of purchase consideration for tenement acquisitions; and Whether facts and circumstances indicate that the exploration and expenditure assets should be tested for impairment. evaluation expenditure capitalised during the year for compliance with the recognition and measurement criteria of AASB 6; (cid:127) (cid:127) Considering whether there are any other facts or circumstances existing to suggest impairment testing was required; and Assessing the adequacy of the related disclosures in Note 9 to the financial report. Other information The directors are responsible for the other information. The other information comprises the information contained in the Director’s report for the year ended 30 June 2022, but does not include the financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s report, and the Annual report, which is expected to be made available to us after that date. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the Annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and will request that it is corrected. If it is not corrected, we will seek to have the matter appropriately brought to the attention of users for whom our report is prepared. Other Matter The financial report of Saturn Metals Limited, for the year ended 30 June 2021 was audited by another auditor who expressed an unmodified opinion on that report on 30 September 2021. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 20 to 29 of the directors’ report for the year ended 30 June 2022. In our opinion, the Remuneration Report of Saturn Metals Limited, for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit (WA) Pty Ltd Dean Just Director Perth 29 September 2022 E 31/1063* E 31/1075 E 31/1076 E 31/1087 E 31/1116* E 31/1132 E 31/1163* E 31/1164 E 31/1202 E 31/1259 E 31/1287 E 31/1340 E 39/1198* E 39/1887* E 39/1984* E 40/337 E 40/372 E 40/373 M 31/486* M 31/494* M 39/296* M 31/0496* P 31/2068 P 31/2072 P 31/2073 L 31/72 L 31/74 L 31/75 L 31/76 L 31/77 L31/78 L31/79 L 31/80 L 31/81 L 31/82 L 31/83 L 31/84 L 31/85 L 39/284 L 39/292 L 39/0310 L 39/0311 L 39/0312 L 40/28 L 40/29 L40/37 L40/38 L40/39 SCHEDULE OF TENEMENTS Tenement State Interest Current Area Area Unit Measured km2 Grant Date Expiry Date Western Australia: WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 34 11 17 4 14 1 70 17 2 15 11 11 11 5 61 3 55 10 Standard Block 101.73 Standard Block Standard Block Standard Block Standard Block Standard Block 32.91 50.86 11.97 41.89 2.99 Standard Block 209.44 Standard Block Standard Block Standard Block Standard Block Standard Block Standard Block Standard Block Standard Block Standard Block Standard Block Standard Block 50.86 5.98 44.88 32.88 32.88 32.91 14.96 182.51 8.98 164.56 29.92 4.11 11.05 0.24 9/03/2015 9/03/2015 10/03/2015 19/03/2015 26/07/2016 1/02/2017 27/04/2018 27/04/2018 1/02/2021 28/07/2021 23/08/2022 Application 31/03/2009 24/02/2016 30/03/2017 3/12/2014 3/07/2018 16/11/2018 12/03/2015 Application 8/03/2025 8/03/2025 9/03/2025 18/03/2025 25/07/2026 31/01/2027 26/04/2023 26/04/2023 31/01/2026 27/07/2026 22/08/2027 - 30/03/2023 23/02/2026 29/03/2027 2/12/2024 2/07/2023 15/11/2023 11/03/2036 - 30/09/1993 29/09/2035 410.8 1,105 24.43 12,172 78 68 Ha Ha Ha Ha Ha Ha WA Ha Total: 25 Exploration, Prospecting & Mining Leases Ha 19,357 100% 100% 166 WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA WA 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 6,248 10,416 1,206 1,196 598 2874 458 4,706 971 1,303 1,601 4,780 289 6,590 11,727 553 3,789 2,675 3,800 1,189 836 8,138 Ha Ha Ha Ha Ha HA HA HA HA HA HA HA Ha Ha Ha Ha Ha Ha Ha Ha Ha Ha 121.72 Application - 0.78 0.68 1.66 1,193.35km2 193.57 62.48 104.16 12.06 11.96 5.98 28.74 4.58 47.06 9.71 13.03 16.01 47.8 2.89 65.9 117.27 5.53 37.89 26.75 38 11.89 8.36 81.38 953.00 km2 153.70 88.24 241.94 km2 8/05/2015 8/05/2015 8/05/2015 7/05/2023 7/05/2023 7/05/2023 22/02/2021 23/12/2021 06/08/2021 Application Application 21/02/2042 22/12/2042 05/08/2042 - - 13/10/2021 12/10/2042 Application Application Application Application Application Application Application 1/07/2020 24/02/2021 Application Application Application 24/02/2021 24/02/2021 Application Application Application - - - - - - - 30/06/2041 23/02/2042 - - - 23/02/2042 23/02/2042 - - - 03/05/2021 14/01/2019 03/05/2027 14/01/2028 Total: 23 Miscellaneous Licences New South Wales: EL 9168 EL 8815 ** NSW NSW 100% 20% 54 31 Standard Block Standard Block Total: 2 Exploration Leases Notes: * Land subject to 5% Hampton Hill Royalty on +1Moz Production ** Saturn Metals Limited holds an 20% interest in this tenement through a farm in Joint Venture arrangement. SATURN METALS LIMITED – ANNUAL REPORT 2022 61 MINERAL RESOURCE ESTIMATION GOVERNANCE STATEMENT During the year, the Company provided an update to the Apollo Hill Mineral Resource estimate. Saturn Metals Limited has ensured that the Mineral Resource estimates are subject to good governance arrangements and internal controls. The Mineral Resources reported have been generated by independent external consultants who are experienced in best practices in modelling and estimation methods. The consultants have also undertaken a review of the quality and suitability of the underlying information used to generate the resource estimations. Additionally, Saturn Metals Limited carries out regular reviews and audits of internal processes and external contractors that have been engaged by the Company. Competent Persons Statements for the estimation are included on page 63. The Mineral Resource estimate for Apollo Hill was compiled and reported in accordance with the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the JORC Code) 2012 Edition. As at 30 June 2022 May 2022 Apollo Hill Mineral Resource Preliminary Whittle pit optimizations using approximated regional mining and processing costs for multiple processing scenarios have been run on the resource model using a gold price of US$1,800/oz to generate a range of pit shells and cut-off grades. A pit shell for a heap leach scenario representing a revenue factor of 1.2 was selected as a nominal constraint within which to report the Apollo Hill Mineral Resource, thereby satisfying the JORC Code requirement for a Mineral Resource to have reasonable prospects for eventual economic extraction. Other relevant information is described in the JORC Code Table 1 as appropriate. A nominal 0.23 g/t Au lower cut-off grade was selected for all material types. Classification is according to JORC Code Mineral Resource categories. Totals may vary due to rounded figures. There is no known depletion by mining within the model area. Estimation is by LMIK for Apollo Hill ZONECODE=100 and 300 while Ra ZONECODE=200 and Tefnut (ZONECODE=400, 402) were estimated using ROK due to limited data. Grade field AU_FIN1. The model currently assumes a 5mE x 12.5mN x 5mRL SMU for selective open pit mining. Selectivity may vary with changed mining and processing scenarios. The final models are SMU models and incorporate internal dilution to the scale of the SMU. The models do not account for mining related edge dilution and ore loss. These parameters should be considered during the mining study as being dependent on grade control, equipment and mining configurations including drilling and blasting. Classification is according to JORC Code Mineral Resource categories. Totals may vary due to rounded figures. Details of this Mineral Resource were reported to the ASX in an announcement titled ‘Apollo Hill Gold Resource Upgraded to 1.47Moz’ dated 2 May 2022. As at 30 June 2021 January 2021 Apollo Hill Mineral Resource Preliminary Whittle pit optimizations using approximated regional mining and processing costs for multiple processing scenarios have been run on the resource model using a gold price of US$1,700/oz to generate a range of pit shells and cut-off grades. A pit shell for a combined mill and heap leach scenario representing a revenue factor of 1.4 was selected as a nominal constraint within which to report the Apollo Hill Mineral Resource, thereby satisfying the JORC Code requirement for a Mineral Resource to have reasonable prospects for eventual economic extraction. Other relevant information is described in the JORC Code Table 1 as appropriate. A nominal 0.4 g/t Au lower cut-off grade was selected for all material types. There is no material depletion by mining within the model area. Estimation is by localised multiple indicator kriging for Apollo Hill zone and the Apollo Hill Hanging- wall zone; estimation of Ra and Tefnut zone used restricted ordinary kriging due to limited data. The model assumes a rotated 5 m by 12.5 m by 5 m RL Selective Mining Unit (SMU) for selective open pit mining. The final models are SMU models and incorporate internal dilution to the scale of the SMU. Technically the models do not account for mining related edge dilution and ore loss. These parameters should be considered during the mining study as being dependent on grade control, equipment and mining configurations including drilling and blasting. Classification is according to JORC Code Mineral Resource categories. Totals may vary due to rounded figures. 62 SATURN METALS LIMITED – ANNUAL REPORT 2022 COMPETENT PERSONS STATEMENT Competent Persons Statements – January 2021 & May 2022 Mineral Resources Apollo Hill and Apollo Hill Project The information in this report that relates to exploration targets, geology, and exploration results and data compilation is based on information compiled by Ian Bamborough (IB), a Competent Person who is a Member of The Australian Institute of Geoscientists. Ian Bamborough is a fulltime employee (Managing Director) of the Company and a shareholder in the Company. Ian Bamborough has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ian Bamborough consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. The information in this announcement that relates to Apollo Hill Mineral Resource estimates (gold) is based on information compiled and generated by Ingvar Kirchner, an employee of AMC Consultants. Mr Kirchner consents to the inclusion, form and context of the relevant information herein as derived from the original resource reports. Mr Kirchner has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the JORC ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Competent Persons Statement – Exploration The information in this report that relates to exploration targets and exploration results is based on information compiled by Ian Bamborough, a Competent Person who is a Member of The Australian Institute of Geoscientists. Ian Bamborough is a fulltime employee and Director of the Company, in addition to being a shareholder in the Company. Ian Bamborough has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ian Bamborough consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. (a) This document contains exploration results and historic exploration results as originally reported in fuller context in Saturn Metals Limited ASX Announcements, Quarterly Reports and Prospectus - as published on the Company's website. Saturn Metals Limited confirms that it is not aware of any new information or data that materially affects the information on results noted. Announcement dates to refer to include but are not limited to 12/07/21, 30/07/21, 19/08/21, 27/10/21, 28/10/21,29/10/21, 29/10/21, 19/10/21, 27/01/22, 28/01/22, 31/01/22, 29/03/22, 31/03/22, 26/04/22, 02/05/22, 19/05/22, 16/06/22, 22/06/22 and 27/07/22. SATURN METALS LIMITED – ANNUAL REPORT 2022 63 ADDITIONAL SHARHEOLDER INFORMATION Issued Securities The following security holder information set out in this section was applicable at 18 October 2022. Quoted Securities – Fully Paid Ordinary Shares a) Distribution of Share Holdings Size of Holding 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and Over Total Number of Shareholders 47 209 128 402 122 908 Number of Shares 20,437 596,519 1,072,286 15,669,556 112,540,379 129,899,177 % 0.02 0.46 0.83 12.06 86.64 100.00 At the prevailing market price of $0.26 per share there were 105 shareholders holding less than a marketable parcel of shares, totalling 99,373 shares. b) Twenty Largest Shareholders Rank Shareholder CITICORP NOMINEES PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED J P MORGAN NOMINEES AUSTRALIA PTY LIMITED GLYDE STREET NOMINEES PTY LTD PERTH CAPITAL PTY LTD MR IAN BAMBOROUGH EQUITY TRUSTEES LIMITED BNP PARIBAS NOMINEES PTY LTD 1 2 3 4 5 6 7 8 WYTHENSHAWE PTY LTD 9 10 MR ANDREW LENOX HEWITT 11 MR KEIRAN HAYNES 12 13 MR ANDREW LENOX HEWITT 14 15 16 17 MR RICHARD ARTHUR LOCKWOOD 17 18 WYTHENSHAWE PTY LTD 19 20 REDCLIFF PTY LTD PERTH CAPITAL PTY LTD SASSEY PTY LTD HOWARD TRADING CO PTY LTD CAP HOLDINGS PTY LTD Top Twenty Shareholders Total Issued Capital ROMAN ROAD HOLDINGS PTY LTD RUPERT CLARKE & COMPANY PTY LTD c) Substantial Shareholder Notifications Shareholder DUNDEE CORORATION & ASSOCIATES FRANKLIN RESOURCES, INC. AND ITS AFFLIATES WHYTHENSHAWE PTY LTD AND ASSOCIATES SPROTT INC. Total Number of Shares Held 33,316,371 13,507,298 4,890,205 4,000,000 3,375,000 3,063,941 2,865,953 2,445,000 2,422,003 1,960,000 1,746,967 1,550,000 1,495,000 1,260,000 1,204,047 1,067,255 1,000,000 1,000,000 950,000 900,000 885,000 84,904,040 129,899,177 % 25.65 10.40 3.76 3.08 2.60 2.36 2.21 1.88 1.86 1.51 1.34 1.19 1.15 0.97 0.93 0.82 0.77 0.77 0.73 0.69 0.68 65.36 100.00 Number of Shares Held 19,911,200 11,129,938 10,691,969 8,881,234 50,957,459 % 15.33 8.57 8.23 6.84 38.96 64 SATURN METALS LIMITED – ANNUAL REPORT 2022 ADDITIONAL SHAREHOLDER INFORMATION (Cont.) d) Voting Rights “Subject to any rights or restrictions for the time being attached to any class or classes of Shares, at meetings of Shareholders or classes of Shareholders: a) each Shareholder entitled to vote may vote in person or by proxy, attorney or Representative; b) on a show of hands, every person present, who is a Shareholder, or a proxy, attorney or Representative of a Shareholder has one vote (even though he or she may represent more than one member); and c) on a poll, every person present who is a Shareholder or a proxy, attorney or Representative of a Shareholder shall, in respect of each fully paid Share held by him, or in respect of which he is appointed a proxy, attorney or Representative, have one vote for the Share, but in respect of partly paid Shares, shall have such number of votes being equivalent to the proportion which the amount paid (not credited) is of the total amounts paid and payable in respect of those Shares (excluding amounts credited).” e) On Market Buy-Back There is currently no on-market buy-back in place. Unquoted Securities – Options & Performance Rights Options a) Details of Options on Issue Class Exercisable at $0.364 Expiring 08/12/22 Exercisable at $0.800 Expiring 22/11/24 Exercisable at $0.630 Expiring 09/12/25 Total Options on Issue b) Voting Rights Number of Holders 7 4 2 13 Number of Options 1,200,000 2,200,000 1,200,000 4,600,000 Unquoted options do not entitle the holder to any voting rights. c) Holders of More Than 20% of a Class of Unquoted Options The Group has a total of 4,600,000 unquoted options over ordinary shares on issue. All unquoted options are issued under the Employee Incentive Option & Performance Rights Plan. There are no security holders holding more than 20% of a class of Unquoted Option, not issued under the Employee Incentive Option & Performance Rights Plan to report. SATURN METALS LIMITED – ANNUAL REPORT 2022 65 ADDITIONAL SHAREHOLDER INFORMATION (Cont.) Performance Rights a) Details of Performance Rights on Issue Class Unvested 2020 rights, Expiring 20/12/23 Unvested 2021 rights, Expiring 13/12/24 Total Performance Rights on Issue b) Voting Rights No. of Holders No. Performance Rights 3 9 12 636,000 1,757,000 2,393,000 Unquoted performance rights do not entitle the holder to any voting rights. c) Holders of More Than 20% of a Class of Unquoted Performance Rights The Group has a total of 2,393,000 unquoted performance rights on issue. All unquoted performance rights are issued under the Employee Incentive Option & Performance Rights Plan. There are no security holders holding more than 20% of a class of Unquoted Performance Right, not issued under the Employee Incentive Option & Performance Rights Plan to report. Corporate Governance Statement The Company’s 2022 Corporate Governance Statement can be accessed at: https://saturnmetals.com.au/about/corporate-governance/ 66 SATURN METALS LIMITED – ANNUAL REPORT 2022 9 Havelock Street West Perth WA 6005 info@saturnmetals.com.au +61 (8) 6234 1114 www.saturnmetals.com.au