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2023 ReportAND ITS CONTROLLED ENTITIES _____________________________________________________________________________________ ANNUAL REPORT ENDED 30 JUNE 2023 _____________________________________________________________________________________ WWW.SUREFIRERESOURCES.COM.AU • ASX: SRN•ABN 48 083 274 024 REVIEW OF OPERATIONS Figure 1: Surefire Victory Bore Vanadium Project resources over TMI base map & project location - Page 6 - REVIEW OF OPERATIONS . Figure 2: Victory Bore Project Cross section 6.873,050mN – displaying a width 200m of Aluminium and Vanadium mineralisation, drilling results and central location of the Aluminium resource compared to the Vanadium resource Maiden Aluminium Resource During the year the Company also reported a maiden resource of Aluminium Oxide. The maiden resource estimate has 17Mt @ 23.1% Al2O3 of a near surface measured and indicated component. Potential future mining at Victory Bore will likely produce minimum quantities of waste as vanadium and aluminium ores are mutually exclusive in the deposit. Magnetic beneficiation can remove the aluminium from the magnetite and conversely remove the magnetite from the aluminium. The wide and extensive zone of Aluminium Oxide grading up to 23% Al203 occurs between the vanadium rich zones (Figure 1). Measured 5.2 M t @ 2 3 . 1 % A l 2 O 3 Indicated 1 1 . 8 M t @ 2 3 . 1 % A l 2 O 3 Inferred 2 0 . 7 M t @ 2 3 . 5 % A l 2 O 3 Total 3 7 . 7 M t @ 2 3 . 3 % A l 2 O 3 (Note: Numbers might not add up due to rounding errors. Victory Bore aluminium resource based on a 22.% Al2O3 cut-off. Estimation by HGMC using ordinary kriging) Expected High Purity Alumina (HPA) Demand High Purity Alumina (HPA) – a type of aluminium oxide at 99.99 % purity – is a high value critical mineral that is important for the industrial sector, given its use in creating synthetic sapphire crystals used in LED lights, semiconductors, watch faces and smartphones. However, it is also seeing greater use to coat the separators that keep the cathodes and anodes in lithium-ion batteries apart, which has been found to significantly improve safety by providing greater thermal stability and reducing the risk of batteries catching fire, as well as significantly improving impedance, which allows for high power capability. It also improves battery life and lowers self-discharge. Each EV battery uses from 5kg to 30kg of 4HPA in automotive batteries, depending on the size of the batteries. This use of the material has the potential to quickly outstrip demand from other applications. EV (electric vehicle) batteries already account for about 20 per cent of current HPA production – and that is likely to grow further. According to Business Research Insight, sales of ceramic (HPA) coated separators totalled about $US1.6 billion in 2021 and are forecast to grow at a 25 per cent compound annual growth rate to $US7.8 billion by 2028. This growth is rapid enough that some commentators have indicated that even if every planned HPA project comes online, there will not be enough supply to meet estimated demand over the next decade and beyond. - Page 7 - DIRECTORS’ REPORT ensure that, where practicable, incentive plans are designed around appropriate and realistic performance targets that measure relative performance and provide remuneration when they are achieved; and review and, if necessary, improve any existing benefit programs established for employees. Retirement and Superannuation Payments No prescribed benefits were provided by the Group to directors by way of superannuation contributions during the year. Non-Executive Director and Executive Remuneration The remuneration of non-executive directors may not exceed in aggregate in any financial year the amount fixed by the Group. The Board has previously agreed to set remuneration for non-executive directors at $3,500 per month and the Chairman at $5,000 per month once working capital and cashflow of the Group allowed. During the year ended 30 June 2023, the non-executive directors received an annualised director’s fee of $30,000 and the Chairman received an annualised fee of $48,000 (no change from 2022). Relationship between Group Performance and Remuneration There is no relationship between the financial performance of the Group for the current or previous financial year and the remuneration of the key management personnel. Remuneration is set having regard to market conditions and encourage the continued services of key management personnel. Use of Remuneration Consultants The Group did not employ the services of any remuneration consultant during the financial year ended 30 June 2023. Employment and Consultant Agreements Mr Burton has entered into an employment agreement which agrees a total Fixed Remuneration of $300,000 per annum (plus statutory superannuation entitlements), standard terms and conditions for agreements of its nature, including confidentiality, retention of intellectual property and leave, and subject to shareholders’ approval being granted, he will be entitled to be granted a total of 30,000,000 Executive Options within 30 days after such approval has been granted by the Company. These Options will expire on the date which is the earlier of two years from date of issue, or ceasing to be employed in the designated role as Managing Director, will be exercisable at a price (Nominated Exercise Price), calculated as being 25% higher than the 1 intra-day Volume Weighted Average Price (VWAP) of ASX:SRN on the ASX trading day immediately before the day of commencement of employment (Nominated Share Price), and shall vest upon the following milestones being achieved: o o o An initial 10,000,000 Executive Options shall vest upon the 10-day VWAP of ASX:SRN shares being at or above a price which is 50% greater than the Nominated Share Price; A further 10,000,000 Executive Options shall vest upon the 10-day VWAP of ASX:SRN shares being at or above a price which is 100% greater than the Nominated Share Price; and A further 10,000,000 Executive Options shall vest upon the 10-day VWAP of ASX:SRN shares being at or above a price which is 200% greater than the Nominated Share Price. Other than the above detailed agreement with Mr Burton, the current directors and company secretary do not have employment contracts with the Group save to the extent that the Group’s constating documents comprise the same. Key Management Personnel Remuneration Key Management Person Vladimir Nikolaenko Paul Burton (Appointed 6.2.2023) Michael Povey Roger Smith Rudolf Tieleman Total Year ended 30 June 2023 Short-term benefits Fees & contractual payments ($) Total cash and cash equivalent benefits ($) 348,000 133,265 30,000 30,000 66,000 348,000 133,265 30,000 30,000 66,000 Total ($) 348,000 133,265 30,000 30,000 66,000 607,265 607,265 607,265 - Page 20 - DIRECTORS’ REPORT EMPLOYEES On 30 June 2023, aside from directors, the Group has two other employees (As at 30 June 2022 - two other employees). CORPORATE STRUCTURE Surefire is a no liability company incorporated and domiciled in Australia. ACCESS TO INDEPENDENT ADVICE Each director has the right, so long as he is acting reasonably in the interests of the Group and in the discharge of his duties as a director, to seek independent professional advice and recover the reasonable costs thereof from the Group. The advice shall only be sought after consultation about the matter with the chairman (where it is reasonable that the chairman be consulted) or, if it is the chairman that wishes to seek the advice or it is unreasonable that he be consulted, another direc tor (if that be reasonable). The advice is to be made immediately available to all Board members other than to a director against whom privilege is claime d. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Group has entered into agreements indemnifying, to the extent permitted by law, all the directors and officers of the Group against all losses or liabilities incurred by each director and officer in their capacity as directors and officers of the Group. During the year, no amount was incurred as insurance premiums for this purpose. OPTIONS As at the date of this report the Company has no options on issue. For details of options exercised by directors, refer to the Remuneration Report above. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Group, or to 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 part of those proceedings. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out in this annual report. This report has been signed in accordance with a resolution of directors. For and on behalf of the Directors Signature of Vladimir Nikolaenko noted as having been affixed with approval Mr Vladimir Nikolaenko Executive Chairman 29 September 2023 - Page 23 - Auditor’s Independence Declaration To those charged with the governance of Surefire Resources NL As auditor for the audit of Surefire Resources NL for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been: (i) (ii) no contraventions of the independence requirements of the Corporations Act 2001 in relation to the audit; and no contraventions of any applicable code of professional conduct in relation to the audit. Signature of Elderton Audit Pty Ltd noted as having been affixed with approval Elderton Audit Pty Ltd Signature of Sajjay Cheema noted as having been affixed with approval Sajjad Cheema Audit Director Perth 29 September 2023 - Page 24 -
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