Tietto Minerals Limited
Annual Report 2023

Plain-text annual report

ANNUAL REPORT YEAR ENDED 31 DECEMBER 2023 ASX: TIE CHAIRMAN’S MESSAGE CONTENTS Corporate Directory ................................................................................................................................ 1 Review of Operations .............................................................................................................................. 2 Directors’ Report ................................................................................................................................... 12 Auditor’s Independence Declaration .................................................................................................... 14 Consolidated Statement of Comprehensive Income ............................................................................ 15 Consolidated Statement of Financial Position ...................................................................................... 16 Consolidated Statement of Changes in Equity ...................................................................................... 17 Consolidated Statement of Cash Flow Statement ................................................................................ 18 Notes to the Consolidated Financial Statements ................................................................................. 19 Directors’ Declaration ........................................................................................................................... 36 Independent Auditor’s Report .............................................................................................................. 37 CORPORATE’S DIRECTORY Non-Executive Chairman Managing Director and Chief Executive Officer Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Board of Directors Francis Harper Matthew Wilcox Hanjing Xu Paul Kitto Shaddrack Sowah Adjetey Sabina Shugg Company Secretary Matthew Foy Registered Office Unit 22, 123B Collin Street West Perth WA 6005 Telephone: +61 8 6331 6182 Website: www.tietto.com Stock Exchange Listing Listed on the Australian Securities Exchange (ASX Code: TIE) Auditors BDO Audit (WA) Pty Ltd Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 Solicitors Allion Partners Pty Limited Level 9, 863 Hay Street Perth WA 6000 Share Registry Automic Pty Ltd Level 5, 126 Phillip Street Sydney NSW 2000 ASX: TIE 1 ASX: TIE CHAIRMAN’S MESSAGE Dear Fellow Shareholders, It gives me great pleasure to present the 2023 Annual Report for Tietto Minerals Limited (Tietto) (ASX: TIE), and to comment on a transformative year for our company as we became West Africa’s newest gold producer. Tietto achieved this goal following the commencement of gold production from our Abujar Gold Mine (Abujar) in Côte d’Ivoire, West Africa at the beginning of 2023, and we have continued to ramp up our gold production throughout the year, as we work towards achieving full production at Abujar in H1 2024. Like many greenfield mining projects, we encountered a number of issues in our 2023 ramp-up, all of which were addressed with intense focus by our recently appointed Chief Executive Officer (CEO), Matt Wilcox, and his team. These issues included: inadequate pre-stripping; more extensive oxide and transitional layer gold depletion by artisanal miners than forecast; inadequate mining fleet due to unanticipated delays in customs approval processes; and, inability to stockpile ROM ore prior to onset of wet season because of the inadequate mining fleet. Expansion of our mining contractor EPSA’s mining fleet towards the end of 2023 enabled mining rates to begin to outpace milling allowing the first stockpiling of ROM ore to commence. Stockpiling continues as at the date of this Report. Our milling team has performed strongly from the outset to exceed 4 million tonnes per annum, the rate envisaged in the Abujar Definitive Feasibility Study. Milling rates are currently in excess of 5 million tonnes per annum. We are implementing several clearly defined productivity improvements to our production processes and achieving improved cash generation, finishing 2023 with nearly A$83 million in cash, bullion and VAT receivables. We are confident that free cash flow generation will continue to increase in the year ahead as we focus on cost reduction initiatives including optimising blasting and mining, reductions in reagent consumption and other mill consumables, and implementing mill management and circuit enhancements. A revised Life of Mine Plan for Abujar released in October 2023 demonstrated the vast potential of the project, with a nine-year mine life to 2032, average yearly production of ~170,000oz gold and a life-of-mine (LOM) all-in sustaining cost (AISC) of US$982/oz. Assuming a US$1,900/oz gold price, Abujar is expected to deliver annual post-tax free cash flows of US$108M (A$171M) over the LOM and a post-tax NPV5 of US$853M (A$1.35B). Tietto’s improved performance through 2023 is a testament to the leadership shown by our management team under new Managing Director and CEO Matt Wilcox. Matt was our Chief Operating Officer (COO) during Abujar’s construction and took over the top executive role following the resignation of founder Dr Caigen Wang in May 2023. We thank Caigen for his extraordinary work and guidance throughout Tietto’s journey from pre-IPO to gold producer. Matt is supported by new COO Clinton Bennett, a process engineer and metallurgist who brings an extensive background and experience in West African gold operations to the team. In recognising our team’s efforts, we acknowledge the safety incident at Abujar in August 2023, which resulted in the death of an employee of our contractor, EPSA Group. This was tragic and shocking to us all, and we continue to support the employee’s family as well as our employees and contractors at 2 ASX: TIE CHAIRMAN’S MESSAGE Abujar. We consulted with the relevant Ivorian regulatory authorities and instigated an investigation as well as a full safety audit and review at Abujar following the incident, and we continue to review and improve our safety processes to ensure all employees and contractors carry out their work with safety as their first priority. I thank our Shareholders for your continued support of Tietto, particularly over the past 12 months. As you are aware, we received an unsolicited takeover offer from Zhaojin Capital (Hong Kong) Limited in October 2023. Tietto’s Directors unanimously recommend our Shareholders reject the unsolicited and highly conditional offer, which we believe was opportunistically timed prior to the Tietto share price reflecting the improved monthly performance at Abujar, delivered in recent months as outlined above. The offer also vastly undervalued Tietto, with the Independent Expert Report indicating a valuation range for Tietto of A$0.793 to A$0.927 per share assuming a gold price well below the current spot gold price, compared to Zhaojin’s offer of $0.58 per share. We are confident our Shareholders see the potential Tietto holds to create and return value over the coming years as Abujar achieves and maintains full production levels. Your Directors are excited about Tietto’s future as we move toward full production and explore organic growth opportunities including exploration targets across our large and highly prospective 1,114km2 land package, extending Abujar’s mine life by converting our 3.83Moz of Resources to Reserves and our other exploration projects in Côte d’Ivoire and Liberia, where we are now shaping exploration targets. Any company is reliant on the quality of its management and we are confident that Matt and his team are the most sharply focussed operators in West African gold operations. Francis Harper Chairman 3 ASX: TIE REVIEW OF OPERATIONS African-focused gold producer Tietto Minerals Limited (ASX: TIE) reports on its activities for the year ended 31 December 2023. Abujar Gold Mine, Côte d’Ivoire Tietto became West Africa’s newest gold producer during the period with first gold poured at its Abujar Gold Mine, Côte d’Ivoire, on 14 January 2023. Tietto declared commercial production at Abujar in early July 2023. Safety Tietto surpassed four million hours without a lost time injury (LTI) in the first half of the year, however in August 2023, a fatality occurred at Abujar when an employee of mining contractor EPSA Group died following an incident. Tietto commenced an investigation into the incident and liaised with the relevant Ivorian Authorities. As a result of this, EPSA made efforts to increase safety awareness and fatigue management, and new simulators are in use to improve productivity and safe operation. A new site HSE manager also commenced work at Abujar late in the year. Tietto recorded an average total recordable injury frequency rate (TRIFR) of 33 injuries per 1 million hours worked. Production Tietto produced ~94,300 ounces of gold in 2023 with mining and processing continuing to ramp up over the year following first gold pour in January. Table 1: Summary of Abujar gold production - 2023 Quarter Tonnes processed March June Sept Dec 578,546 860,000 1,114,082 1,176,929 Gold grade 0.55g/t 0.68g/t 0.95g/t 0.98g/t Plant recovery Gold production (ounces smelted) 95% 92% 95% 95% 9,043 15,592 33,753 35,553 Early in the year, Tietto mined ore from Abujar’s oxide layer, which had previously been subject to artisanal mining. Initial mining rates were also impacted by delays in deliveries of mobile mining equipment, which prevented planned pre-stripping, and wet in-pit conditions. As mining conditions improved, mill throughput continued to rise, exceeding the DFS annualised rate of 4.0 million tonnes per year in June. In July, mill throughput reached an annualised rate of more than 4.4Mtpa. Gold production more than doubled in the September quarter, compared to the June quarter, reaching 33,750oz as Tietto began processing mainly fresh rock. Gold grade also improved to 0.95 grams per tonne (g/t) as processing of depleted oxide material was completed. ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Tietto finished the year with record production of 35,553oz in the December quarter following record monthly gold production of 13,781oz in December from just 26 days of milling operations. Head gold grades showed improvement through the year, achieving 0.98g/t Au in the December quarter, while plant recovery was stable at ~95% during the second half of the year. Monthly mining rates increased to 508,000 tonnes ore in December 2023 from a monthly average of 349,000 tonnes over the past six months (June to November 2023) with additional equipment mobilised to Abujar. Tietto remains on track to achieve full production at Abujar in H1 2024. Mining Tietto’s mining fleet was fully mobilised in early March 2023, however this was later than expected and a substantial delays in pre-stripping slowed gold production in the first half of the year, as the mill was required to accept run-of-mine ore. Tietto completed grade control drilling in July which enabled it to more accurately predict grade and likely production in the second half of 2023. In August, Tietto reported that actual mining benches averaged 10m higher (180 mRL vs 170 mRL) than forecast in March 2023, delaying access to high-grade ore at lower benches as the pit gets deeper, mainly affected by difficult ground conditions with significant amount of water encountered. In the December quarter, mining rates overtook milling rates following additional equipment being mobilised to site. Monthly mining rates increased to 508,000 tonnes ore in December from a monthly average of 349,000 tonnes over the prior six months (June to November 2023). This allowed for higher grade ore to be presented to the mill while lower grade ore was stockpiled. A continuation of this trend in 2024 will ensure Tietto is well placed with sufficient stockpiles of ore ahead of the next wet season. Tietto’s team is working closely with EPSA in 2024 to increase availability and productivity and to optimise blasting and fragmentation to ensure correct particle size and to reduce ore movement. Processing Tietto commenced processing ore at Abujar in late December 2022 and achieved gold recovery rates in the April 2023 quarter that exceeded expectations. Milling rates in June peaked at more than 100,000 tonnes per week and Tietto milled more than 315,000 tonnes in June, but damage to conveyor belts in the last week of the month reduced monthly mill operating time to 76%. Following this, Tietto made efforts to optimise mill throughput, achieving rates of more than 16,000 tonnes per day during July, with an annualised rate of 4.4Mtpa, which exceeded the DFS rate of 4.0Mtpa. Tietto achieved a record high hourly milling rate of >600 tonnes per hour, equating to 374,000 tonnes milled in December from only 26 days of operation. A mill reline was completed during a five-day shutdown. Tietto achieved an average recovery rate of ~94% and head grade consistently improved through the year to reach 0.98g/t in the December quarter. 5 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Permitting Tietto’s local entity (SML) and Cote d’Ivoire Government ratified a Mining Convention for Abujar on 26 May 2023, which was issued in accordance with the 2015 Cote d’Ivoire Mining Code. The Convention is valid for the current 10-year mine life and can be renewed for additional five-year periods, with details in line with Abujar DFS assumptions Updated Mineral Resource Estimate for Abujar In April, Tietto reported an updated Mineral Resource Estimate (MRE) for Abujar, with resources increased to 3.83Moz gold. Table 2: Updated Abujar Project Mineral Resource as at 1 March 2023 Indicated Resource Measured Resource Measured & Indicated Resource Inferred Resource Total Resource Grade (Au g/t) Au Oz Mt Grade (Au g/t) Au Oz Mt Grade (Au g/t) Au Oz Mt Grade (Au g/t) Au Oz Mt Grade (Au g/t) Resource Area AG APG SG APG-ex Mt 29.0 9.5 1.3 0.8 1.2 0.2 12.3 1.2 0.5 41.3 9.5 1.3 0.8 1.7 0.2 15.6 30.8 5.5 21.2 Total 39 1.2 1.45 12.3 1.2 0.49 50.9 1.2 1.94 73 1.5 0.7 0.8 0.5 0.8 0.7 0.7 0.1 0.3 57 40 5 21 1.90 124.0 1.3 0.7 0.8 0.5 1.0 Au Moz 2.42 0.93 0.14 0.34 3.83 Statement of Mineral Resources by Deposit as at 1 March 2023 reported at 0.25 g/t Au cut off within US$2,000 pit shells; and 1.1 g/t Au cut off below the pit shells for AG; and 0.3 g/t Au cut off within pit shells, and 1.1 g/t Au cut off below the US$2000 pit shells for APG, and 0.25 g/t to a depth of 120m for SG and APG Extension area. Gold mineralisation at Abujar remains open along strike and at depth and further drilling is required to test the limits. Large portions of the Abujar main shear bounded by gold mineralisation remain to be drilled; Tietto plans systematic drill testing of this. 6 REVIEW OF OPERATIONS (CONTINUED) ASX: TIE Figure 1: Abujar Oblique Long Section showing updated Resource Model classification shell and drilling Tietto’s exploration programs have delivered both increased confidence and rapid growth of gold Mineral Resources at Abujar (Figure 2). Abujar Resource Growth 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Jan 2018 Apr 2019 Nov 2019 Oct 2020 Jul 2021 Apr 2022 Mar 2023 AG Measured AG Indicated AG Inferred APG Indicated APG Inferred SG Inferred APG extra Inferred Figure 2: Abujar Gold Project Mineral Resource growth Measured Resources were based on drill sample spacings of 20m to 25m by 20m to 25m using geospatial analysis with 25m being approximately 40% of the effective sill. Infill drilling on 20m to 25m by 20m to 25m pierce points (down‐dip) has confirmed the continuity of both the grade and geology in‐line with the expectation of the style of mineralisation particularly given the high gold nugget observed in all phases of drilling. Of significance, the infill drilling supported the interpretation of the grades and geological structures over several hundred metres in the target areas. 7 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Infill Drill Program To inform the updated MRE, Tietto systematically diamond drill tested Indicated and Inferred Mineral Resources at the AG and AGS, SG, AGM, PGL, PGL WEST, 22, and ZKP South deposits since the April 2022 Mineral Resource model update1. Tietto’s drilling teams completed 679 holes for 120832.35m across a range of deposits and prospects at Abujar (Table 3). Tietto drilled 227 holes for 47,597m at AG; 75 holes at AG South (Sections 0-13) and 152 holes at AG Core (Sections 14-30). Inferred drill programs designed for resource growth were undertaken at AGM, SG, and APG Extensional (PGL west and ZKP). Target testing drill programs designed to define more target for resource were undertaken at Koflankro, 22, AG East, APG East, ZKP West AG NW, and Potoco deposits. Table 3: New diamond drilling completed at Abujar since April 2022 Deposit/Prospect Holes Total Metres Ave Depth (m) Max Depth (m) AG AGS (sections 0-13) AG Core (sections 14-30) SG APG Extensional PGL PGL West ZKP South AGM 22 Koflankro AG East APG East ZKP West AG NW Potoco Total 227 75 152 101 160 29 108 23 34 83 38 9 9 8 6 4 47,597 15,082.5 32,514.5 18,550.1 24,921.25 4,816.5 16,308.25 3,796.5 5,807.5 13,625.5 5,257 1,522 989.5 1,109 981.5 472 679 120,832.35 209.67 201.1 213.91 183.66 155.75 166.08 151 165.06 170.8 164.16 138.34 169.11 109.94 138.62 163.58 118 177.95 726 367.5 726 370 315.5 276.5 315.5 234 290 276 204 293 182 267 285 175.5 726 The drill program met its goals of increasing the overall resource at Abujar by more than 10% to a total of 124Mt @ 1 g/t for 3.83Moz. Measured gold resources have been declared at AG Core within the first two years of gold production from the Abujar Ore Reserves of 12.3Mt @ 1.3 g/t Au for 470,000oz that sit inside the Life of Mine (LOM) mining inventory of 41.3Mt @ 1.3 g/t Au for 1.69Moz at AG. The Infill drilling program at AG Core confirms continuity of resource at depth below the pit limits. Tietto declared additional Inferred gold resources at APG Extensional prospect for 21.2Mt @ 0.5 g/t Au for 0.34Moz. Tietto plans to continue further drilling to assess the potential of the APG and APG Extensional deposits at Abujar. 1 ASX Announcement dated 11 April 2022 8 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Updated Life of Mine Plan for Abujar In October, Tietto announced an updated Life of Mine Plan (LOMP) for Abujar following updated Reserves as of 30 June 20232. Highlights included: - - - Nine-year mine life from 2024 to 2032 including average yearly production of 170,000 oz gold. - Production head grade of 1.04 grams gold per tonne after increasing blended plant throughput to 5.5 Mtpa by 2025 for total production of 1.53 Moz (2024-2033) gold. LOM all in sustaining cost (AISC) of US$982/oz (2024-2032). Pre-tax NPV5 of US$1.06B (A$1.68B) and post-tax NPV5 of US$853M (A$1.35B) at US$1,900/oz gold price. Average annual free cashflow LOM pre-tax of US$137M (A$216M) and post-tax of US$108M (A$171M). LOM strip ratio of 5.74 (2024-2032). - - - Near-lowest processing costs within West African gold mining industry of US$7.13 per tonne LOM. - Measured and Indicated Resources comprise 75% of LOMP production with Inferred Resources - - - comprising 25% of LOMP production. Abujar total Proved and Probable Ore Reserves estimated at 36.7 Mt at 1.15 g/t gold for 1.36 Moz, compared to 30 September 2021 estimate of 34.4 Mt at 1.31 g/t Au for 1.45 Moz gold. AG deposit Ore Reserves now total 31.2 million tonnes of ore at 1.22 g/t gold, containing 1.22 Moz of gold. APG deposit Ore Reserves now total 5.4 million tonnes of ore at 0.77 g/t gold, containing 0.13 Moz of gold. Table 4: Key parameters for Abujar LOMP Key parameters Total Ore + waste mined Strip ratio Ore processed Head grade Gold recovery rate Gold production Production costs Sustaining capital Average All-in Site Costs Additional capital Total Capital Units Mt/a t:t Mt/a g/t gold % Moz/a US$/oz US$/oz US$/oz US$M US$M 5-Yr Average 2024-2028 LOMP Average 2024-2032 46.48 7.06 5.29 1.08 94.42 0.173 1,036.16 45.61 1,081.77 - - 2 TIE ASX release “Updated Life of Mine Plan for Abujar Gold Mine” dated 5 October 2023 36.40 5.74 5.37 1.04 94.26 0.170 942.31 39.55 981.86 - - 9 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) US$ Gold Price Revenue EBITDA Net Present Value at 5% pre- tax Net Present Value at 5% post- tax All-in Sustaining Costs (AISC) Average (yr.) free cashflow pre-tax Average (yr.) free cashflow post-tax Project free cashflow pre-tax Project free cashflow post-tax Notes: Table 5: NPV by gold price for LOM basis $1500/oz 2,391 854 605 $1700/oz 2,709 1,131 826 $1800/oz 2,869 1,282 945 $1900/oz 3,028 1,432 1,065 $2000/oz 3,187 1,583 1,185 $2100/oz 3,347 1,700 1,278 507 1,012 77 63 755 619 673 1,038 106 85 1,032 827 763 1,043 121 96 1,183 940 853 1,049 137 108 1,333 1,054 943 1,054 152 120 1,484 1,167 1,013 1,081 164 129 1,601 1,255 1. Royalties are 4% $1300-1600, 5% at $1600-2000/ounce and 6% above $2000/ounce gold prices. 2. Assumes gold price of US$1,500 /oz for Reserve calculation in September 2023 LOMP and USD/AUD currency pair of 1.58. 3. Assumes a flat gold price of US$1,700 /oz for royalty calculation in September 2023 LOMP. Ore Reserves Estimate The Ore Reserve estimate for Abujar Gold Mine includes increases at the AG and APG open pit. Refer to ASX release “Updated Life of Mine Plan for Abujar Gold Mine” dated 5 October 2023 for additional details and notes. Table 6: Abujar Ore Reserves estimate Proved Grade g/t Au 1.12 0.00 0.72 1.12 Gold M oz 0.43 0.0 0.0 0.43 Quantity Mt 19.2 5.4 Probable Grade g/t Au 1.28 0.77 Gold M oz 0.79 0.13 24.6 1.17 0.92 Deposit Deposit Type Quantity Open Pit Open Pit Stockpile Mt 12.0 0.0 0.1 12.1 AG APG Stockpiles TOTAL Notes: Proved + Probable Grade g/t Au 1.22 0.77 0.72 1.15 Quantity Mt 31.2 5.4 0.1 36.7 Gold M oz 1.22 0.13 0.0 1.36 1. Based on depletion to 30 June 2023 mining surfaces. 2. Based on Mineral Resource Estimates which were current at 30 June 2023. 3. The following marginal cut-off grades determined based on a US$ 1,500 per troy ounce gold price, and updated costs and mining and metallurgical modifying factors. 4. Marginal cut-off grades for AG: Oxide 0.29 g/t Au, Transition 0.30 g/t Au and Fresh 0.31 g/t Au. 5. Marginal cut-off grades for APG: Oxide 0.31 g/t Au, Transition 0.32 g/t Au and Fresh 0.34 g/t Au (as greater haulage distance to AG ROM pad) Inferred Mineral Resource is considered as waste for pit limit optimisation purposes. 6. Pit designs are based on US$1,500/oz gold metal price. 7. 8. Based on EOM June 2023 stockpile balance report. 9. Ore Reserve estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The quantities contained in the above table have been rounded to three significant figures to reflect the relative uncertainty of the estimate. Rounding may cause values in the table to appear to have computational errors. 10. All Ore Reserve estimates are on a dry basis. 10 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) The changes in the Ore Reserve from that last quoted on 30 September 2021 are associated with: - Ore depletion from open pit mining activities in AGM up to 30 June 2023. - Revised AGM and APG pit designs based on updated mineral resources, US$ 1,500 per troy ounce gold price and changes in other modifying factors. - Update to cut-offs due to increase in mine costs. Modifying Factors Considered (refer ASX quarterly report released 30 October 2023) Economic Assumptions - Gold metal price of US$1,500/oz used for pit optimisation. - Open pit optimisation input cost parameters; - RPM estimated mining costs based on a contractor rates, processing and other site costs were generally based on Tietto’s 2022-2023 operating budget and site costs. A discount rate of 10% (real) has been assumed for economic valuation. - Open Pit Parameters - - - - - - - The mining method for the extraction of ore is to be selective open cut mining, utilising hydraulic excavators and trucks. A mining bench height of 10 metres is used, with loading on 2.5 metres flitches to minimise ore loss and dilution. AG and the APG Resource Models were regularised to a size of 5m east-west, 5m north-south and 2.5m vertical. The AG ROM Model is estimated to model an ore loss of 23%, dilution of 29% and gold loss (contained ounces) of 9%. The APG ROM Model is estimated to model an ore loss of 21%, dilution of 19% and gold loss (contained ounces) of 12%. This approach has increased the mining modifying factors compared to previous studies to reflect the reconciliation outcomes of the current operations. The geotechnical criteria for the design of the open cut were developed by Dempers & Seymour Pty Ltd for the purposes of the DFS and to reflect current operational reviews. In general, oxide rock has an overall slope of 17 to 20 degrees, with the deeper transition and fresh ranging from ~50 to 60 degrees. The economic pit shell was defined using Whittle 4X pit optimisation software (“Whittle 4X”) with inputs such as geotechnical parameters, ore loss and dilution, metallurgical recoveries, operating costs, and gold price. The pit optimisation was run at a gold price of US$1,500 per ounce with revenue generated only by M&I Mineral Resources. No value was allocated to Inferred Mineral Resources. Economic mining limits were tested inclusive and exclusive of Inferred Mineral Resources. That is, the exclusive scenario assumed Inferred material to have zero grade. The results indicated that Inferred Resources did not materially impact the potential pit viability and hence as a DFS has a strategic element, were included to estimate mineable quantities for life of mine planning. The life of mine plan that supported the estimate of Ore Reserves has less than 5% Inferred Resources. Inferred Resources were not converted to Ore Reserves − Vertical mining advance has been capped based at 60m per annum based on operating experience and minimum mining width for a “good-bye” cut is approximately 30m. There are no physical constraints to mining within the lease area. No property, infrastructure or environmental issues are known to exist which may limit the extent of mining within the mining lease. Ore cut-off grades, based on metallurgical recoveries, ore costs and gold price for the estimate of Ore Reserves for the AG and APG are shown in Table 7. 11 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Table 7: Ore Reserve cut-off grades Item AG APG Unit g/t rom g/t rom Oxide 0.29 0.31 Transition 0.30 0.32 Fresh 0.31 0.34 Processing Parameters - Metallurgical recoveries are based on actual operational results as well as test work undertaken to support the earlier feasibility studies. The samples tested are considered representative of the different material types throughout the mining area. - Metal recoveries vary depending on the feed head grade. On average, the metal recovery is estimated to be 94%. - No deleterious material has been identified. - Average annual processing throughput rate of ore is dependent on deposit, rock type and weathering state. The Target throughput rate is 5.5 Mtpa. The processing circuit involves single stage crushing, semi-autogenous grinding, gravity recovery and carbon-in- leach (CIL). - Ore Reserve Classification The criteria used for classification, including the classification of the Mineral Resources on which the Ore Reserves are based, and the confidence in the modifying factors applied are: The Ore Reserve is classified as Proved and Probable in accordance with the JORC Code, corresponding to the resource classifications of Measured and Indicated Resources. - Measured Resources have been converted to Proven Reserves. - - No Inferred Mineral Resources were included in the Ore Reserve estimate. Indicated Resources have been converted to Probable Reserves. APG deposit development In CY2022, Tietto identified an opportunity to grow its production profile with a second standalone mine at the Abujar‐Pischon‐Golikro (APG) deposit and completed a Scoping Study, which found a heap leach gold processing operation at APG could deliver an additional 85,000oz gold per year for 10 years. Tietto commenced further metallurgical studies and engineering design activities to progress its feasibility evaluation of this opportunity. During 1H CY2023, Tietto approved a second round of metallurgical test work for APG Heap Leach Project. CORPORATE Unsolicited Takeover Offer Tietto received an unsolicited, non-binding indicative proposal from Zhaojin to acquire 100% of Tietto for cash consideration of $0.58 per share on 29 October 2023. Zhaojin is Tietto’s second largest shareholder, owning 7.02% of Tietto, prior to its Offer. 12 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Tietto’s Directors continue to unanimously recommend that Tietto shareholders REJECT the Offer by DOING NOTHING and TAKING NO ACTION in relation to all documents sent by Zhaojin, for the reasons set out in section 1 of the Target’s Statement (and as supplemented by the First and Second Supplementary Target’s Statements). - - - The Directors commissioned Grant Thornton Corporate Finance Pty Ltd to act as independent expert (Independent Expert) and prepare an Independent Expert’s Report (IER) in relation to the Offer. As part of the IER, Grant Thornton prepared an independent valuation of Tietto in accordance with the requirements of ASIC Regulatory Guide 111. Tietto notes that the independent valuation of Tietto of $0.793 to $0.927 per Tietto share was materially (37% to 60%) above Zhaojin’s Offer price of A$0.58 cash per Tietto share. In the First Supplementary Bidder’s Statement, Zhaojin noted that the Independent Expert’s valuation was sensitive to the gold price, and pointed to the Independent Expert’s assessment of the impact of a 10% fall in the gold price without any reference to what would happen to the valuation should the gold price increase above the Independent Expert’s chosen gold price forecast. In the Second Supplementary Target’s Statement, Tietto noted that a decrease in the Independent Expert’s chosen gold price forecast by 10% still resulted in a valuation range greater than the Zhaojin offer of $0.58 cash per Tietto share and that the gold price forecast used by the Independent Expert was well below the current spot price of gold. As a result, Tietto requested that the Independent Expert confirm its valuation range at the spot gold price prevailing at the date of the Second Supplementary Target’s Statement, which the Independent Expert indicated to be A$0.890 – A$1.008 per Tietto share (12 – 9% above the valuation range of A$0.793 – 0.927 per Tietto share in the IER and far higher (53% – 74%) than Zhaojin’s Offer price of A$0.58 cash per Tietto share). As announced on 29 February 2024, Zhaojin has extended the offer to remain open until 7.00pm (Sydney time) on Friday, 5 April 2024, unless extended or withdrawn. Shareholders who have accepted the Offer on or before 29 February 2024 are entitled to withdraw their acceptance by giving notice to Zhaojin within a period of one month beginning on day after the date the Notice of Variation from Zhaojin was received. For further information on withdrawing acceptance, please see the Notice of Variation from Zhaojin (a copy of which was lodged with ASX on 29 February 2024). Chifeng Jilong Gold Mining Co., which as at the Last Practicable Date held approximately 12.47% of Tietto Shares (indirectly through its subsidiary Chijin International (HK) Limited), and Kongwell Management Ltd, which as at the Last Practicable Date held approximately 6.26% of Tietto Shares, have each confirmed to Tietto that they do not intend to accept Zhaojin’s Offer at the Offer Price of $0.58 cash per Tietto share in respect of the Tietto shares they respectively own or control. Board Changes In March, Tietto appointed COO Matthew Wilcox as Executive Director following the resignation of Mr Mark Strizek. Mr Wilcox has more than 20 years’ experience in mining operations and construction and has led the Abujar project ‘s development from feasibility to operations. Throughout his career, he has held senior positions with resource companies in various stages of development through feasibility, construction, and operations, primarily in West Africa. Matthew holds a Bachelor of Engineering (Chemical) and Bachelor of Science (Applied Chemistry) from Curtin University, Western Australia. 13 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) In May, Tietto founder and Managing Director Dr Caigen Wang retired from the Board after more than 13 years with the Company, leading it through exploration and resource development to become Africa’s newest gold producer, commencing gold production at Abujar, in Côte d’Ivoire, in January 2023. Following Dr Wang’s retirement, the Company appointed Mr Wilcox as Managing Director and CEO of Tietto. Mr Wilcox transitioned from his role as Tietto’s Executive Director and Chief Operating Officer, having delivered Abujar Gold Mine on time and below budget. Tietto appointed Sabina Shugg AM as a Non-Executive Director in September 2023. Ms Shugg is a mining executive with extensive experience in senior roles within some of the largest resource and consulting organisations in Australia. Her experience includes delivering technical mining projects from conceptual design to project handover as well as operations management experience at senior site level covering both underground and open pit environments. She is a prominent proponent for the mining industry, with an emphasis on advocating for and supporting women in male dominated workplaces, and she has also had long involvement in a variety of not-for-profit organisations. She is currently a Non-executive Director of Resolute Mining Limited and recently completed a three-year term as Chair of the Goldfields Esperance Development Commission (September 2020 to September 2023). Appointment of Chief Operating Officer Clinton Bennett commenced as Tietto’s Chief Operating Officer in October 2023 after serving with Endeavour Mining since 2017. Mr Bennett was most recently General Manager of the 300koz+ Ity Gold Mine, and was also Vice-President of Metallurgy during his tenure at Endeavour. Clinton has vast international operational and development experience at mines in Burkina Faso, Mali, Côte d’Ivoire, Saudi Arabia, Indonesia and Australia. He holds a Master of Science in Energy and Mineral economics, a Master of Law in Energy and Resource Law, a Bachelor of Science and a Post Graduate Diploma in Extractive Metallurgy. Working Capital Facility In March, Tietto executed a term sheet with Coris Bank for a working capital facility of ~US$25M (XOF:15,400,000,000). Loan Facility The Company extended the maturity of an existing unsecured US$8 million loan facility for a further three months to 30 September 2023. In consideration for the extension, the Company agreed to issue the lenders 4,000,000 unlisted options exercisable at $0.70 expiring 31 December 2026. Entities who provided this loan facility elected to convert this debt into ordinary shares in Tietto. Debt converted to shares at a VWAP- determined share price of approximately $0.34 per share rather than cash repayment, in accordance with the loan terms announced 30 January 2023 (as amended). The loan was provided to support Tietto’s APG Heap Leach Study by entities affiliated with two unrelated, longstanding high net worth shareholders of the Company and carried an interest rate of 8% per annum. 14 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Appendix A – Schedule of Tenements as at 31 December 2023 Tenement ID Status Interest at beginning of quarter Interest acquired or disposed Interest at end of quarter Côte d’Ivoire Abujar Middle3 – Mining Granted 88% Mining Abujar North1 (Zahibo License) Abujar Middle2 (Zoukougbeu License) Abujar South (Issia License) Bongouanou North Bongouanou South Granted Granted Granted Granted Granted Exploration 15% 90% 100% 50% 50% - - - - - - Two Boundiali tenements In application 1. 2. 3. Tietto has the right to acquire up to a 80% interest in the Abujar North Exploration License. Tietto has 90% share capital of Tiebaya Gold which holds 100% interest of the Abujar Middle Exploration License Tietto has 88% interest in the newly granted mining licence according to its JV agreement with local partners. Liberia Dube South Cestos Project Compound 4 Gold Project Fish Town Lithium Project Granted Granted Granted Granted 100% 100% 100% 100% - - - - 88% 15% 90% 100% 50% 50% 100% 100% 100% 100% 15 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Abujar Gold Project, Côte d’Ivoire The Abujar Gold Project is located approximately 30km from the major regional city of Daloa in central western Côte D’Ivoire. It is close to good regional and local infrastructure to facilitate exploration and development being only 15km from nearest tarred road and grid power. The Abujar Gold Project is comprised of three contiguous exploration tenements, Middle, South and North tenement, with a total land area of 1,114km2, of which less than 10% has been explored. It features an NNE- orientated gold corridor over 70km striking across three tenements. In December 2020, a gold exploitation (mining) licence within the Abujar Middle exploration tenement was granted. The mining tenement covers an area of 120.36km2. Tietto is well placed to grow its resource inventory. It has substantially advanced the project since starting exploration in mid-2015 with the identification of 3.83 million ounces Measured, Indicated, and Inferred JORC 2012 Mineral Resources. Tietto recently completed construction of the Abujar Gold Plant and poured first gold on 14 January 2023. Abujar Mineral Resources Results of the Independent Mineral Resources estimate for the Project are tabulated in the Statement of Mineral Resources below, which are reported in line with the requirements of the 2012 JORC Code; as such the Statement of Mineral Resources is suitable for public reporting. The Statement of Mineral Resources shown in Error! Reference source not found.. Within AG, the Mineral Resource is reported at a cut of grade of 0.25 g/t Au within a pit shell that used a gold price of 2,000 USD per troy ounce, and 1.1 g/t Au below the pit shell. The cut off grades were based on estimated mining and processing costs and recovery factors. It is highlighted that while a 2,000 USD per ounce pit shell was utilised the cut-off grades were estimated based on the gold price of 1,800 USD per troy ounce which is 1.25 times the consensus forecast as of February 2022. Within APG, the Mineral Resource is reported at a cut of grade of 0.30 g/t Au within a pit shell that used a gold price of 2,000 USD per troy ounce, and 1.1 g/t Au below the pit shell. The cut off grades were based on estimated mining and processing costs and recovery factors and are detailed in JORC Table 1. It is highlighted that while a 2,000 USD per ounces pit shell was utilised the cut-off grades were estimated based on the gold price of 1,800 USD per troy ounce which is 1.25 times the consensus forecast as of February 2021. South Gamina Resource is reported to a depth of 120m and not reported at depths below 120m. 16 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Table 3: Statement of Mineral Resources by Deposit by Deposit as at 31st March 2023 Reported at 0.25 g/t Au cut off within pit shells; and 1.1 g/t Au cut off below the pit shells for AG; and 0.3 g/t Au cut off within pit shells, and 1.1 g/t Au cut off below the pit shells) Indicated Resource Measured Resource Measured & Indicated Resource Inferred Resource Total Resource Resource Area AG APG SG APG-ex Total Grade (Au g/t) 1.3 0.8 Mt 29.0 9.5 Au Oz Mt 12.3 1.2 0.2 Grade (Au g/t) 1.2 Au Oz Mt 0.5 41.3 9.5 Grade (Au g/t) Au Oz Mt 1.7 0.2 15.6 30.8 5.5 21.2 39 1.2 1.45 12.3 1.2 0.49 50.9 1.2 1.94 73 Grade Grade (Au g/t) 1.5 0.7 0.8 0.5 0.8 Au Oz Mt 0.7 0.7 0.1 0.3 57 40 5 21 1.90 124.0 (Au g/t) 1.3 0.7 0.8 0.5 1.0 Au M Oz 2.42 0.93 0.14 0.34 3.83 Note: The Mineral Resources have been compiled under the supervision of Mr. Jeremy Clark who is a sub- consultant to RPM and a Registered Member of the Australian Institute of Mining and Metallurgy. Mr. Clark has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he has undertaken to qualify as a Competent Person as defined in the JORC Code. 1. All Mineral Resources figures reported in the table above represent estimates at 1 March 2023. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies. 2. Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The Joint Ore Reserves Committee Code – JORC 2012 Edition). The Mineral Resources have been reported at a 100% equity stake and not factored for ownership proportions. The total resource at AG and APG is reported at varying cut-off grades are provided in the table below. However, RPM recommends that the Mineral Resource be reported using the criteria shown in the table below. It is highlighted that the below tableError! Reference source not found. is not a Statement of Mineral Resources and d oes not include the use of pit shells to report the quantities rather the application of various cut off grades. As such variations with Error! Reference source not found. will occur and a direct comparison is not able to be c ompleted. 17 REVIEW OF OPERATIONS (CONTINUED) ASX: TIE Table 4: Abujar Mineral Resources at varying cut off grades AG Measured Au (g/t) 1.1 1.2 1.3 1.5 1.7 1.9 2.1 2.3 2.6 2.7 3.0 3.2 3.4 3.6 3.8 3.9 4.1 4.3 4.5 4.7 5.5 6.3 Tonnes (Mt) 13.8 13.0 11.5 9.7 8.0 6.7 5.8 5.0 4.3 3.9 3.4 3.1 2.8 2.5 2.3 2.2 2.0 1.9 1.7 1.6 1.2 0.9 Au (Moz) 0.5 0.5 0.5 0.5 0.4 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 AG Indicated Au (g/t) 1.0 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.7 2.9 3.0 3.2 3.3 3.5 3.6 3.7 3.9 4.0 4.7 5.4 Tonnes (Mt) 43.6 41.2 35.2 28.4 23.1 19.2 16.2 14.0 12.2 10.9 9.8 9.0 8.2 7.6 7.0 6.5 6.1 5.6 5.3 4.9 3.5 2.6 Au (Moz) 1.4 1.4 1.3 1.2 1.2 1.1 1.0 1.0 0.9 0.9 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.6 0.5 0.5 AG Inferred Au (g/t) 0.8 0.8 0.9 1.1 1.2 1.4 1.6 1.8 1.9 2.0 2.2 2.3 2.4 2.6 2.7 2.9 3.0 3.2 3.4 3.5 4.4 5.1 Tonnes (Mt) 54.1 51.9 45.4 35.6 27.1 21.2 17.2 14.6 12.6 11.2 10.0 9.0 8.1 7.0 6.0 5.3 4.7 4.1 3.7 3.4 2.0 1.4 Au (Moz) 1.4 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.8 0.7 0.7 0.7 0.6 0.6 0.5 0.5 0.5 0.4 0.4 0.4 0.3 0.2 APG Indicated Au (g/t) 0.6 0.6 0.7 0.8 1.0 1.1 1.3 1.4 1.5 1.7 1.8 1.9 2.1 2.3 2.5 2.7 2.8 3.0 3.1 3.2 4.4 5.2 Tonnes (Mt) 16.3 15.9 13.1 10.1 7.5 5.7 4.3 3.4 2.8 2.2 1.8 1.4 1.2 0.9 0.8 0.6 0.6 0.5 0.4 0.4 0.2 0.1 Au (Moz) 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 APG Inferred Au (g/t) 0.5 0.5 0.6 0.7 0.8 1.0 1.1 1.3 1.5 1.6 1.8 1.9 2.0 2.1 2.4 2.5 2.6 2.8 2.8 2.9 3.4 3.8 Tonnes (Mt) 100.2 94.6 76.7 53.4 35.2 21.9 15.1 11.1 8.2 6.3 4.9 4.1 3.4 2.9 2.1 1.8 1.6 1.4 1.3 1.2 0.7 0.4 Au (Moz) 1.6 1.6 1.5 1.2 0.9 0.7 0.6 0.5 0.4 0.3 0.3 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Tonnes (Mt) 228.1 216.7 182.0 137.1 100.9 74.8 58.6 48.1 40.1 34.5 30.0 26.6 23.7 20.9 18.2 16.4 14.9 13.5 12.4 11.5 7.6 5.5 Total Au (g/t) 0.7 0.7 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.5 2.7 2.8 3.0 3.2 3.4 3.5 3.7 3.8 4.6 5.3 COG 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2 2.5 3 Au (Moz) 5.2 5.2 4.9 4.4 3.9 3.4 3.1 2.8 2.6 2.4 2.3 2.1 2.0 1.9 1.8 1.7 1.6 1.5 1.5 1.4 1.1 0.9 18 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Abujar Ore Reserves A total of 36.7 of Open Cut Ore Reserves at 1.15 g/t Au grade for 1.36Moz was estimated as of 30 June 2023 by RPM, refer table below (refer ASX release 5 October 2023). PROVED PROBABLE PROVED + PROBABLE DEPOSIT DEPOSIT TYPE QUANTITY GRADE GOLD QUANTITY GRADE GOLD QUANTITY GRADE GOLD Mt g/t gold M oz Mt g/t gold M oz Mt g/t gold M oz Open Pit Open Pit Stockpile 12.0 1.12 0.43 19.2 1.28 0.79 31.2 1.22 1.22 0.0 0.00 0.1 0.72 0.0 0.0 5.4 0.77 0.13 5.4 0.77 0.13 0.1 0.72 0.0 12.1 1.12 0.43 24.6 1.17 0.92 36.7 1.15 1.36 Table 5: Abujar Ore reserve estimate as of 30 June 2023 AG APG Stockpiles TOTAL Notes: 1. Based on depletion to 30 June 2023 mining surfaces. 2. Based on Mineral Resource Estimates which were current at 30 June 2023. 3. The following marginal cut-off grades determined based on a US$ 1,500 per troy ounce gold price, and updated costs and mining and metallurgical modifying factors. 4. Marginal cut-off grades for AG: Oxide 0.29 g/t Au, Transition 0.30 g/t Au and Fresh 0.31 g/t Au. 5. Marginal cut-off grades for APG: Oxide 0.31 g/t Au, Transition 0.32 g/t Au and Fresh 0.34 g/t Au (as greater haulage distance to AG ROM pad) 6. Pit designs are based on US$1,500/oz gold metal price. 7. Inferred Mineral Resource is considered as waste for pit limit optimisation purposes. 8. Based on EOM June 2023 stockpile balance report. 9. Ore Reserve estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The quantities contained in the above table have been rounded to three significant figures to reflect the relative uncertainty of the estimate. Rounding may cause values in the table to appear to have computational errors. 10. All Ore Reserve estimates are on a dry basis. 11. The Ore Reserves have been reported at a 100% equity stake and not factored for ownership proportions. 12. The Company first reported the production targets and forecast financial information derived from its production targets in accordance with Listing Rules 5.16 and 5.17 in this release and its ASX announcement on 5 October 2023 titled “Tietto Updates Abujar Life of Mine Plan”. The Company confirms that all material assumptions underpinning the production targets and the forecast financial information derived from the production targets continue to apply and have not materially changed. 19 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) MATERIAL BUSINESS RISKS Tietto makes every effort to identify materials risks and to manage these effectively. This section does not attempt to provide an exhaustive list of risks faced by the Company or by investors in the Company, nor are they in order of significance. Actual events may be different to those described. The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of the risks are, however, highly unpredictable and the extent to which the Board can effectively manage them is limited. The Board is responsible for ensuring that risks and also opportunities, are identified on a timely basis and that activities are aligned with the risks and opportunities identified by the Board. Gold price volatility The profitability of Tietto depends on the world market price of gold. Volatility in the gold price creates revenue uncertainty and requires careful management of operating and business performance to ensure that operating cash margins are maintained. If the market gold price falls below Tietto’s future production costs and remains at that level for a sustained period, it may not be economically feasible to continue production. A declining gold price can also impact operations by requiring a re-assessment of the feasibility of mine plans and certain projects and initiatives, the commencement of development projects and the ongoing commitment to exploration projects. Even if a project is economically determined to be economically viable, the need to conduct a re-assessment of viability could potentially cause substantial delays and / or may interrupt operations, which may have a material adverse effect on Tietto’s operational and financial performance. Tietto cannot provide any assurances as to the gold price it may receive in the future for its products. Changes in general commodity prices, including for gold and associated pricing for impurities and treatment charges, may have a positive or negative effect on Tietto’s revenues, which may have a flow-on impact on Tietto’s exploration and development programs and ongoing operations. Tietto may in the future be required or choose to enter into gold price hedging arrangements. Although gold price hedging arrangements may protect Tietto in some instances, they may also limit the price that can be realised on the proportion of recovered metal that is subject to any hedges, if the market price for gold exceeds the hedge contract price. Operational uncertainties and risks The ability of Tietto to achieve the production guidance, or meet operating and capital expenditure estimates, cannot be assured. These uncertainties are more pronounced over a longer period. Tietto’s assets and mining operations may be adversely impacted by factors including (but not limited to): ore tonnes, mine grade, ground conditions, metallurgical recovery and impurities, unanticipated metallurgical issues, operational environment, funding for development, availability of power and water supply, regulatory changes, accidents, contractual risks, infill resource drilling, mill performance, experience of the workforce and other unforeseen circumstances such as unplanned mechanical failure of plant and equipment, changes in applicable laws and regulations, general inflationary pressure and changes in currency exchange rates, cyclones, storms, floods, fires or other natural disasters, or outbreaks, continuations or escalations of disease or pandemics (including COVID-19). Tietto’s operations and revenue could also be adversely impacted by increased prices for diesel, reagents, and other supply chain commodities, increased cost of labour, and other input costs. 20 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Tietto has in place a framework for the management of operational risks and an insurance program which provides coverage for a number of these risks. However, the occurrences of any of these circumstances could result in Tietto not realising its operational or development plans, these plans increasing in cost, or being significantly delayed. Any of these outcomes could have a material adverse effect on Tietto’s operational and financial performance. Exploration and development The ability to continually find and replace reserves and resources is important for the long-term stability of Tietto’s operations and financial performance. There is a risk that depletion of reserves will not be offset by discoveries or acquisitions. The exploration for and development of mineral deposits is speculative and involves significant costs and risks. The reserve base of Tietto may decline if reserves are mined without adequate replacement, and Tietto may not be able to sustain production beyond current mine lives. Whether a mineral deposit will be commercially viable depends on a number of factors, including (but not limited to): the particular attributes of the deposit (including size, ore grade, and proximity to infrastructure), prevailing commodity prices, metallurgical recovery, capital construction and operating costs, and applicable government regulation including regulations relating to prices, taxes, royalties, land tenure, land use, exporting of minerals and environmental protection. There is no certainty that any expenditure made by Tietto towards the search for, and evaluation and development of, mineral deposits, will result in economically viable production of commercial quantities of ore. Resources and reserves Tietto notes that its Mineral Resources and Ore Reserve estimates are expressions of judgment based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. No assurance can be given that the estimated Mineral Resources and Ore Reserves are accurate or that the indicated level of gold or any other mineral may be produced. By their very nature, resource and reserve estimates are imprecise and depend to some extent on interpretations, which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis, the estimates are likely to change. In addition, actual mineralisation or geological conditions may be different from those predicted. No assurance can be given that any or all of Tietto’s inferred Mineral Resources estimates will be converted into measured Mineral Resources with further geological definition. This may result in alterations to development and mining plans which may, in turn, have a material adverse effect on Tietto’s operational and financial performance. Production guidance Production guidance and any other production guidance that Tietto has previously provided to the market, is based on assumptions and forecasts which may subsequently prove to be incorrect or inaccurate. Statement of production guidance, by their very nature, are imprecise. Although Tietto considers that its production guidance is reasonable, no assurance can be given that actual future production may materially differ from the guidance for various reasons, many of which cannot be foreseen and are beyond the control of Tietto. These factors may cause the production guidance not to be achieved, or to be achieved later than expected or at a higher cost than anticipated. 21 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Key personnel and labour market risk Tietto is dependent on the experience, skills and knowledge of its key personnel, both in Australia and in Côte d’Ivoire, to successfully manage its business. Recruiting and retaining qualified personnel is crucial to the ongoing success of Tietto. The loss of any of Tietto’s key personnel, the inability to recruit necessary staff as needed or the increase cost of doing so, may cause a significant disruption to Tietto and adversely affect its operational and financial performance. There is no assurance that Tietto will successfully continue to retain existing specialised key personnel or attract additional key personnel required to execute and implement Tietto’s business plan, which will be particularly important as Tietto continues to develop and grow. Competition for experienced key personnel in the mineral resources industry is intense. In addition, there can be no assurance that the operations of Tietto or its contractors will not be affected by labour related issues in the future, such as disputes or strikes. Relations between Tietto and its employees (and between Tietto’s contractors and their employees) may be affected by labour laws and regulations in the jurisdictions in which Tietto operates. Such changes in laws and regulations could have a material adverse effect on Tietto’s operational and financial performance. There may also be political, community or reputational risks associated with labour related issues involving Tietto and its workforce. Exchange rate volatility Tietto is an Australian business that reports its financial results in Australian dollars. However, the functional currencies of Tietto’s subsidiaries are varied, and include Australian dollars, US dollars and West African francs. Movements in the exchange rates between these various currencies may have a material adverse impact on Tietto’s operational and financial performance. The risks associated with exchange rate volatility may be reduced to an extent by currency hedging arrangements, however Tietto does not currently have any hedging arrangements in place, and there can be no assurance as to the efficacy of currency hedging arrangements if Tietto were to put such arrangements in place in the future. Future capital requirements Tietto’s continued ability to operate its business and effectively implement its business plan over time will depend in part on its ability to raise additional funds for future operations and to repay or refinance debts as they fall due. Mining operations, exploration and development involve significant financial risk and capital investment. It is difficult to predict the level of funding that may be required by Tietto in the future. No assurance can be given as to Tietto’s ability to successfully obtain required funding, including on a timely basis and on economically viable terms. To meet its future funding requirements, Tietto may need to seek funding from a variety of sources, including through the issue of new equity and / or debt financing. In some circumstances the issue of new equity to raise funds may be dilutive to Shareholders. In the future, Tietto may need to renegotiate or refinance the terms of existing debt facilities or may seek future facilities or replacement facilities with alternate financiers to satisfy its capital requirements. The terms on which debt financiers are willing to offer finance vary from time to time and depend on, amongst other things, macro-economic conditions, the performance of Tietto and an assessment of the risks and intended use of funds. Additionally, in a world that is rapidly migrating towards a lower-carbon economy, and where the global community is increasingly focused on the social and environmental sustainability of investment, obtaining future financing may prove difficult. 22 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) If sufficient funds are not available either internally or from debt or equity markets to satisfy Tietto’s short-, medium- or long-term capital requirements, when required, there may be a material adverse impact to Tietto’s operational and financial performance. Health and safety Mining and mining-related operations and activities can potentially be hazardous. Workplace accidents and incidents may occur for various reasons, including as a result of occupational health and safety laws and regulations in the jurisdictions in which Tietto operates. Tietto is committed to providing a safe and healthy workplace and environment for personnel, contractors and visitors. Tietto provides appropriate instructions, equipment, preventative measures, first aid information, medical facilities and training to all stakeholders through its occupational health and safety management systems. Notwithstanding this, Tietto may be liable for workplace accidents and incidents that occur, which can involve significant penalties and have a material adverse effect on Tietto’s operational and financial performance, and reputation. Such workplace accidents and incidents may not be covered, or may be inadequately covered, by Tietto’s insurance policies. Additionally, any accidents or injuries that occur at Tietto’s operations could result in delays or stoppages to operations and activities. Tietto is subject to health and safety laws and regulations in the jurisdictions in which it operates. Any unexpected change to such laws and regulations may result in increased costs of, or uncertainties in relation to, compliance with such laws and regulations. COVID-19 Although the immediate adverse impacts of the outbreak of COVID-19 have reduced to some extent, ongoing supply chain disruptions resulting from the transmission of COVID-19 in the community and measures implemented by governments around the world to limit the transmission of COVID-19, including the possible reinstatement of such measures in the event of a recurrent outbreak of COVID-19 in the jurisdictions in which Tietto conducts its operations and activities, may cause a material adverse effect to Tietto’s operational and financial performance. Environment The operations and activities of Tietto are subject to the environmental laws and regulations of the jurisdictions in which it operates. As with all mining and mining-related operations, Tietto’s activities are expected to have an impact on the environment. Tietto intends to conduct its operations and activities to the highest standards of environmental performance, including compliance with applicable environmental laws and regulations. Nevertheless, such operations and activities may give rise to potentially substantial costs for compliance, environmental rehabilitation, damage control and losses that exceed estimates, and possible regulatory intervention, potentially having a material adverse effect on Tietto’s operational and financial performance and reputation. Additionally, environmental regulation is evolving in a manner which will require increasingly strict standards and enforcement, including fines and penalties for non-compliance, more stringent assessments of projects, and a heightened standard of responsibility for companies and their officers, directors and employees. No assurance can be given that future changes in environmental standards, if any, will not have a material adverse effect on Tietto’s operational and financial performance. Changes in environmental regulation deal with, amongst other things, air quality, water and noise pollution and other discharges of materials into the environment, plant and wildlife protection, the reclamation and restoration of mining properties, greenhouse gas emissions, the storage, treatment and disposal of wastes, the effects of mining on the water table and groundwater quality. In addition 23 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) to the potential increased costs of compliance as referred to above, these changes could cause delays to Tietto’s operations or the cessation of activities altogether. Environmental hazards may exist on the properties on which Tietto holds interest and these hazards may be unknown to Tietto at present and there is the potential that Tietto may have to bear the burden of rectification of such hazards that arise and become known to Tietto. In addition, climate change may cause certain physical and environmental risks that cannot be predicted by Tietto, including adverse weather conditions or patterns and incidences of extreme weather events. Tietto may also be impacted by changes to local or international compliance regulations related to climate change mitigation effects, and / or by specific penalties or costs related to compliance with, or breaches of, climate change regulations. Community relations and social license to operate Tietto’s relationship with the communities within which it conducts its operations and activities is important to ensure the future success of its existing operations and the development of its projects. While Tietto believes its existing relationships with these communities is strong, there is an increasing level of public concern relating to the perceived effect of mining activities on the environment and on communities impacted by such activities. Certain non-governmental organisations (NGOs), some of which oppose globalisation and resource development, can be vocal critics of the mining industry and its practices. Adverse publicity generated by such NGOs or others related to the mining industry generally, or Tietto’s operations specifically, could have a material adverse effect on Tietto’s operating and financial performance, and reputation, and may impact Tietto’s relationship with the communities in which it operates. Closure and rehabilitation risk At the completion of any existing or future mining operations, Tietto will be required to rehabilitate or otherwise close those operations in accordance with its approved plans and any applicable laws and regulations. No assurance can be given that the cost of, or time taken to, rehabilitate or otherwise close any mining operation will not exceed any existing estimates or provisions made by Tietto in respect of such rehabilitation or closure. The ultimate cost of rehabilitation and / or closure of mining operations is uncertain and can vary in response to many factors, including (but not limited to) changes to applicable laws and regulations or the emergence of new restoration techniques. Regulatory risk Tietto’s operations and activities are subject to various federal, state and local laws and regulations in the jurisdictions in which Tietto operates, including Côte d’Ivoire. These laws include those relating to mining, prospecting, development permit and licencing requirements, industrial relations, environment, land use, royalties, water, native title and cultural heritage, mine safety and occupational health. These laws and regulations (and the interpretation of such laws and regulations) are subject to change and there is the potential for significant penalties to be levelled on Tietto for failure to comply with such laws and regulations and / or fail to take satisfactory corrective action for any failure to comply. This may have an adverse effect on Tietto’s operational and financial performance. Tietto undertakes its operations and activities in reliance on various approvals, licences and permits. Renewals of existing approvals, licences and permits, or the granting of new approvals, licences and permits required for Tietto’s ongoing activities is subject to the discretion of authorities including governments and regulatory agencies and in some cases, local communities. No assurance can be given that Tietto will be successful in obtaining extensions and / or grants of required approvals, licences and permits, including in a timely manner 24 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) or subject to economically viable conditions. Additionally, the occurrence of unforeseen circumstances or events may impact Tietto’s ability to maintain compliance with the conditions of existing approvals, licences and permits. Tietto may be subject to legal challenges on the validity of any approvals, licences and permits. Any of these circumstances may have a material adverse effect on Tietto’s operating and financial performance, including in situations where Tietto is curtailed or prohibited from continuing or proceeding with its operations and activities as a result of a failure to obtain, renew or maintain required approvals, licences and permits. Sovereign risk Tietto’s Abujar Gold Project is located in Côte d’Ivoire. Investors should note that operating in the jurisdiction of Côte d’Ivoire is materially different to operating in Australia, and conditions in Côte d’Ivoire may change rapidly and without warning. By conducting operations and activities in Côte d’Ivoire, Tietto is exposed to a variety of risk factors, including (but not limited to): expropriation, renegotiation, forced interruption or suspension of operations, curtailment of sales, forced change or nullification of existing contracts, unenforceability of contractual rights, granting or extension of licences, changing taxation policies or the interpretations, adverse changes in laws (whether of general application or otherwise) or the interpretation or enforcement thereof, foreign exchange restrictions, inflation, changing political conditions, the death or incapacitation of political leaders, local currency devaluation, currency controls and foreign governmental regulations that favour or require the rewarding of contracts to local contractors or require foreign contractors to employ citizen of, or purchase supplies from, a particular jurisdiction. No assurance can be given that industries deemed of national or strategic important to countries in Africa, including Côte d’Ivoire, will not be nationalised. Governmental policy may change to discourage foreign investment, re-nationalisation of mining industries may occur and other governmental limitations, restrictions or requirements not currently foreseen may be implemented. No assurance can be given that Tietto’s assets in Côte d’Ivoire will not be subject to nationalisation, requisition or confiscation, whether legitimate or not, by any authority or body. Similarly, Tietto’s operations may be affected in varying degrees by governmental regulations with respect to restrictions on pricing, production, price controls, export controls, income taxes, environmental regulation or mine safety and annual payments to maintain mineral properties in good standing. In addition, Tietto’s activities could be subject to the effects of political changes and / or instability, war and civil conflict, changes in governmental policy, lack of law enforcement, labour unrest and the creation of new laws. The manifestation of any one or more of the risks outlined in this section could have a material adverse effect on Tietto’s operational and financial performance. Tenure risk Interests in tenements in Côte d’Ivoire are governed by national legislation and are evidenced by the granting of licences or leases. Each licence or lease is for a specific term and has annual expenditure and reporting commitments, together with other conditions requiring compliance. Tietto could lose its title to or its interest in one or more of the tenements in which it has an interest, or the size of any tenement held by Tietto could be reduced if licence conditions are not met or if insufficient funds are available to meet the relevant minimum expenditure commitments. Tietto’s tenements, and other tenements in which Tietto may acquire an interest in the future, will be subject to renewal, which is usually at the discretion of the relevant authority. If a tenement is not renewed Tietto may lose the opportunity to discover materialisation and develop that tenement. Tietto cannot guarantee that tenements in which it presently has an interest will be renewed beyond their current expiry date. 25 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Corruption and bribery Countries in Africa, including Côte d’Ivoire, can experience relatively high levels of criminal activity and governmental and business corruption. Exploration and mining companies operating in certain areas of Africa may be particular targets of criminal action. Criminal or corrupt action against Tietto may have a material adverse effect on Tietto’s operating and financial performance. By doing business in Côte d’Ivoire, Tietto could face, directly or indirectly, corrupt demands by officials, militant groups or private entities. Consequently, Tietto faces the risk that one or more of its employees, agents, intermediaries, consultants or other personnel outside of the control of Tietto may make or receive unauthorised payments. Although Tietto has in place policies and procedures design to ensure that it and its personnel comply with anti-corruption and anti-bribery legislation and regulation, no assurance can be given that such policies or procedures will be effective and / or protect Tietto against liability under any such legislation or regulation in connection with actions undertaken by its personnel. Any alleged or actual involvement in corrupt practices, breaches of anti-corruption and anti-bribery legislation or regulations or other illegal activities could adversely affect Tietto’s reputation and its ability to do business, including by affecting its rights and title to assets or by the loss of key personnel, and together with penalties or compliance costs, could have a material adverse effect on Tietto’s operating and financial performance. Insurance risk Tietto maintains appropriate policies of insurance that are consistent with those customarily carried by similar organisations in the energy sector. Any future increase in the cost of such insurance policies, or an inability to fully replace, renew or claim against insurance policies could adversely affect Tietto's business, financial position and operational results. Additionally, there is no assurance that Tietto's insurance coverage will be sufficient to compensate it against all losses it may suffer as a result of an incident affecting its assets. There are certain types of risks that are not covered by insurance because they are either uninsurable or not economically insurable, including acts of war, acts of terrorism, civil unrest and business disruption caused by outbreaks of disease (including the COVID-19 pandemic). If such events were to occur, Tietto may have to bear the costs of any uninsured risk or uninsured amount and this could have a material adverse effect on Tietto's business, financial position and operational results. 26 ASX: TIE REVIEW OF OPERATIONS (CONTINUED) Competent Persons’ Statements The information in this report that relates to Exploration Targets and Exploration Results is based on information compiled by Dr Paul Kitto, a Competent Person who is a Member of AIG. Dr Kitto is a non- executive director of the Company. Dr Kitto has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Kitto consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears. Additionally, Dr Kitto confirms that the entity is not aware of any new information or data that materially affects the information contained in the ASX releases referred to in this report. The information in this report that relates to Mineral Resources was prepared by RPM Global and released on the ASX platform on 19 April 2023. The Company confirms that it is not aware of any new information or data that materially affects the Minerals Resources in this publication. The Company confirms that all material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. The Company confirms that the form and context in which the RPM Global’s findings are presented have not been materially modified. The information in this report that relates to Mineral Resources is based on information evaluated by Mr Jeremy Clark who is a Member of The Australasian Institute of Mining and Metallurgy (MAusIMM) and who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Clark is an associate of RPM and he consents to the inclusion of the estimates in the report of the Mineral Resource in the form and context in which they appear. The information in the report that relates to Ore Reserves for the Abujar Gold Project is based on information compiled and reviewed by Mr. Igor Bojanic, who is a Fellow of the Australasian Institute of Mining and Metallurgy, and is an employee of RPM. Mr. Igor Bojanic has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he has undertaken to qualify as a Competent Person, as defined in the 2012 Edition of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves. Mr. Igor Bojanic is not aware of any potential for a conflict of interest in relation to this work for the Client. The estimates of Ore Reserves presented in this Statement have been carried out in accordance with the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (30 September 2021). The material assumptions used in the estimation of the Production Target and associated forecast financial information are set out in the Ore Reserve Statements accompanying this release. The Ore Reserve and Mineral Resource estimates underpinning the Production Target were prepared by a Competent Person in accordance with the JORC Code 2012. The Company confirms that all material assumptions underpinning the production target and forecast financial information in the report of 5 October 2023 continue to apply and have not materially changed. 27 ASX: TIE DIRECTORS’ REPORT The Directors of Tietto Minerals Limited herewith submit the annual financial report of the Company consisting of Tietto Minerals Limited (“Tietto or the Company”) and its controlled entities (“the Group”) for the financial year ended 31 December 2023 in order to comply with the provisions of the Corporations Act 2001, the Directors’ Report as follows: DIRECTORS The names of the Directors of the Company who have held office during and since the end of the financial year and until the date of this report are noted below. Directors were in office during and since the end of the financial period unless otherwise noted. Francis Harper Matthew Wilcox Hanjing Xu Paul Kitto Shaddrack Sowah Adjetey Sabina Shugg Caigen Wang Mark Strizek Non-Executive Chairman Managing Director and Chief Executive Officer (appointed 30 May 2023) Executive Director (appointed 20 March 2023) Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director (appointed 27 September 2023) Managing Director (resigned 30 May 2023) Executive Director (resigned 20 March 2023) INFORMATION ON DIRECTORS AND COMPANY SECRETARY The names and particulars of the Company’s Directors in office during the financial year and at the date of this report are as follows. Directors held office for this entire year unless otherwise stated. Name Title Experience and expertise Mr Francis Harper Non-Execuitve Chairman Mr Harper is the chairman of Tietto. He has been a Director of Blackwood Capital since 2002 and prior to that spent 15 years with NM Rothschild in the US, UK and Australia in M&A and resources finance. Blackwood Capital has raised over $1 billion for small caps since inception. Mr Harper (through Blackwood Capital) financed West African Resources (ASX: WAF) and was chairman from 2009 to 2015. Directorships held in the last three financial years: Predictive Discovery Limited. 28 ASX: TIE DIRECTORS’ REPORT INFORMATION ON DIRECTORS AND COMPANY SECRETARY (continued) Name Title Experience and expertise Matthew Wilcox Managing Director and Chief Executive Officer Mr Wilcox is highly experienced in the gold mining industry in West Africa, overseeing construction of West African’s (ASX: WAF) 300,000ozpa Sanbrado Gold Mine, completed in March 2020, ahead of schedule and under budget and having spent eight years working for Nord Gold, which operates nine gold mines globally, including three in Burkina Faso and one in Guinea. He was Project Director for the construction of Nord Gold’s 4Mtpa Bissa Gold Project and 8Mtpa Bouly Gold Project, both in Burkina Faso, General Manager of the 6Mtpa LEFA Gold Project in Guinea, and Project Director for construction of the 12Mtpa Gross Gold Project in Siberia, Russia. Name Title Experience and expertise Hanjing Xu Non-Executive Director Mr Xu has enjoyed a successful career in the natural resources industry over the last 25 years. The unique characteristic of his career is that he has been a top decision making executive in both Chinese state-owned conglomerates and internationally listed mining companies. Examples include his roles as President of the Australian Branch of China National Nonferrous Metals and Export Corporation (CNIEC), President of CNIEC, Director of Foreign Affairs Bureau, China National Nonferrous Metals Industry Corporation (CNNC), Executive Director of Sino Gold Mining Ltd and Managing Director of Eldorado Gold China. His knowledge of China was instrumental to the success of Sino Gold. Mr Xu has a university graduation certificate in English from Chengdu University of Electronic Science and Technology. Prior to joining CNNC Hanjing worked as a teacher of English and editor of China Greater Encyclopedia Publishing House. Mr Xu led China and CNNC in its launch into the international resource industry with a number of first breakthroughs in Chinese mining industry, including first trade investment in alumina of Alcoa, first international project finance for mining in China and first international company mining in China. He was a keynote speaker at the opening session of Prospectors and Developers Association of Canada 2010 in Canada. He is now actively involved in research on Chinese mining reform and regarded as a leading authority in this area. In November 2012, Mr Xu successfully published a book in Chinese, "Mining And The World". The book sets a growth theory of mining which in turn illustrates the growth history of world economies, politics and cultures. He is now a visiting professor of China Mining and Geology University and a Fellow Member of Specialist Committee of China Nonferrous Metals Association. 29 ASX: TIE DIRECTORS’ REPORT INFORMATION ON DIRECTORS AND COMPANY SECRETARY (continued) Name Title Experience and expertise Paul Kitto Non-Executive Director Dr Kitto has more than thirty years of experience within the mining industry serving on a number of Board of Directors and holding senior management positions in various countries around the world predominantly in Australasia and Africa. Dr Kitto is a member of AIG. Dr Kitto has been Exploration Manager, West Africa for Newcrest Mining Ltd since 2015, and prior to that was CEO of Ampella Mining Ltd from 2008 until 2014 when Ampella was acquired by Centamin PLC. Dr Kitto led Ampella in discovering and growing the 3.25 million oz Konkera resource at the Batie West Project in Burkina Faso. Dr Kitto has also led or been part of the exploration teams whose research resulted in the discovery of numerous multi-millions of ounces of gold in Africa, Australia and Papua New Guinea. Dr Kitto has extensive experience associated with a wide range of deposit types predominantly associated with gold and base metal deposits. Name Title Experience and expertise Shaddrack Sowah Adjetey Non-Executive Director Mr Adjetey Sowah is currently Vice President and Manager Director of Golden Star Resources, a subsidiary of Chifeng Gold Group which operates the Wassa gold mine in Ghana, West Africa. Name Title Experience and expertise Mr Adjetey Sowah is a chartered accountant and has more than 30 years’ experience primarily in the mining industry. He has in-depth knowledge and experience in both surface and underground mining, metallurgical processes, and geology. Sabina Shugg AM Non-Executive Director Sabina is a Mining Executive with extensive experience in senior roles within some of the largest resource and consulting organisations in Australia. Her experience includes delivering technical mining projects from conceptual design to project handover as well as operations management experience at senior site level covering both underground and open pit environments. Sabina was named a Member of the General Division of the Order of Australia (AM) in 2015 for significant service to the mining industry through executive roles in the resources sector, and as a role model and mentor to women. Sabina currently serves on Mining and Petroleum Advisory Committee (MAPAC) for DMIRS and the Industry Expert Panel for the Mental Awareness, Respect and Safety (MARS) Mining Industry Landmark Study. 30 ASX: TIE DIRECTORS’ REPORT INFORMATION ON DIRECTORS AND COMPANY SECRETARY (continued) Name Title Experience and expertise Name Title Experience and expertise Name Title Experience and expertise Dr Caigen Wang Managing Director Dr Wang founded Tietto in 2010 following a long career as a mining engineer and mine manager in Australia and China, and early in his career, 2 years at University of Alberta, Canada, 5 years at the Western Australian School of Mines in Kalgoorlie and 7 years before that a China University of Mining and Technology. Dr Wang is a fellow of AusIMM. From 2009 to 2011, Dr Wang was CEO of ASX listed Ishine Resources, which had multiple Australian exploration projects, and from 2008 to 2009 Dr Wang was Mine Manager/ General Manager of Hunan Westralian, managing five small producing and three development gold mines in China. From 2007 to 2008, Dr Wang was Senior Mine Planning Engineer at St Barbara’s Southern Cross Operations. From 2004 to 2007 Dr Wang was Senior Geomechanics Engineer for BHP at its Leinster Nickel Operations (Nickel West). From 2003 to 2004 Dr Wang was Senior Geotechnical Engineer at Sons of Gwalia’s Southern Cross Operations. Dr Wang has been responsible for all of Tietto’s project acquisition, daily operations of the Company’s business and project development. Mark Strizek Executive Director Mr Strizek is a resource industry professional with over 20 years in the industry with experience in gold, base and technology metal projects. Mr Strizek has worked as an executive with management and Board responsibilities in exploration, feasibility, finance and development ready assets across Australia, West Africa, Asia and Europe. Mr Strizek was Managing Director of Vital Metals Limited, an ASX listed company from 2011 to 2019. Matthew Foy Company Secretary Mr Foy is a chartered secretary and Fellow of Governance Institute Australia (GIA). Mr Foy is a professional company secretary and director with over 15 years’ experience facilitating public company compliance with core strengths in the ASX Listing Rules, transactional and governance disciplines. PRINCIPAL ACTIVITIES The principal activities of the group are gold exploration, mine operations and sale of gold in West Africa, specifically Cote d’Ivoire and Liberia. 31 ASX: TIE DIRECTORS’ REPORT REVIEW OF OPERATIONS A review of the Group’s projects and activities during the year is discussed in the Review of Operations included in this report. The profit/ (loss) of the Group after income tax for the year was $32,562,562 (2022: loss of $17,630,160). DIVIDENDS No dividends were paid or declared since the start of the financial year. No recommendation for the payment of dividends has been made. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of the Group other than those referred to in this financial report. EVENTS SUBSEQUENT TO REPORTING DATE There has not been any matter or circumstance occurring subsequent to the year that has 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 OF OPERATIONS Disclosure of information regarding the likely developments in the operations of the Group in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this information has not been disclosed in the report. SAFETY AND ENVIRONMENTAL REGULATIONS Tietto is committed to sound environmental management through the incorporation of environmental considerations into business decisions at all stages. A comprehensive environmental and social impact assessment (‘ESIA’) is competed on all projects during the permitting process. This enables Tietto to apply the impact mitigation hierarchy to avoid, minimise and mitigate negative environmental impacts, and improve environmental outcomes. Environmental management and monitoring continue throughout the life of the project, guided by the Environmental and Social Management and Monitoring Plan (‘ESMMP’) developed in accordance with international industry practices and standards. Revegetation and rehabilitation take place on a continuous basis to reduce prolonged disturbance to the natural environment and to ensure that planned post closure outcomes for the environment and the community are achieved. PROCEEDINGS ON BEHALF OF THE GROUP No persons have applied for leave pursuant to section 237 of the Corporations Act 2001 to bring, or intervene in, proceedings on behalf of the Group. 32 ASX: TIE DIRECTORS’ REPORT SHARE OPTIONS Share options outstanding at the date of this report: Type Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Unlisted Number 2,000,000 300,000 3,200,000 5,000,000 3,500,000 4,000,000 4,000,000 Grant date 14/01/2021 22/03/2021 17/01/2022 4/02/2022 1/07/2022 14/12/2022 28/03/2023 Expiry date 21/05/2024 01/08/2024 17/01/2025 4/02/2025 17/01/2025 31/12/2024 31/12/2026 Exercise price $ 0.39 0.62 0.41 0.62 0.53 0.80 0.70 Fair value at grant date $ 0.23 0.18 0.21 0.22 0.122 0.28 0.29 The holders of such options do not have the right, by virtue of the option, to participate in any share or other interest issue of any other body corporate or registered scheme. Shares issued on the exercise of options During the year, 8,000,000 ordinary shares were issued on the exercise of 8,000,000 options at $0.30 (Refer to Note 17). Share options that expired/ lapsed No share options expired or lapsed during or since the end of the financial year. PERFORMANCE RIGHTS Performance rights outstanding at the date of this report: Class Number Grant date Expiry date Exercise price $ Fair value at grant date $ Class E Class F Class G Class H Class I Class J 1,500,000 1,000,000 100,000 1,500,000 500,000 500,000 14/1/2021 14/1/2021 22/3/2021 30/11/2021 17/1/2022 17/1/2022 21/5/2024 21/5/2024 1/8/2024 30/11/2024 17/1/2025 17/1/2025 Nil Nil Nil Nil Nil Nil 0.41 0.41 0.37 0.45 0.47 0.47 The holders of the performance rights do not hold any voting rights or rights to participate in dividends unless the rights have vested and were converted to fully paid ordinary shares. Shares issued on vesting of performance rights 2,200,000 shares were issued during the year upon the vesting of performance rights. Refer to Note 16 of the Notes to the Consolidated Financial Statements for further details on the shares issued. Performance rights that expired/lapsed During the year, 6,750,000 performance rights expired. Refer to Note 17 (iii) for the detailed movement of performance rights. 33 ASX: TIE DIRECTORS’ REPORT DIRECTORS’ MEETING The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the relevant financial year and the number of meetings attended by each director (while they were a director or committee member). DirectorsPl Francis Harper Matthew Wilcox Hanjing Xu Paul Kitto Shaddrack Sowah Adjetey Sabina Shugg Caigen Wang Mark Strizek Directors' Meetings Audit Committee Meetings Remuneration Committee Meetings Eligible to attend Attended Eligible to attend Attended 15 9 15 15 15 6 7 5 15 9 15 15 14 5 7 5 4 N/A N/A 4 4 N/A N/A N/A 2 N/A N/A 4 4 N/A N/A N/A Eligible to attend 3 N/A N/A 3 3 N/A N/A N/A Attended 3 N/A N/A 3 2 N/A N/A N/A INDEMNIFICATION OF DIRECTOS AND AUDITORS During or since the end of the financial year the Company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay insurance premiums as follows: • except as may be prohibited by the Corporations Act 2001 a Director or Officer of the Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as Director or officer of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal. Since the beginning of the year, the Company has paid insurance premiums of $55,000 (2022: $32,000) in respect of Directors and Officers liability and corporate reimbursement, for Directors and Officers in the Company. The insurance premiums relate to: • costs and expenses incurred by the relevant Officers in defending proceedings, whether civil or criminal and whatever the outcome; and other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of duty. • 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 liability incurred by the auditor. During the year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. NON-AUDIT SERVICES During the year, there were no non-audit services provided by the Company’s external auditor BDO Audit (WA) Pty Ltd as disclosed in Note 20. AUDITOR'S INDEPENDENCE DECLARATION Section 307C of the Corporations Act 2001 requires our auditors, BDO Audit (WA) Pty Ltd, to provide the Directors of the Company with an Independence Declaration in relation to the audit of the Annual Report. This Independence Declaration is set out on page 41. 34 ASX: TIE REMUNERATION REPORT (AUDITED) This report, which forms part of the Directors’ Report, outlines the remuneration arrangements in place for the Key Management Personnel of Tietto Minerals Limited (the “Company”) for the year ended 31 December 2023. The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001. The Remuneration Report details the remuneration arrangements for Key Management Personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether Executive or otherwise) of the parent Company. The prescribed details for each person covered by this report are detailed below under the following headings: • • • • • • • Key Management Personnel details; remuneration policy and relationship between the remuneration policy and Company performance; key terms of employment contracts; remuneration of Key Management Personnel; Key Management Personnel equity holdings; transactions with related parties; and loans with related parties. Key management personnel details The key management personnel of Tietto Minerals Limited during the year were: Francis Harper (appointed 19 July 2017) Matthew Wilcox Hanjing Xu (appointed 4 August 2017) Paul Kitto (appointed 22 January 2019) Shaddrack Sowah Adjetey (appointed 24 October 2022) Sabina Shugg (appointed 27 September 2023) Ting Xu (joined 1 April 2022) Clinton Bennett (appointed 31 October 2023) Caigen Wang (resigned 30 May 2023) Mark Strizek (resigned 20 March 2023) Non-Executive Chairman Managing Director and Chief Executive Officer (appointed 30 May 2023) Executive Director (appointed 20 March 2023) Former Chief Operating Officer Non-Executive Director Non-Executive Director Non-Executive Director Non- Executive Director Chief Financial Officer (CFO) Chief Operating Officer (COO) Former Managing Director Former Executive Director Remuneration policy and relationship between the remuneration policy and Company performance The Board policy for determining remuneration is based on the principle of remunerating Directors and Senior Executives on their ability to add value to the Company (taking into account the Company’s strategic plan and operations) whilst also considering market remuneration packages for similar positions within the industry. No external consultants were engaged during the current or prior financial years to review the Company's existing remuneration policies. 35 ASX: TIE REMUNERATION REPORT (AUDITED) In this regard, the Company has put in place additional long-term incentives for senior management that relate to the safe and successful construction of Abujar Gold Mine as well as achieving name plate capacity of the mill. At the Board level, shareholders most recently approved long term incentives at the 2020 Annual General Meeting for Directors that relate to specific share price milestones that are a proxy for Company performance. The Board appreciates the interrelationship between this policy and Company performance. It acknowledges that it is in the best interests of shareholders to provide challenging but achievable incentives to reward Senior Executives for reaching the Company’s stated goals. The Board will discuss these issues internally and with candidates prior to engaging additional Directors or Senior Executives in the future. The Remuneration Committee (presently comprised of the full Board) is responsible for determining the remuneration policies for the Group, including those affecting Executive Directors and other Key Management Personnel. The Committee may seek appropriate external advice to assist in its decision making. Remuneration policies and practices are directed primarily at attracting, motivating and retaining Key Management Personnel. The remuneration policy for Directors and other Key Management Personnel has the following key elements: Fixed Remuneration Fixed remuneration includes base salaries received, payments made to superannuation funds, the taxable value of non-monetary benefits received and any once-off payments such bonuses or termination benefits, see 'Remuneration of Key Management Personnel' table for details. Short-term incentives There were no bonuses which were awarded to Key Management Personnel that were paid for the year ended 31 December 2023. Non-Executive Directors' fee pool limit is $400,000 per annum as approved by Shareholders at the Annual General Meeting held on 22 November 2022. Long-term incentives The value of options granted and vested during the current and previous financial years was determined using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at valuation date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The primary purpose of the issue of long-term incentives is to provide a performance linked incentive component in the remuneration package for the Eligible Participants to motivate and reward the performance of the Eligible Participants in their respective roles. Long-term incentives are assessed over a three-year period and are designed to promote long-term stability in shareholder returns. The value of performance rights are determined using the spot share price at grant date of respective performance rights and taking into account the terms and conditions upon which the instruments were granted. No performance rights were granted to the KMPs during the year. Statutory performance indicators We aim to align our Executive remuneration to our strategic and business objectives and the creation of shareholder wealth. The table below shows measures of the Group’s financial performance over the last five years as required by the Corporations Act 2001. 36 ASX: TIE REMUNERATION REPORT (AUDITED) Dec 2023 (12 months) Dec 2022 (6 months) June 2022 (12 months) June 2021 (12 months) June 2020 (12 months) Income/ (loss) for the year attributable to the owners of Tietto Minerals Limited 4,531,458 (16,743,802) (46,149,579) (19,590,381) (12,495,098) Earnings/ (loss) per share (cents) 0.40 (1.62) (7.14) (4.51) (4.02) Share price at the beginning of the year ($) Share price at the end of the year ($) 0.71 0.61 0.31 0.71 0.30 0.31 0.49 0.30 0.17 0.49 Key terms of Executive employment contract Remuneration and other terms of employment for the Managing Director and Chief Executive Officer (formerly Chief Operating Officer), Matthew Wilcox are set out below: • Base salary of $625,000 per year effective 30 May 2023 (base salary as Chief Operating Officer: $525,000). • • The Agreement may be terminated by giving the Company 3 months’ notice. The following share-based payment form part of the remuneration package before the variation. i) 2,000,000 options each exercisable at $0.41, subject to 3-year continuous employment. The options were granted in 2021. These have vested and can be exercised as of 31 December 2023. ii) 2,500,000 performance rights subject to vesting conditions associated with performance of the Abujar Project. The performances rights were granted in 2021. These have vested and can be exercised as of 31 December 2023. Remuneration and other terms of employment for the Chief Financial Officer, Ting Xu are set out below: • Base salary of $250,000 per year effective 1 April 2023 (2022: $180,000). • • The Agreement may be terminated by giving the Company 3 months' notice. The following share-based payment form part of the remuneration package before the variation. i) 300,000 options each exercisable at $0.62 on or before the date that is three years from the date of the Probation Period. The options were granted in 2021. These have vested and can be exercised as of 31 December 2023. ii) 1,000,000 options each exercisable at $0.53. The options have vested and excisable as of 31 December 2023. The options were granted in 2022. iii) 200,000 performance rights that vest up to maximum of 100,000 shares per year, subject to continuous employment with the Company and KPIs. KPIs include implementation of the ERP accounting system, on time lodgement of the annual and half year report, successful management of Chinese drilling staff and logistic supply related payments and accounting and successful coordination of accounting management of subsidiary company’s accounting practice. The performance rights were granted in 2021. These have vested and can be exercised as of 31 December 2023. Remuneration and other terms of employment for the Chief Operating Officer, Clinton Bennett are set out below: • Base salary of $475,000 per year effective 23 October 2023; • The Agreement may be terminated by giving the Company 3 month’s notice; Key terms of Non-Executive Directors contracts: • Francis Harper: fee of $160,000 per year plus 11% superannuation effective 1 August 2023 (on or before 1 August 2023: $100,000). • Hanjing Xu: fee of $100,000 per year plus 11% superannuation effective 1 August 2023 (on or before 1 August 2023: $60,000). Paul Kitto: fee of $1,500 per day plus GST. Shaddrack Sowah Adjetey: fee of $100,000 per year effective 1 August 2023 (on or before 1 August 2023: $60,000). Sabina Shugg: fee of $100,000 per year plus 11% superannuation • • • 37 ASX: TIE REMUNERATION REPORT (AUDITED) Remuneration of key management personnel The following table shows details of the remuneration expense recognised for the group’s executive key management personnel for the current financial year and previous financial year measured in accordance with the requirements of the accounting standards. Fixed Remuneration Salary and fees $ Superannuation $ Others (i) $ Variable Remunera tion Share-based payments (ii) $ Total $ Performance related $ Performan ce related % 131,250 583,333 76,667 105,791 83,006 33,333 166,667 125,362 91,761 232,500 14,438 27,500 8,433 - - 3,667 - 7,054 - 152,260 - - - - 273,308 - 38,123 217,829 31,769 31,769 - - 158,846 158,846 183,811 980,922 116,869 137,560 83,006 37,000 598,821 291,262 38,123 217,829 31,769 31,769 - - 158,846 158,846 10,094 25,038 - 84,317 - 12,231 101,855 354,086 - 12,231 21% 22% 27% 23% 0% 0% 27% 55% 0% 3% 12 months ended 31 December 2023 Directors Francis Harper (b) Matthew Wilcox Hanjing Xu (b) Paul Kitto (b) Shaddrack Sowah Adjetey Sabina Shugg Caigen Wang (a & b) Mark Strizek (a & b) Executive KMP Clinton Bennett Ting Xu 1,629,670 96,224 509,885 649,413 2,885,192 649,413 (a) The remuneration of Caigen Wang and Mark Strizek are incurred during their employment with the Company. (b) The share-based payments of Francis Harper, Hanjing Xu, Paul Kitto, Caigen Wang and Mark Strizek relate to performance rights that have expired during the period. The amount shown in the table is an expense recognised in line with the accounting standards. i. Relates to annual leave for Matthew Wilcox and Ting Xu, and termination payment for Caigen Wang. ii. Relates to 11,900,000 Class A and B Performance Rights issued on 24 November 2020 to Messrs. Harper, Wang, Strizek, Xu and Kitto, 1,500,000 Class H Performance Rights issued on 30 November 2021 to Mr. Strizek, 2,500,000 Tranche E and F Performance Rights issued on 14 January 2021 to Matthew Wilcox, 300,000 unlisted options issued to Ting Xu on 22 March 2021 and 3,500,000 unlisted options issued on Ting Xu on 1 July 2022. In the prior year 1,000,000 options were issued on 1 July 2022 to Ting Xu. Terms and conditions of share-based payment arrangements – Performance Rights (“PR”) There were no performance rights issued during the year. Terms and conditions of share-based payment arrangements – Options There were no options issued to the directors during the year. 38 ASX: TIE REMUNERATION REPORT (AUDITED) 6 months ended 31 December 2022 Directors Francis Harper Caigen Wang Mark Strizek Hanjing Xu Paul Kitto Shaddrack Sowah Adjetey Executive KMP Matthew Wilcox Ting Xu Fixed Remuneration Salary and fees Superannuation $ $ Others $ Variable Remuneration Share-based payments (i) $ Total $ Performance related $ Performance related % 50,000 200,000 150,000 30,000 36,000 11,667 262,500 90,000 830,167 5,500 - 16,500 3,300 - - 12,500 9,450 47,250 - - - - - - - - - 42,021 171,368 38,606 34,274 34,274 97,521 371,368 205,106 67,574 70,274 42,021 171,368 38,606 34,274 34,274 - 11,667 - 440,539 138,677 715,539 238,127 899,759 1,777,176 440,539 138,679 899,759 43% 46% 19% 51% 49% 0% 62% 58% i. Relates to 11,900,000 Class A and B Performance Rights issued on 24 November 2020 to Messrs. Harper, Wang, Strizek, Xu and Kitto, 1,500,000 Class H Performance Rights issued on 30 November 2021 to Mr. Strizek, 2,500,000 Tranche E and F Performance Rights issued on 14 January 2021 to Matthew Wilcox, 300,000 unlisted options issued to Ting Xu on 22 March 2021 and 3,500,000 unlisted options issued on Ting Xu on 1 July 2022. In the prior year 1,000,000 options were issued on 1 July 2022 to Ting Xu. Voting and comments made at the Company's 2023 Annual General Meeting At the 2023 Annual General Meeting the Company remuneration report was passed by a 97.28% requisite majority of shareholders. Key management personnel equity holdings Fully paid ordinary shares of Tietto Minerals Limited Balance at 31 Dec 2022 31 December 2023 No. Exercise of Performance Rights/ Options No. Granted on compensation No. Purchased/ (Sold) during the year No. Balance on resignation No. Balance at 31 Dec 2023 No. Directors Francis Harper Matthew Wilcox Caigen Wang Mark Strizek Hanjing Xu Paul Kitto Shaddrack Sowah Adjetey Sabina Shugg Executive KMP Clinton Bennet Ting Xu 15,330,530 256,411 25,925,637 3,271,635 6,047,789 4,500,000 - - - - - 1,000,000* - - - 100,000 55,432,002 - - - - 1,000,000 - - - - - - - - - - - (750,000) 300,000 (7,371,227) (2,759,334) - - - - 18,554,410 512,301 - - 14,580,530 556,411 - - 6,047,789 5,500,000 - - - - - - - - - - - 100,000 (10,580,561) 19,066,711 26,784,730 *On 20 January 2023, Paul Kitto converted 1,000,000 vested options into ordinary shares. 39 ASX: TIE REMUNERATION REPORT (AUDITED) Options of Tietto Minerals Limited 31 December 2023 Directors Francis Harper Matthew Wilcox Caigen Wang Mark Strizek Hanjing Xu Paul Kitto Shaddrack Sowah Adjetey Sabina Shugg Executive KMP Clinton Bennett Ting Xu Balance at 31 Dec 22 No. Granted on compensation Exercised No. No. Expired No. Balance at 31 Dec 2023 No. Vested and exercisable at 31 Dec 2023 No. - 2,000,000 - - - 1,000,000 - - - 1,300,000 4,300,000 - - - - - - - - - - - - - - - - (1,000,000) - - - - (1,000,000) - - - - - - - - - - - 2,000,000 - - - - - - - 2,000,000 - - - - - - - 1,300,000 3,300,000 - 1,300,000 3,300,000 Performance rights of Tietto Minerals Limited 31 December 2023 Directors Francis Harper Matthew Wilcox Caigen Wang Mark Strizek Hanjing Xu Paul Kitto Shaddrack Sowah Adjetey Sabina Shugg Executive KMP Clinton Bennett Ting Xu Balance at 31 Dec 22 No. Granted on compensation Exercised No. No. Expired No. Balance at 31 Dec 2023 No. Vested and exercisable at 31 Dec 2023 No. 600,000 2,500,000 2,500,000 4,000,000 500,000 500,000 - - - 100,000 10,700,000 - - - - - - - - - - - - - - - - - - - - - - (600,000) - (2,500,000) (2,500,000) (500,000) (500,000) - - - 2,500,000 - 1,500,000 - - - - - - - 100,000 - 2,500,000 - 1,500,000 - - - - - 100,000 (6,600,000) 4,100,000 4,100,000 Transactions with related parties During the year, there were no related party transactions. The related party transactions during the financial year ending 31 December 2023 were as follows: All related party transactions are on arm's length terms. 40 ASX: TIE REMUNERATION REPORT (AUDITED) (END OF AUDITED REMUNERATION REPORT) The Directors’ Report is signed in accordance with a resolution of directors made pursuant to section 298(2) of the Corporations Act 2001. On behalf of the Directors Matthew Wilcox Director Dated at Perth this 28th day of March 2024 41 ASX: TIE AUDITORS’ INDEPENDENCE DECLARATION AUDITOR'S INDEPENDENCE DECLARATION Section 307C of the Corporations Act 2001 requires our auditors, BDO Audit (WA) Pty Ltd, to provide the Directors of the Company with an Independence declaration in relation to the review of the interim financial report. This Independence Declaration is set out on page 43. The Directors’ Report is signed in accordance with a resolution of directors made pursuant to section 298(2) of the Corporations Act 2001. On behalf of the Directors Matthew Wilcox Director Dated at Perth this 28th day of March 2024 42 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 JARRAD PRUE TO THE DIRECTORS OF TIETTO MINERALS LIMITED As lead auditor of Tietto Minerals Limited for the year ended 31 December 2023, 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 Tietto Minerals Limited and the entities it controlled during the period. Jarrad Prue Director BDO Audit (WA) Pty Ltd Perth 28 March 2024 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. ASX: TIE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Notes 12 months ended 31 December 2023 $ 6 months ended 31 December 2022 $ 5 6 7 12 17 8 Revenue Cost of sales Gross profit Exploration expenses Salaries and wages Depreciation of non-mine site assets Interest expense Directors’ remuneration Professional fees Share-based payment expense Provision for VAT receivables Travel, meals and accommodation Business registration and compliance fees Interest income Net foreign exchange gain/ (loss) Other expenses Profit/ (loss) before income tax Income tax expense/ (benefit) Net profit/ (loss) for the year Other comprehensive profit/ (loss), net of tax Items that may be reclassified to profit or loss Foreign currency translation reserve Other reserve Revaluation gain of financial assets at fair value through other comprehensive income Total other comprehensive income/ (loss) 255,669,068 (200,907,184) 54,761,884 (7,754,493) (6,556,511) (3,893,921) (3,405,304) (2,235,778) (2,622,216) (1,054,462) (1,373,644) (624,326) (195,074) 173,433 (3,337,326) (9,323,213) 12,559,049 (5,180,653) 7,378,396 4,692,100 (10,176) - 4,681,924 - - - (7,008,208) (5,464,356) (1,057,148) (149,930) (491,300) (3,017,314) (2,001,443) - (194,877) (176,969) 349,441 3,579,522 (1,997,578) (17,630,160) - (17,630,160) (3,483,145) (7,653) 5,000 (3,485,798) Total comprehensive income/ (loss) for the year 12,060,320 (21,115,958) Income/ (Loss) attributable to: Owners of the parent Non-controlling interest Total comprehensive income/ (loss) attributable to: Owners of the parent Non-controlling interest Basic earnings/ (loss) per share (cents per share) Diluted earnings / (loss) per share (cents per share) The accompanying notes form part of the financial statements. 4,531,458 2,846,938 7,378,396 (16,743,802) (886,358) (17,630,160) 9,274,102 2,786,218 12,060,320 (20,209,435) (906,523) (21,115,958) 0.41 0.40 (1.62) (1.62) 43 ASX: TIE CONSOLIDATED STATEMENT OF FINANCIAL POSITION CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Total current assets NON-CURRENT ASSETS Property, plant and equipment Financial assets at fair value through other comprehensive income Right-of-use of asset Deferred tax assets Total non-current assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Borrowings Employee provision Lease liability Income tax payable Total current liabilities NON-CURRENT LIABILITIES Rehabilitation provision Lease liability Total non-current liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses Total equity attributable to members of the company Non-controlling interests TOTAL EQUITY Notes 9 10 11 31 December 2023 $ 31 December 2022 $ 41,063,922 21,875,947 37,154,303 100,094,172 47,007,779 3,792,056 6,260,252 57,060,087 12 304,212,582 247,684,459 10,000 80,642 1,663,033 305,966,257 406,060,429 91,554,965 19,343,774 1,851,049 63,176 6,843,685 119,656,649 8,926,190 9,813 8,936,003 128,592,652 24,000 38,932 - 247,747,391 304,807,478 46,433,683 11,812,045 166,507 19,431 - 58,431,666 - - - 58,431,666 277,467,777 246,375,812 379,341,724 2,407,311 (105,785,353) 275,963,682 1,504,095 277,467,777 362,516,344 (2,695,148) (112,163,261) 247,657,935 (1,282,123) 246,375,812 13 14 15 16 17 The accompanying notes form part of the financial statements. 44 ASX: TIE CONSOLIDATED STATEMENT OF CHANGES IN EQUITY At 1 January 2023 Net profit for the year Other comprehensive income/(loss) for the year Total comprehensive income/(loss) Transactions with owners in their capacity as owners: Exercise of options and performance rights Loan to equity conversion Share based payments At 31 December 2023 At 1 July 2022 Net loss for the year Other comprehensive income/(loss) for the year Total comprehensive income/(loss) Transactions with owners in their capacity as owners: Issue of shares (net of costs) Share based payments Notes Issued Capital $ Reserves $ Accumulated losses $ Owners of the parent $ Non-controlling interest $ Total $ 362,516,344 (2,695,148) (112,163,261) 247,657,935 (1,282,123) 246,375,812 - - - 3,423,000 13,402,380 - 16,825,380 - 4,531,458 4,742,640 4,742,640 (1,023,000) - 1,382,819 359,819 - 4,531,458 - - 1,846,450 1,846,450 4,531,458 4,742,640 9,274,098 2,400,000 13,402,380 3,229,269 19,031,649 2,846,938 (60,720) 2,786,218 - - - - 7,378,396 4,681,920 12,060,316 2,400,000 13,402,380 3,229,269 19,031,649 17 14 & 16 17 379,341,724 2,407,311 (105,785,353) 275,963,682 1,504,095 277,467,777 295,756,000 6,642,633 (101,746,900) 200,651,733 (375,600) 200,276,133 - - - - (16,743,802) (16,743,802) (3,465,633) - (3,465,633) (3,465,633) (16,743,802) (20,209,435) (886,358) (20,165) (906,523) 66,760,344 - 66,760,344 (1,651,344) (4,220,804) (5,872,148) - 6,327,441 6,327,441 65,109,000 2,106,637 67,215,637 - - - (17,630,160) (3,485,798) (21,115,958) 65,109,000 2,106,637 67,215,637 At 31 December 2022 362,516,344 (2,695,148) (112,163,261) 247,657,935 (1,282,123) 246,375,812 The accompanying notes form part of the financial statements. 45 ASX: TIE ASX: TIE CONSOLIDATED STATEMENT OF CASH FLOWS 12 months ended 31 December 2023 $ 6 months ended 31 December 2022 $ Notes CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Payments for exploration expenses Interest received Net cash generated by / (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for plant, plant and equipment Withdraw of term deposits Net cash used in investing activities CASH FLOW FROM FINANCING ACTIVITIES Proceeds from loans and borrowings Loan repayment Payment of lease liability Issue of share capital (net of costs) Net cash generated from financing activities 26 26 26 26 Net increase/ (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Effect of foreign exchange Cash and cash equivalents at end of the year 9 The accompanying notes form part of the financial statements. 255,669,068 (197,081,761) (7,754,493) 96,814 50,929,628 - (24,051,159) (5,333,262) 400,263 (28,984,158) (76,758,567) - (76,758,567) (82,800,282) 39,917,458 (42,882,824) 37,692,374 (20,239,681) (72,452) 2,400,000 19,780,241 (6,048,698) 47,007,779 104,841 41,063,922 11,812,045 - (26,551) 65,109,000 76,894,494 5,027,512 41,884,362 95,905 47,007,779 46 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL INFORMATION The financial report covers Tietto Minerals Limited as a consolidated entity consisting of Tietto Minerals Limited and the entities it controlled during the year (“the Group”). The financial report consists of the financial statements, notes to the financial statements and the directors' declaration. Tietto Minerals Limited is a listed public company limited by shares, incorporated and domiciled in Australia. The Company was listed on the Australian Securities Exchange on 18 January 2018. The Group’s registered office and its principal place of business are as follows: Australia: Unit 22, 123B Collin Street West Perth 6005 Republic of Côte d'Ivoire: Cocody Attoban derrière le 30 ieme arrondissement en face de l'ÀNSUT Abidjan The Group is principally engaged in gold production, exploration and development in West Africa, specifically in the Republic of Côte d'Ivoire and in the Republic of Liberia. 2. BASIS OF PREPARATION The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. Accounting Standards include Australian equivalents to International Financial Reporting Standards ("AIFRS"). Compliance with AIFRS ensures that the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. Functional and Presentation currency The functional currency of the Company is Australian dollars (AUD). The functional currencies of the subsidiaries are: Tietto Minerals (Liberia) Limited Tietto Minerals (Cote d’Ivoire) Limited Bamba & Fred Minerals SARL Tietto Minerals Austar Pty Ltd Tiebaya Gold SARL Societe Miniere de la Lobo Basis of Consolidation US Dollars (USD) West African Franc (XOF) West African Franc (XOF) Australian Dollar (AUD) West African Franc (XOF) West African Franc (XOF) The financial report is comprised of the financial statements of Tietto (“the Company”) and its controlled entities (the Group). The financial statements of subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. All intercompany balances and transactions have been eliminated in full. 47 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Basis of Consolidation (continued) Consolidated entities are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. There was no change in ownership of controlled entities during the year. Where there is loss of control of a controlled entity, the consolidated financial statements include the results for the part of the reporting period during which the Company has control. Basis of Measurement The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non- current assets and financial instruments. Cost is based on the fair value of the consideration given in exchange for assets. Going concern These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. As disclosed in the financial statements, the Group has a net profit after tax of $7,378,396 and net cash inflows from operating activities of $50,929,628 for the year ended 31 December 2023. Cash and cash equivalents totalled $41,063,922 and net current liability was $19,562,477 as at 31 December 2023. The Directors believe that the entity will continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report based on forecasted cash flows which indicate that the Group will have sufficient cash flows to meet all commitments and working capital requirements during the forecast period. The cash flow forecast is dependent upon the Group generating positive cash flows from continuing production at Abujar Gold Mine in Cote d’Ioire. At the date of this report, having considered the above factors, the Directors are of the opinion the Group will be able to continue as a going concern. Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the financial statements. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 25. 48 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3. MATERIAL ACCOUNTING POLICY INFORMATION The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. a) Principles of Consolidation and Equity Accounting Subsidiaries Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has the 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. Subsidiaries are fully consolidated from the date on which control is transferred to or obtained by the Group. They are deconsolidated from the date on which the Group ceases or loses control. The acquisition method of accounting is used to account for business combinations by the Group. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. Acquisition-related costs are expensed as incurred and included in administrative expenses. Intercompany transactions, balances and unrealised gains on transactions between group entities are eliminated in full on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interest in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position respectively. The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity attributable to owners of the Company. Financial instruments b) Financial assets and financial liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets Except for certain trade receivables the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Financial assets are subsequently measured at fair value through profit or loss ("FVPL"), amortised cost, or fair value through other comprehensive income ("FVOCI"). The classification is based on two criteria: the Group’s business model for managing the assets; and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal amount outstanding (the "SPPI criterion"). 49 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS b) Financial instruments (continued) Financial assets (continued) Debt and other instruments at amortised cost This Category of financial assets are held within a business model with the objective to hold the financial assets in order to collect contractual cash flows that meet the SPPI criterion. It includes the Group’s trade and other receivables and cash and cash equivalents. Subsequent to initial recognition, trade and other receivables are measured at amortised cost using the effective interest method, less any impairment losses based on lifetime expected credit losses. Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of any outstanding bank overdrafts. Other receivables are held in order to collect the contractual cash flows and accordingly are measured at initial recognition at fair value, which ordinarily equates to cost and are subsequently measured at cost less impairment due to their short-term nature. A provision for impairment is established based on 12-month expected credit losses unless there has been a significant increase in credit risk when lifetime expected credit losses are recognised. The amount of any provision is recognised in profit or loss. Equity instruments at FVOCI This category of financial assets has no recycling of gains or losses to profit or loss on derecognition, and only includes equity instruments which are not held-for-trading and which the Group has irrevocably elected to so classify upon initial recognition or transition. Equity instruments at FVOCI are not subject to an impairment assessment under AASB 9. For this category there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the group’s right to receive payments is established. The Group has irrevocably elected to classify some of its quoted equity instruments as equity instruments at FVOCI. Financial assets at FVPL These comprise derivative instruments, hybrid financial instruments and quoted and unquoted equity instruments which the Group had not irrevocably elected, at initial recognition or transition, to classify at FVOCI. This category would also include debt instruments whose cash flow characteristics fail the SPPI criterion or are not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell. Financial liabilities Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. Financial liabilities comprise loans and borrowings and trade and other payables. Loans that are repayable in the equity of the Company where the number of shares to be issued is variable is classified as liability. 50 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS b) Financial instruments (continued) Financial liabilities (continued) All loans and borrowings are initially recorded at fair value, which is ordinarily equal to the proceeds received net of transaction costs. These liabilities are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the loans or borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. Loans and borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs. Trade and other payables represent liabilities for goods and services provided to the entity prior to the end of the financial year and which are unpaid. Trade and other payables are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, trade and other payables are measured at amortised cost using the effective interest rate method. All loans, borrowings and payables are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Convertible notes were issued by the Group which include embedded derivatives. Convertible notes are initially recognised as financial liabilities at fair value. On initial recognition, the fair value of the convertible notes equated to the proceeds received and subsequently the convertible note is measured at fair value. The movements are recognised in profit and loss as finance costs except the movement attributed to changes in the group’s own credit risk status, in which case it is recognised in other comprehensive income. Equity An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. The Group's equity includes ordinary shares, for which incremental costs directly attributable to their issue are recognised as a deduction from equity, net of any tax effects. Dividends are recognised as a liability in the year in which they are declared. Impairment of financial instruments The Group assesses on a forward-looking basis the expected credit losses ("ECLs") associated with its debt instruments carried at amortised cost. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate. 51 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS b) Financial instruments (continued) Impairment of financial instruments (continued) For trade receivables, the Group has applied the standard’s simplified approach and has calculated ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. For other debt financial assets, the ECL is based on either the 12-month or lifetime ECL. The 12-month ECL is the portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months after the reporting date. When there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL. In all cases, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. The Group considers a financial asset in default when contractual payment are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. Impairment of other financial asset A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. Financial assets are tested for impairment on an individual basis. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available for sale financial asset is calculated by reference to its fair value. All impairment losses are recognised in profit or loss. Any cumulative loss in respect of an available for sale financial asset recognised previously in equity is transferred to profit or loss. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available for sale financial assets that are debt securities, the reversal is recognised in profit or loss. For available for sale financial assets that are equity securities, the reversal is recognised directly in equity. Fair value measurement Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. 52 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS b) Financial instruments (continued) Finance costs Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred. c) Foreign currency Foreign currency transactions Transactions in foreign currencies are translated at foreign exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the foreign exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for- sale equity instruments or qualifying cash flow hedges, which are recognised directly in equity. Foreign operations The assets and liabilities of foreign operations are translated to the presentation currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at the average exchange rates for the year. Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation reserve in equity. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income and are presented in the translation reserve in equity. d) Cash and cash equivalents Cash and short-term deposits in the statement of financial position comprise cash at bank and on hand and short-term deposits with an original maturity period of three months or less. For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts, if any. e) Project exploration expenditures Project exploration expenditure, including the costs of acquiring licenses, are expensed as exploration and evaluation expenditure as incurred. 53 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS f) Property, plant and equipment Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. Once assets are available for use, depreciation is calculated using the straight-line method to allocate asset costs over their estimated useful lives, as follows: Plant and equipment – 2-5 years Motor vehicles – 3-5 years Land is not depreciated An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. g) Mine properties Initial recognition Upon completion of the mine construction phase, the assets are transferred into “Property, plant and equipment” or “Mine properties”. Items of property, plant and equipment and producing mine are stated at cost, less accumulated depreciation and accumulated impairment losses. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets (where relevant), borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset. Mine properties also consist of the fair value attributable to mineral reserves and the portion of mineral resources considered to be probable of economic extraction at the time of an acquisition. When a mine construction project moves into the production phase, the capitalisation of certain mine construction costs ceases, and costs are either regarded as part of the cost of inventory or expensed, except for costs which qualify for capitalisation relating to mining asset additions, improvements or new developments, underground mine development or mineable reserve development. Depreciation/ amortisation Accumulated mine development costs are depreciated/amortised on a units-of-production (UOP) basis over the economically recoverable reserves of the mine concerned, except in the case of assets whose useful life is shorter than the life of the mine, in which case, the straight-line method is applied. The unit of account for run- of-mine (ROM) costs is tonnes of ore, whereas the unit of account for post-ROM costs is recoverable ounces of gold and recoverable tonnes of silver. Rights and concessions are depleted on the UOP basis over the economically the depreciation/amortisation of mine development costs takes into account expenditures incurred to date, together with sanctioned future development expenditure. Economically recoverable reserves include proven and probable reserves. relevant area. The UOP rate calculation reserves of recoverable the for 54 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS g) Mine properties (continued) The estimated fair value attributable to the mineral reserves and the portion of mineral resources considered to be probable of economic extraction at the time of the acquisition is amortised on a UOP basis, whereby the denominator is the proven and probable reserves. These other mineral resources may be included in depreciation calculations in limited circumstances and where there is a high degree of confidence in their economic extraction. This would be the case when the other mineral resources do not yet have the status of reserves merely because the necessary detailed evaluation work has not yet been performed and the responsible technical personnel agree that inclusion of a proportion of measured and indicated resources is appropriate based on historic reserve conversion rates. Stripping (waste removal) costs As part of its mining operations, the Group incurs stripping (waste removal) costs both during the development phase and production phase of its operations. Stripping costs incurred in the development phase of a mine, before the production phase commences (development stripping), are capitalised as part of the cost of constructing the mine and subsequently amortised over its useful life using a UOP method. The capitalisation of development stripping costs ceases when the mine/component is commissioned and ready for use as intended by management. Stripping activities undertaken during the production phase of a surface mine (production stripping) are accounted for as set out below. After the commencement of production, further development of the mine may require a phase of unusually high stripping that is similar in nature to development phase stripping. The cost of such stripping is accounted for in the same way as development stripping (as outlined above). Production stripping is generally considered to create two benefits, being either the production of inventory or improved access to the ore to be mined in the future. Where the benefits are realised in the form of inventory produced in the period, the production stripping costs are accounted for as part of the cost of producing those inventories. Where the benefits are realised in the form of improved access to ore to be mined in the future, the costs are recognised as a non-current asset, referred to as a ‘stripping activity asset’, if the following criteria are met: • • • Future economic benefits (being improved access to the ore body) are probable The component of the ore body for which access will be improved can be accurately identified The costs associated with the improved access can be reliably measured If any of the criteria are not met, the production stripping costs are charged to profit or loss as operating costs as they are incurred. In identifying components of the ore body, the Group works closely with the mining operations personnel for each mining operation to analyse each of the mine plans. Generally, a component will be a subset of the total ore body, and a mine may have several components. The mine plans, and therefore the identification of components, can vary between mines for a number of reasons. The stripping activity asset is initially measured at cost, which is the accumulation of costs directly incurred to perform the stripping activity that improves access to the identified component of ore, plus an allocation of directly attributable overhead costs. If incidental operations are occurring at the same time as the production stripping activity, but are not necessary for the production stripping activity to continue as planned, these costs are not included in the cost of the stripping activity asset. 55 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS g) Mine properties (continued) If the costs of the inventory produced and the stripping activity asset are not separately identifiable, a relevant production measure is used to allocate the production stripping costs between the inventory produced and the stripping activity asset. This production measure is calculated for the identified component of the ore body and is used as a benchmark to identify the extent to which the additional activity of creating a future benefit has taken place. The Group uses the expected volume of waste extracted compared with the actual volume for a given volume of ore production of each component. The stripping activity asset is accounted for as an addition to, or an enhancement of, an existing asset, being the mine asset, and is presented as part of ’Mine properties’ in the statement of financial position. This forms part of the total investment in the relevant cash generating unit(s), which is reviewed for impairment if events or changes of circumstances indicate that the carrying value may not be recoverable. The stripping activity asset is subsequently depreciated using the UOP method over the life of the identified component of the ore body that became more accessible as a result of the stripping activity. Economically recoverable reserves, which comprise proven and probable reserves, are used to determine the expected useful life of the identified component of the ore body. The stripping activity asset is then carried at cost less depreciation and any impairment losses. Impairment The carrying value of capitalised mine properties and development expenditure is assessed for impairment whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount. h) Development assets Development expenditures All expenditure for the Mine Development is included Asset in construction heading in Property, plant and equipment. Development expenditure is recorded at historical cost. Once a mining project has been established as commercially viable and technically feasible, expenditure is include, pre-production capitalised under development expenditure. Development expenditure costs development costs, development excavation, development studies, land compensation and other subsurface expenditure pertaining to that area of interest. Costs related to surface plant and equipment and any associated land and buildings are accounted for as property, plant and equipment. Development costs are accumulated in respect of each separate area of interest. Revenue and costs associated with commissioning new assets in the period before they are capable of operating in the manner intended by management, are capitalised. Development costs incurred after the commencement of production are capitalised to the extent they are expected to give rise to a future economic benefit. When an area of interest is abandoned or the Directors decide that it is not commercial or technically feasible, any accumulated cost in respect of that area is written off in the financial period the decision is made. Each area of interest is reviewed at the end of each accounting period and accumulated cost written off to the profit or loss to the extent that they will not be recoverable in the future. Development assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, development assets are allocated to cash-generating units to which the development activity relates. The cash generating unit shall not be larger than the area of interest. 56 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS h) Development assets (continued) Development stripping Overburden and other mine waste materials are often removed during the initial development of a mine in order to access the mineral deposit. This activity is referred to as development stripping. The directly attributable costs (inclusive of an allocation of relevant operational overhead expenditure) are capitalised as development costs. Capitalisation of development stripping costs ceases and amortisation of those capitalised costs commences upon extraction of ore. Amortisation of capitalised development stripping costs is determined on a unit of production basis for each separate area of interest. Capitalised development and production stripping costs are classified as ‘Development Expenditure”. Development stripping costs are considered in combination with other assets of an operation for the purpose of undertaking impairment assessments. Removal of waste material normally continues throughout the life of a mine. This activity is referred to as production stripping and commences upon extraction of ore. Amortisation Once commercial levels of production are achieved, and the mine asset is classified as available for use, amortisation will commence based a units of production method. i) Inventories Consumables inventory Spare parts and consumables inventory are stated at cost. Gold bullion, gold in circuit and ore stockpiles Gold bullion, gold in circuit and ore stockpiles are physically measured or estimated and valued at the lower of cost or net realisable value. Net realisable value is the estimated future sales price of the product the entity expects to realise when the product is processed and sold, less estimated costs to complete production and bring the product to sale. If the ore stockpile is not expected to be processed in 12 months after the reporting date, it is included in non- current assets and the net realisable value is calculated on a discounted cash flow basis. Cost is determined by using the weighted-average method and comprises direct purchase costs and an appropriate portion of fixed and variable overhead costs, including depreciation and amortisation, incurred in converting materials into finished goods, based on the normal production capacity. The cost of production is allocated using a ratio of spot prices by volume at each month end. Separately identifiable costs of conversion of each metal are specifically allocated. 57 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS j) Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Rehabilitation provision Mine rehabilitation costs will be incurred by the Group either while operating, or at the end of the operating life of, the Group’s facilities and mine properties. The Group assesses its mine rehabilitation provision at each reporting date. The Group recognises a rehabilitation provision where it has a legal and constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of obligation can be made. The nature of these restoration activities includes: dismantling and removing structures; rehabilitating mines and tailings dams; dismantling operating facilities; closing plant and waste sites; and restoring, reclaiming and revegetating affected areas. The obligation generally arises when the asset is installed or the ground/environment is disturbed at the mining operation’s location. When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the carrying amount of the related mining assets to the extent that it was incurred as a result of the development/construction of the mine. Any rehabilitation obligations that arise through the production of inventory are recognised as part of the related inventory item. Additional disturbances that arise due to further development/construction at the mine are recognised as additions or charges to the corresponding assets and rehabilitation liability when they occur. Costs related to the restoration of site damage (subsequent to the start of commercial production) that is created on an ongoing basis during production are provided for at their net present values and recognised in profit or loss as extraction progresses. Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with prospectively by recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, if the initial estimate was originally recognised as part of an asset measured in accordance with AASB 137. Any reduction in the rehabilitation liability and, therefore, any deduction from the asset to which it relates, may not exceed the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately to the statement of profit or loss and other comprehensive income. If the change in estimate results in an increase in the rehabilitation liability and, therefore, an addition to the carrying value of the asset, the Group considers whether this is an indication of impairment of the asset as a whole, and if so, tests for impairment. If, for mature mines, the estimate for the revised mine assets net of rehabilitation provisions exceeds the recoverable value, that portion of the increase is charged directly to expense. Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognised in the statement of profit or loss and other comprehensive income as part of finance costs. 58 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS j) Provisions (continued) Rehabilitation provision (continued) The Group recognises neither the deferred tax asset in respect of the temporary difference on the decommissioning liability nor the corresponding deferred tax liability in respect of the temporary difference on a decommissioning asset. k) Leases The Group as lessee The Group leases mining equipment, housing for the key staff on site as well as various warehouse space. The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right- of-use asset and corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for the short-term leases (defined as leases with lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Lease liabilities The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise: • • Variable lease payments that depend on an index rate, initially measured using the index or rate at the Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable; • • commencement date; The amount expected to be payable by the lessee under residual value guarantees; The exercise price of purchase options, if the lease term reflects the exercise of an option to terminate the lease. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. Right of use assets The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. The Group applied AASB 136 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in Property, Plant and Equipment policy. 59 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS l) Employee benefits Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Other long-term employee benefits The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured at the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Defined contribution superannuation expense Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. m) Borrowings Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. n) Sale of refined gold and silver Revenue is recognised when control of the goods has passed to the buyer based upon agreed delivery terms. The Group’s metal sales represent sales of refined gold and silver, when control passes to the customer which is when legal title of the metal transfers to the customer. The sales price is based on prevailing market metal prices. 60 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS o) Goods and Service Tax (GST) and Value Added Tax (VAT) Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST) or value added tax (VAT), except where the amount of GST or VAT incurred is not recoverable from the taxation authority. In these circumstances, the GST or VAT is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST or VAT included. The net amount of GST or VAT recoverable from, or payable to, the relevant tax authority is included as a current asset or liability in the Statement of Financial Position. Cash flows are included in the statements of cash flows on a gross basis. The GST or VAT components of cash flows arising from investing and financing activities which are recoverable, or payable are classified as operating cash flows. p) Income tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. 61 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS q) Share-based payments Equity-settled share-based payments to directors, employees, consultants and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value determined at the grant date of the equity-settled share-based payments is expensed immediately where they vest immediately or on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. For options with non-market based vesting conditions, at each reporting date, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the option reserve. The cost of equity-settled transactions are measured at fair value on grant date. Fair value of performance rights is determined based on the underlying share price on grant date. Fair value of options is independently determined using either the Trinomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. r) Earnings per share Basic Earnings per share Basic earnings per share is determined by dividing the net profit after income tax attributable to members of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during the year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after 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. s) Issued capital Ordinary shares are classified as equity. 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. t) Segment reporting AASB 8 requires a ‘management approach’ under which segment information is presented on the same basis as that used for internal reporting purposes. Operating segments are now reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker has been identified as the Board of Directors of Tietto Minerals Limited. u) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current period. 62 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS u) Comparative figures (continued) In 2022, the Group has changed its financial year end from 30 June to 31 December. This comparative report therefore relates to the six months ending 31 December 2022. The change of financial year end will align Tietto with the reporting obligation of its subsidiary, Societe Miniere De La Lobo (SML) SA which has a financial year- end of 31 December. v) New and revised accounting standards and interpretations on issue but not yet adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting year ended 31 December 2023. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. 4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND KEY ESTIMATES The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and in any future years affected. Information about estimates and judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements are: • Revenue Judgment is required to determine when transfer of control occurs relating to the sale of the goods to customers. Management based its assessment on a number of indicators of control, which include, but are not limited to whether the Company has present right of payment, and whether the control and legal title have transferred to the customer. • Determination of Mineral Resources and Ore Reserves Estimated economically recoverable reserves are used in determining the depreciation and/or amortisation of mine-specific assets. This results in a depreciation/amortisation charge proportional to the depletion of the anticipated remaining life-of-mine production. The life of each item, which is assessed at least annually, has regard to both its physical life limitations and present assessments of economically recoverable reserves of the mine property at which the asset is located. These calculations require the use of estimates and assumptions, including the amount of recoverable reserves and estimates of future capital expenditure. The calculation of the UOP rate of depreciation/amortisation could be impacted to the extent that actual production in the future is different from current forecast production based on economically recoverable reserves, or if future capital expenditure estimates change. Changes to economically recoverable reserves could arise due to changes in the factors or assumptions used in estimating reserves, including: - The effect on economically recoverable reserves of differences between actual commodity prices and commodity price assumptions - Unforeseen operational issues Depreciation rates and methods are reviewed annually for appropriateness. When changes are made, adjustments are reflected prospectively in current and future periods only. • Net realisable value of stockpile inventory Inventories consisting of ore in stockpiles, metal-in process and finished metal are valued at the lower of cost and net realisable value. Cost represents the weighted average cost and includes direct costs and an appropriate portion of fixed and variable production overhead expenditure, incurred in converting materials 63 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS into finished goods. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Consumables are valued at the lower of cost and net realisable value. Any allowance for obsolescence is determined by reference to stock items identified. • Rehabilitation provision In determining an appropriate level of provision, consideration is given to the expected future costs to be incurred, the timing of these expected future costs (largely dependent on the life of the mine), and the estimated future level of inflation. The discount rate is a pre-tax rate that reflects current market assessment of the time value of money and the risks specific to the liability. The ultimate cost of decommissioning and restoration is uncertain, and costs can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other mine sites. The expected timing of expenditure can also change, for example in response to changes in reserves or to production rates. Changes to any of the estimates could result in significant changes to the level of provisioning required, which would in turn impact future financial results. • • • • Convertible notes carried at fair value On initial recognition, the value of the convertible notes was calculated based on the proceeds received. At the reporting date, the fair value of the conversion options within the convertible loan has been assessed to be nil and credit risk has not changed from inception. Fair value of share-based payments The fair values of options is calculated using Black Scholes pricing model and the fair value of performance rights is determined using the Trinomial Option Pricing Model that takes into account the term of the performance rights, share price at valuation date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option and the probability and timing of achieving milestones related to the performance rights. The Probability and timing of achieving milestones related to the performance rights. The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down. • Development represents expenditure necessarily incurred during establishments and construction of a mining project that is in progress but yet to be complete. This expenditure includes the cost associated with studies and evaluation through to early construction cost of assets or infrastructure yet to be fully formed or ready for use. As tangible assets are completed, they will be transferred to the relevant classification and depreciated over their useful life. Other expenditure on project development that is not capitalised as plant or equipment will be capitalised as mine properties and amortised on a units of production bases over the expected life of the project. Judgement is applied in relation cost allocation and timing of asset completion. 64 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • At the end of each reporting period, the Group assesses whether is any indication that an asset may be impaired, The assessment will include the consideration of external and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less cost of disposal (FVLCD) and value in use to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit and loss and other comprehensive income. No indicators were present at 31 December 2023. • The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the deferred tax provisions in the period in which such determination is made. 5. REVENUE Sale of gold at spot Sale of silver at spot 6. COST OF SALES External services Raw materials and consumables Changes in inventories of finished goods and work in progress Salaries, wages and other employee benefits Depreciation of mine assets (note 12) Business registration and compliance fees Insurance Freight Professional fees Utilities Supplies Amortisation of right of use assets Other operating expense 7. EXPLORATION EXPENSES Exploration expenses – Liberia Exploration expenses - Côte d'Ivoire 12 months ended 31 December 2023 $ 255,400,076 268,992 255,669,068 12 months ended 31 December 2023 $ 84,650,805 57,781,656 (23,334,559) 15,911,208 21,145,128 6,403,120 3,398,754 2,540,487 1,637,059 1,271,504 1,090,927 81,562 28,329,533 200,907,184 6 months ended 31 December 2022 $ - - - 6 months ended 31 December 2022 $ - - - - - - - - - - - - - - 12 months ended 31 December 2023 $ 381,501 7,372,992 7,754,493 6 months ended 31 December 2022 $ 264,788 6,743,420 7,008,208 65 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 8. INCOME TAX Accounting profit/ (loss) before income tax Income tax at 30% (2022: 25%) Tax effect of amounts which are not deductible/ (taxable) in calculating taxable income: Non-deductible expenses Non-assessable income Adjustments recognised in the current year in relation to the current tax for previous years Effect of temporary differences that would be recognised directly in equity Temporary differences not recognised Income tax expense 12 months ended 31 December 2023 $ 6 months ended 31 December 2022 $ 12,559,049 3,767,715 (17,630,159) (4,407,540) 1,347,931 - 6,350 500,361 (208,345) (454,301) 511,110 (237,758) 5,180,653 291,532 4,063,598 - The tax rate used in the above reconciliation is the corporate tax rate of 30% (2022: 25%) payable by Australian corporate entities on taxable profits under Australian tax laws. The tax rate used for entities situated in Cote d’Ivoire is 20% under Cote d’Ivoire laws. Unrecognised deferred tax assets and liabilities The following deferred tax assets and liabilities have not been brought to account: Tax losses – revenue Other temporary differences 31 December 2023 $ 31,977,485 (5,270,258) 26,707,227 31 December 2022 $ 30,156,083 (3,211,098) 26,944,985 The above potential tax benefit for tax losses has not been recognized in the statement of financial position. These tax losses can only be utilized in the future if the continuity of ownership test is passed, or failing that, the same business test is passed. 66 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 9. CASH AND CASH EQUIVALENTS Cash at bank and on hand 31 December 2023 $ 41,063,922 41,063,922 31 December 2022 $ 47,007,779 47,007,779 The Group’s exposure to interest rate risk and effective weighted average interest rate for bank balances is disclosed in Note 18. 10. TRADE AND OTHER RECEIVABLES Deposits Prepayments GST/ VAT paid Interest receivables Other debtors and advances GST/ VAT paid relates to GST/ VAT input tax credit from purchases. 11. INVENTORIES Spare parts and consumables Ore stockpile Gold in circuit Gold bullion 31 December 2023 $ 31 December 2022 $ 1,411,829 160,555 20,170,055 19,523 113,985 21,875,947 1,314,652 2,022,814 255,928 19,523 179,139 3,792,056 31 December 2023 $ 31 December 2022 $ 13,963,973 7,654,981 2,720,548 12,814,801 37,154,303 6,260,252 - - - 6,260,252 During the year, the Group recognised ore stockpile, gold in circuit and gold bullion inventories as a result of achieving commercial production. 12. PROPERTY, PLANT AND EQUIPMENT Assets under construction Motor vehicles Plant and equipment Mine properties 31 December 2023 $ 16,451,706 528,575 59,131,934 228,100,367 304,212,582 31 December 2022 $ 241,245,825 704,767 5,733,867 - 247,684,459 67 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12. PROPERTY, PLANT AND EQUIPMENT (continued) Movement in carrying amounts of plant and equipment: Balance at 1 January 2023 Transfers (i) Additions Depreciation (ii) Exchange difference Balance at 31 December 2023 Balance at 1 July 2022 Additions Depreciation Exchange difference Balance at 31 December 2022 Assets under construction $ 241,245,825 (283,645,536) 59,781,490 - (930,073) 16,451,706 129,082,866 111,701,157 - 461,802 241,245,825 Motor vehicles $ 704,767 - - (237,422) 61,230 528,575 806,395 - (101,628) - 704,767 Plant and equipment $ 5,733,867 59,866,969 3,536,120 (9,295,455) (709,567) 59,131,934 5,380,244 1,333,998 (996,176) 15,801 5,733,867 Mine properties $ - 223,778,567 21,941,073 (15,506,172) (2,113,101) 228,100,367 - - - - - Total $ 247,684,459 - 85,258,683 (25,039,049) (3,691,511) 304,212,582 135,269,505 113,035,155 (1,097,804) 477,603 247,684,459 i) Assets under construction attributable to Abujar gold mine were transferred to its respective property, plant and equipment as a result of achieving commercial production. ii) Breakdown of depreciation expense as follows: Non-mine assets Mine assets (note 6) 13. TRADE AND OTHER PAYABLES $ 3,893,921 21,145,128 25,039,049 Trade payables Other payables Accrued expenses 31 December 2023 $ 59,244,258 31,825,504 485,203 91,554,965 31 December 2022 $ 29,349,445 17,029,338 54,900 46,433,683 Trade and other payables are non-interest bearing and generally on 30 to 60-day terms. 68 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 14. BORROWINGS Loan from Coris Bank (i) Loan from Kongwell Management Limited (ii) Loan from Dr. Minlu Fu (ii) i. Loan from Coris Bank 31 December 2023 $ 19,343,774 - - 19,343,774 31 December 2022 $ - 8,856,089 2,955,956 11,812,045 The working capital facility of $37.9 million was arranged with Coris Bank. It was fully drawn during the year. The loan is repayable in twelve (12) months, with annual interest rate of 8%. Maturity date is 31 May 2024. The loan includes the following guarantee: • An independent and unconditional letter of guarantee from Tietto Minerals Pty Ltd; • • Pledge of 30% of the shares of Tietto Minerals Austar Pty Ltd held by Tietto Minerals Ltd; and The opening of a current account for SML at CBI Cote d’Ivoire. ii. Loans from Kongwell and Dr. Minlu On 26 April 2023, the Company amended the terms of the original loan agreement by extending the maturity of each loan to 30 September 2023. It has also been agreed that the Company will issue additional 4,000,000 options expiring 31 December 2026. In addition, the Company granted the right to convert any or all of the loan amount and interest under the loan into shares. The converted shares to be issued to the lenders (as applicable) will be issued at a price equal to the lower of; a) The lowest VWAP of shares for each calendar month between 1 January 2023 and 30 September 2023 (inclusive); and b) The price of any shares issued by the Company as part of any capital raise between 1 January 2023 to 30 September 2023 (inclusive). The converted shares to be issued following receipt of a conversion notice will be issued within five (5) business days of the maturity date and will constitute full and final payment of the relevant portion of the loan amount. On 17 October 2023, loans plus interest from Kongwell and Dr. Minlu, totalling $13.4 million (or US$8.5 million), have been elected for conversion into ordinary shares. The loan was converted to shares at a VWAP-determined share price of approximately $0.34 per share rather than cash repayment, in accordance with the loan terms announced on 30 January 2023. The total number of shares from the conversion is 40,162,961 (Refer to Note 16). 69 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 14. BORROWINGS (continued) Issue of options a) Loan from Dr. Minlu Tranche 1 The Group, within three (3) business days of the Effective Date, will issue one (1) million options being one option for every US$2 of the Loan amount to the lender. Tranche 2 The Group will issue a further one (1) million options being one option for every US$2 of the loan amount to the lender. b. Loan from Kongwell Tranche 1 The Group, within three (3) business days of the Effective Date, will issue three (3) million options being one option for every US$2 of the Loan amount to the lender. Tranche 2 The Group will issue a further three (3) million options being one option for every US$2 of the loan amount to the lender. Valuation of options issued on 28 March 2023 On 26 April 2023, the Company granted 3,000,000 options to Kongwell Management Limited and 1,000,000 options to Dr. Minlu for extension of the Company’s loan facility agreement. The options were valued using the Black Sholes pricing model. The table below summarises the valuation inputs for these: Number granted Expected volatility (%) Risk-free interest rate (%) Expected life of options (years) Share price at grant date (cents) Fair value at grant date (cents) Value attributed ($) Value expensed during the year ended ($) (a) 31 December 2023 $ 4,000,000 70% 2.9% 3.7 60.50 29.00 1,160,000 1,160,000 70 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 15. REHABILITATION PROVISION The rehabilitation provision represents the present value of rehabilitation costs relating to mine sites, which are expected to be incurred up to 2033, which is when the producing mine properties are expected to cease operations. These provisions have been created based on the Group’s internal estimates. Assumptions based on the current economic environment have been made, which management believes are a reasonable basis upon which to estimate the future liability. These estimates are reviewed regularly to take into account any material changes to the assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for the necessary rehabilitation works required that will reflect market conditions at the relevant time. Furthermore, the timing of rehabilitation is likely to depend on when the mines cease to produce at economically viable rates. This, in turn, will depend upon future gold prices, which are inherently uncertain. The discount rate used in the calculation as at 31 December 2023 is 6.74%. Beginning balance Recognition Unwinding of discount Exchange differences Ending balance 31 December 2023 $ 31 December 2022 $ - 8,500,116 428,723 (2,649) 8,926,190 - - - - - The Group makes full provision for the future cost of rehabilitating mine sites and related production facilities on a discounted basis. 71 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ASX: TIE ASX: TIE 16. ISSUED CAPITAL Ordinary shares – fully paid Less: Capital raising costs Movement in ordinary shares on issue Opening balance Issued share capital on conversion of listed options Issued share capital on conversion of performance rights (note 17) Issued share capital Exercise of options 31 December 2023 # of shares 31 December 2022 # of shares 1,129,890,451 1,079,527,490 31 December 2023 $ 399,002,091 (19,660,367) 379,341,724 31 December 2022 $ 382,176,711 (19,660,367) 362,516,344 31 December 2023 31 December 2022 # of shares $ # of shares $ 1,079,527,490 362,516,344 959,513,204 295,756,000 - - 4,200,000 2,338,844 2,200,000 1,023,000 100,000 37,000 - - 115,714,286 64,657,143 Issued share capital on loan conversion (note 14) 40,162,961 13,402,380 8,000,000 2,400,000 - - - - Share issue costs, net of tax Total - 1,129,890,451 - 379,341,724 - 1,079,527,490 (272,643) 362,516,344 Ordinary shares carry one vote per share and participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. 17. RESERVES Revaluation reserve for financial assets at fair value through other comprehensive income (i) Foreign exchange reserve (ii) Share-based payment reserve (iii) Other reserve (iv) 31 December 2023 $ 31 December 2022 $ (115,000) 3,270,631 6,534,697 (7,283,017) 2,407,311 (101,000) (1,539,773) 6,174,878 (7,229,253) (2,695,148) (i) Revaluation reserve for financial assets at fair value through other comprehensive income The revaluation reserve comprises the cumulative net change in the fair value of financial assets at fair value through other comprehensive income (in accordance with AASB 9 Financial Instruments), until the investments are derecognised or impaired. (ii) Foreign exchange reserve The foreign exchange reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations. 72 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 17. RESERVES (continued) (iii) Share-based payment reserve The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services. On issue 31 December 2022 Issue of options Exercise of options and performance rights Lapse of performance rights (a) Recognition of share-based payment expense for options and performance rights # of unlisted options 26,000,000 4,000,000 (8,000,000) # of performance rights 14,050,000 - (2,200,000) 31 December 2023 $ 6,174,878 - (1,023,000) - (6,750,000) (1,846,450) - 22,000,000 - 5,100,000 3,229,269 6,534,697 a) These amounts have been transferred between the share-based payment reserve to accumulated losses as they relate to options or performance rights which have expired or lapsed. Options Weighted average exercise price is $0.60. Weighted average contractual life is 1.40 years. Performance rights Weighted average contractual life is 0.33 year. (iv) Other reserve The other reserve relates to transactions with non-controlling interests. 18. FINANCIAL RISK MANAGEMENT OBJECTVES AND POLICIES The Group’s principal financial instruments comprise of trade and other receivables, cash and cash equivalents, borrowings, trade and other payables and equity investments. Risk exposures and responses The Board of Directors have overall responsibility for the establishment and oversight of the risk management framework. Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. 73 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 18. FINANCIAL RISK MANAGEMENT OBJECTVES AND POLICIES (continued) Foreign currency risk The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations. Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis cash flow forecasting. The carrying amount of the Group’s foreign currency denominated financial assets and liabilities at the reporting date, expressed in Australian dollars, were as follows: UK pound sterling Euro US dollars West African CFA franc 31 December 2023 31 December 2022 Assets Liabilities Assets Liabilities 1,247 2,537,912 48,561 115,841 2,249 1,006,415 3,180 112,111 153,325 20,883,733 10,200,191 15,047,952 58,243,210 60,935,694 39,601,542 60,649,677 4,685,055 15,893,910 19,426,648 34,589,891 Foreign currency sensitivity analysis The sensitivity analyses the Group’s exposure to foreign currency risk at the reporting date has been determined based on a change of 10% in the venue of the Australian dollar against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated items and adjusts their translation at the year end for a 10% change in foreign currency rates. At reporting date, if the Australian dollar was 10% stronger and all other variables were constant, the Group’s net profit would have increased by $28,602 (31 December 2022: net loss would have increased by $1,869,598) with a corresponding increase in equity. Where the Australian dollar strengthen, there would be an equal and opposite impact on profit after tax and equity. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Liquidity risk management is the responsibility of the Board of Directors, who have built an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities, identifying when further capital raising initiatives are required. 74 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 18. FINANCIAL RISK MANAGEMENT OBJECTVES AND POLICIES (continued) Remaining contractual maturities The following tables detail the consolidated entity’s remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the discounted cash flows of financial liabilities based in the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. Trade and other payables (note 13) Borrowings (note 14) Lease liability Average interest rate % One year or less $ More than one year $ Total $ - 91,069,762 8.0% 4.0% 19,343,774 63,176 110,476,712 - - 9,813 9,813 91,069,762 19,343,774 72,989 110,486,525 Fair value of financial assets and liabilities The carrying amount of financial assets and liabilities recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in Note 3. The directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial statements approximate their net fair values. Credit risk Credit risk is the risk that third party might fail to fulfill its performance obligations under the terms of a financial instrument. Credit risk arises from cash and cash equivalents and receivables. The Group closely monitors its financial assets and maintains its cash deposits in a high-quality financial institution with a minimum A-/A3 credit rating. As at 31 December 2023, the Group is unaware of any information which would cause it to believe that these financial assets are not fully recoverable. Capital management The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The capital structure of the Group consists of equity mainly, comprising issued capital and reserves, net of accumulated losses and negligible amount of debt. The Group’s policy is to use capital market issues to meet the funding requirements of the Group. There were no changes in the Group’s approach to capital management during the year. Neither the Company or any of its subsidiaries are subject to externally imposed capital requirements. 75 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 19. KEY MANAGEMENT PERSONNEL DISCLOSURES Details of key management personnel compensation are disclosed in the Remuneration Report which forms part of the Director’s Report and has been audited. The aggregate compensation of the key management personnel is summarised below: Short-term employee benefits Post employee benefits Share-based payments 20. REMUNERATION OF AUDITORS Amounts received or due and receivables by BDO Audit (WA) Pty Ltd: Fees for auditing the statutory financial report of the parent covering the group and auditing the statutory financial reports of any controlled entities - Group - BDO network firms 12 months ended 31 December 2023 $ 1,866,247 369,532 649,413 2,885,192 6 months ended 31 December 2022 $ 830,167 47,250 899,759 1,777,176 12 months ended 31 December 2023 $ 6 months ended 31 December 2022 $ 218,110 264,935 483,045 78,747 124,780 203,527 76 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 21. SEGMENT INFORMATION Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker has been identified as the Board of Directors of Tietto Minerals Limited. Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics. The Group operates as four segments which is mineral exploration within Liberia and Côte d'Ivoire, production within Côte d'Ivoire and administration within Australia. The Group is domiciled in Australia. The following table presents the revenue and results information regarding the segment information provided to the Board of Directors. Production Cote D Ivoire $ Exploration Liberia $ Exploration Cote D'Ivoire $ Administration Australia $ Intersegment Eliminations $ Total $ 31 December 2023 Revenue Cost of sales Gross profit 255,669,068 (200,907,184) 54,761,884 - - - - - - - - - Depreciation Exploration expenditure (23,895,102) (5,802,503) - (381,501) (982,493) (1,570,489) (243,016) - Net income/ (loss) 25,307,692 (811,227) (9,433,789) (7,684,280) - - - - - - 255,669,068 (200,907,184) 54,761,884 (25,120,611) (7,754,493) 7,378,396 403,319,885 395,935,693 7,384,192 3,287 7,757,951 (7,754,664) 454,349 47,636,776 (47,182,427) 307,027,643 4,802,290 302,225,353 (304,744,735) (327,540,058) 22,795,323 406,060,429 128,592,652 277,467,777 Total assets Total liabilities Net assets Half-year ended 31 December 2022 Segment income Segment expenditure Net income/ (loss) 940 (4,257,912) (4,256,972) - (521,159) (521,159) - (4,266,782) (4,266,782) 348,501 (8,933,748) (8,585,247) Depreciation Exploration expenditure (111,300) - - (264,788) (713,475) (4,579,867) (232,373) (2,163,553) - - - - - 349,441 (17,979,601) (17,630,160) (1,057,148) (7,008,208) Total assets Total liabilities Net assets 164,619,694 167,722,787 (3,103,093) 36,104 7,579,095 (7,542,991) 102,817,234 149,481,155 (46,663,921) 306,431,400 19,344,645 287,086,755 (269,096,954) (285,696,016) 16,599,062 304,807,478 58,431,666 246,375,812 77 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 22. COMMITMENTS Committed at reporting date but not recognised as liabilities, payable: Within one year After one year but not more than five years 12 months ended 31 December 2023 $ 6 months ended 31 December 2022 $ 18,694,727 - 18,694,727 26,184,964 - 26,184,964 The commitments relate to the capital expenditure for the mill, equipment to be used in the Abujar project. 23. CONTINGENT LIABILITIES In accordance with the Partnership Agreement between the Group and Bamba & Fred Minerals Sarl ("B&F"), the Group has an obligation to pay the shareholders of B&F (other than Tietto Minerals) USD$250,000 upon each discovery of 500,000 ounces of gold to a maximum USD$1,500,000 upon the discovery of total 3,000,000 ounces of gold, as defined by the standard "indicated" category of the JORC code. USD$500,000 has been paid via issue of shares during the previous years. The remaining contingent obligation at 31 December 2023 is USD$1,000,000. There have been no significant changes in contingent liabilities since 31 December 2022. 24. RELATED PARTIES Transactions with related parties During the year the Company made no cash payment to Resource Strategy Consultants (half-year ended 31 December 2022: $495,000), a company associated with the Company’s Non-Executive Director, Mr Hanjing Xu, in relation to capital raising. All related party transactions are on arm's length terms. There were no other transactions with related parties during the year ended 31 December 2023. 78 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 25. PARENT ENTITY INFORMATION Investments in controlled entities Tietto Minerals (Liberia) Limited Tietto Minerals (Côte d'Ivoire) Limited Tietto Minerals Austar Pty Ltd Bamba & Fred Minerals SARL Tiebaya Gold SARL Societe Miniere de la Lobo Principal activities Country of incorporation Exploration Exploration Exploration Exploration Exploration Production Liberia Ivory Coast Australia Ivory Coast Ivory Coast Ivory Coast Ownership of interest December 2023 % December 2022 % 100 100 100 50 100 88 100 100 100 50 100 88 Set out below is the supplementary information about the parent entity, Tietto Minerals Limited. Results of parent entity Profit/ (loss) for the year Other comprehensive income/ (loss) Total comprehensive income/ (loss) for the year Financial position of parent entity at year end Total current assets Total non‐current assets Total assets Total current liabilities Total non‐current liabilities Total liabilities Net assets Share capital Revaluation reserve Options reserve Other reserve Other equity Accumulated losses Total equity 31 December 2023 $ 6 months ended to 31 December 2022 $ (8,809,868) - (8,809,868) (49,296,188) 5,000 (49,291,188) 31 December 2023 $ 31 December 2022 $ 306,376,684 650,959 307,027,643 264,954,433 766,025 265,720,458 4,792,477 9,813 4,802,290 19,344,647 - 19,344,647 302,225,353 246,375,811 379,341,724 (115,000) 6,534,697 (644,910) (5,740,000) (77,151,158) 302,225,353 362,516,344 (101,000) 6,174,878 (644,910) (5,740,000) (115,829,501) 246,375,811 79 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 25. PARENT ENTITY INFORMATION (continued) Parent entity capital commitments for acquisition for property, plant and equipment There are no contracted capital commitments of the parent entity at year end, other than disclosed in Note 22. Parent entity guarantees in respect of the debts of its subsidiaries There are no parent entity guarantees in respect of the debts of its subsidiaries at year end. 26. CASH FLOW INFORMATION Reconciliation of cash flows from/ (used in) operating activities with loss after tax is as follows: Net profit/ (loss) after tax Adjustment for: Foreign currency exchange differences Depreciation (note 12) Amortisation of right of use assets Share-based payments (note 17) Interest expense in investing and financing activities Operating profit/ (loss) before working capital changes (Increase)/ decrease in trade and other receivables (Increase)/ decrease in inventories (Increase)/ decrease in deferred tax assets (Decrease)/ increase in trade and other payables (Decrease)/ increase in employee provision (Decrease)/ increase in employee provision 12 months ended 31 December 2023 $ 6 months ended 31 December 2022 $ 7,378,396 (17,630,160) 9,985,252 25,039,049 81,563 3,229,269 2,207,565 47,921,094 (18,083,891) (30,894,051) (1,663,033) 45,121,282 1,684,542 6,843,685 50,929,628 (3,998,031) 1,057,148 - 2,106,636 44,737 (18,419,670) (963,226) (6,260,252) - (3,341,010) - - (28,984,158) Non-cash investing activities during the current or prior year are disclosed in the above. Changes in liabilities arising from financing activities is detailed below: Balance at 1 January 2023 Proceeds from loans and borrowings Repayment of loan Acquisition of leases Lease payment Loan to equity conversion (note 14) Interest Others Loan from Coris Bank - 37,692,374 (20,239,681) - - - 1,775,314 115,767 19,343,774 Loan from Kongwell Management Limited 8,856,089 - - - - (10,051,785) 631,785 563,911 - Loan from Dr. Minlu Fu Lease liability 2,955,956 - - - - (3,350,595) 210,595 184,044 - 19,526 - - 121,760 (72,452) - 3,528 627 72,989 80 ASX: TIE ASX: TIE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 27. EARNINGS PER SHARE Basic earnings/ (loss) per share (cents per share) Diluted earnings/ (loss) per share (cents per share) Profit/ (loss) after income tax attributable to the owners of 12 months ended 31 December 2023 $ 0.41 0.40 6 months ended 31 December 2022 $ (1.62) (1.62) Tietto Minerals Limited 4,531,458 (16,743,802) 31 December 2023 $ 31 December 2022 $ Weighted average number of ordinary shares 1,122,966,627 1,034,969,571 28. TRANSACTIONS WITH NON-CONTROLLING INTEREST At 30 June 2021, Tiebaya Gold Sarl held a 85% interest in the Abujar gold project mining license. Of the remaining 15%, 10% of the interest was owned by the Cote D’Ivoire government and the remaining 5% split equally between Mr. Bamba and Mr. N’Kanza. In 2021, an agreement was reached allowing Tietto Group to acquire an additional 3% interest in the mining license from Mr Bamba and Mr N’Kanza in consideration for: • The issue of 3,750,000 ordinary shares in Tietto to each of Mr Bamba and Mr N’Kanza at a deemed issue price of $062 per share; The issue of 2,500,000 options exercisable at $0.62 expiring three years from the date of issue to each of Mr Bamba and Mr N’Kanza; and Cash payment of US$200,000 to each of Mr Bamba and Mr N’Kanza. • • The agreement was finalised in 2022: • On 4 February 2022, the Company issued 7,500,000 ordinary shares to non-controlling interests (shareholders of SML) in consideration for 3% interest in the Abujar Mining License. The shares had a value of $4,650,000. • On the same date, 5,000,000 options were also issued, the options were valued at $1,090,000. • Cash payment of US$400,000 was made. There were no transactions with NCI during the current financial year 29. EVENTS SUBSEQUENT TO REPORTING DATE There has not been any other matter or circumstance occurring subsequent to the end of the year that has 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 periods. 81  TIETTO MINERALS LIMITED    FINANCIAL REPORT 2023  Directors’ Declaration  The directors of the Company declare that:   1) The attached financial statements notes thereto comply with the Corporations Act 2001, The Australian  Accounting  Standards,  the  Corporations  Regulations  2001  and  other  mandatory  professional  reporting  requirements; and  a) Comply  with  International  Financial  Reporting  Standards  as  issued  by  the  International  Accounting  Standards Board as described in Notes 2 and 3 to the financial statements;  b) Give  a  true  and  fair  view  of  the  Group’s  financial  position  as  at  31  December  2023  and  of  its  performance for the financial year ended on that date; and  2) There  are  reasonable  grounds  to  believe  that  the  group  will  be  able  to  pay  its  debts  as  and  when  they  become due and payable.   3) The directors have been given the declarations required by section 295A of the Corporation Act 2001.  Signed in accordance with a resolution of directors made pursuant to section 303(5)(a) of the Corporations Act  2001.   On behalf of the Directors   Matthew Wilcox  Managing Director   Dated at Perth this 28th day of March 2024 82              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 Tietto Minerals Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Tietto Minerals Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2023, 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 material accounting policy information 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 31 December 2023 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. 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. 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. Accounting for Property, Plant and Equipment Key audit matter How the matter was addressed in our audit During the year the Group commenced production on Our audit procedures in this area included, but were the Abujar Gold Project. Note 12 of the financial not limited to: report discloses the carrying value of the Group’s Property, Plant and Equipment (“PP&E”). • Reviewing Board minutes and ASX announcements to understand the operational activity relating to The carrying value of PP&E is impacted by various key the project; estimates and judgements, in particular: • Obtaining the year end reconciliation of PP&E and • Ore reserves and estimates; agreeing a sample of items to supporting source • Amortisation rates; and • Capitalisation of costs. Additionally, this was determined to be a key audit matter due to the significant judgement applied in determining whether impairment indicators exist in accordance with the AASB 136 Impairment of Assets (“AASB 136”). This is a key audit matter due to the quantum of the PP&E balances and the significant judgement involved in management’s assessment of the carrying value of PP&E. documentation; • Verifying on a sample basis, plant and equipment capitalised during the year for compliance with the measurement and recognition criteria of AASB 116 Property, Plant and Equipment; • Reviewing management’s amortisation models, including agreeing key inputs to supporting information; • Considering whether any facts or circumstances existed indicating that impairment testing was required under AASB 136; and • Reviewing the adequacy of related disclosures within Notes 4 and 12 to the financial statements. Going concern Key audit matter How the matter was addressed in our audit The financial statements have been prepared by the Our audit procedures in this area included, but were Group on a going concern basis, which contemplates not limited to: that the Group will continue to meet its commitments, realise its assets and settle its liabilities in the normal course of the business. • Evaluating the appropriateness of the Group’s assessment of its ability to continue as a going concern, including whether the period covered is The group relies on generating positive cash flows at least 12 months form the date of the financial from continuing production at Abujar Gold Mine in report and that relevant information of which we Cote d’Ivoire and the management of costs in line with are aware as a result of the audit is included; forecast to continue as a going concern. • Inquiring with management and the Directors Assessing the appropriateness of the basis of whether they are aware of any events or preparation for the Group’s financial report is deemed conditions, including beyond the period of to be a key audit matter due to its importance to the assessment, that may cast significant doubt on the financial report and the judgement involved in Group’s ability to continue as a going concern; forecasting future cash flows for a period of at least 12 months form the date of the financial report. • Comparing the key underlying data and assumptions in the Group’s cash flow forecast to Note 2 of the financial report discloses the basis of approved budgets, historical cash flows and preparation of the financial report and the Directors’ performance subsequent to reporting date; assessment of the going concern assumption. • Developing an understanding of what forecast expenditure in the cash flow forecast is committed and what could be considered discretionary; • Assessing management’s historical accuracy of cash flow forecasting by comparing actual results to prior period forecast; and • Assessing the adequacy of the related disclosure in the financial statements. Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 31 December 2023, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the 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 35 to 41 of the directors’ report for the year ended 31 December 2023. In our opinion, the Remuneration Report of Tietto Minerals Limited, for the year ended 31 December 2023, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit (WA) Pty Ltd Jarrad Prue Director Perth, 28 March 2024  TIETTO MINERALS LIMITED FINANCIAL REPORT 2023 ASX Additional Information Information as at 6 March 2024 (a) Distribution of Shareholders Category (size of holding) Number of Holders Number of Shares % Issued Share Capital 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over 324 1,074 552 1,126 208,842 3,026,143 4,556,896 42,095,750 0.02% 0.27% 0.40% 3.73% 95.58% 100.00% Based on the share price ($0.605 on 5 March 2024), the number of shareholdings held in less than marketable parcels is 171. 1,080,002,820 1,129,890,451 Total 3,513 437 (b) Distribution of Unquoted Securities UNL OPT @ $0.62 EX 01/08/24 UNL OPT @ $0.39 EX 21/05/24 Category (size of holding) No of Holders % Issued Capital No of Holders % Issued Capital 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Total - - - - 1 1 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% - - - - 1 1 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% UNL OPT @ $0.41 EX 17/01/25 UNL OPT @ $0.62 EX 04/02/25 Category (size of holding) No of Holders % Issued Capital No of Holders % Issued Capital 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Total - - - - 4 4 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% - - - - 2 2 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% UNL OPT @ $0.53 EX 01/07/25 UNL OPT @ $0.80 EXP 31/12/2024 Category (size of holding) No of Holders % Issued Capital No of Holders % Issued Capital 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over - - - - 2 0.00% 0.00% 0.00% 0.00% 100.00% - - - - 2 0.00% 0.00% 0.00% 0.00% 100.00% 87  TIETTO MINERALS LIMITED FINANCIAL REPORT 2023 ASX Additional Information Total 2 100.00% 2 100.00% UNL OPT @ $0.70 EXP 31/12/2026 PERF RIGHTS CLASS E- EXP 21/05/2024 Category (size of holding) No of Holders % Issued Capital No of Holders % Issued Capital 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Total - - - - 2 2 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% - - - - 1 1 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% PERF RIGHTS CLASS F- EXP 21/05/2024 PERF RIGHTS CLASS G - EXP 01/08/2024 Category (size of holding) No of Holders % Issued Capital No of Holders % Issued Capital 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Total - - - - 1 1 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% - - - 1 - 1 0.00% 0.00% 0.00% 100.00% 0.00% 100.00% PERF RIGHTS CLASS H - EXP 30/11/2024 PERF RIGHTS CLASS I - EXP 17/01/2025 Category (size of holding) No of Holders % Issued Capital No of Holders % Issued Capital 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over Total - - - - 1 1 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% - - - - 1 1 0.00% 0.00% 0.00% 0.00% 100.00% 100.00% PERF RIGHTS CLASS J - EXP 17/01/2025 Category (size of holding) No of Holders 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 % Issued Capital - - - - 0.00% 0.00% 0.00% 0.00% 88  TIETTO MINERALS LIMITED FINANCIAL REPORT 2023 ASX Additional Information 100,001 – and over Total 1 1 100.00% 100.00% (c) Voting rights The voting rights attached to each class of equity security are as follows: Ordinary Shares Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands. Options There are no voting rights attached to any class of options that are on issue. Performance Rights There are no voting rights attached to any class of Performance Rights that are on issue. (d) 20 Largest Shareholders – Ordinary Shares a at 6 March 2024 Rank Name Ordinary Shares Held % of Issued Capital 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 CITICORP NOMINEES PTY LIMITED BNP PARIBAS NOMINEES PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED J P MORGAN NOMINEES AUSTRALIA PTY LIMITED HONGKONG AUSINO INVESTMENT LTD CHIJIN INTERNATIONAL HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 ZHAOJIN CAPITAL LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED PHILLIP PERRY MR YANCHAO GUO BNP PARIBAS NOMS PTY LTD DR CAIGEN WANG HAYES INVESTMENTS CO PTY LTD LIZENG PTY LTD MR QIXIAN WU BNP PARIBAS NOMS PTY LTD NATIONAL NOMINEES LIMITED MR JEFFREY MICHAEL WILSON YAO N'KANZA 200,804,174 128,980,317 86,828,783 72,048,644 60,853,671 55,590,076 47,378,538 35,110,000 26,655,613 22,066,625 19,833,515 14,263,253 11,553,119 10,644,600 9,000,000 8,547,584 7,097,618 7,006,909 7,000,927 6,988,129 Total 838,252,095 Balance of register 291,638,356 17.77% 11.42% 7.68% 6.38% 5.39% 4.92% 4.19% 3.11% 2.36% 1.95% 1.76% 1.26% 1.02% 0.94% 0.80% 0.76% 0.63% 0.62% 0.62% 0.62% 74.19% 25.81% Total Issued Capital 1,129,890,451 100.00% (e) Securities Subject to Escrow 89  TIETTO MINERALS LIMITED FINANCIAL REPORT 2023 ASX Additional Information No securities are currently subject to any escrow provisions (f) On-market Buy-Back Currently there is no on-market buy-back of the Company’s securities. (g) Substantial Shareholders Shareholders who hold 5% or more of the issued capital of the Company as per substantial shareholder notices lodged with ASX are listed below as at 5 March 2024. Name Number of Shares Held Percentage Held CHIJIN INTERNATIONAL (HK) LIMITED 140,855,864 12.47% ZHAOJIN CAPITAL LIMITED KONGWELL MANAGEMENT LIMITED 79,204,311 70,732,588 7.02% 6.26% (h) Unquoted Equity Security Holders with Greater than 20% of an Individual Class As at 5 March 2024 the following classes of unquoted securities had holders with greater than 20% of the class on issue. Options exercisable at 39¢ on or before 21 May 2024 Matthew Wilcox Options exercisable at 62¢ on or before 1 August 2024 Ting Xu Options exercisable at 41¢ on or before 17 January 2025 Daniel Kotzee Guillaume Hubert Hesbon Okwayo Options exercisable at 62¢ on or before 4 February 2025 Bamba Tahi Henri Yao n'Kanza Options exercisable at 53¢ on or before 1 July 2025 Extra Salt Pty Ltd Ting Xu Options exercisable at 80¢ on or before 31 December 2024 Hongkong Ausino Investment Ltd Kongwell Management Limited Class E Performance Rights Matthew Wilcox Class F Performance Rights Matthew Wilcox % Interest 100.00% 100.00% 31.25% 31.25% 31.25% 50.00% 50.00% 71.43% 28.57% 25% 75% 100.00% 100.00% 90  TIETTO MINERALS LIMITED FINANCIAL REPORT 2023 ASX Additional Information Class G Performance Rights Ting Xu Class H Performance Rights Mark Strizek Class I Performance Rights Daniel Kotzee Class J Performance Rights Daniel Kotzee % Interest 100.00% 100.00% 100.00% 100.00% (i) Corporate Governance Pursuant to the ASX Listing Rules, the Company’s Corporate Governance Statement will be released in conjunction with this report. The Company’s Corporate Governance Statement is available on the Company’s website at: https://www.tietto.com/corporate/corporate-governance/ 91 

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