ANNUAL REPORT 2021 ABN 56 120 178 949 CORPORATE DIRECTORY Equipment mobilisation at Mulga Rock BOARD OF DIRECTORS The Hon. Cheryl Edwardes, AM Non-executive Chairman Wayne Bramwell Non-executive Director (appointed 18 October 2021) Tony Chamberlain Non-executive Director David Cornell Non-executive Director COMPANY SECRETARY Shannon Coates (appointed 15 October 2021) REGISTERED AND PRINCIPAL OFFICE First Floor 1209 Hay Street West Perth WA 6005 T: +61 8 9389 2700 E: info@vimyresources.com.au W: www.vimyresources.com.au AUDITOR KPMG Australia 235 St Georges Terrace Perth WA 6000 This report is released for and on behalf of the Board of Vimy Resources Limited SHARE REGISTRY Automic Group Postal Address: GPO Box 5193 SYDNEY NSW 2001 Office Address: Level 5 126 Phillip Street SYDNEY NSW 2000 Telephone: Australia: 1300 288 664 International: +61 2 9698 5414 Website: https://investor.automic.com.au TRANSACTIONAL BANKER ANZ Banking Group Limited 1275 Hay Street West Perth WA 6005 AUSTRALIAN SECURITIES EXCHANGE Shares in Vimy Resources Limited are quoted on the Australian Securities Exchange. ASX CODE: VMY OTCQB, OTC MARKETS GROUP Trading in Vimy shares commenced on the US-based OTCQB Venture Market on 13 January 2021. OTCQB CODE: VMRSF VIMY RESOURCES LIMITED ANNUAL REPORT 2021 3 This year has seen the achievement of significant milestones for Vimy and remarkable change in many areas. . CHAIRMAN’S LETTER At Vimy we have been saying for a long time that change is imminent – that the world would wake up to nuclear power as the ultimate clean energy, that uranium pricing would improve to allow the construction of new uranium mines and that investor enthusiasm would return to the sector. Some of those changes have been slower to happen than we anticipated but this year has seen significant progress in all these areas. The timing of these changes has corresponded with some significant milestones for the Company. On 1 October 2021 we were very pleased to announce that the Western Australian Department of Mines, Industry Regulation and Safety (DMIRS) had approved the Mulga Rock Mining Proposal and associated Mine Closure Plan. Together with the earlier approval of the Project Management Plan and Conditional Environmental Management Plans, this allowed us to implement the Early Works program at Mulga Rock, including vegetation clearing, stockpiling of topsoil and excavation of subsoil. The approvals and Early Works program have further de-risked the Project and we continue firmly on the path to becoming Western Australia’s first uranium mine and in production by 2025. The Mulga Rock camp has re-opened, a maiden test flight has successfully landed on the refurbished Officer Basin landing area, water infrastructure has been re-established and associated infrastructure has been recommissioned. A FIFO workforce is now undertaking pre-production mining operations on site. DMIRS and EPA Services at the WA Department of Water and Environmental Regulations have done an excellent job of reviewing and processing the complex approvals and I would like to thank them for continuing to work co-operatively with the Vimy team during the year. As a former Minister for the Environment, I always like to be reminded of the high standard of environmental stewardship we have in Western Australia. Nuclear energy is rapidly gaining favour with worldwide policy makers keen to reach targets for carbon reduction and every day brings further positive news on this front. At the same time, demand fundamentals for uranium continue to improve, with global demand growing and now outstripping pre-Fukushima levels. While demand grows, supply is shrinking. In fact, according to industry analysts UxC, global mine production is expected to lag global consumption by 63 million pounds in 2021. Investor enthusiasm for uranium has recently reached levels not seen for many years. A key factor behind the resurgent uranium spot price and renewed investor interest has been the Sprott Physical Uranium Trust, established in July 2021 to buy and hold physical uranium ore. The announcement of this, the world’s largest physical uranium fund, has provided a catalyst for the significant rise in share prices of ASX-listed uranium miners, including Vimy, in recent months. During the year we were also very pleased to be included in the index composition for the Global X Uranium Exchange Traded Fund (ETF) (NYSE:URA), North Shore Global Uranium Mining ETF (NYSE:URNM) and the Horizons Global uranium Index ETF (TSX:HURA). The influx of funds into uranium ETFs offers an avenue to allocate portfolio exposure to the market and is another indication of the improvement in investor sentiment in the sector. Maiden test flight to the upgraded Officer Basin airstrip 4 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 In January 2021, the Company also began trading on the US-based OTCQB Venture Market, a well- established trading platform that provides live-market trading in developing companies which hold primary listings in other markets. This listing has enhanced Vimy’s visibility and accessibility to shareholders and media partners in North America. This year has also seen significant change to the management team at Vimy. At the end of August 2021, Managing Director and CEO, Mike Young, decided to step down from his role after seven years at Vimy’s helm. Chief Sustainability Officer, Julian Tapp also stepped down at this time. During their tenure, Mike, Julian and the team made remarkable progress in moving the Mulga Rock Project to the cusp of development, through the Public Environmental Review and DFS stages and bringing the potential of the Project to the attention of the global nuclear industry and investment market. Mike and Julian’s passion and commitment have left Mulga Rock in great shape for the future, with project financing and final investment decision next on the agenda. On behalf of the Board, shareholders and team members both past and current, I wish Mike and Julian well for the future and thank them for their outstanding contribution to Vimy. We also welcomed Wayne Bramwell to our Board as Non-executive Director on 18 October 2021. Wayne brings a breadth of skills and experience which will help Vimy towards its goal of becoming a global clean energy supplier. I would also like to thank FTI Consulting for providing project co-ordination and strategic advisory services since being mandated by Vimy in May this year. The FTI team worked very hard to support the approvals process and Early Works program and in August, the mandate was extended to allow Steven Michael to act as Interim CEO while an executive search process for a new CEO takes place. Steven’s strengths in strategic business development and commercial negotiation have kept Vimy on track during this busy time and will put Vimy on the best possible path for the future. And, as always, I would like to thank the Vimy team for their hard work and persistence during the year. The re-opening of the Mulga Rock camp has been a major milestone that has required a great deal of hard work from many people and it is wonderful to see the return of previous team members to share their knowledge of the Project and assist with this effort. The Hon. Cheryl Edwardes, AM Chairman Installing new accommodation facilities at Mulga Rock VIMY RESOURCES LIMITED ANNUAL REPORT 2021 5 REVIEW OF ACTIVITIES MULGA ROCK PROJECT WESTERN AUSTRALIA Vimy’s Mulga Rock Project is one of Australia’s largest undeveloped uranium resources and will produce 3.5 million pounds of uranium annually1. It lies in the Great Victoria Desert in Western Australia, 290km by road ENE of Kalgoorlie. The Project comprises four mining areas: Ambassador and Princess, which form the Mulga Rock East Mining Centre, and Shogun and Emperor, which comprise the Mulga Rock West Mining Centre, approximately 20km away. The Mulga Rock Project is one of only four projects in Western Australia to receive State Ministerial approval to progress with the mining of uranium and it is the only one of those four likely to be developed in the near future. Vimy released the Mulga Rock Definitive Feasibility Study in 2018 which confirmed robust financials and a simple, low-cost uranium mining and recovery process. The 2018 DFS positioned Vimy as Australia’s largest near-term uranium producer. In August 2020, Vimy announced the results of the updated Definitive Feasibility Study (DFS Refresh) – see below – on the Mulga Rock Project, which demonstrated that the Project will generate even stronger financial returns than previously forecast. As well as the environmental approvals and the Early Works program highlighted in the Chairman’s Letter, the substantial progress made at the Mulga Rock Project during the year is detailed below. METALLURGICAL OPTIMISATION TESTWORK In September 2021, Vimy announced preliminary testwork results on an alternative ion exchange resin for the Mulga Rock plant uranium circuit. Following the 2020 DFS Refresh, Vimy embarked on a number of optimisation studies, including the evaluation of the mining and metallurgical processes at Mulga Rock. The uranium extraction technique to be used at Mulga Rock is based around ion exchange resin technology and it is extremely important to use the right resin. Vimy announced the identification of a high-capacity strong base anionic resin (Lewatit® TP107, manufactured by Lanxess) to be very effective for uranium recovery from saline sulphuric acid leach liquors. Resin technology and efficiency is constantly improving and may lead to further gains during the Project’s life. BASE METALS REVIEW In February 2021, the Company announced further assessment of a base metals plant at Mulga Rock. Battery minerals, comprising nickel, copper, cobalt and zinc, occur in material quantities in the Princess and Ambassador deposits which provide feed to the plant in the first eleven years of operations. At long-term consensus base metal prices at that time, Vimy estimated a Life-of-Mine base metals by-product credit of circa US$4.0 to $4.5 per pound of U3O8 produced. Importantly, base metals do not report to the uranium concentrate, as the base metal circuit is treating the uranium circuit tailings stream. The base metal plant was assessed during the Preliminary Feasibility Study in November 2015 and pilot plant testwork on base metal precipitates was successfully conducted during the DFS in 2018. However, at the time of the DFS, base metal prices resulted in a marginal outcome and so the plant was put on hold. However, given the pressing global emphasis on decarbonisation of energy systems, battery mineral prices have increased significantly so Vimy has resumed the assessment of the base metal plant. 1. Refer to ASX announcement on 26 August 2020. The Company confirms that all material assumptions underpinning the production targets and forecast financial information from these production targets as reported on 26 August 2020, continue to apply and have not materially changed. 6 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 DFS REFRESH In August 2020, Vimy announced the results of the updated Definitive Feasibility Study (DFS Refresh) on the Mulga Rock Project, which reinforced the global importance of the Mulga Rock Project and moved it into the middle of the uranium producer AISC cost curve. The points below show improvements for the DFS Refresh2. • Strong project economics: - NPV8 pre-tax US$393M, a 14% increase - IRR 31%, a 23% increase - Capital cost of US$255M, a 20% reduction - Payback 2.4 years, reduced by 8 months - Free cash flow US$61M year, a 22% increase • Strong operating cost results: - Cash operating cost (C1) of US$23.33 U3O8 over the first five years, an 8% decrease - C1 of US$26.02 over LoM, a 7% decrease - AISC of US$28.09 over the first 5 years and US$31.22 over LoM, both an 8% decrease The DFS Refresh demonstrated the Mulga Rock Project’s low economic sensitivity to operating and capital costs risks, reinforced the Project’s long mine life of 15 years with an annual production of 3.5Mlbs U3O8 and forms a key part of finalising project funding and strategic partnerships. Uranium production at Mulga Rock will generate significant socio-economic benefits, indigenous and enterprise opportunities. Vimy is proud of its Buy Local policy for Western Australia, especially in Kalgoorlie, the hub for most of its site activities. Mulga Rock Tenements at 30 June 2021 Mt Margaret Field, Western Australia Tenement Nature of Interest Ownership M39/1104 Granted 100% M39/1105 Granted 100% E39/2049 Granted 100% L39/193 Granted 100% L39/219 Granted 100% L39/239 Granted 100% L39/240 Granted 100% L39/241 Granted 100% L39/242 Granted 100% L39/243 Granted 100% L39/251 Granted 100% L39/252 Granted 100% L39/253 Granted 100% L39/254 Granted 100% L39/279 Granted 100% L39/280 Granted 100% L39/287 Granted 100% L39/288 Granted 100% L39/289 Granted 100% P39/5844 Granted 100% P39/5853 Granted 100% R39/0002 Granted 100% VELO RESOURCES In November 2018, Vimy announced the acquisition of a large land holding located to the northeast of the Mulga Rock Project through a separate corporate entity, Vélo Resources. The area is thought to be highly prospective for base metals. Vélo will apply modern exploration techniques across the province, which has not previously been recognised as prospective for sediment- hosted base metals under shallow cover. The target deposit type is sedimentary exhalative base metal (SEDEX) which accounts for more than 50% of the world’s zinc and lead reserves and more than 25% of global production. SEDEX deposits are characterised by their large size, high grades and significant silver credits. Vélo Tenements – Great Victoria Desert Project at 30 June 2021 Mt Margaret Field, Western Australia Tenement Nature of Interest Ownership E38/3203 Granted 100% E39/2012 Granted 100% E39/2013 Granted 100% E29/2115 Granted 100% E39/2149 Granted 100% 2. Refer to ASX announcement on 26 August 2020. The Company confirms that all material assumptions underpinning the production targets and forecast financial information from these production targets as reported on 26 August 2020, continue to apply and have not materially changed. ALLIGATOR RIVER PROJECT NORTHERN TERRITORY Vimy’s 100%-owned Alligator River Project is the largest granted uranium exploration package in the world-class Alligator River uranium district in the Northern Territory. The Alligator River Project is a very important part of Vimy’s long-term strategy as it will provide the certainty of long-term supply that offtake customers require. Mulga Rock has an economic life of fifteen years with the potential for adding another five, and Alligator River has the potential for another ten years. The potential of the Alligator River Project is demonstrated by the proven track record of the nearby Jabiluka and Ranger deposits providing over 750Mlbs of U3O8 in mineral endowment (current resources and mined). ACQUISITION OF BALANCE OF ALLIGATOR RIVER PROJECT In August 2021, Vimy announced that it now holds 100% of the Alligator River Project by settling the acquisition of Rio Tinto Pty Limited’s (RTX) 20.89% interest in the Wellington Range and King River Joint Venture. Vimy owns the Project through its wholly-owned subsidiary Viva Resources Pty Ltd. ORE SORTING TRIAL In September 2020, Vimy announced the excellent results of an ore sorting trial from the Angularli deposit. The Vimy team worked with TOMRA, a leading sorting systems supplier, to investigate the potential of ore sorting to lower project costs, using a composite of mineralised material from Angularli. The proof of concept trial results indicated the potential for feed grade enhancement through ore sorting, and there is also the potential to recover high-value by-products associated with the uranium mineralisation. Further ore sorting trials are warranted including optimisation of the process flow for different ore types and grade or size fractions. As the Project moves towards pre-feasibility, an infill drilling program will provide larger quantities of ore for further testing. Alligator River Tenements at 30 June 2021 Tenement Nature of Interest Ownership EL22430 Granted 100% EL24920 Granted 100% EL26089 Granted 100% EL24017 Granted 79%1 EL25064 Granted 79%1 EL25065 Granted 79%1 EL27059 Granted 79%1 EL5893 Granted 79%1 ALLIGATOR RIVER PROJECT Located in Arnhem Land, Northern Territory Covering a total area of 3,865km2 Comprises three projects: Wellington Range-King River - 1,600km2 of granted tenure - Highly prospective with limited sandstone cover Algodo-Beatrice Project - A group of tenement applications to the east of the Ranger and Jabiluka deposits Mt Gilruth Project - A group of tenement applications to the southeast of the Ranger and Jabiluka deposits 1 Ownership increased to 100% on 17 August 2021 8 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 MINERAL RESOURCES AND ORE RESERVE STATEMENT MULGA ROCK PROJECT The Mineral Resources and Ore Reserves for the Mulga Rock Project have not changed from those quoted in the 2020 Annual Report. MULGA ROCK PROJECT TOTAL MINERAL RESOURCE – Reported at a 150ppm U3O8 cut-off grade Deposit / Resource Classification Tonnes (Mt)1 U3O8 (ppm)2 U3O8 (Mlbs) Mulga Rock East Princess Indicated 2.0 820 3.6 Inferred 1.3 420 1.2 Ambassador Measured 5.2 1,100 12.6 Indicated 14.8 800 26.0 Inferred 14.2 420 13.1 Sub-total 37.4 680 56.4 Mulga Rock West Emperor Inferred 30.8 440 29.8 Shogun Indicated 2.2 680 3.2 Shogun Inferred 0.9 290 0.6 Sub-total 33.8 450 33.6 Total Resource 71.2 570 90.1 MULGA ROCK PROJECT TOTAL ORE RESERVE – Reported at a 150ppm U3O8 cut-off grade Deposit / Resource Classification Tonnes (Mt)3 U3O8 (ppm)4 U3O8 (Mlbs) Mulga Rock East Ambassador Proved 5.3 1,055 12.3 Ambassador Probable 14.1 775 24.0 Princess Probable 1.7 870 3.3 Sub-total 21.1 850 39.6 Mulga Rock West Shogun Probable 1.6 760 2.7 Sub-total 1.6 760 2.7 Total Reserves 22.7 845 42.3 ALLIGATOR RIVER PROJECT The maiden Inferred Mineral Resource for the Angularli Deposit was announced to the ASX on 20 March 2018. There has been no change to this Resource during the reporting period. ALLIGATOR RIVER PROJECT MINERAL RESOURCE Classification Cut-off Grade (% U3O8) Tonnes (Mt)1 U3O8 (%)2 U3O8 (Mlbs)3 Angularli Project Inferred 0.10 0.95 1.24 26.0 0.15 0.91 1.29 25.9 0.20 0.88 1.33 25.8 0.25 0.77 1.49 25.2 0.30 0.72 1.58 24.9 1 t = metric dry tonnes; appropriate rounding has been applied and rounding errors may occur. 2 Using cut combined U3O8 composites (combined chemical and radiometric grades). The information in this table is extracted from ASX announcement entitled ‘Significant Resource Update – Mulga Rock Cracks 90Mlbs’ released on 12 July 2017 and available to download from www.asx.com.au ASX:VMY. The Company is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. 1 Tonnages and grades are reported including mining dilution. 2 t = metric dry tonnes; appropriate rounding has been applied and rounding errors may occur. 3 Using cut combined U3O8 composites (combined chemical and radiometric grades). 4 Metallurgical plant recovery factors are not applied to Total Metal content. The information in this table is extracted from ASX announcement entitled ‘Major Ore Reserve Update – Moving to the go line’ released on 4 September 2017 and available to download from www.asx.com.au ASX:VMY. The Company is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. 1 t = metric dry tonnes; appropriate rounding has been applied and rounding errors may occur. 2 Using chemical U3O8 composites from drill core. 3 100% of the Mineral Resource is attributable to Vimy. The information in this table is extracted from ASX announcement entitled ‘Maiden Mineral Resource at Angularli Deposit, Alligator River Project’ released on 20 March 2018 and available to download from www.asx.com.au ASX:VMY. The Company is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. In accordance with ASX Listing Rule 5.21.5, the Company, through its senior geological and mining engineering staff ensures that all Mineral Resource and Ore Reserves estimations are subject to appropriate levels of governance and internal controls. Exploration results are collected and managed by a competent qualified geologist. All data collection activities are conducted to industry standards based on a framework of quality assurance and quality control protocols covering all aspects of sample collection, topographical and geophysical surveys, drilling, sample preparation, physical and chemical analysis and data and sample management. Mineral Resource and Ore Reserve estimates are prepared by appropriately qualified Competent Person. If there is a material change in the estimate of a Mineral Resource or Ore Reserve, the estimate and supporting documentation in question is reviewed by a suitably qualified Competent Person and announced to the ASX in accordance with the Listing Rules. Independent peer review processes are adopted throughout the Mineral Resources estimation and Ore Reserves definition processes. The Company reports its Mineral Resources and Ore Reserves on an annual basis in accordance with the JORC Code 2012 Edition. There have been no changes to the Mineral Resources and Ore Reserves since the dates listed above. The Company’s Competent Persons are members of the Australian Institute of Geoscientists (AIG) or the Australasian Institute of Mining and Metallurgy (AUSIMM), and qualify as Competent Persons under the JORC Code 2012. In accordance with ASX Listing Rule 5.24, this Mineral Resources and Ore Reserves Statement is based on and fairly represents information and supporting documentation prepared by Competent Persons. It has been approved as a whole by Xavier Moreau, who is employed by Vimy Resources Limited and is a member of the AIG, and Joel van Anen, Principal of TME and previous employee of Vimy Resources Limited and a member of the AusIMM. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. ANNUAL FINANCIAL REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 9 VIMY RESOURCES LIMITED – CONSOLIDATED ENTITY Contents Page Directors’ Report Directors 10 Principal Activities 12 Significant Changes in the State of Affairs 12 Operating and Financial Review 12 Likely Developments and Business Strategy 13 Matters Subsequent to the End of the Year 14 Meetings of Directors 14 Directors’ Interests in Shares and Options 14 Employee Share Options 15 Environmental Regulations and Performance 15 Remuneration Report (Audited) 15 Auditor’s Independence Declaration 24 Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income 25 Consolidated Statement of Financial Position 26 Consolidated Statement of Changes in Equity 27 Consolidated Statement of Cash Flows 28 Notes to the Financial Statements 29 Directors’ Declaration 52 Independent Auditor’s Report 53 This financial report covers Vimy Resources Limited as a Group consisting of Vimy Resources Limited and its subsidiaries. The financial report covers the year ended 30 June 2021 and is presented in Australian dollars. Vimy Resources Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Level 1, 1209 Hay Street West Perth, Western Australia, 6005 The financial report was authorised for issue by the Directors on 30 September 2021. The Company has the power to amend and reissue the financial report. Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at minimum cost to the Company. Public releases are available at asx.com.au by entering the Company’s ASX code ‘VMY’. Additional information on the Company is available on its website http://www.vimyresources.com.au. DIRECTORS’ REPORT for the year ended 30 June 2021 10 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Your Directors present their report on Vimy Resources Limited consolidated entity (‘Group’) for the financial year ended 30 June 2021. DIRECTORS The names and details of Directors who held office during the year ended 30 June 2021 and up to the date of this report (unless otherwise stated), are: The Hon. Cheryl Edwardes AM, LLM, B.Juris, BA Independent Non-executive Chairman Appointed 26 May 2014 Mrs Edwardes is a Company Director on a number of ASX boards, private companies and not-for-profit associations. Mrs Edwardes is a member of the Foreign Investment Review Board. A solicitor by profession, Mrs Edwardes is a former Minister in the Court Government with extensive experience and knowledge of WA’s legal and regulatory framework relating to mining projects, environmental, native title, heritage and land access. During her political career, Mrs Edwardes held positions as the first female Attorney General for Western Australia, Minister for Environment and Labour Relations, and was the Member for Kingsley for nearly seventeen years. Mrs Edwardes was awarded an Order of Australia in the Queen’s Birthday Honours 2016 for “significant service to the people and Parliament of Western Australia, to the law and to the environment, and through executive roles with business, education and community organisations.” Cheryl was also named in the 100 Women of Influence 2016, inducted into Western Australian Women’s Hall of Fame 2016 and was a finalist in the Women in Resources Award 2015 and is a member of Chief Executive Women. Listed company directorships in the last three years: Atlas Iron Limited May 2015 to October 2018, AusCann Group Holdings Limited May 2016 to January 2020, CropLogic Limited March 2018 to February 2019, Flinders Mines Limited June 2019 to present and Nuheara Limited January 2020 to present. Michael (Mike) Young BSc (Hon), MAIG Managing Director and Chief Executive Officer Appointed 17 April 2013 – Resigned 30 August 2021 Mike was the first CEO and MD of BC Iron. He successfully steered BC Iron through first stage exploration, definition of resources, feasibility study, the negotiation of development agreements with Fortescue Metals Group and ultimately the profitable production of iron ore. Mike is a geologist and a graduate of Queens University, Canada with a Bachelor of Science (Honours) degree in Geological Sciences. His experience includes base metals, iron ore, uranium and gold, with a strong focus on mine-camp exploration, resource definition, and mine development. Mike was a founding director of uranium developer Bannerman Resources and was non-executive Chairman of Cassini Resources until 2020 (now part of Oz Minerals). Mr Young was a Director of the Minerals Council of Australia from August 2017 to August 2021 and in June 2017 was appointed as Chairman of the Uranium Forum. Listed company directorships in the last three years: Cassini Resources Limited January 2012 to October 2020, and Cycliq Group Limited February 2017 to January 2019. David Cornell B.Comm, CA Independent Non-executive Director Appointed 17 July 2012 Mr Cornell is a director of Element Capital Pty Ltd and has significant experience providing strategic and corporate advice to listed companies, with a strong focus on transaction services. Mr Cornell has assisted several companies, including Vimy Resources Limited, through the listing process and has raised over a quarter of a billion dollars through debt, equity and hybrid structures for leading resource companies including Atlas Iron and CopperCo. Mr Cornell is a Chartered Accountant, gaining his experience with the international accounting firms Arthur Andersen and Ernst & Young where he specialised in providing corporate and professional services to both Western Australian junior explorers and international mining companies. Listed company directorships in the last three years: Nil DIRECTORS’ REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 11 Dr Tony Chamberlain PhD (Metallurgy), Grad. Dip. Extractive Metallurgy (Mineral Science), B.Sc (App. Chem. Hons), AusIMM Non-executive Director Appointed 1 February 2019 Dr Chamberlain was the Company’s Chief Operating Officer from June 2014 to January 2018. During that time, he guided the Mulga Rock Project through the PFS, PER and DFS processes and was instrumental in the acquisition of the Alligator River Project in 2017. During his twenty years in the mining industry Dr Chamberlain has been involved in operating and project delivery, while also earning a PhD in Metallurgy from Curtin University. Dr Chamberlain has held a number of senior operational and management roles during the twelve years with WMC Resources and later BHP Billiton, overseeing an expansion to the Kwinana Nickel refinery in 2001 and spending a significant amount of time in China as Development Manager for BHP Billiton Stainless Steel Material Group. Working across Australia, Asia, Africa and Eurasia Dr Chamberlain has gained solid technical experience in the management, development and delivery of projects, particularly uranium projects around the world. He has also held senior positions in junior resource companies, including Clean TeQ Holdings (ASX:CLQ), Stonehenge Minerals and Crossland Strategic Metals (ASX: CUX) before joining Vimy in 2014. Listed company directorships in the last three years: Nil Luca Giacovazzi Non-executive Director Appointed 19 October 2020 – resigned 23 July 2021 Mr Giacovazzi is the head of Wyloo Metals, a company of private investment group Tattarang. Wyloo Metals manages a diverse portfolio of wholly exploration projects and cornerstone investments in both public and private companies. Formerly of Credit Suisse, Mr Giacovazzi has successfully completed numerous metals and mining transactions over the course of his career both domestically in Australia and internationally. Mr Giacovazzi holds a Bachelor of Commerce (Chartered Accounting) from the University of Johannesburg, a Master of Management from the University of Sydney and a Masters in International Management from the London School of Economics (CEMS). Listed company directorships in the last three years: Noront Resources (TSXV) June 2021 COMPANY SECRETARY Marcel Hilmer BCom, FCA Chief Financial Officer and Company Secretary Appointed 8 March 2019 – Resigned as Company Secretary 25 August 2021 Marcel has over thirty years’ experience as a finance professional in the resources and manufacturing industries with significant involvement in funding, exploration, mergers and acquisitions. Before joining Vimy Resources, Marcel was a director of uranium development company Forsys Metals Corporation (TSX-listed) and ASX-listed Caravel Minerals Limited. He was previously Executive Manager, Finance and Business Development at First Quantum Minerals Limited. Marcel holds a Bachelor of Business, majoring in Accounting and Data Processing, from Southern Cross University; is a Fellow of the Chartered Accountants Australia and New Zealand (CA ANZ). DIRECTORS’ REPORT for the year ended 30 June 2021 12 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 PRINCIPAL ACTIVITIES The principal activities of the Group during the year ended 30 June 2021 were exploration and evaluation on the Mulga Rock Project in Western Australia and the Alligator River Project in the Northern Territory. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS During the year the following significant events occurred: • On 19 October 2020, the Company appointed Luca Giacovazzi to the Board as a Non-executive Director. • On 13 January 2021, the Company received approval and commenced trading on the US-based OTCQB. • On 10 March 2021, the Company announced a binding term sheet with Rio Tinto Exploration Pty Ltd to acquire its 20.89% interest in the Wellington Range and King River Joint Venture at the Alligator River Project in the Northern Territory. • On 1 April 2021, the Company announced its inclusion into the index composition of the North Shore Global Uranium Mining Index. • On 19 April 2021, the Company issued 168.2 million fully paid ordinary shares at an issue price of $0.11 per share to raise $18.5 million upon completion of an equity placement to institutional and sophisticated investors. • On 18 May 2021, the Company issued 81.8 million fully paid ordinary shares at an issue price of $0.11 per share to complete the share purchase plan to raise $9.0 million. • On 31 May 2021, the Company announced early payment of the final instalment to Cameco for acquisition of the Alligator River Uranium Project. • Under Ministerial Statement 1046, Vimy is required to achieve “substantial commencement” at the Mulga Rock Project by 16 December 2021. The Company announced commencement of early works on the Mulga Rock Project in the second half of 2021 with planning and logistics currently underway. Vimy has continued to work co-operatively with the various Government departments to obtain the secondary approvals required, including the Mining Proposal and Mine Closure Plan, to enable the Company to achieve “substantial commencement” within the required timeframe. An alternative development option that may be implemented at short notice is the commencement of the Princess Deposit which provides flexibility to ensure the Company achieves “substantial commencement” within the required timeframe. OPERATING AND FINANCIAL REVIEW OPERATING RESULT The consolidated operating loss after tax for the year ended 30 June 2021 attributable to members of the Group was $6,869,370 (2020: operating loss after tax $6,296,514). The loss after tax is partly attributable to the accounting policy to expense all exploration and evaluation expenditure as incurred. Key highlights for the year were as follows: • Other income decreased to $309,905 (2020: $793,492) because of lower research and development tax incentive grant and lower exploration grants during the year. • Higher exploration and evaluation expenditure of $3,062,170 (2020: $2,713,513) was due to exploration and development activities being focused both on the Alligator River and Mulga Rock Projects during the year. DIVIDENDS No dividends were paid in the current year (2020: $nil). REVIEW OF OPERATIONS The Group’s Mulga Rock Project, one of Australia’s largest undeveloped uranium resources, is located 290 kilometres east- northeast of Kalgoorlie in the Great Victoria Desert of Western Australia. The Group’s Alligator River Project is the largest granted uranium exploration package located in the world class Alligator River uranium district, located in the Northern Territory. As an exploration and evaluation company, Vimy Resources Limited is in the high-risk, high-reward sector of the global mining industry. Exploration and evaluation companies are the critical front-end of the mining industry with the highest risk, and as such the Company’s business model is specific to this sector. DIRECTORS’ REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 13 During the year the following significant exploration and development events occurred: • On 26 August 2020, the Company announced a DFS Refresh, reporting improvement to the Mulga Rock Project economics demonstrating stronger financial returns than previously reported • On 2 September 2020, the Company announced that seven of the conditional environmental management plans have been approved • On 16 September 2020, the Company announced ore sorting results strengthening the potential of the Angularli Uranium deposit at Vimy’s Alligator River Project • On 8 April 2021, the Company announced the Above Ground Tailings Storage Facility Monitoring and Management plan has been approved by the WA Department of Water and Environmental Regulator (DWER) • On 31 May 2021, the Company announced that the logistics and planning for early works at Mulga Rock were underway Financial Position Net assets at 30 June 2021 were $28,538,494 (2020: $8,277,818). The Group is in the exploration and evaluation phase and expensing related expenditure on granted tenements as incurred. Cash and cash equivalents at 30 June 2021 totalled $24,060,674 (2020: $7,181,734). Trade and other receivables totalled $289,999 (2020: $391,454). Going Concern The Group incurred a net loss of $6,869,370 during the year ended 30 June 2021. The cash and cash equivalents held as at 30 June 2021 was $24,060,674. Current assets exceed current liabilities by $23,315,774 as at 30 June 2021. The Group’s net cash used in operating activities for the year ended 30 June 2021 was $4,978,356. The Directors have reviewed a cash flow forecast for the next twelve months from the date of signing the financial report which demonstrates that the Group will have sufficient cash resources to continue as a going concern, subject to fund raising activities during the period. The Group’s ability to continue as a going concern, including to advance its exploration and evaluation activities, depends on its ability to obtain additional funding through strategic partners, equity, debt, hybrid financing, joint ventures, production off-take arrangements, research and development claim or other means. In considering these circumstances, the Directors have taken into account the Group’s demonstrated past successes in raising equity and debt, and in the event that additional funding is not able to be obtained at the amounts and timeframes anticipated, the Directors would actively curtail both project and corporate expenditure to conserve cash resources. For these reasons the Directors continue to adopt the going concern basis in preparing these financial reports. LIKELY DEVELOPMENTS AND BUSINESS STRATEGY The Group’s strategy is to develop its assets and to ultimately become a uranium producer. At the same time, the Group is continually looking for other uranium exploration and development opportunities to add to its project pipeline. New assets will be evaluated on a case-by-case basis. The Group’s objectives are to develop the Mulga Rock Project by negotiation of offtake contracts with electrical power utilities, funding facilities, and to further undertake exploration and evaluation activities at the Alligator River Project. DIRECTORS’ REPORT for the year ended 30 June 2021 14 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 MATTERS SUBSEQUENT TO THE END OF THE YEAR Since 30 June 2021 the following significant subsequent events have occurred: • On 23 July 2021, the Company announced its inclusion into the index composition for the Global X Uranium ETF (URA). • On 23 July 2021, the Company announced that Mr Luca Giacovazzi has resigned from the Board. • On 29 July 2021, the Company announced the re-opening of the Mulga Rock camp to support the commencement of site works at the Mulga Rock Project. • On 17 August 2021, the Company announced it had settled the acquisition of Rio Tinto Exploration Pty Ltd (RTX) 20.89% interest in Wellington Range and King River Joint Venture at the Alligator River Project in the Northern Territory. Vimy now owns 100% of the Alligator River Project through its wholly-owned subsidiary Viva Resources Pty Ltd. • On 25 August 2021, the Company announced the appointment at Matthew Foy as Company Secretary, following the resignation of Marcel Hilmer as Company Secretary. • On 27 August 2021, the Company announced that the Western Australian Department of Mines Industry Regulation and Safety (DMIRS) had approved the Mulga Rock Project Management Plan. • On 30 August 2021, the Company announced the stepping down of Mike Young as Managing Director and CEO and the engagement of Mr Steven Michael to act as an Interim CEO while an executive search process is undertaken. • On 6 September 2021, the Company announced positive results from metallurgical optimisation testwork at the Mulga Rock Project. • On 29 September 2021, the Company announced an update on the Early Works Program and approvals process for the Mulga Rock Project. • On 30 September 2021, the Company announced a trading halt in its securities pending an announcement by the Company to the market in relation to project approvals for the Mulga Rock Project. • On 15 October 2021, the Company announced that Mr Matthew Foy had resigned as Company Secretary for personal reasons and that Ms Shannon Coates had been appointed as Company Secretary. • On 19 October 2021, the Company announced the appointment of Mr Wayne Bramwell as Non-executive Director. MEETINGS OF DIRECTORS The meetings of the Company’s Board of Directors held during the year ended 30 June 2021, and the number of meetings attended by each Director were: Full meetings of Directors Remuneration Committee Audit Committee Directors during the year ended 30 June 2021 A B A B A B C. Edwardes 10 10 1 1 3 3 D. Cornell 10 10 1 1 3 3 T. Chamberlain 10 10 1 1 3 3 L. Giacovazzi 8 8 * * * * M. Young 9 10 * * 3 3 A = Number of meetings attended in person or electronic means. B = Number of meetings held during the time that the Director held office and for which they were entitled to participate. * = Not a member of the relevant committee. DIRECTORS’ INTERESTS IN SHARES AND OPTIONS Particulars of Directors’ interests and of persons connected with them in shares of the Group as at the reporting date are as follows: Director Number of shares Number of options C. Edwardes 2,195,798 818,000 T Chamberlain 2,690,177 364,000 D. Cornell 383,186 - M. Young 9,793,670 3,360,000 DIRECTORS’ REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 15 EMPLOYEE SHARE OPTIONS Options over ordinary shares of the Group as at the reporting date are as follows: Date granted Expiry date Fair value per option at grant date Exercise price Number of options 31 July 2019 31 July 2022 $0.082 $0.082 19,790,000 No option holder has any right under the options to participate in any other share issue of the Group or of any other controlled entity. No options were exercised during the year ended 30 June 2021. ENVIRONMENTAL REGULATIONS AND PERFORMANCE The Group has conducted exploration and evaluation activities on mineral tenements. The right to conduct these activities is granted subject to environmental conditions and requirements. The Group aims to ensure a high standard of environmental care is achieved, and as a minimum, to comply with relevant environmental regulations. There have been no known material breaches of any of the environmental conditions. REMUNERATION REPORT (AUDITED) The Directors of the Group present the Remuneration Report of Non-executive Directors, Executive Directors and other Key Management Personnel, prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2001. The Remuneration Report is set out under the following main headings: A. Our response to the concerns raised regarding the FY20 Remuneration Report B. Principles used to determine the nature and amount of remuneration C. Details of remuneration D. Service agreements E. Share-based compensation F. Additional information A. Our response to the concerns raised regarding the FY20 Remuneration Report At the 2020 AGM, 25.75% of shareholders voted against the FY20 Remuneration Report (a ‘First Strike’). The Vimy Board has carefully considered all feedback in conjunction with reviews of executive and director remuneration against our business strategy. The Board decided on changes to address strategic and other issues, while also addressing concerns expressed by a significant minority of shareholders. Key FY21 changes are detailed in this Remuneration Report. The feedback received has been incorporated into the ongoing evolution of the remuneration framework and the disclosure of outcomes. B. Principles used to determine the nature and amount of remuneration The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. Remuneration levels are set to attract qualified and experienced people to pursue the Group’s stated objectives. The Board, through the Remuneration Committee, takes advice on industry remuneration standards through internal database benchmarking or use of external consultants. The Board has established a remuneration charter which provides oversight guidance on remuneration and incentive policies and practices and specific recommendations on remuneration packages and other terms of employment for executive Directors, other senior executives and Non-executive Directors. The Board recognises that the Company’s future performance will be dependent on the quality of its people. To achieve its financial and operating objectives, the Group must be able to attract, retain and motivate highly capable people. To this end, the Board and management have reviewed and agreed the appropriate people systems required at each level of Company development. These will be implemented over time in order to support the continuing growth and change of the business. Non-executive Directors Fees and payments to Non-executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. Non-executive Directors’ fees and payments are reviewed periodically. The Chairman does not attend any discussions relating to determination of her own remuneration. Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum fee pool currently stands at $500,000 per annum. There are no retirement allowances for Non-executive Directors other than statutory superannuation contributions. DIRECTORS’ REPORT for the year ended 30 June 2021 16 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Executive pay The Company has modified Executive Team contracts to provide the Company with flexibility to respond to the current uranium market conditions. Refer to section C – Service agreements for the specific details on the modifications. The executive pay and reward framework has three components: (i) Base pay and benefits, including superannuation Base pay is structured as a total employment cost package which may be delivered as a combination of cash and prescribed non-financial benefits at the executives’ discretion. Employees are offered a competitive base pay that comprises the fixed component of pay and rewards. External remuneration consultants provide initial analysis and advice to ensure base pay is set to reflect the market for a comparable role. Base pay for senior executives is reviewed annually to ensure the executive’s pay is competitive with the market. An executive’s pay is also reviewed on promotion. There are no guaranteed base pay increases included in any executive contract. Superannuation contributions are made to employees’ chosen superannuation funds in accordance with Australian regulatory requirements. (ii) Short-term incentives The Board is responsible for assessing short-term incentives for Key Management Personnel. Short-term incentives are established against key performance indicators which are assessed by the Board through the Remuneration Committee. The key performance indicators used during the year included Group performance in safety, Company share price performance compared to a peer group, and specific individual Group work program achievements. (iii) Long-term incentives Long-term incentives are provided to employees through the 2019 Vimy Employee Option Plan. When options are issued under the 2019 Vimy Employee Option Plan they are subject to vesting conditions including a staged three year vesting period. See section D – Share-based compensation for further information. Company performance The Company is currently focused on exploration and evaluation of its projects and is not expected to generate profits during this phase. Share price performance will occur as a result of the success in progressing project development, quality of the projects, management’s performance and external factors such as commodity price. Consequences of performance on shareholder wealth In considering the Group’s performance and benefits for shareholder wealth, the Board has regard to the following indices in respect of the current financial year and the previous four financial years: Item 2021 2020 2019 2018 2017 Loss per share (cents) (0.84) (1.07) (1.52) (2.62) (4.11) Dividend (cents per share) - - - - - Net loss (6,869,370) (6,296,514) (6,864,312) (9,545,741) (11,500,157) Share price ($) 0.12 0.03 0.05 0.10 0.18 DIRECTORS’ REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 17 C. Details of remuneration Amounts of remuneration The Key Management Personnel of the Group are the Directors and specified executives. Details of the remuneration of the Key Management Personnel of the Group for the years ended 30 June 2021 and 2020 are set out in the following tables. Short-term benefits Post-employment benefits Share-based payments Cash salary and fees Cash bonus Share-based payments Superannuation Value of shares / options Total Directors Non-executive C. Edwardes (Chairman) 2021 36,000 - 93,725 (1) 7,695 11,444 148,864 2020 36,000 - 46,687 (1) 7,695 20,956 111,338 D. Cornell 2021 18,000 - 29,992 (1) 3,420 - 51,412 2020 32,400 - 4,397 (1) 3,420 - 40,217 T. Chamberlain 2021 18,000 - 37,490 (1) 3,420 14,854 73,764 (appointed 1 February 2019) 2020 18,000 - 18,675 (1) 3,420 31,931 72,026 Luca Giacovazzi 2021 - - 44,232 (1) - - 44,232 (appointed 19 October 2020 – resigned 23 July 2021) 2020 - - - - - - Executive M. Young 2021 318,750 - 257,569 (1) 25,000 70,513 671,832 CEO and MD (resigned 30 August 2021) 2020 318,750 - 114,143 (1) 25,000 135,554 593,447 Total Directors 2021 390,750 - 463,008 39,535 96,811 990,104 2020 405,150 183,902 39,535 188,441 817,028 (1) The Company has an established Salary Sacrifice Share Plan which is available to Directors and staff to voluntarily sacrifice a portion of their cash salary and fees to receive shares on the condition that they remained employed by the Company as at 30 June each financial year. Short-term benefits Post-employment benefits Share-based payments Cash salary and fees Cash bonus Share-based payments Superannuation Value of shares / options Total Key Management Personnel M. Hilmer (appointed 8 March 2019 – resigned as Company Secretary 25 August 2021) 2021 245,000 2,000 62,484 (1) 26,315 39,818 375,617 CFO and Company Secretary 2020 227,000 - 49,447 (1) 25,650 72,911 375,008 Total Key Management Personnel 2021 245,000 2,000 62,484 26,315 39,818 375,617 2020 227,000 - 49,447 25,650 72,911 375,008 (1) The Company has an established Salary Sacrifice Share Plan which is available to Directors and staff to voluntarily sacrifice a portion of their cash salary and fees to receive shares on the condition that they remained employed by the Company as at 30 June each financial year. Annual short-term incentive bonus is a component of the service agreement. Award of incentive bonus is dependent upon the Group performance in safety, Company share price performance compared to a peer group, and specific individual project achievements. DIRECTORS’ REPORT for the year ended 30 June 2021 18 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 The relative proportions of remuneration that are linked to performance and those that are fixed are as follows: Fixed remuneration At risk – short term incentives At risk – long term incentives 2021 2020 2021 2020 2021 2020 Directors Non-executive C. Edwardes 29% 39% 63% 42% 8% 19% D. Cornell 42% 89% 58% 11% - - T. Chamberlain 29% 30% 51% 26% 20% 44% Executive M. Young 51% 58% 38% 19% 11% 23% Key Management Personnel M. Hilmer 73% 68% 17% 13% 10% 19% D. Service agreements Remuneration and other terms of employment for certain key management are formalised in service agreements. Employees are eligible for long term incentive benefits under the 2019 Vimy Employee Option Plan. From 1 July 2018 the Company has modified the Executive Team contracts to provide the Company with flexibility to respond to current uranium market conditions. These modifications relate to the Key Management Personnel service agreements noted below and included a reduction in the contract notice periods for the Key Management Personnel from six months to two months by either party. The service agreements in effect for the year ended 30 June 2021 were: Mr M. Young, Chief Executive Officer and Managing Director • Base Remuneration - $450,000 inclusive of superannuation, prorated. • Short Term Incentive – Maximum annual award of 30% of base remuneration. • Term of Agreement – The executive service agreement has no fixed completion term. • Termination – The Company may terminate Mr Young’s employment at any time with two months’ written notice or the payment of two months’ remuneration in lieu of notice. Mr Young must provide two months’ written notice to terminate the agreement. • The service agreement may be terminated by the Company at any time, without notice to the executive as a result of misconduct, wilful neglect, material breaches of his duties, the executive being charged with a criminal offence which brings the Company into serious disrepute, the executive becoming insolvent or becoming ineligible to hold office as a Director. • Change of Control - If there is a change of control of the Company, and there is a material diminution of the executive’s duties or decision-making authority which is not agreed with the executive, the executive will be entitled to twelve months’ base remuneration plus the equivalent of the full year short term incentive bonus. This change of control entitlement is inclusive of the applicable notice period. • On 30 August 2021 Mr Young stepped down as Chief Executive Officer and Managing Director. The amount of the payout was $107,849; being $53,309 for Long Service Leave and $54,539 for Annual Leave. Mr Young has been contracted to the Company for a period of six months and will receive fees of $35,417 exclusive of GST, per month during this period. Mr M. Hilmer, Chief Financial Officer and Company Secretary • Base Remuneration - $300,000 plus superannuation, prorated. • Short Term Incentive – Maximum annual award of 20% of annual base remuneration. • Term of Agreement – The executive service agreement has no fixed completion term. • Termination – The Company may terminate Mr M. Hilmer’s employment at any time with two months’ written notice or the payment of two months’ remuneration in lieu of notice. Mr M. Hilmer must provide two months’ written notice to terminate the agreement. • The service agreement may be terminated by the Company at any time, without notice to the executive as a result of misconduct, wilful neglect, material breaches of his duties, the executive being charged with a criminal offence which brings the Company into serious disrepute, the executive becoming insolvent or becoming ineligible to hold office as an officer. • Change of Control - If there is a change of control of the Company, and there is a material diminution of the executive’s duties or decision making authority which is not agreed with the executive, the executive will be entitled to twelve months’ base remuneration plus the equivalent of the full year short term incentive bonus. This change of control entitlement is inclusive of the applicable notice period. DIRECTORS’ REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 19 E. Share-based compensation Shareholdings The number of ordinary shares in the Company held during the year by each Director and Key Management Personnel, including their personally related entities or associates, are set out below. Balance at the start of the period Salary Sacrifice Share Plan Share buy back Purchased on market Balance at the end of the period 30 June 2021 Directors C. Edwardes - 1,414,754 - - 1,414,754 M. Young 4,188,395 3,458,869 - - 7,647,264 T. Chamberlain 2,624,785 565,901 (1,000,000) - 2,190,686 Key Management Personnel M. Hilmer 95,000 1,498,385 - 218,182 1,811,567 6,908,180 6,937,909 (1,000,000) 218,182 13,064,271 No other Directors or Key Management Personnel hold options in the Company directly, indirectly or beneficially. Option holdings The movement during the reporting period, by number of options over ordinary shares in the Company held directly, indirectly or beneficially, by each Key Management Personnel is set out below. Balance at the start of the period Granted as remuneration Expired Balance at the end of the period Vested and exercisable at 30 June 2021 Directors C. Edwardes 818,000 - - 818,000 272,667 T. Chamberlain 364,000 - - 364,000 121,333 M. Young (a) 5,040,000 - - 5,040,000 1,680,000 6,222,000 - - 6,222,000 2,074,000 Key Management Personnel M. Hilmer 2,846,000 - - 2,846,000 948,667 2,846,000 - - 2,846,000 948,667 (a) Mr Young stepped down as a Director on 30 August 2021 and the balance of 1,680,000 unvested options have lapsed at the date of this report. No other Directors or Key Management Personnel hold options in the Company directly, indirectly or beneficially. DIRECTORS’ REPORT for the year ended 30 June 2021 20 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Vesting Profiles Details of the vesting profiles of employee share plans held at 30 June 2021 by each Key Management Personnel of the Company are detailed below. Number of shares Grant date % vested in year % forfeited in year % expired during the year Financial year in which grant vests Directors M. Young 1,666,667 22 Nov 2016 - - - 2017, 2018, 2019, 2020 T. Chamberlain 1,000,000 20 Nov 2015 - - 100% 2018 T. Chamberlain 1,000,000 20 Jul 2018 33% - - 2019, 2020, 2021 3,666,667 No other Directors or Key Management Personnel hold options in the Company directly, indirectly or beneficially. Details of the vesting profiles of employee option plans held at 30 June 2021 by each Key Management Personnel of the Company are detailed below. Number of options Grant date % vested in year % forfeited in year % expired during the year Financial year in which grant vests Directors C. Edwardes 818,000 31 Jul 2019 33% - - 2021, 2022, 2023 T. Chamberlain 364,000 31 Jul 2019 33% - - 2021, 2022, 2023 M. Young 5,040,000 31 Jul 2019 33% - - 2021, 2022, 2023 6,222,000 Key Management Personnel M. Hilmer 2,846,000 31 Jul 2019 33% - - 2021, 2022, 2023 2,846,000 Loans to Directors and Key Management Personnel During 2016, shareholders approved an employee share scheme for the Company. As a result, the Company adopted the employee share plan to be known as the 2016 Vimy Employee Share Plan, pursuant to which employees (including Directors) of the Company can be invited to subscribe for shares using financial assistance provided by the Company. The Plans provide a mechanism for the Company to invite employees (including the Directors) to subscribe for shares in the Company and to apply for a loan from the Company to pay the subscription price for those shares (‘Plan Shares’). The Company takes security over the Plan Shares acquired under the Plans until the limited recourse loan provided for the subscription price for those shares has been repaid in full (‘Limited Recourse Loan’). A summary of the terms of issue and the Limited Recourse Loan(s) provided is shown below. Grant date Number of shares acquired Amount of the loan Term of the loan Directors (or associate) M. Young 22 Nov 2016 1,666,667 $407,500 up to 5 years T. Chamberlain 20 Jul 2018 1,000,000 $99,400 up to 5 years Share based payment As non-interest bearing limited recourse loans were provided to purchase Plan Shares in the Company and these loans are secured against the same Plan Shares, AASB 2 (share based payments) applies. On this basis, the loan amount is not recognised in the financial statements. DIRECTORS’ REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 21 Loan terms The key terms of each Limited Recourse Loan provided under the Plans are as follows: (i) the Limited Recourse Loan may only be applied towards the subscription price for the shares issued under the Plans; (ii) the Limited Recourse Loan will be interest free, provided that if the Limited Recourse Loan is not repaid by the repayment date set by the Board, the Limited Recourse Loan will incur interest at 9% per annum after that date (which will accrue on a daily basis and compound annually on the then outstanding loan balance); (iii) by signing and returning an application for a Limited Recourse Loan, the participants of the Plans (each a Participant): ─ acknowledges and agrees that the Plan Shares will not be transferred, encumbered, otherwise disposed of, or have a security interest granted over it, by or on behalf of the Participant until the Limited Recourse Loan is repaid in full to the Company; and ─ authorises the Company (at its election) either to take such action in the Participant's name or direct that Participant take such action in relation to the Plan Shares as the Company considers appropriate which may include but is not limited to the Company undertaking buy-back of the Plan Shares or selling the Plan Shares; (iv) the Limited Recourse Loan becomes repayable on the earliest of: ─ the date which is five years after the grant date of the Limited Recourse Loan (‘Repayment Date’); ─ one month after the Participant ceases for any reason to be employed by the Company; and ─ (by the legal personal representative of the Participant) six months after the Participant ceases to be an employee of the Company due to their death; (v) notwithstanding paragraph (iv) above and subject to any voluntary escrow conditions entered into by the individual Participant, the Participant may repay all or part of the loan at any time before the Repayment Date; and (vi) on the repayment date the repayment obligation under the Limited Recourse Loan will be limited to the lesser of: ─ the outstanding balance of the Limited Recourse Loan; and ─ the market value of the Plan Shares on that date. In addition, where the Participant has elected for the Plan Shares to be provided to the Company in full satisfaction of the Limited Recourse Loan, the Company must accept the Plan Shares as full settlement of the repayment obligation under the Limited Recourse Loan. Rights attaching to Plan Shares The Plan Shares will rank equally with all other shares on issue in the capital of the Company. Holders of Plan Shares issued under the Plans will be entitled to exercise all voting rights attaching to the Shares in accordance with the Constitution. In addition, holders of Plan Shares issued under the Plans will be entitled to participate in dividends declared and paid by the Company in accordance with the Constitution. Sale of Plan Shares Where the Participant has been granted a Limited Recourse Loan to purchase the Plan Shares, and subject to voluntary escrow, those Plan Shares may only be sold by a Participant when the Limited Recourse Loan has been repaid proportionately to the number of Plan Shares to be sold. Otherwise any dealing by the Participant in the Plan Shares is prohibited without the prior written consent of the Company. If the Limited Recourse Loan becomes due and payable and the Participant has not repaid the amount of the Limited Recourse Loan in full within one month of the due date, then the Participant will forfeit their interest in the Plan Shares as full consideration for the repayment of the outstanding loan balance. The Company may either (at its election) take such action in the Participant's name or direct that Participant take such action in relation to the Plan Shares as the Company considers appropriate, which may include but is not limited to the Company undertaking buy-back of the Plan Shares or selling the Plan Shares. Other transactions with Director and Key Management Personnel related entities C. Edwardes (Chairman) has been an employee of FTI Consulting since 2013. FTI Consulting has been engaged since May 2021 to provide project co-ordination and strategic advisory services. No fees were paid to FTI Consulting during the current financial year. There were no other transactions with Directors or Key Management Personnel during the current financial year. End of audited remuneration report. DIRECTORS’ REPORT for the year ended 30 June 2021 22 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Auditor KPMG was appointed as the Group’s auditor on 17 November 2017 in accordance with section 327 of the Corporations Act 2001. NON-AUDIT SERVICES During the period, the following fees were paid or payable for services provided by the auditor of the Parent entity, its related practices and non-related audit firms: Consolidated Year ended 30 June 2021 $ Year ended 30 June 2020 $ 1. Audit services Audit of financial reports and other audit work under the Corporations Act 2001: KPMG 68,477 41,362 2. Non-audit services KPMG research and development tax incentive compliance and advisory 26,000 40,455 KPMG financial advisory service 120,000 - KPMG general accounting and taxation advisory fee - 13,455 KPMG taxation return preparation and advisory 17,595 17,210 Total auditor’s remuneration 232,072 112,482 AUDITORS’ INDEMNITIES AND INSURANCE The Company does not indemnify its auditors for liability to another person’s or the Company that may arise out of the conduct of the Audit. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on the page following this Directors’ Report. OFFICERS’ INDEMNITIES AND INSURANCE The Company has agreed to indemnify former and current Directors and officers of the Company against all liabilities to another person and the Company that may arise from their position as Directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a wilful breach of duty. The agreement stipulates that the Company will meet the full amount of such liabilities including costs and expenses. The Company has also agreed to pay a premium in respect of a contract insuring Directors and officers of the Company. That contract of insurance prohibits the Company disclosing the nature of the liability insured against and the amount of the premium paid. The liabilities insured include legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. PROCEEDINGS ON BEHALF OF THE COMPANY No person has applied to the court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or intervened in or on behalf of the Company with leave of the court under section 237 of the Corporations Act 2001. DIRECTORS’ REPORT for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 23 ROUNDING OF AMOUNTS The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the Directors’ report. Amounts in the Directors’ report have been rounded off in accordance with the Class Order to the nearest dollar. This Directors’ Report, incorporating the Remuneration Report, is made in accordance with a resolution of the Directors. The Hon. Cheryl Edwardes AM Independent Non-executive Chairman KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Vimy Resources Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Vimy Resources Limited for the financial year ended 30 June 2021 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Derek Meates Partner Perth 30 September 2021 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 25 Consolidated Note 2021 $ 2020 $ Other Income 6 309,905 793,492 Exploration and evaluation expenditure (3,062,170) (2,713,513) Corporate and administration expense (2,632,103) (2,639,049) Sales and marketing expenses (307,172) (495,437) Financing expense (528,243) (632,662) Share based payments expense 7(b) (649,587) (609,345) Loss before income tax (6,869,370) (6,296,514) Income tax expense - - Loss attributable to members of the Company (6,869,370) (6,296,514) Other comprehensive income, net of tax - - Total comprehensive loss attributable to members of the Company (6,869,370) (6,296,514) Cents per share Cents per share Loss per share from continuing operations attributable to the ordinary equity holder of the Company: Basic and diluted loss per share 4 (0.84) (1.07) The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 30 June 2021 26 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Consolidated Note 2021 $ 2020 $ CURRENT ASSETS Cash and cash equivalents 9 24,060,674 7,181,734 Trade and other receivables 10 289,999 391,454 Prepayments 11 57,914 169,859 Total Current Assets 24,408,587 7,743,047 NON-CURRENT ASSETS Trade and other receivables 10 356,258 356,258 Right of Use Assets 305,598 397,278 Plant and equipment 12 58,547 86,713 Exploration and evaluation 13 5,788,237 5,788,237 Total Non-Current Assets 6,508,640 6,628,486 TOTAL ASSETS 30,917,227 14,371,533 CURRENT LIABILITIES Trade and other payables 14 792,053 2,304,911 Provisions 15 300,760 276,434 Total Current Liabilities 1,092,813 2,581,345 NON-CURRENT LIABILITIES Trade and other payables 14 225,770 2,605,291 Provisions 15 1,060,150 907,079 Total Non-Current Liabilities 1,285,920 3,512,370 TOTAL LIABILITIES 2,378,733 6,093,715 NET ASSETS 28,538,494 8,277,818 EQUITY Contributed equity 16 140,157,572 113,677,114 Reserves 17 1,578,218 1,288,327 Accumulated losses 19 (113,197,296) (106,687,623) TOTAL EQUITY 28,538,494 8,277,818 The above consolidated statement of financial position should be read in conjunction with the accompanying notes CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 27 Contributed equity $ Accumulated losses $ Reserves $ Total $ CONSOLIDATED Balance at 1 July 2019 102,271,967 (104,178,998) 4,466,871 2,559,840 Loss attributable to members of the Company - (6,296,514) - (6,296,514) Transactions with owners in their capacity as owners: Issue of ordinary shares net of issue costs 11,405,147 - - 11,405,147 Share based payments expense - - 609,345 609,345 Transfer to retained earnings - 3,787,889 (3,787,889) - Balance at 30 June 2020 113,677,114 (106,687,623) 1,288,327 8,277,818 Balance at 1 July 2020 113,677,114 (106,687,623) 1,288,327 8,277,818 Loss attributable to members of the Company - (6,869,370) - (6,869,370) Transactions with owners in their capacity as owners: Issue of ordinary shares net of issue costs 26,480,458 - - 26,480,458 Share based payments expense - - 649,588 649,587 Transfer to retained earnings - 359,697 (359,697) - Balance at 30 June 2021 140,157,572 (113,197,296) 1,578,218 28,538,494 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 30 June 2021 28 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Consolidated Note 2021 $ 2020 $ Cash Flows from Operating Activities Interest received 25,201 37,095 R&D tax incentive and COVID-19 grant income 612,178 1,009,414 Other Income 29,396 179,083 Payments to other suppliers and employees (5,645,131) (5,430,788) Net cash used in Operating Activities 23 (4,978,356) (4,205,196) Cash Flows from Investing Activities Purchase of plant and equipment (35,791) (2,738) Tenement acquisition costs (4,186,000) (1,020,000) Net cash used in Investing Activities (4,221,791) (1,022,738) Cash Flows from Financing Activities Proceeds from issue of ordinary shares 27,500,000 12,212,703 Share issue costs (1,420,913) (780,794) Net cash provided by Financing Activities 26,079,087 11,431,909 Net increase/(decrease) in cash and cash equivalents held 16,878,940 6,203,975 Cash and cash equivalents at the beginning of the financial year 7,181,734 977,759 Cash and cash equivalents at the end of the financial year 9 24,060,674 7,181,734 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 29 TABLE OF CONTENTS Critical accounting estimates and judgements 30 Segment information 31 Financial risk management 32 Earnings per share 34 Directors and Key Management Personnel disclosure 34 Other income 37 Loss for the year 37 Income tax benefit 37 Cash and cash equivalents 38 Trade and other receivables 38 Prepayment 39 Plant and equipment 39 Exploration and evaluation 40 Trade and other payables 40 Provisions 40 Contributed equity 41 Reserves 42 Share based payments 43 Accumulated losses 44 Expenditure commitments 44 Controlled entities 45 Remuneration of auditors 45 Cash flow information 46 Contingent liabilities 46 Parent entity information 46 Events occurring after reporting date 47 Summary of significant accounting policies 48 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 30 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 REPORTING ENTITY Vimy Resources Limited (‘the Company’) is a company incorporated and domiciled in Australia. The address of the Company’s registered office and principal place of business is Level 1, 1209 Hay Street, West Perth, WA, 6005, Australia. The consolidated financial statements of the Company as at and for the year ended 30 June 2021 comprise the Company and its subsidiaries, together referred to as the (‘Group’). The Group is a for-profit entity and primarily involved in uranium project exploration and evaluation. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (a) Carrying amounts of assets and liabilities The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: (i) Share-based payment transactions The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes formula. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity. (ii) Rehabilitation provision Significant estimates and assumptions are made in determining the provision for rehabilitation of the project area as there are numerous factors that will affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases as compared to inflation rates, and changes in discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided. (iii) Income taxes The Group is subject to income taxes in Australia. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Sufficient tax losses exist to offset any deferred tax liabilities. The Group’s ability to access existing tax losses is dependent on it demonstrating achievement of either of two income tax defined tests, being the continuity of ownership test or the same business test. (iv) Impairment At each reporting date, the Group reviews the carrying amounts of its assets, excluding deferred tax assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocated basis can be identified. Intangible assets with indefinite useful lives and intangible assets not available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of the money and the risks specific to the asset for which the estimated of the future cash flows have not been adjusted. If recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the assets (cash generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. (b) Going concern The Group incurred a net loss of $6,869,370 during the year ended 30 June 2021. The cash and cash equivalents held as at 30 June 2021 was $24,060,674. Current assets exceed current liabilities by $23,315,774 as at 30 June 2021. The Group’s net cash used in operating activities for the year ended 30 June 2021 was $4,978,356. NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 31 The Directors have reviewed a cash flow forecast for the next twelve months from the date of signing the financial report which demonstrates that the Group will have sufficient cash resources to continue as a going concern, subject to fund raising activities during the period. The Group’s ability to continue as a going concern, including to advance its exploration and evaluation activities, depends on its ability to obtain additional funding through strategic partners, equity, debt, hybrid financing, joint ventures, production off- take arrangements, research and development claim or other means. In considering these circumstances, the Directors have taken into account the Group’s demonstrated past successes in raising equity and debt, and in the event that additional funding is not able to be obtained at the amounts and timeframes anticipated, the Directors would actively curtail both project and corporate expenditure to conserve cash resources. For these reasons the Directors continue to adopt the going concern basis in preparing these financial reports. SEGMENT INFORMATION The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision maker) in assessing performance and determining the allocation of resources. The Group operates an Exploration and Evaluation segment and a Sales and Marketing segment. The Exploration and Evaluation activities undertaken by the Exploration and Evaluation segment including exploration on granted tenements in Western Australia and the Northern Territory. The Sales and Marketing segment activities undertaken by the Sales and Marketing segment include research and economic analysis of the global uranium market. The segment activities do not generate any sales revenue. Segments 2021 $ 2020 $ Result Exploration losses for the year (3,062,170) (2,713,513) Sales and Marketing losses for the year (307,172) (495,437) (3,369,342) (3,208,950) Reconciliation to Consolidated Loss Segment contribution (3,369,342) (3,208,950) Corporate and administration expense (2,632,103) (2,639,049) Finance expense (528,243) (632,663) Share based payments expense (649,587) (609,345) Research and development tax incentive grant income 282,519 379,659 Interest revenue and other income 27,386 413,834 Loss from continuing operations (6,869,370) (6,296,514) Total assets Exploration Segment assets 6,474,238 6,276,287 Sales and Marketing Segment assets - - 6,474,238 6,276,287 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 32 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Segments 2021 $ 2020 $ Reconciliation to Consolidated Total Assets Segment assets 6,474,238 6,276,287 Corporate and administration assets 24,442,989 8,095,246 Total assets 30,917,227 14,371,533 Total liabilities Exploration Segment liabilities (1,263,552) (4,790,172) Sales and Marketing liabilities (10,088) (2,774) (1,273,640) (4,792,9456) Reconciliation to Consolidated Total Liabilities Segment liabilities (1,273,640) (4,792,946) Corporate and administration liabilities (1,105,092) (1,300,769) Total liabilities (2,378,732) (6,093,715) FINANCIAL RISK MANAGEMENT The Group’s activities may expose it to a variety of financial risks in the future such as market risk (including fair value interest rate risk), credit risk, and liquidity risk. The Group’s overall financial risk management focuses on the unpredictability of the financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. Risk management is carried out under an approved framework covering a risk management policy and internal compliance and control by management. The Board identifies, evaluates and approves measures to address financial risks. The Group holds the following financial instruments: Consolidated 2021 $ 2020 $ Financial assets Cash and cash equivalents 24,060,674 7,181,734 Trade and other receivables – current 289,999 391,454 Trade and other receivables – non-current 356,258 356,258 24,706,931 7,929,446 Financial liabilities Trade and other payables – current 792,053 906,643 Trade and other payable – non-current 225,770 - Deferred consideration – current - 1,398,268 Deferred consideration – non-current - 2,605,291 1,017,823 4,910,202 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 33 (a) Market risk Cash flow and fair value interest rate risk The Group’s main interest rate risk arises from cash deposits. Deposits at variable rates expose the Group to cash flow interest rate risk. Deposits at fixed rates expose the Group to fair value interest rate risk. During 2021 and 2020, the Group’s deposits at variable rates were denominated in Australian dollars. As at the reporting date, the Group had the following variable rate cash at bank and fixed rate short-term deposits: 2021 2020 Weighted average interest rate Balance $ Weighted average interest rate Balance $ Short-term deposits 21,000,000 6,000,000 Cash at bank 3,060,674 1,181,734 Net exposure to cash flow interest rate risk 0.04% 24,060,674 0.77% 7,181,734 The Group analyses its interest rate exposure on each occasion a deposit term expires. The Group aims to maximise interest returns from available funds and at the same time retain operating flexibility through adequate access to funds. During 2021 and 2020 if interest rates had been 10% higher or lower than the prevailing rates realised, with all other variables held constant, there would be an immaterial change in post-tax loss for the year. Equity would not have been materially impacted. (b) Credit risk The Group has no significant concentrations of credit risk. Cash transactions are limited to high credit quality financial institutions. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures on outstanding receivables and committed transactions. For banks and financial institutions, the Group will only hold deposits with A or better rated banks or financial institutions. All funds are currently banked with the Australian and New Zealand Banking Group Limited. Receivables are generally limited to Goods and Services Tax refunds or Research and Development Tax Incentive grant income from the Australian Taxation Office. Events leading to other receivables are reviewed on a case by case basis and if there is no independent rating, management assesses the credit quality of the transaction party, taking into account its financial position, past experience and other factors. The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised at the beginning of this note. All receivables at 30 June 2021 are expected to be received within three months. (c) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close-out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Group will aim at maintaining flexibility in funding by accessing appropriate committed credit lines available from different counterparties where appropriate and possible. Surplus funds when available are generally only invested in high credit quality financial institutions in highly liquid markets. Maturities of financial liabilities As at 30 June 2021, the Group’s financial liabilities have contractual maturities (including interest payments where applicable) as summarised below: Current Non-current Within six months $ Six - twelve months $ One - five years $ Later than five years $ 30 June 2021 Trade and other payables 792,053 - 225,770 - Loans and borrowings - - - - Total 792,053 - 225,770 - NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 34 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows: Current Non-current Within six months $ Six - twelve months $ One - five years $ Later than five years $ 30 June 2020 Trade and other payables 906,643 - 316,842 - Loans and borrowings - 1,398,268 2,288,449 - Total 906,643 1,398,268 2,605,291 - (d) Capital management The Group’s capital management objective is to ensure adequate funding is obtained to enable it to progress its exploration and evaluation activities, while retaining sufficient cash reserves to ensure the Group continues as a going concern. As a project development company, funds for activities are generally sourced from equity markets, asset sales, or from borrowing facilities. The Group has utilised equity raisings and borrowings in the past to maintain adequate funding. The Board monitors cash resources against expenditure forecasts associated with the Company’s stated growth strategies and development plans to assess financial requirements. (e) Fair value estimation Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities • Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly • Level 3: unobservable inputs for the asset or liability There were no financial assets measured at fair value which required allocation into the Levels of fair value hierarchy at 30 June 2021 or 30 June 2020. There were no financial liabilities measured at fair value which required allocation into the Levels of fair value hierarchy at 30 June 2021 or 30 June 2020. EARNINGS PER SHARE Consolidated 2021 2020 Basic and diluted loss per share (cents per share) (0.84) cents (1.07) cents Loss after tax used in the calculation of basic and diluted EPS $(6,869,370) $(6,296,514) Weighted average number of shares outstanding during the year used in calculations of loss per share #818,054,721 #588,455,961 There are 19,790,000 (2020:19,790,000) potential ordinary shares in the form of unlisted employee options that have not been included in the dilutive EPS calculation because they are anti-dilutive. DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURE (a) Key Management Personnel In addition to the Directors, the following persons had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the year: Name Position Employer M. Hilmer Chief Financial Officer Vimy Resources Limited NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 35 (b) Directors and Key Management Personnel compensation Consolidated 2021 $ 2020 $ Short-term benefits – cash salary and fees 635,750 632,150 Short-term benefits – cash bonus 2,000 - Short-term benefits – share-based payments 525,492 233,349 Post-employment benefits 65,850 65,185 Long-term incentives – share-based payments 136,629 261,352 1,365,721 1,192,036 (c) Loans to Director and Key Management Personnel The Employee Plans provide a mechanism for the Company to invite employees (including the Directors) to subscribe for shares in the Company and to apply for a loan from the Company to pay the subscription price for those shares (‘Plan Shares’). The Company takes security over the Shares acquired under the Plans until the limited recourse loan provided for the subscription price for those shares is repaid in full (‘Limited Recourse Loan’). Subsequent to shareholder approval of the Plans and separate shareholder approval to issue shares to Directors, a summary of the terms of issue and the Limited Recourse Loan provided is shown below. Grant date Number of shares acquired Amount of the loan Term of the loan Directors (or associate) M. Young 22 Nov 2016 1,666,667 $407,500 up to 5 years T. Chamberlain 20 Jul 2018 1,000,000 $99,400 up to 5 years Share based payment As non-interest bearing limited recourse loans were provided to purchase Plan Shares in the Company and these loans are secured against the same Plan Shares, AASB 2 (share based payments) applies. On this basis, the loan amount is not recognised in the financial statements. Loan terms The key terms of each Limited Recourse Loan provided under the Plans are as follows: (i) the Limited Recourse Loan may only be applied towards the subscription price for the shares issued under the Plans; (ii) the Limited Recourse Loan will be interest free, provided that if the Limited Recourse Loan is not repaid by the repayment date set by the Board, the Limited Recourse Loan will incur interest at 9% per annum after that date (which will accrue on a daily basis and compound annually on the then outstanding loan balance); (iii) by signing and returning an application for a Limited Recourse Loan, the participants of the Plans (each a Participant): ─ acknowledges and agrees that the Plan Shares will not be transferred, encumbered, otherwise disposed of, or have a security interest granted over it, by or on behalf of the Participant until the Limited Recourse Loan is repaid in full to the Company; and ─ authorises the Company (at its election) either to take such action in the Participant's name or direct that Participant take such action in relation to the Plan Shares as the Company considers appropriate which may include but is not limited to the Company undertaking buy-back of the Plan Shares or selling the Plan Shares; (iv) the Limited Recourse Loan becomes repayable on the earliest of: ─ the date which is five years after the grant date of the Limited Recourse Loan (‘Repayment Date’); ─ one month after the Participant ceases for any reason to be employed by the Company; and ─ (by the legal personal representative of the Participant) six months after the Participant ceases to be an employee of the Company due to their death; NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 36 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 (v) notwithstanding paragraph (iv) above and subject to any voluntary escrow conditions entered into by the individual participant, the Participant may repay all or part of the loan at any time before the Repayment Date; and (vi) the Limited Recourse Loan will be limited recourse such that on the repayment date the repayment obligation under the Limited Recourse Loan will be limited to the lesser of: ─ the outstanding balance of the Limited Recourse Loan; and ─ the market value of the Plan Shares on that date. In addition, where the Participant has elected for the Plan Shares to be provided to the Company in full satisfaction of the Limited Recourse Loan, the Company must accept the Plan Shares as full settlement of the repayment obligation under the Limited Recourse Loan. Rights attaching to Plan Shares The Plan Shares will rank equally with all other shares on issue in the capital of the Company. Holders of Plan Shares issued under the Plan will be entitled to exercise all voting rights attaching to the Shares in accordance with the Constitution. In addition, holders of Plan Shares issued under the Plan will be entitled to participate in dividends declared and paid by the Company in accordance with the Constitution. Sale of Plan Shares Where the Participant has been granted a Limited Recourse Loan to purchase the Plan Shares; and subject to voluntary escrow those Plan Shares may only be sold by a Participant when the Limited Recourse Loan has been repaid proportionately to the number of Plan Shares to be sold. Otherwise any dealing by the Participant in the Plan Shares is prohibited without the prior written consent of the Company. If the Limited Recourse Loan becomes due and payable and the Participant has not repaid the amount of the Limited Recourse Loan in full within one month of the due date, then the Participant will forfeit their interest in the Plan Shares as full consideration for the repayment of the outstanding loan balance. The Company may either (at its election) take such action in the Participant's name or direct that Participant take such action in relation to the Plan Shares as the Company considers appropriate, which may include but is not limited to the Company undertaking buy-back of the Plan Shares or selling the Plan Shares. (d) Other transactions with Director and Key Management Personnel related entities C. Edwardes (Chairman) has been an employee of FTI Consulting since 2013. FTI Consulting has been engaged since May 2021 to provide project co-ordination and strategic advisory services. No payments were made to FTI Consulting during the year. There were no other transactions with Directors or Key Management Personnel during the current financial year. (e) Vesting profiles of share based payments to Key Management Personnel Details of the vesting profiles of employee share plans held by each Key Management Personnel of the Company are detailed below. Number of shares Grant date % vested in year % forfeited in year % expired during the year Financial year in which grant vests Directors M. Young 1,666,667 22 Nov 2016 -% -% -% 2017, 2018, 2019, 2020 T. Chamberlain 1,000,000 20 Nov 2015 -% -% 100% 2018 T. Chamberlain 1,000,000 20 Jul 2018 33% -% -% 2019, 2020, 2021 3,666,667 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 37 OTHER INCOME Consolidated 2021 $ 2020 $ Interest revenue 27,314 36,674 R&D tax incentive and other grant income 282,519 379,659 Other income 72 377,159 309,905 793,492 LOSS FOR THE YEAR The loss from ordinary activities before income tax has been determined after: Consolidated 2021 $ 2020 $ (a) Expenses Depreciation expense 177,265 203,690 Audit and review fees 68,477 41,362 245,742 245,052 (b) Employee benefits expense Wages, salaries and Directors' fees 2,161,280 2,420,476 Defined contribution superannuation expense 180,744 197,979 Share based payments expense (refer Note 18(c)) 649,587 609,345 Other employee benefits 13,905 21,466 3,005,516 3,249,266 INCOME TAX BENEFIT (a) Income tax recognised No income tax is payable by the Group as it recorded losses for income tax purposes for the year. (b) Reconciliation of effective tax rate Consolidated 2021 $ 2020 $ Loss after income tax (6,869,370) (6,296,514) Income tax expense - Loss before income tax (6,869,370) (6,296,514) Income tax using the Company’s domestic tax rate of 30 percent (2020: 30 percent) (2,060,811) (1,888,954) Non-deductible expenses and non-assessable income 153,078 84,359 Equity based remuneration 194,876 182,803 Research and development grant incentive income (84,756) (98,898) Research and development expenditure 148,858 227,351 Movement in deferred tax assets not brought to account as future income tax benefits 1,648,755 1,493,339 - - NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 38 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 (c) Unrecognised deferred tax assets and liabilities Consolidated 2021 $ 2020 $ Deferred tax assets and liabilities are attributable to the following Property, plant and equipment 75,851 75,658 Accrued income - - Exploration tenements 1,370,201 1,580,513 Employee provisions 3,748 105,074 S40-880 costs 554,974 353,880 Accrued expenses 404,525 17,789 Other costs - - Rehabilitation provision 21,138 210,855 Lease liability 3,372 2,177 Tax losses 27,610,608 25,630,835 Net tax assets 30,044,417 27,976,781 Unrecognised tax assets (30,044,417) (27,976,781) - - On 1 July 2007, Vimy Resources Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidation group under the Tax Consolidation Regime. Each entity in the Group will continue to recognise its own current and deferred tax liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the Parent entity. The current tax liability of each Group entity will then subsequently be assumed by the Parent entity. The tax consolidated group entered into a tax sharing agreement whereby each company in the Group contributes to the income tax payable in proportion to their contribution to profit before tax of the tax consolidated group. CASH AND CASH EQUIVALENTS Consolidated 2021 $ 2020 $ Cash at bank and in hand 3,060,674 1,181,734 Short-term deposits 21,000,000 6,000,000 24,060,674 7,181,734 (a) Cash and cash equivalents at the end of the financial period as per the statement of cash flows. (b) Cash at bank and on hand includes interest-bearing amounts. The weighted average rate applicable to the Group’s balance at 30 June 2021 was 0.04% (2020: 0.77%). TRADE AND OTHER RECEIVABLES Consolidated 2021 $ 2020 $ Current Other receivables 13,971 33,214 R&D Tax Incentive Grant receivable 215,018 329,659 Goods and services tax receivable 61,010 28,581 289,999 391,454 Non-Current Security deposit (a) 356,258 356,258 (a) The security deposit of $356,258 (2020: $356,258) is cash security for a bank guarantee relating to the Alligator River Project in the Northern Territory and the office lease at 1209 Hay Street, West Perth. NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 39 PREPAYMENT Consolidated 2021 $ 2020 $ Current Deposits for tenement applications 12,831 31,058 Other prepayments 45,083 138,801 57,914 169,859 PLANT AND EQUIPMENT Consolidated 2021 $ 2020 $ Office equipment Cost 273,052 244,024 Accumulated depreciation (244,203) (222,934) Total office equipment 28,849 21,090 Exploration equipment Cost 1,634,435 1,606,047 Accumulated depreciation 1,604,737 (1,540,424) Total exploration equipment 29,698 65,623 Total office and exploration equipment 58,547 86,713 Movements in the carrying amounts of each class of assets at the beginning and end of the current financial period is as set out below: Office equipment Balance at the beginning of year 21,090 39,541 Asset additions 29,029 2,034 Depreciation expense (21,270) (20,485) Carrying amount at the end of the year 28,849 21,090 Exploration equipment Balance at the beginning of year 65,623 156,445 Asset additions 28,391 703 Depreciation expense (64,316) (91,525) Carrying amount at the end of the year 29,698 65,623 Total carrying amount at the end of the year 58,547 86,713 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 40 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 EXPLORATION AND EVALUATION Consolidated 2021 $ 2020 $ Exploration Tenements 5,788,237 5,788,237 5,788,237 5,788,237 On 17 July 2018, the Group acquired the tenements to the Alligator River exploration project in Arnhem Land, Northern Territory. The Group acquired the project for a cash consideration of $6.5 million with staged payments and a conditional buyback option for Cameco Australia Pty Ltd (Cameco). The Group has granted the buy-back option on any individual project within the tenement package where a uranium resource of not less than 100Mlbs U3O8 in JORC Code compliant measured and indicated resources (Buyback Project) is defined. The buyback option must be exercised by Cameco within four months of the Group releasing a Definitive Feasibility Study on a Buyback Project. The purchase price payable by Cameco for a Buyback Project upon exercising the buyback option is dependent on the size and classification of the mineral resource, determined by a reference price at the relevant time. TRADE AND OTHER PAYABLES Consolidated 2021 $ 2020 $ Current Trade payables and accruals 792,053 906,643 Deferred consideration - 1,398,268 792,053 2,304,911 Non-Current Other payables 225,770 316,842 Deferred consideration - 2,288,449 225,770 2,605,291 PROVISIONS Consolidated 2021 $ 2020 $ CURRENT Employee entitlement: Annual Leave Opening balance 153,224 185,631 Employee entitlements provided for 79,491 134,753 Employee entitlements used (109,937) (167,160) Closing balance 122,778 153,224 Employee entitlement: Long Service Leave Opening balance 123,210 73,851 Employee entitlements provided for / (used) 54,772 49,359 Closing balance 177,982 123,210 Total current provision 300,760 276,434 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 41 Consolidated 2021 $ 2020 $ NON-CURRENT Employee entitlement: Long Service Leave Opening balance 60,426 76,331 Employee entitlements provided for / (used) (47,933) (15,905) Closing balance 12,493 60,426 Rehabilitation Opening balance 846,653 829,102 Reclassification from/(to) current - - Rehabilitation provided for 201,004 17,551 Closing balance 1,047,657 846,653 The Group has a provision for rehabilitation relating to the Mulga Rock Project and the Alligator River Project Total non-current provision 1,060,150 907,079 CONTRIBUTED EQUITY 1,027,387,069 (2020: 766,286,743) fully paid ordinary shares Consolidated Number $ Ordinary shares At 1 July 2019 484,671,912 102,271,967 5 July 2019 Shares purchase plan @ 5 cents per share 36,673,302 1,833,665 2 October 2019 Issue of shares @ 6 cents per share 370,771 22,246 30 October 2019 Shares purchase plan @ 5 cents per share 77,865,832 3,893,292 25 November 2019 Share purchase plan @ 5 cents per share 19,270,000 963,500 28 January 2020 Share Buy Back (5,342,852) - 17 June 2020 Share placement @ 3.6 cents per share 152,777,778 5,500,000 Share issue costs - (807,556) Balance at 30 June 2020 766,286,743 113,677,114 At 1 July 2020 13 July 2020 Share purchase plan @ 3.6 cents per share 11,103,984 329,605 13 October 2020 lssue od shares @ 3 cents per share 1,276,342 45,000 24 April 2021 share purchase plan @ 11 cents per share 168,181,818 18,500,000 7 May 2021 share buy back (1,000,000) - 18 May 2021 share purchase plan @ 11 cents per share 81,818,182 9,000,000 22 June 2021 share buy back (280,000) - Share issue costs - (1,394,147) Balance at 30 June 2021 1,027,387,069 140,157,572 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 42 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Employee share plan shares The number of fully paid ordinary shares disclosed in Note 16 includes the outstanding shares issued under the employee share plans. At 30 June 2021 this amounted to 5,036,667 shares (2020: 6,316,667 shares) which have either not vested to the employee or the employee has not repaid the non-recourse loan used to fund the share issue. Both these conditions must be met in order for the employee to freely trade the shares. Fully paid ordinary shares Ordinary shares participate in dividends and the proceeds on winding up of the Parent entity in proportion to the number of shares held. At shareholders’ meetings, each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands. The ordinary shares have no par value. RESERVES Employee Share Plan Reserve The employee share plan reserve records items recognised as expenses on the valuation of employee shares. Consolidated 2021 $ 2020 $ Reserve comprises the following: Balance as at start of financial year 1,288,327 3,047,845 1,666,667 shares issues and vesting (a) - 6,435 4,030,000 shares issued and vesting (b) 24,110 46,159 900,000 shares issued and vesting (c) 8,506 12,929 19,790,000 options issued and vesting (d) 276,878 506,995 Salary sacrifice liability revaluation 340,095 36,827 Transferred to retained earnings (359,697) (2,368,863) Balance as at end of the financial year 1,578,218 1,288,327 (a) On 22 November 2016, 1,666,667 shares were issued to Mr M. Young after shareholder approval was received and have been funded by a non-interest bearing, limited recourse loan from the Company. The shares are subject to a variety of vesting conditions over a three-year period, and expire on 22 November 2021. (b) On 20 July 2018, 4,030,000 shares were issued to employees and have been funded by a non-interest bearing, limited recourse loan from the Company. The shares are subject to vesting conditions over a three-year period, and expire on 20 July 2023. The Black Scholes valuation expense will be proportionally allocated over the vesting period. (c) On 6 December 2018, 900,000 shares were issued to Mr J. Tapp after shareholder approval was received and have been funded by a non-interest bearing, limited recourse loan from the Company. The shares are subject to vesting conditions over a three-year period, and expire on 6 December 2023. The Black Scholes valuation expense will be proportionally allocated over the vesting period. (d) On 31 July 2019, 19,790,000 options were issued to employees. The options are subject to vesting conditions over a three-year period, and expire on 31 July 2022. The Black Scholes valuation expense will be proportionally allocated over the vesting period. As non-interest bearing limited recourse loans were provided to purchase Plan shares in the Company and these loans are secured against the same Plan shares, AASB 2 (share based payments) applies. On this basis, the loan amount is not recognised in the financial statements and instead an amount is expensed as a share based payment. NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 43 SHARE BASED PAYMENTS (a) Employee share option plan The Company had an employee share option plan, which was also available to Directors (the issue of securities to Directors requires shareholder approval), called the Vimy Resources Limited Employee Share Option Plan (“Plan”). The Company issued 19,790,000 options to eligible employees on 31 July 2019. The input variables used in the Black Scholes option pricing model are as follows: Grant date: 31 July 2019 Expiry date: 31 July 2022 Exercise price: $0.082 Expected volatility: 115% Expected life: 3 years Risk free interest rate (based on government bonds): 0.87% Calculated share value at grant date: $0.070 Total amount to be recognised as share based payment over the three year vesting period $906,900 Set out below is a summary of options granted to employees under the Vimy Resources Limited Employee Option Plan: Grant date Expiry date Number Balance at start of year Number Granted during year Number Exercised during year Number Forfeited during year Number Balance at end of year Number Exercisable at end of year 31 July 2019 31 July 2022 19,790,000 - - - 19,790,000 6,596,667 Weighted average exercise price $0.082 $0.082 Weighted average remaining contractual life 1.08 years 1.08 years (b) Employee share plans On 18 November 2016, the Company established an employee share plan, which is also available to Directors (the issue of securities to Directors requires shareholder approval). The plan is called the 2016 Vimy Employee Share Plan. A summary of the main terms and conditions of the Vimy Employee Share Plans can be found at Note 5. Set out below is a summary of shares granted to employees under the Plans: Issue date Number Balance at start of year Number Issued during year Number Forfeited during year Number Balance at end of year 20 November 2015 1,000,000 - (1,000,000) - 3 June 2016 280,000 - (280,000) - 22 November 2016 1,666,667 - - 1,666,667 20 July 2018 2,470,000 - - 2,470,000 6 December 2018 900,000 - - 900,000 6,316,667 - (1,280,000) 5,036,667 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 44 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 (c) Expenses recognised in profit and loss Total expenses arising from share-based payment transactions recognised during the year as part of employee benefit expense were as follows: Consolidated 2021 $ 2020 $ Employee share plan granted in 2017 8,506 6,435 Employee share plan granted in 2019 24,110 59,088 Employee option plan granted in 2020 276,876 506,995 Salary sacrifice liability revaluation 340,095 36,827 649,587 609,345 In June 2019 the Company established the Salary Sacrifice Share Plan which is available to Directors and staff to voluntarily sacrifice a portion of their cash salary and fees to receive shares on the condition that they remained employed by Company as at 30 June 2021. ACCUMULATED LOSSES Consolidated 2021 $ 2020 $ Accumulated losses at the beginning of the financial year (106,687,623) (104,178,998) Transferred from Reserves 359,697 3,787,889 Net loss attributable to members of the Company (6,869,370) (6,296,514) Accumulated losses at the end of the financial year (113,197,296) (106,687,623) EXPENDITURE COMMITMENTS Consolidated 2021 $ 2020 $ Expenditure commitments contracted for: In order to maintain current rights of tenure to exploration tenements, the Group is required to meet the minimum expenditure requirements. These obligations are not provided for in the financial statements: - not later than 12 months 929,496 1,069,917 - between 12 months and 5 years 4,424,875 4,116,254 5,354,371 5,186,171 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 45 CONTROLLED ENTITIES Country of incorporation Percentage owned 2021 2020 Parent entity: Vimy Resources Limited Australia Subsidiaries of Vimy Resources Limited: Narnoo Mining Pty Ltd Australia 100% 100% Vélo Resources Pty Ltd (previously Camuco Pty Ltd) Australia 100% 100% Viva Resources Pty Ltd (previously Gunbarrel Energy and Minerals Australia Pty Ltd) Australia 100% 100% Wellington Range and King River Joint Venture(1) Australia 79% 79% (1) On 17 August 2021, the Company announced it had settled the acquisition of Rio Tinto Exploration Pty Ltd (RTX) 20.89% interest in Wellington Range and King River Joint Venture at the Alligator River Project in the Northern Territory. Vimy now owns 100% of the Alligator River Project through its wholly-owned subsidiary Viva Resources Pty Ltd. REMUNERATION OF AUDITORS Consolidated 2021 $ 2020 $ 1. Audit services Audit of financial reports and other audit work under the Corporations Act 2001: KPMG 68,477 41,362 2. Non-audit services KPMG research and development tax incentive compliance and advisory 26,000 40,455 KPMG financial advisory services 120,000 - KPMG general accounting and taxation advisory fees - 13,455 KPMG taxation return preparation and advisory 17,595 17,210 Total auditor’s remuneration 232,072 112,482 NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 46 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 CASH FLOW INFORMATION Consolidated 2021 $ 2020 $ (a) Reconciliation of Loss after tax to net cash outflow from Operating Activities Loss after income tax (6,869,370) (6,296,514) Adjustments for: Depreciation expense 177,265 203,690 Share based payments expense 649,587 609,345 Financial Income - (287,439) Deferred consideration 400,447 610,703 (5,642,071) (5,160,215) Changes in operating assets and liabilities: (Increase) / Decrease in trade and other receivables 101,455 764,092 (Increase) / Decrease in prepayments 111,945 40,417 (Increase) / Decrease in right of use assets 91,680 (488,958) Increase / (Decrease) in trade and other payables 268,939 216,333 Increase / (Decrease) in lease liabilities (87,699) 404,537 Increase / (Decrease) in provisions 177,395 18,598 Net cash outflow from operating activities (4,978,356) (4,205,196) CONTINGENT LIABILITIES Contingent Liability - Royalty In 2015 the Company entered into a royalty agreement with RCF VI. Narnoo Mining Pty Ltd (‘Narnoo’), wholly owned subsidiary of Vimy, has agreed to pay a royalty to RCF VI of 1.15% on the gross proceeds received by Narnoo from selling mineral products extracted and recovered from the tenements that make up the Mulga Rock Project. The Company has granted security to RCF VI for the royalty obligations, in the form of a mortgage over the mining tenements. PARENT ENTITY INFORMATION Parent Entity 2021 $ 2020 $ Information relating to Vimy Resources Limited: Current assets 24,053,366 7,622,687 Total assets 30,432,180 10,427,415 Current liabilities 1,011,623 926,275 Total liabilities 1,115,183 1,303,544 Total net assets 29,316,997 9,123,871 Contributed equity 140,157,571 113,677,114 Reserves 1,578,218 1,288,327 Accumulated losses (112,418,792) (105,841,570) Total equity 29,316,997 9,123,871 Loss of the parent entity (6,577,224) (6,170,168) Total comprehensive loss of the parent entity (6,577,224) (6,170,168) NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 47 Guarantees of the Parent: On 1 July 2007, Vimy Resources Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidation group under the Tax Consolidation Regime. Each entity in the Group will continue to recognise its own current and deferred tax liabilities, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the Parent entity. The current tax liability of each Group entity will then subsequently be assumed by the Parent entity. The tax consolidated group entered into a tax sharing agreement whereby each company in the Group contributes to the income tax payable in proportion to their contribution to profit before tax of the tax consolidated group. EVENTS OCCURRING AFTER REPORTING DATE Since 30 June 2021 the following significant subsequent events have occurred: • On 23 July 2021, the Company announced its inclusion into the index composition for the Global X Uranium ETF (URA). • On 23 July 2021, the Company announced that Mr Luca Giacovazzi had resigned from the Board. • On 29 July 2021, the Company announced the re-opening of the Mulga Rock Camp to support the commencement of site works at the Mulga Rock Project. • On 17 August 2021, the Company announced it had settled the acquisition of Rio Tinto Exploration Pty Ltd (RTX) 20.89% interest in Wellington Range and King River Joint Venture at the Alligator River project in the Northern Territory. Vimy now owns 100% of the Alligator River Project through its wholly-owned subsidiary Viva Resources Pty Ltd. The acquisition price of $2 million was fully satisfied by the issue to RTX of fully paid shares in Vimy (18,793,069 shares at a deemed issue price of $0.10642 per share). An additional on-sale payment may be payable to RTX in the event that Vimy disposes of an interest in the Alligator River Project within three years from the date of settlement at an implied price (on a proportional basis) that is higher than the $2 million paid for RTX’s interest. RTX would receive 30% of any proportionate gain (over $2 million) on any such on-sale by Vimy of an interest in the Alligator River Project. Secondly, a uranium upside payment is payable to RTX if the average daily spot price indicator of uranium exceeds US$60/lb (of U3O8) over the last 180 days of the three-year period that commences on the settlement date. If satisfied, Vimy agrees to pay to RTX a further consideration amount equal to $1.1 million less the total on-sale payment(s) that may have been made during the three-year period. • On 25 August 2021, the Company announced the appointment at Matthew Foy as Company Secretary, following the resignation of Marcel Hilmer. • On 27 August, the Company announced that the Western Australian Department of Mines Industry Regulation and Safety (DMIRS) has approved the Mulga Rock Project Management Plan. • On 30 August, the Company announced the stepping down of Mike Young as Managing Director and CEO. Vimy had previously advised it had engaged FTI Consulting to provide project co-ordination and strategic advisory services. Vimy announced that it has now extended this engagement to include Mr Steven Michael to act as an Interim CEO while an executive search process is undertaken. • On 6 September 2021, the Company announced positive results from metallurgical optimisation testwork at the Mulga Rock Project. • On 29 September 2021, the Company announced an update on the Early Works Program and approvals process for the Mulga Rock Project. • On 30 September 2021, the Company announced a trading halt in its securities pending an announcement by the Company to the market in relation to project approvals for the Mulga Rock Project. NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 48 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements to the extent they have not already been disclosed in other notes above. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group consisting of Vimy Resources Limited and its subsidiaries. (a) Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. Vimy Resources Limited is a for-profit entity for the purpose of preparing the financial statements. Compliance with IFRS The consolidated financial statements of Vimy Resources Limited Group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Historical cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets, and financial assets and liabilities at fair value. Critical accounting estimates The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 1. Functional and presentation currency These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency and are rounded to the nearest dollar. New and amended standards adopted by the Group AASB 16 Leases has been adopted by the Group effective from the 1 July 2019. AASB 16 introduced a new framework for accounting for leases which has superseded AASB 117 Leases. AASB 16 affects the accounting by lessees and has resulted in the recognition of leases on the Statement of Financial Position. The standard has removed the distinction between operating and financing leases and requires recognition of an asset (the right to use the leased item) and a financial liability. (b) Principles of consolidation The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2021. Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity, and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. 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. (c) Segments Operating segments are reported in a manner 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. (d) Revenue and income recognition Revenue and income are recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Group and the revenue and income can be reliably measured. The following specific recognition criteria must also be met before revenue and income is recognised: Interest revenue Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate. R&D Tax Incentive grant income Any grant received for eligible research and development tax incentive income is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income as a consequence of the accounting policy to expense exploration and evaluation costs as incurred. The grant income is only recognised when it can be measured reliably. NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 49 (e) Income tax The income tax expense for the period is the tax payable on the current period's taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered, or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. (f) Leases The Group has adopted AASB 16 Leases which has been applied form the date of initial application. The Group does have a three year lease on the head office premises. (g) Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liability. The cost of right-of-use assets include the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The right-of-use asset are depreciated on a straight line basis over the shorter of its estimated useful life and the lease term. (h) Lease Liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of the lease payments to be made over the lease term. The lease payments are recognised as expenses in the period in which the payments occur. In calculating the present value of the lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. (i) Impairment of assets At each reporting date, the entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. (j) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and deposits held at call with financial institutions, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. (k) Trade and other receivables Trade receivables are recognised and carried at original invoice amount less a provision for impairment. NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 50 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 (l) Financial instruments (i) Non-derivative financial assets Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise trade and other receivables. (ii) Non-derivative financial liabilities The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Other financial liabilities comprise loans, borrowings, trade and other payables. (m) Plant and equipment Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset as follows: Plant and equipment – 2 to 15 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of comprehensive income. (n) Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. (o) Loans and borrowings Loans and borrowings are initially recognised at fair value, net of transaction cost incurred. Loans and borrowings are subsequently measured at amortised costs. Loans and borrowings are derecognised from the Statement of Financial Position when the obligation specified in the contract is discharged, cancelled or expired. (p) Provisions Provisions for legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as an expense. (q) Rehabilitation and site restoration The Group is required to rehabilitate mine sites, to the extent that any environmental disturbance has occurred, to a condition acceptable to the relevant authorities. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as an expense. (r) Reserves The reserve account is an accumulation of expenses relating to the issue of current employee share and option plans. In the event these employee shares and options are forfeited or expire their value will be transferred to retained earning. NOTES TO THE FINANCIAL STATEMENTS 30 June 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 51 (s) Employee benefits Employee entitlement Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave and long service leave. Liabilities arising in respect of wages and salaries, annual leave and long service leave and any other benefits expected to be settled wholly within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market yield as at the reporting date on high quality corporate bonds, which have terms to maturity approximating the terms of the related liabilities, are used. Share-based payments The Company provides staff with Employee Share Plans, whereby eligible participants are granted shares in the Company funded by a limited recourse loan from the Company. The limited recourse loans are recorded within equity and not as a receivable or financial asset to be recovered from the Company. The Limited Recourse Loan becomes repayable on the earliest of: ─ the date which is five years after the grant date of the Limited Recourse Loan (‘Repayment Date’); ─ one month after the Participant ceases for any reason to be employed by the Company; and ─ (by the legal personal representative of the Participant) six months after the Participant ceases to be an employee of the Company due to their death. The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes formula. (t) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the Statement of Financial Position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. (u) Exploration and evaluation expenditure Exploration and evaluation expenditure that has been acquired in a business combination or asset acquisition and associated transaction costs are capitalised under the scope of AASB 6, Exploration for and Evaluation of Mineral Resources. All other exploration and evaluation expenditure is expensed in the year it is incurred. Exploration and evaluation expenditure is allocated separately to specific areas of interest. Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining operation. Such expenditure comprises direct exploration and evaluation costs incurred, together with an appropriate portion of directly related overhead expenditure. Exploration and evaluation assets are only continued to be recognised if the rights to the area are current and either: (i) the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest or by its sale; or (ii) exploration and evaluation activities have not at the reporting date reached a stage which permits a reasonable assessment of the existence of economically recoverable resources, and active operations are continuing. Exploration and evaluation assets are assessed for impairment if facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash generating units (CGUs) to which the exploration activity relates. The CGU shall not be larger than the area of interest. In the event that an area of interest is abandoned or if the Directors consider the exploration and evaluation assets attributable to the area of interest to be of reduced value, the exploration and evaluation assets are impaired in the period in which the assessment is made. Each area of interest is reviewed at each reporting period and accumulated costs are written off to the extent that they will not be recoverable in future. When a decision to proceed to development is made for an area of interest, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mine property assets within property, plant and equipment. DIRECTORS’ DECLARATION 30 June 2021 52 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 1. In the opinion of the Directors of Vimy Resources Limited: (a) the consolidated financial statements and notes of Vimy Resources Limited are in accordance with the Corporations Act 2001, including: i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance for the financial year ended on that date; and ii. complying with Accounting Standards, the Corporations Regulations 2001, and other mandatory professional reporting requirements. (b) there are reasonable grounds to believe that Vimy Resources Limited will be able to pay its debts as and when they become due and payable; and 2. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by Section 295A of the Corporations Act 2001. 3. The consolidated financial statements comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. This declaration is made in accordance with a resolution of the Directors: The Hon. Cheryl Edwardes AM Independent Non-executive Chairman Dated 30 September 2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation Independent Auditor’s Report To the shareholders of Vimy Resources Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Vimy Resources Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2021. • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Notes including a summary of significant accounting policies. • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 fulfilled our other ethical responsibilities in accordance with the Code. 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. This matter was 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 this matter. Going concern basis of accounting Refer to Note 1(b) to the Financial Report The key audit matter How the matter was addressed in our audit The Group’s use of the going concern basis of accounting and the associated extent of uncertainty is a key audit matter due to the high level of judgement required by us in evaluating the Group’s assessment of going concern and the events or conditions that may cast significant doubt on their ability to continue as a going concern. These are outlined in Note 1(b). The Directors have determined that the use of the going concern basis of accounting is appropriate in preparing the financial report. Their assessment of going concern was based on cash flow projections. The preparation of these projections incorporated a number of assumptions and significant judgements, and the Directors have concluded that the range of possible outcomes considered in arriving at this judgement does not give rise to a material uncertainty casting significant doubt on the Group’s ability to continue as a going concern. We critically assessed the levels of uncertainty, as it related to the Group’s ability to continue as a going concern, within these assumptions and judgements, focusing on the following: • The Group’s planned levels of operational and capital expenditures, and the ability of the Group to manage cash outflows within available funding, particularly in light of loss making operations; and • the Group’s ability to raise additional funds from shareholders or other parties and the projected timing thereof. This included source of funds, availability of fund type, feasibility and status/progress of securing those funds. In assessing this key audit matter, we involved senior audit team members who understand the Group’s business, industry and the economic environment it operates in. Our procedures included: • We analysed the cash flow projections by: - Evaluating the underlying data used to generate the projections. We specifically looked for their consistency with those used by the Directors, and tested by us, their consistency with the Group’s intentions, as outlined in Directors minutes and strategy documents, and their comparability to past practices; - Analysing the impact of reasonably possible changes in projected cash flows and their timing, to the projected periodic cash positions. Assessing the resultant impact to the ability of the Group to pay debts as and when they fall due and continue as a going concern. The specific areas we focused on were informed from our test results of the accuracy of previous Group cash flow projections and sensitivity analysis on key cash flow projection assumptions. - Assessing the planned levels of operating and capital expenditures for consistency of relationships and trends to the Group’s historical results, particularly in light of the loss making operations, results since year end, and our understanding of the business, industry and economic conditions of the Group. • We read Directors minutes and relevant correspondence to understand and assess the Group’s ability to raise additional shareholder funds. • We evaluated the Group’s going concern disclosures in the financial report by comparing them to our understanding of the matter, the events or conditions incorporated into the cash flow projection assessment, the Group’s plans to address those events or conditions, and accounting standard requirements. Other Information Other Information is financial and non-financial information in Vimy Resources Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report. The Chairman’s Letter, CEO’s Review of Activities, Outlook for 2022, Operations Review, Mineral Resources and Ore Reserve statement, Additional Information and Corporate Governance Statement are expected to be made available to us after the date of the Auditor’s Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. • assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objective is: • 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 Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They 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 the 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 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 In our opinion, the Remuneration Report of Vimy Resources Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001. Directors’ 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 responsibilities We have audited the Remuneration Report included in pages 15 to 21 of the Directors’ report for the year ended 30 June 2021. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Derek Meates Partner Perth 30 September 2021 ADDITIONAL INFORMATION as at 15 October 2021 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 57 Capital structure The capital structure of the Company at the date of this report is 1,051,498,659 ordinary shares on issue. Distribution of listed ordinary fully paid shares Size of holding Number of shareholders Number of ordinary shares 1 - 1,000 447 151,045 1,001 - 5,000 751 2,336,158 5,001 - 10,000 564 4,521,179 10,001 - 100,000 2,019 85,219,652 100,001 - and over 907 959,270,625 4,688 1,051,498,659 The number of shareholders holding less than a marketable parcel of ordinary shares was 598. Twenty largest shareholders of listed ordinary shares Name Ordinary shares held % of total 1 HSBC Custody Nominees (Australia) Limited 206,306,058 19.62% 2 Lexband Pty Ltd62,975,024 5.99% 3 Citicorp Nominees Pty Limited 59,564,281 5.66% 4 BNP Paribas Nominees Pty Ltd 53,439,431 5.08% 5 Sandhurst Trustees Ltd 21,556,578 2.05% 6 BNP Paribas Noms Pty Ltd 20,628,620 1.96% 7 Mr Peter Sarantzouklis 20,444,445 1.94% 8 Sumico (WA) Pty Ltd 19,545,937 1.86% 9 HSBC Custody Nominees (Australia) Limited 18,379,917 1.75% 10 Mr Mitchell Gerard Ogilvie 16,053,778 1.53% 11 Mr Jiahuang Zhang 15,000,000 1.43% 12 Olive Tree Group Pty Ltd 14,646,455 1.39% 13 BNP Paribas Nominees Pty Ltd Six Sis Ltd 13,368,617 1.27% 14 HSBC Custody Nominees (Australia) Limited 10,520,481 1.00% 15 Merrill Lynch (Australia) Nominees Pty Limited 8,979,223 0.85% 16 Situate Pty Ltd 8,485,689 0.81% 17 BNP Paribas Nominees Pty Ltd ACF Clearstream 8,354,349 0.79% 18 Miss Lihan Huang 7,500,000 0.71% 19 Mr Michael Charles Young and Mrs Jocelyn Therese Young 7,271,942 0.69% 20 JP Morgan Nominees Australia Pty Limited 6,044,048 0.57% 599,064,872 56.97% Voting rights of ordinary shares (ASX Code: VMY) At a general meeting, on a show of hands, every ordinary shareholder present in person or by proxy has one vote. On the taking of a poll, every ordinary shareholder present in person or by proxy, and whose shares are fully paid, has one vote for each of his or her shares. ADDITIONAL INFORMATION as at 15 October 2021 58 VIMY RESOURCES LIMITED ANNUAL REPORT 2021 Substantial shareholders Name Ordinary shares held % of total 1 Paradice Investment Management Pty Ltd 92,076,023 8.757% 2 Lexband Pty Ltd 62,975,024 6.0% On-market buy back There is no current on-market buy back of the Company’s shares in place. Investor Relations Shareholders and investors seeking information on the Company should visit the Australian Securities Exchange website www.asx.com.au and search announcements under the Company’s ASX symbol VMY, or contact the Chief Executive Officer or Company Secretary at: Vimy Resources Limited First Floor, 1209 Hay Street West Perth WA 6005 Telephone: +61 8 9389 2700 Email: info@vimyresources.com.au Website: www.vimyresources.com.au Shareholder enquiries Enquiries relating to shareholding, tax file number and notification of change of address should be directed to: Automic Group GPO Box 5193 SYDNEY NSW 2001 Telephone: 1300 288 664 (within Australia) +61 2 9698 5414 (outside Australia) Email: hello@automic.com.au Website: www.automic.com.au Corporate Governance The Company’s Corporate Governance Statement for the 2021 financial year is available from the Company’s website at : www.vimyresources.com.au/corporate/corporate-governance