Walkabout Resources
Annual Report 2021

Plain-text annual report

and Controlled Entities (ACN 119 670 370) ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2021 COMPANY DIRECTORY Directors Andrew Cunningham Michael Elliott Phil Montgomery Peter Finnimore Company Secretary Shaun Menezes Tony Allen ASX Code: WKT Auditors HLB Mann Judd (WA) Partnership Level 4, 130 Stirling Street Perth WA 6000 Australia Securities Exchange Listing ASX code: WKT Australian Securities Exchange Limited Level 40, Central Park 152-158 St Georges’ Terrace Perth, WA 6000 Australia Registered Office and Principal Place of Business Bankers: National Australia Bank Perth West Business Banking Centre 1238 Hay Street West Perth, WA 6005 Australia Level 3 681 Murray Street West Perth, WA 6005 Australia Telephone: +61 8 6298 7500 Facsimile: +61 8 6298 7501 Website : www.wkt.com.au Email: admin@wkt.com.au Share Register Computershare Investor Services Pty Ltd Level 11, 172 St Georges Terrace Perth WA 6000, Australia GPO Box 2975 Melbourne VIC 3001, Australia Phone: 1300 850 505 (within Australia) +61 3 9415 4000 (outside Australia) Fax: +61 3 9473 2500 Email: www.investorcentre.com/contact Web: www.computershare.com TABLE OF CONTENTS 1. DIRECTORS’ REPORT 2 2. AUDITOR’S INDEPENDENCE DECLARATION 16 4. FINANCIAL STATEMENTS 17 5. DIRECTORS' DECLARATION 44 6. INDEPENDENT AUDITOR’S REPORT 45 7. ADDITIONAL SHAREHOLDER INFORMATION 49 1 DIRECTORS’ REPORT Your Directors submit the annual financial report of the consolidated entity (or “the Group”) consisting of Walkabout Resources Ltd (“the Company”) and the entities it controlled during the period for the financial year ended 30 June 2021. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Directors The names of Directors who held office during or since the end of the year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated. Name and independence status Experience, qualifications, special responsibilities and other directorships Mr Michael Elliott Non-Executive Director Chairman Appointed as a Director on 20 December 2018 Appointed as Chairman on 21 April 2021 Mr Andrew Cunningham Executive Director Chief Executive Officer Appointed as a Non- Executive Director on 13 November 2015 Appointed as CEO/Executive Director on 21 April 2021 Peter Finnimore Non-Executive Director Appointed as a Director 15 July 2021 Mike Elliott holds a Bachelor of Commerce from the University of New South Wales. He was the Global Mining & Metals Sector Leader at Ernst and Young (EY) for over 10 years and has over 34 years’ experience working with mining and metals clients around the world. He was a Partner at EY from 1995-2015 and was a member of the Oceania governing body of EY for 5 years. Mike advised and briefed the CEOs, CFOs and Directors of some of the largest global mining and metals companies. He has advised mining and metals clients from all over the world, from countries that include Australia, New Zealand, South Africa, China, USA, Japan, Canada, Russia, Chile, Peru, Brazil, Papua New Guinea, Zimbabwe, Gabon and Colombia. As a key advisor to a number of mining companies, Mike has participated in many of the large transactions, IPOs and privatisations that have transformed the industry. Mike is a Member of Australian Institute of Company Directors (MAICD), a Fellow of Chartered Accountants Australia and New Zealand (FCA) and a member of Financial Services Institute of Australasia. Other directorships of listed companies in the last 3 years: None Andrew has a BSc Hons in Geology from the University of Stellenbosch in South Africa and is a member of the Australian Institute of Geosciences. Andrew has extensive cross discipline technical and management experience in the minerals industry predominantly in Africa and Australia and has worked in a range of commodities and geological styles including uranium, iron ore, graphite, diamonds, gold and base metals. During the last 15 years, Andrew has managed all facets of exploration and development projects in Africa from project generation to the completion of feasibility studies. He has held senior geology and exploration positions with major international mining companies as well as various ASX and TSX listed companies. He has been working with Walkabout Resources since 2013 and brings a wide range of exploration, resource development, mine geology and management experience to the company. Other directorships of listed companies in the last 3 years: None Mr Finnimore is a sales and marketing executive with 20 years’ experience in the mining and metals sector with majors such as Rio Tinto, Rusal, BHP and South32. Most recently, while with South32, Peter held the roles of Chief Marketing Officer and Chief Commercial Officer, with a remit including logistics, risk management, technical marketing, industry and commodity analysis and product development. Peter has a genuine international perspective, having spent majority of his executive career working and living abroad in countries including Japan, Russia, Holland, Singapore, Cyprus and Switzerland. Over his career, Peter was responsible for many tens of billions of dollars in revenue of aluminium, alumina, manganese and nickel. He also designed and executed a strategy to transform the global alumina industry’s pricing mechanism. Peter holds a Bachelor of Commence and Bachelor of Laws from the University of Queensland. He is a member of the Institute of Company Directors and has 2 DIRECTORS’ REPORT Phil Montgomery Non-Executive Director Appointed as a Director 15 July 2021 Mr Allan Mulligan Executive Director Appointed Managing Director 7 August 2012 Resigned as Director 15 July 2021 Mr Trevor Benson Chairman Executive Director Appointed Chairman 13 September 2016 Resigned as Director on 19 October 2020 previously served as a director of both the International Aluminium Institute and the International Nickel Institute. Other directorships of listed companies in the last 3 years: None Mr Montgomery has extensive global executive experience with an exceptional pedigree in major project delivery. As an executive at BHP and its predecessor organisations, Phil was responsible for the project’s quadrupling output in the WA Iron Ore Division. While with BHP he held the roles of Chief Growth Officer, Global Head of Group Project Management and Vice President – Projects, leading the Jansen potash project. Having worked in developing countries including Mozambique, the DRC, South Africa and Colombia, Phil is well positioned to manage risk and challenges as a key advisor during the construction and commissioning of the Lind Jumbo Graphite Mine. Phil has a Bachelor of Science (Mechanical Engineering & Business Management) from Oxford Brookes University. He is currently a non-executive director at both Salt Lake Potash and Société des Mines de Fer de Guinée. Other directorships of listed companies in the last 3 years: Salt Lake Potash Limited - appointed October 2020. Allan is a mining engineer with over thirty years of mine management and production experience. Allan has specialised in technical assessment and production economics, feasibilities, project design and costing of underground mines and prospects. He has worked extensively in exploration, mine development and operations across Africa and Australia. Allan is a Member of the Australian Institute of Mining and Metallurgy, a qualified Mining Engineer and the holder of a Mine Managers Certificate of Competency (Metalliferous) from South Africa. Allan was a founding Director of Walkabout Resources Pty Ltd. He has previously been on the board of several Western Australian explorers. Other directorships of listed companies in the last 3 years: None Trevor has extensive experience as an investment banker and has served on a number of ASX listed company boards as both Chairman and Director. He has specialised in cross border transactions within the natural resources sector across China, Africa and SE Asia, and has been an adviser to Chinese State-Owned Enterprises (SOE’s). His specialist activities include corporate funding solutions and off-take agreement negotiations within the natural resources domain. Trevor holds a Bachelor of Science Degree from the University of Western Australia. Other directorships of listed companies in the last 3 years: None 3 DIRECTORS’ REPORT Company Secretary Mr Shaun Menezes Company Secretary Appointed 9 November 2020 Mr. Menezes is a Member of Chartered Accountants Australia & New Zealand, Member of Governance Institute of Australia Ltd. Mr. Menezes is Secretary of Sterling Plantations Ltd and Secretary for Mont Royal Resources Ltd. Tony Allen Company Secretary Appointed 16 September 2021 Mr. Allen is a Member of CPA Australia with over 30 years in the profession. Mr. Allen has acted as CFO and Company Secretary for a number of Australian companies and is experienced in exploration and mining companies. Mr Ian Hobson Company Secretary Appointed 14 December 2017 Resigned 9 November 2020 Mr. Hobson is a fellow chartered accountant and chartered company secretary with over 32 years’ experience in the profession. Mr. Hobson acts as company secretary and CFO for a number of ASX listed companies and is experienced in exploration companies. Interests in the shares and options of the company and related bodies corporate The following relevant interests in shares of the Company or a related body corporate were held by the directors at the date of this report. Director Ordinary shares Options (listed) Options (unlisted) A Cunningham M Elliott 1,332,096 22,202,908 - - 3,000,0001 - 1Exercisable at $0.20 by 11 December 2021 (granted on 11 December 2018). As at the date of this report unissued shares or interests of the Company under options are: Series Date options granted Number of shares under option Exercise price of option Expiry date of option 3 11 December 2018 7,000,000 $0.20 11 December 2021 Series 3 options were issued as director incentives and were approved by shareholders on 15 November 2018 at the Annual General Meeting. Principal Activities The principal activities of the Group during the financial year were the exploration and development of resources and energy assets located in Tanzania, Namibia, Scotland and Northern Ireland, with the Botswana projects on hold. Operating Results The net loss after tax of the Group amounted to $3,325,061 (2020: loss of $4,440,408). Financial Position The net assets of the Group were $22,051,728 at 30 June 2021 (2020: $19,503,016). Dividends Paid or Recommended There were no dividends paid or recommended throughout the period. 4 DIRECTORS’ REPORT Review of Operations Walkabout is actively engaged in developing the fully permitted, 100% owned high-grade Lindi Jumbo Graphite Project in South East Tanzania and has over the course of the year, finalised debt and equity funding to secure the capital required to construct the Project. In addition, the Company has continued exploration on its highly prospective suite of base metal and gold tenements in Tanzania, Scotland and Northern Ireland. Lindi Jumbo Graphite Project Funding During the period under review a major milestone in the Company’s progress towards the construction and development of the Lindi Jumbo Graphite Mine was reached through securing a US$20 million Debt Funding Facility (Facility) with CRDB Bank of Tanzania. The Facility which will meet 62.5% of the total project funding was executed between Lindi Jumbo Limited and CRDB. The Facility remains subject to conditions precedent and the Company has been working towards satisfying these. The most significant of these conditions is the contribution of US$12 million of Companion Equity and the finalisation of Material Agreements. The Company’s Companion Equity contribution was executed in three stages with US$4 million tranches transferred to the project accounts with CRDB at the completion of each stage. Stage 1: On 12 May 2021, the Company announced the successful completion of stage one funding, raising A$6.4 million (US$4.67 million) through a placement of shares at A$0.20c per share with Institutional investors in Australia. US$4 million was deposited with CRDB as Lindi Jumbo companion equity. Stage 2: Subsequent to the year, the Company also raised a further A$7.6 million (US$5.54 million) through the offering of a 1 for 10 non-renounceable rights issue for eligible shareholders to subscribe for new ordinary shares at A$0.20c per share. The rights issue was underwritten to the amount of A$3.63 million (US$2.65 million) by existing shareholders with the Chairman personally underwriting an amount of $1.6 million (US$1.17 million). A further US$4 million was deposited with CRDB as Lindi Jumbo companion equity. Stage 3: While the rights issue was still open, the third and final stage of the three-stage Companion Equity fund raising process was executed through an institutional placement of up to US$10 million with Battery Metals Capital Group LLC (BMCG). US$6 million was received subsequent to the end of the year, as a prepayment on the issue of ordinary shares. US$4 million was deposited with CRDB as the completion of the Lindi Jumbo companion equity. The contribution of the companion equity satisfies the major condition precedent to the draw-down of the project debt. Subsequent to 30 June 2021, a number of other conditions precedent have been met, including the signing of major contracts. The remaining conditions are expected to be satisfied before the end of 2021 when the draw down of the debt funds will be required. Lindi Jumbo Project Development With funding achieved, Walkabout obtained all the remaining regulatory approvals & permits to commence construction & move into production. The project commenced with a process of Covid-19 project preparedness and compiled a wide ranging set of operating procedures, policies and guidelines to facilitate the safe mobilisation of staff and contractors into site from China, Australia and domestically to the Lindi Jumbo site. Further project readiness work was undertaken in regards to establishing project controls, detailed scopes of work and alignment of contracts in preparation for the mobilisation of contractors to site. The Lindi Jumbo team was also very active in country in preparation for the commencement of mobilisation and construction activities on site. Numerous stakeholder meetings and information sessions were held with the regional, district and local authorities, government departments, village councils, villages and others which is considered by the Company as critical to earning and maintaining our social licence to operate. The finalisation of material contracts commenced during the period under review including the major bulk earthworks on site, concrete works and buildings, manufacture and shipping of processing plant equipment, QA/QC, camp, logistics, power and other associated contracts in preparation of the construction and installation of the Lindi Jumbo Processing Plant and associated infrastructure. Construction commenced at site subsequent to the financial period. 5 DIRECTORS’ REPORT Exploration Scotland During the period under review, the Company’s primary focus on securing the funding for the Lindi Jumbo project and the severe impact of COVID-19 curtailed exploration work on the ground but the time was used to progress various permit applications and access agreements for drilling over the Blackcraig poly-metallic lead zinc project with several technical and important administrative milestones achieved. As part of the permitting process an environmental baseline survey was completed by an independent consultancy. The Company finalised access agreements with Scotland Land and Forest and environmental and subsequent drilling approval related to the Blackcraig Polymetallic project. Soil sampling over the larger Blackcraig trend commenced and where possible, reconnaissance work continued over previously unexplored or accessible areas with several grab samples collected for analyses. In March, 2021 the Company achieved the earn-in conditions for 75% ownership of the joint venture over the Scotland licence areas. Blackcraig Poly-Metallic Project The Blackcraig Lead, Zinc and Silver Project is a priority target area delineated from the limited historical datasets covering the Company’s 746km2 landholding in Scotland. The area has a pre-eminent history of high-grade lead and zinc mining during the 18th and 19th centuries. Many of the remnant mines were constrained in depth due to limited water handling capabilities and significant opportunity is expected to be found below these areas. Geophysical and other reconnaissance work has identified the potential for parallel structures to the historical discovery in addition to the targeted down-dip depth extensions of the historical workings. The company has a identified a number of priority drilling targets at Blackcraig that are available to be drilled at the discretion of the company and will remain a priority exploration focus of the company. Glenhead Gold Project The Glenhead Gold Project, located approximately 15km to the north of the Blackcraig Project. The area was originally evaluated during a mineral reconnaissance program by the British Geological Survey during the late 1970s where seven shallow holes primarily targeting the location of the outcropping quartz vein and in-soil anomalies, were drilled. Best results recorded were estimated at approximately 1m @ 5.9 g/t Au, 1m @ 4.6 g/t Au and 4.5m @ 1.5 g/t Au. Detailed structural mapping by Company geologists have identified a series of arsenopyrite-bearing quartz veins correlating to the location of the arsenic in-soil anomalies. The presence of visible gold in the veins was also recorded in the historic reports. Legacy gold occurrences from the southern uplands region are recorded in many historical anecdotes dating back to the 16th century. Rock-chip sampling of the sparse outcrop in the area have returned grades of up to 12.8 g/t Au in individual samples with gold mineralisation closely associated with arsenopyrite in quartz veins. The best assay results were returned from quartz veins within N-S orientated fault zones. Mineralised quartz veins of up to 4.5m width have been intersected in the historical drilling. A long-term access agreement with Scotland Lands and Forestry has been finalised for the Glenhead area. Regional and Social Covid-19 restrictions delayed the permitting applications for the planned low-cost tenement scale airborne-drone geophysical program as previously reported, with final approvals expected to be granted within the fourth quarter. This will now proceed upon election once approvals are received. The survey is designed to enhance the Company’s understanding of the complex structural setting of the area, with the aim of significantly reducing the time and cost to generate robust undercover targets for detailed follow-up field work. Both the Glenhead and Blackcraig Project areas will be covered by the survey which is expected to assist with the understanding of the larger structural setting of both areas. Access Agreements with several local land-owners and farmers have been finalised, and ongoing local community and stakeholder engagement has reinforced the Company’s social licence credentials. Important stakeholder engagement through the Scotland-based social and community risk specialist consultancy is ongoing with all parties regularly being updated on the Company’s activities, progress and plans within the area and any comments and suggestions well received and incorporated into these plans. 6 DIRECTORS’ REPORT The Company has applied for a new licence adjacent to the Newton Stewart licence. The licence hosts several historical lead-zinc workings that appear to be on the same trend as the Blackcraig mine. The licence is expected to be awarded during the second half of 2021. Northern Ireland Due to the travel restrictions in the UK during the period under review no field work was conducted in Northern Ireland. The Tyronne licence area was initially identified through country wide project generation program by WKT, is prospective for base and precious metals and is widely seen as the main area for VMS-type targets within Northern Ireland with the Dalradian and Omagh Au deposits in close proximity. A SKYTEM survey completed over selected areas of the licence area in 2018 and a number of drill targets have been identified and ground-truthed. Although the baseline environmental studies were completed and landowner consent for drilling was in place the notification for drilling was turned down by the local council and Permitted Development process will now be necessary to apply for drilling on the licence. Preliminary work for this program has been done through a local planning consultancy. In May 2021 the company satisfied the earn-in conditions for 50% ownership over the Tyronne licence area with the project vendor. The Company has withdrawn from the Antrim JV and the 50% ownership has been returned to the vendor. Tanzania Kimoingan Project The Kimoingan Graphite Project is located in northern Tanzania in close proximity to the Tanzanite gemstone mining area and known large-flake graphite occurrences in the area. During the period a maiden Potential Mineral (Exploration Target) of 22 to 72 million tonnes @ 8-12% TGC was disclosed (see ASX release of 09 June 2021). Amani Hard Rock Gold Project The area was previously the focus of an alluvial gold rush during the late 1990’s but has remained largely unknown to the gold exploration industry within Tanzania and has never been exposed to a modern, systematic exploration program for hard-rock gold. Recent geological work in the area by academic institutions have resulted in internationally published research papers on the characteristics of the gold and the possible origin of the alluvial gold also highlighted striking similarities to the orogenic gold deposits of the Lupa Goldfields approximately 300 km to the northwest. During the period under review the Company completed the first ever modern and systematic exploration program undertaken at the Amani Hard Rock Gold Project. This initial reconnaissance soil sampling program successfully identified multiple gold anomalies throughout PL11469/2020, confirming the undercover hard rock potential of this large project. Published geological maps from the 1950’s indicate large, regional scale shear zones with numerous historical and currently active artisanal alluvial gold mining activities in close proximity. With no previous exploration data for the majority of the project area, this initial program was designed to provide coverage over what is interpreted to be prospective areas for orogenic gold mineralisation similar to the vein and shear zone hosted gold occurrences of the Lupa Goldfield approximately 300km to the north of the Project area. The Amani reconnaissance soil sampling program was specifically designed to focus on mapped and inferred structures, and shear zones along strike of known hard rock artisanal workings. The Amani soil sampling successfully identified ten distinct gold-in-soil anomalies within the licence area. The immediate vicinity of PL11469/2020 was the focus of a mini alluvial gold rush in the 1990’s and it is estimated that more than 2.5 tonnes of coarse gold nuggets were recovered by artisanal miners from a two kilometre stretch of riverbed in only one of the alluvial mining areas within the project area (ASX release 11 June 2020). As far as the public records go, the area has never before been exposed to a systematic modern exploration program focussing on the hard rock provenance of the abundant alluvial gold in the area. During a field visit this month new occurrences of historical and currently active gold workings were encountered almost 10km away from the original gold-rush area at Amani and in a range of catchment areas. Opportunistic gold-panning within these catchment areas often reveals fine gold flakes associated with magnetite in the panned concentrate. It has become clear that the alluvial gold workings are far more widespread than originally thought which highlights the large scale-gold potential of the area. The results from the various on the ground sampling and mapping programs and the remote-sensing/geophysical datasets will put the Company in a much better position to prioritise work areas and programs with the ultimate aim of drill testing priority targets for vein and shear zone hosted gold occurrences. The Company thus considers the Amani hard rock gold project to be a valuable addition to its diverse mineral exploration portfolio in Africa and the UK. 7 DIRECTORS’ REPORT Business Development As a result of the Company’s diverse exploration portfolio with projects at various stages of development within the exploration pipeline and the embedded technical presence and exploration expertise in various jurisdictions across the globe, longer-term, multi-commodity exploration opportunities are constantly under review. International Covid-19 economic and travel restrictions are viewed by the Company as presenting opportunities for low cost, brownfields diversification and strengthening of the project base. Significant Changes in State of Affairs The following significant changes in the state of affairs of the Company occurred during the year: 1. Funding secured for the construction of the Lindi Jumbo Graphite Project through a US$ debt facility with CRDB and companion equity initiated with a first tranche institutional placement of A$6.4m; 2. Restructure of Board and Management to best position the Company for the next stage of development and operations; 3. Acceptance into the European Raw Materials Alliance (ERMA), a membership which aligns with the Company’s commitment to improve resilience of critical supply chains and energy security and enables Walkabout to collaborate with European Union end users, financiers and stakeholders of lithium-ion battery technologies. Significant Events After Balance Date The following significant changes in the state of affairs of the Company occurred after balance date: 1. Second stage of companion equity completed oversubscribed, being a 1 for 10 non-renounceable Entitlement issue raising A$7.6m including US$4m for the continued development of the Lindi Jumbo project, 2. Third and final stage of US$12m companion equity requirement completed by agreeing a placement of ordinary Shares of up to US$10m with Battery Metals Capital Group LLC, a U.S.-based institutional investor, raising up to US$6m in two tranches with a further US$4m available within 10 months at the Company’s election, 3. Appointment of two new Non-Executive Directors and full time CFO to deliver development, production and growth as the Company transitions from explorer to production, 4. Commencement of construction activities of the Lind Jumbo Graphite Mine, No other matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the consolidated entity, the results of those operations, or the situation of the consolidated entity in future financial years. Likely Developments and Expected Results Further information has not been presented in this report as disclosure of information regarding likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Environmental legislation The consolidated entity is subject to environmental legislation in Tanzania for the development and construction works of the Lindi Jumbo Graphite Project. The Group does not consider the requirements to be material given the limited work performed on site to date before the end of the period. Indemnification and insurance of Directors and Officers The Company has agreed to indemnify all the Directors of the Company for any liabilities to another person (other than the Company or related body corporate) that may arise from their position as Directors of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. During the financial year the Company paid a premium in respect of a contract insuring the Directors and officers of the Company and its controlled entities against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. 8 DIRECTORS’ REPORT REMUNERATION REPORT (Audited) This report, which forms part of the Directors’ Report, outlines the remuneration arrangements in place for the Key Management Personnel (“KMP”) of the Company for the financial year ended 30 June 2021. The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001. The remuneration report details the remuneration arrangements for KMP who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and its controlled entities, directly or indirectly, including any Director (whether Executive or otherwise) of the parent company. The Key Management Personnel of the Group during the year were: Mr T Benson Mr A Mulligan Mr A Cunningham Mr M Elliott Executive Chairman Executive Director Chief Executive Officer/Executive Director, Non-Executive Director Chairman, Non-Executive Director Remuneration policy The remuneration policy of Walkabout has been designed to align Director and Executive objectives with shareholder and business objectives by providing a fixed remuneration component and potentially, at the Boards discretion, long term incentives based on key performance areas affecting the consolidated entity’s financial results. The Board of Walkabout believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and Directors to run and manage the consolidated entity, as well as create goal congruence between Directors, Executives and shareholders. The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of the consolidated entity is as follows: the remuneration policy, setting the terms and conditions for the Executive Directors and other senior executives, was developed by the Board of Directors, and approved by resolution of the Board. All Executives receive a base salary including superannuation with the possibility of options and performance incentives. The Board of Directors review executive packages annually by reference to the consolidated entity’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The performance of Executives is assessed annually with each executive and is based predominantly on operational and exploration activities and shareholders’ value. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can award these if they can be reasonably justified. The policy is designed to attract and retain the highest calibre of Executives and reward them for performance that results in long term growth in shareholder value. Directors and Executives receive a superannuation guarantee contribution required by the Government, and do not receive any other retirement benefits. All remuneration paid to Directors and Executives is valued at the cost to the Company and expensed. The Board policy is to remunerate Non-executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Company has established a Remuneration Committee. The Remuneration Committee is responsible for determining and reviewing compensation arrangements for directors and executive team. The Board of Directors, following a recommendation from the remuneration Committee, determines payments to the Non-executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. Any changes to the maximum aggregate amount of fees that can be paid to Non- executive Directors is subject to approval by shareholders at an Annual General Meeting. The latest determination was at a General Meeting prior to the Company’s listing on ASX, held on 5 August 2006 when shareholders approved an aggregate remuneration of $200,000 per year. Subsequent to the end of the period, shareholders approved an increase in the aggregate remuneration pool for non-executive directors to $400,000. Fees for Non-executive Directors are not linked to performance of the consolidated entity. Andrew Cunningham was paid a Non-executive director fee of $25,000 plus a consulting fee at an hourly rate and Michael Elliott was paid $20,000 p.a. Performance-based remuneration Performance based remuneration (options) were granted to Directors by shareholders at the Company’s Annual General Meeting dated 15 November 2018. Details of this remuneration are disclosed above in the paragraph entitled “Interests in the shares and options of the company and related bodies corporate”. 9 DIRECTORS’ REPORT Company performance, shareholder wealth and Director and executive remuneration The remuneration policy has been tailored to increase goal congruence between shareholders, Directors and Executives. There have been two methods applied in achieving this aim, the first being a fixed market competitive salary, and the second being the potential issue of options to Directors and Executives to encourage the alignment of personal and shareholder interests. In accordance with best practice corporate governance, the structure of Non-executive Director and Executive remuneration is separate and distinct. Key Management Personnel Remuneration Policy The remuneration structure for KMP is to be based on a number of factors, including length of service, particular experience of the individual concerned, and overall performance of the Company. The contracts for service between the Company and KMP are on a continuing basis, the terms of which are not expected to change in the immediate future. Employment Contracts Executive Director Contract Commencement Contract Termination Remuneration Notice period A Cunningham1 13 November 2015 No fixed term $250,000 3 months T Benson2 22 February 2017 No fixed term $250,000 3 months A Mulligan3 7 August 2012 7 August 2015 $250,000 3 months Termination entitlement 3 months’ pay in lieu of notice 3 months’ pay in lieu of notice 3 months’ pay in lieu of notice 1Mr Cunningham was appointed Chief Executive Officer/Executive Director on 21 April 2021. His Total Fixed Remuneration (TFR) from 1 July 2021 is $330,000 & he will receive a short term incentive benefit (STI) on a financial year basis. Performance against set KPI targets will result in an STI benefit of between 70% & 125% of TFR. 50% of the STI will be paid in cash with the balance in shares vesting after 12 and 24 months. There is no set term to the contract and it can be terminated by either party with 3 months’ notice. He was previously appointed as a Non-Executive Director on 13 November 2015. 2Mr Benson resigned on 19 October 2020 and was paid his 3 month notice period. 3Mr Mulligan resigned as a Director on 15 July 2021 and became the Chief Operating Officer and is now being paid as a contractor with the same contract terms. In addition, each Executive Director is entitled to the statutory superannuation guarantee. 10 DIRECTORS’ REPORT The table below details the nature and amount of remuneration for each Director of Walkabout Resources Ltd. There are no Executives who aren’t Directors. 30 June 2021 Short-term Benefits Post- employment Benefits Share-based Payment Total Performance Related Bonuses Non-cash benefit Other Superannuation Equity Options $ $ $ $ $ $ $ Trevor Benson1 Allan Mulligan2 Andrew Cunningham Michael Elliott Salary and fees $ 182,957 249,996 255,400 18,100 706,453 - - - - - - - - - - - - - - - - - - - 196,030 273,746 255,400 20,000 745,176 % - - - - - - - - - - 13,073 23,750 - 1,900 38,723 Post- employment Benefits 30 June 2020 Short-term Benefits Share-based Payment Total Performance Related Trevor Benson1 Allan Mulligan2 Andrew Cunningham Michael Elliott Salary and fees $ 249,996 249,996 234,200 18,100 752,292 Bonuses Non-cash benefit Other Superannuation Equity Options $ $ $ $ $ $ $ - - - - - - - - - - - - - - - 23,750 23,750 - 1,900 49,400 - - - - - - - - 273,746 273,746 234,200 20,000 801,692 % - - - - - 1Resigned 19 October 2020 2Resigned as Director 15 July 2021 11 DIRECTORS’ REPORT Shareholdings of Key Management Personnel Ordinary Shares 30 June 2021 Directors Balance at beginning of period Number Conversion of performance rights Number Acquired Number Net Change Other Balance at end of period Balance held nominally Number Number Number Trevor Benson1 Allan Mulligan2 Andrew Cunningham Michael Elliott 2,050,244 5,474,656 1,240,188 14,300,000 30 June 2020 Directors Balance at beginning of period Number Conversion of performance rights Number Trevor Benson1 Allan Mulligan2 Andrew Cunningham Michael Elliott 2,886,811 6,074,656 1,203,183 12,300,000 - - - - - - - - - - - 100,000 (2,050,244) - - - - 5,474,656 1,240,188 14,400,000 - 1,705,801 629,076 12,400,000 Acquired Number Net Change Other Balance at end of period Balance held nominally Number Number Number - 100,000 37,005 2,000,000 (836,567) (700,000) - - 2,050,244 5,474,656 1,240,188 14,300,000 - 1,705,801 629,076 12,300,000 All equity transactions with key management personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at arm’s length. Net change – other represents the balance on appointment / resignation 1Resigned 19 October 2020 2Resigned as Director 15 July 2021 12 DIRECTORS’ REPORT Option holdings of Key Management Personnel 30 June 2021 Directors Balance at beginning of period Number Granted as remuneration Number Expired Number Net Change Other Balance at end of period Balance held nominally Number Number Number Trevor Benson1 Allan Mulligan2 Andrew Cunningham Michael Elliott - 4,000,000 3,000,000 - 30 June 2020 Directors Balance at beginning of period Number Granted as remuneration Number Trevor Benson1 Allan Mulligan2 Andrew Cunningham Michael Elliott 1Resigned 19 October 2020 2Resigned as Director 15 July 2021 107,509 4,100,000 3,037,005 - - - - - - - - - - - - - - - - - - 4,000,000 3,000,000 - - - - - Expired Number Net Change Other Balance at end of period Balance held nominally Number Number Number (107,509) - - (9,750,000) - (100,000) (37,005) 9,750,000 - 4,000,000 3,000,000 - - - - - At the Company’s 2020 annual general meeting the remuneration report was approved by shareholders. Votes cast against the remuneration report considered at that annual general meeting were less than 25%. Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration The remuneration policy has been tailored to align the strategic goals of the Company to create value for shareholders, Directors and executives. The Company believes the policy has been effective in in aligning the interests of the Company’s key management personnel with the interests of its shareholders. Details of Directors’ and executives' interests in equity securities at year end are set out above. 13 DIRECTORS’ REPORT Additional Information The earnings of the Group for the five years to 30 June 2021 are summarised below: Share Price at 30 June Loss for the year (continuing and discontinued operations) EPS for the year (continuing and discontinued operations) 2017 $0.08 2018 $0.15 2019 $0.425 2020 $0.135 2021 $0.20 ($1,421,369) ($1,965,876) ($2,737,501) ($4,440,408) ($3,325,061) (1.37) cents (0.94) cents (0.95) cents (1.33) cents (0.94) cents Fixed remuneration is not linked to group performance. It is set with reference to the individual’s role, responsibilities and performance and remuneration levels for similar positions in the market. No dividends were paid by the Company nor was there any return of capital over the past 5 years. Other transactions with Key Management Personnel For amounts owing to key management personnel refer to Note 18 to the financial report for details. End of Remuneration Report 14 DIRECTORS’ REPORT Directors’ meetings The number of meetings of directors held during the year and the number of meetings attended by each Director were as follows: Number of meetings held Number eligible to attend Number attended Trevor Benson Alan Mulligan Andrew Cunningham Michael Elliott 7 7 7 7 3 7 7 7 3 7 6 7 Proceedings on Behalf of Company No person has applied for leave of Court to bring proceedings on behalf of the Company or 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 any part of those proceedings. The Company was not a party to any such proceedings during the year. Auditor’s independence Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 16 and forms part of this Directors’ Report for the year ended 30 June 2021. Non-audit Services Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 4 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services have been reviewed to ensure that they do not impact the impartiality and objectivity of the auditor and none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board. Indemnification and insurance of auditor The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. Signed in accordance with a resolution of the Board of Directors. Mike Elliott Non-Executive Chairman 30 September 2021 15 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the consolidated financial report of Walkabout Resources Ltd for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) any applicable code of professional conduct in relation to the audit. Perth, Western Australia 30 September 2021 L Di Giallonardo Partner 16 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021 Note Consolidated Income Foreign exchange gain/(loss) Depreciation expense Occupancy costs Legal and compliance fees Administration expenses Interest expense Consulting fees Professional fees Other expenses Exploration costs expensed or written off Share based payments Travel Loss before income tax Income tax benefit Loss for the year 2 2 2 2 3 2021 $ 2020 $ 38,455 68,528 (316,013) (12,373) (259,004) (443,938) (811,149) (7) (657,167) (169,960) (338,407) (331,498) - (24,000) (210,387) (23,230) (261,647) (620,042) (890,320) (106,332) (610,610) (127,768) (787,131) (159,683) (583,991) (127,795) (3,325,061) (4,440,408) - - (3,325,061) (4,440,408) Other comprehensive income Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations (132,627) (28,583) Other comprehensive loss for the year, net of tax (132,627) (28,583) Total comprehensive loss for the year (3,457,688) (4,468,991) Loss attributable to: Owners of the parent Non-controlling interests Total comprehensive Loss attributable to: Owners of the parent Non-controlling interests Earnings Per Share Basic loss per share (cents per share) Diluted loss per share (cents per share) (3,321,221) (4,400,868) (3,840) (39,540) (3,325,061) (4,440,408) (3,441,629) (4,429,451) (16,058) (39,540) (3,457,688) (4,468,991) (0.94) (0.94) (1.33) (1.33) The accompanying notes form part of these financial statements. 17 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021 Note Consolidated 2021 $ 2020 $ ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables TOTAL CURRENT ASSETS NON-CURRENT ASSETS Trade and other receivables Property, plant and equipment Mine properties Deferred exploration and evaluation expenditure TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Employee benefits TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Share capital Reserves Accumulated losses Equity attributable to owners of the parent Non-controlling interest TOTAL EQUITY 6 7 7 8 8 9 10 12 13 5,659,691 281,911 5,941,602 9,976 31,126 2,882,400 137,424 3,019,824 5,000 37,435 15,540,554 4,165,772 1,821,685 13,597,936 17,403,341 17,806,143 23,344,943 20,825,967 1,116,036 177,179 1,293,215 1,293,215 1,105,538 217,413 1,322,951 1,322,951 22,051,728 19,503,016 82,330,019 76,323,619 1,249,977 1,370,385 (61,472,669) (58,151,448) 22,107,327 19,542,556 (55,599) (39,540) 22,051,728 19,503,016 The accompanying notes form part of these financial statements. 18 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2021 Consolidated Contributed Equity Accumulated Losses Foreign Currency Translation Reserve Option Reserve Total Non- Controlling Interest Total Equity $ $ $ $ $ $ $ Balance as at 1 July 2020 76,323,619 (58,115,448) (118,035) 1,488,420 19,542,556 (39,540) 19,503,016 Net loss for the year Exchange differences arising on translation of foreign operations Total comprehensive loss for the year Shares issued – net of cost Balance as at 30 June 2021 - - - (3,321,221) - - (120,408) (3,321,221) (120,408) 6,006,400 - - - - - - (3,321,221) (3,840) (3,325,061) (120,408) (12,219) (132,627) (3,441,629) (16,058) (3,457,688) - 6,006,400 82,330,019 (61,472,669) (238,443) 1,488,420 22,107,327 (55,599) 22,051,728 Consolidated Contributed Equity Accumulated Losses Foreign Currency Translation Reserve Option Reserve Total Attributable to Parent Non- Controlling Interest Total Equity $ $ $ $ $ $ $ Balance as at 1 July 2019 71,260,507 (53,750,580) (89,452) 904,429 18,324,904 - 18,324,904 Net loss for the year Exchange differences arising on translation of foreign operations Total comprehensive loss for the year Share based payment Shares issued – placement Shares issued – exercise of options Balance as at 30 June 2020 - - - - 530,000 4,533,112 (4,400,868) - - (28,583) (4,400,868) (28,583) - - - (4,400,868) (39,540) (4,440,408) (28,583) - (28,583) (4,429,451) (39,540) (4,468,991) - - - - - - 583,991 - - 583,991 530,000 4,533,112 - - - 583,991 530,000 4,533,112 76,323,619 (58,151,448) (118,035) 1,488,420 19,542,556 (39,540) 19,503,016 The accompanying notes form part of these financial statements. 19 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021 Note Consolidated 2021 $ 2020 $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (2,877,848) (2,974,323) Grant received Interest received Interest paid 37,500 955 (7) 62,500 6,028 (106,332) Net cash used in operating activities 15 (2,839,400) (3,012,127) CASH FLOWS FROM INVESTING ACTIVITIES Exploration and evaluation expenditure Payments for property, plant & equipment Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Proceeds from borrowings Repayment of borrowings Net cash provided by financing activities Net (decrease) / increase in cash held Cash at beginning of financial year Cash at end of financial year (389,709) (1,622,658) - (1,963,714) (389,709) (3,586,372) 6,006,400 - - 6,006,400 2,777,291 2,882,400 5,659,691 4,180,199 5,000,000 (4,418,963) 4,761,236 (1,837,263) 4,719,663 2,882,400 11 11 6 6 The accompanying notes form part of these financial statements. 20 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (a) (b) (c) (d) Basis of Preparation These financial statements are general purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and comply with other requirements of the law. The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The financial statements are for the consolidated entity (or “the Group”) consisting of Walkabout Resources Ltd and its subsidiaries. For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity. The financial statements have been prepared on a historical cost basis. Cost is based on the fair values of the consideration given in exchange for assets. The financial statements are presented in Australian dollars. The Company is a listed public company, incorporated in Australia and operating in Australia, Botswana, Tanzania, Malawi, Northern Ireland, Scotland and Namibia. The Group’s principal activities are mineral exploration and the development of resources and energy assets. Adoption of new and revised standards The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. There was no material impact to Group accounting policies. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted, however are not expected to have a material impact on Group accounting policies. Statement of Compliance The financial report was authorised for issue on 30 September 2021. The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). Basis of Consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Walkabout Resources Ltd (‘the Company’ or ‘parent entity’) as at 30 June 2021 and the results of all subsidiaries for the year then ended. Walkabout Resources Ltd and its subsidiaries are referred to in this financial report as the Group or the consolidated entity. The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing when the Group controls another entity. Business combinations have been accounted for using the acquisition method of accounting. Unrealised gains or transactions between the Group and its associates are eliminated to the extent of the Group’s interests in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are presented separately in the statement of comprehensive income and within equity in the consolidated statement of financial position. Losses are attributed to the non-controlling interests even if that results in a deficit balance. The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity attributable to owners of Walkabout Resources Ltd. 21 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued (d) (e) Basis of Consolidation - continued When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. Critical accounting judgements and key sources of estimation uncertainty The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in which the estimate is revised if it affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Exploration and evaluation expenditure: The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits are likely either from future exploitation or sale or where activities have not reached a stage which permits a reasonable assessment of the existence of reserves. 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. Fair value is determined by an external valuer using a Black and Scholes model, using the assumptions detailed in Note 20. From time to time the Company makes share-based payments to other parties, other than employees, for goods or services. Where the fair value of the goods and services cannot be reliably estimated, the Company measures their fair value by reference to the fair value of the equity instruments granted. (f) Going Concern For the year ended 30 June 2021, the Group recorded a net loss of $3,325,061 (2020: $4,440,408) and a net cash inflow of $2,777,291 (2020: outflow of $1,837,263). At 30 June 2021, the Group had cash available of $5,659,691 and exploration, lease and the Lindi Jumbo Graphite Project construction commitments for the next 12 months of $2,673,170. The financial report has been prepared on the basis of accounting principles applicable to a going concern, which assumes the commercial realisation of the future potential of the Group’s assets and the discharge of their liabilities in the normal course of business. The Board considers that the Group is a going concern. (g) (h) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of Walkabout Resources Ltd. Foreign Currency Translation Both the functional and presentation currency of Walkabout Resources Ltd and its Australian subsidiaries is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance date. All exchange differences in the consolidated financial report are taken to the statement of comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. 22 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued (h) (i) (j) (k) Foreign Currency Translation – continued Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. The functional currency of the foreign operations in Botswana, Tanzania, Malawi, Namibia, Scotland and Northern Ireland is Pula, Schillings, Kwacha, Namibian Dollars and Sterling respectively. As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of Walkabout Resources Ltd at the rate of exchange ruling at the balance date and their statements of comprehensive income are translated at the weighted average exchange rate for the year. The exchange differences arising on the translation are taken directly to a separate component of equity, being recognised in the foreign currency translation reserve. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss. Income Recognition Interest income Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. Other income Other income is recognised when it is received or when the right to receive payment is established. Leases Variable lease payments for lease terms less than 12 months that do not depend on an index or rate are expensed in the period in which they are incurred. Income Tax The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date. Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except: • when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or • when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: • when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or • when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. 23 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued (k) Income Tax - continued The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Tax consolidation legislation The Company and its 100% owned Australian resident subsidiaries have implemented the tax consolidation legislation. Current and deferred tax amounts are accounted for in each individual entity as if each entity continued to act as a taxpayer on its own. The Company recognises its own current and deferred tax amounts and those current tax liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has assumed from its controlled entities within the tax consolidated Group. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts payable or receivable from or payable to other entities in the Group. Any difference between the amounts receivable or payable under the funding agreement are recognised as a contribution to (or distribution from) controlled entities in the tax consolidated Group. (l) Other taxes Revenues, expenses and assets are recognised net of the amount of GST and VAT except: • when the GST and VAT incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST and VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • receivables and payables, which are stated with the amount of GST and VAT included. The net amount of GST and VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis and the GST and VAT component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST and VAT recoverable from, or payable to, the taxation authority. (m) Impairment of assets The Group assesses at each balance date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. 24 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued (m) Impairment of assets - continued 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. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (n) Cash and cash equivalents Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. (o) Trade and other receivables Trade and other receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for expected credit losses. The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. (p) Derecognition of financial assets and financial liabilities (i) Financial assets A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when: • • • the rights to receive cash flows from the asset have expired; the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or the Group has transferred its rights to receive cash flows from the asset and either: (a) (b) has transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration received that the Group could be required to repay. When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash- settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price. 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued (p) Derecognition of financial assets and financial liabilities - continued (ii) Financial liabilities A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss. (q) Property, Plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated on a diminishing value basis or units of production basis over the estimated useful life of the assets at the following rates: Plant and equipment – 20% Computer equipment – 30% Motor Vehicles – 33.3% Furniture and Fittings – 22.2% Mine properties – Amortised over units of production. The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. (i) Impairment The carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. The recoverable amount of plant and equipment 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 an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash- generating unit to which the asset belongs, unless the asset's value in use can be estimated to be close to its fair value. An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. (ii) Derecognition and disposal An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Mine Properties Mining assets, including mineral property interests and mine plant facilities, are initially recorded at cost. Costs incurred to develop the property are capitalised as incurred until the mine is considered to have moved into the production phase, after which they are measured at cost less accumulated depreciation and impairment. Costs include expenditure that is directly attributable to the acquisition of and construction of the asset. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset as appropriate only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Borrowing costs are capitalised to the extent that they are directly attributable to the acquisition and construction of qualifying assets. Qualifying assets are assets that take a substantial time to get ready for their intended use. These costs are capitalised until the asset moves into the production phase. Other borrowing costs are expensed. Depreciation and amortisation of mineral property interests and mine plant facilities are computed principally by the units of production method over the life of mine, based on estimated quantities of economically recoverable proved and probable reserves, which can be recovered in future from known mineral deposits. Changes in management’s estimates of economically recoverable reserves and resources impact depreciation and amortisation on a prospective basis. Where a depreciable asset is used in the construction or extension of a mine, the depreciation is capitalised against the mine’s cost. 26 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued (q) Property, Plant and equipment - continued Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised. (r) Trade and other payables Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months. (s) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as separate assets but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. (t) Employee leave benefits (i) Wages, salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’ services up to the balance date, they are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. (ii) Long service leave The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the balance date. Consideration is given to expect future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the balance date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. (u) Share-based payment transactions Equity settled transactions: The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions). The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. Where appropriate, fair value is determined by using a Black-Scholes model, further details of which are given in Note 12(b). From time to time the Company makes share-based payments to other parties, other than employees, for goods or services. Where the fair value of the goods and services cannot be reliably estimated, the Company measures their fair value by reference to the fair value of the equity instruments granted. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Walkabout Resources Ltd (market conditions) if applicable. 27 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued (u) Share-based payment transactions - continued The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share (see Note 5). (v) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (w) Earnings per share Basic earnings/loss per share is calculated as net profit or loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings/loss per share are calculated as net profit or loss attributable to members of the parent, adjusted for: • • • costs of servicing equity (other than dividends) and preference share dividends; the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. (x) Exploration and evaluation Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied: (i) the rights to tenure of the area of interest are current; and (ii) at least one of the following conditions is also met: (a) the exploration and evaluation expenditures are expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale; or (b) exploration and evaluation activities in the area of interest have not at the balance date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing. The decision to capitalise or expense exploration and evaluation expenditure is made separately for each area of interest. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. 28 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES – continued (x) Exploration and evaluation – continued Expenditure on exploration and evaluation is capitalised and disclosed in the ASX Appendix 5B Quarterly Cash Flow Reports if the expenditure is in line with, and meets, the criteria for capitalisation in accordance with Group Policies. During the course of assessing the exploration expenditure at financial year end, in line with AASB6, some items of expenditure previously capitalised may be written off or treated as operating cash flows in the Annual Financial Report causing differences to the ASX Appendix 5B reports. (y) Parent entity financial information The financial information for the parent entity, Walkabout Resources Ltd, disclosed in Note 17 has been prepared on the same basis as the consolidated financial statements, except as set out below. (i) Investments in subsidiaries, associates and joint venture entities Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial statements of Walkabout Resources Ltd. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments. (ii) Share-based payments The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity. 29 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 2: INCOME AND EXPENSES Income Interest received Government incentive Expenses Foreign exchange (gain) / losses Depreciation Exploration costs expensed or written off Consolidated 2021 $ 2020 $ 955 37,500 38,455 (316,013) (12,373) (331,498) 6,028 62,500 68,528 210,387 (23,230) (159,683) NOTE 3: INCOME TAX EXPENSE a. The components of income tax expense comprise: The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows: Accounting loss before tax Income tax (benefit) calculated at 26.0% (2020: 27.5%) (3,325,061) (4,440,408) (864,516) (1,221,112) Non-deductible expenses Non-assessable income Difference in tax rate of subsidiaries operating in other jurisdictions Unused tax losses not recognised as deferred tax assets Eliminations on consolidation Other deferred tax assets and tax liabilities not recognised Income tax expense/(benefit) reported in the consolidated statement of comprehensive income b. Unrecognised deferred tax balances The following deferred tax assets/(liabilities) have not been brought to account: Deferred tax assets / (liabilities) comprise: • • Losses available for offset against future taxable income – revenue Losses available for offset against future taxable income – capital • Depreciation timing differences • • Accrued expenses and liabilities • • Deferred gains and losses on foreign exchange contracts • • Exploration expenditure capitalised c. Income tax benefit not recognised direct in equity • Share issue costs 193,847 (9,750) (37,462) 736,958 11,497 (30,574) 683,718 (17,188) (29,248) 539,295 - 44,534 - - 5,804,534 18,747 (683) 54,252 450,697 (1,103,454) 5,224,093 78,720 78,720 25 4,629,114 20,622 3,103 Ggg 77,140 71,818 31,479 4,833,276 - - The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits thereof. 30 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE: 4: AUDITOR’S REMUNERATION Remuneration of the auditor for: Auditing or reviewing the financial report – HLB Mann Judd Taxation compliance services – HLB Mann Judd NOTE 5: EARNINGS PER SHARE Basic and diluted earnings/(loss) per share Basic loss per share (cents per share) Diluted loss per share (cents per share) Earnings Earnings used in the calculation of basic and diluted earnings per share Consolidated 2021 $ 2020 $ 56,708 13,500 70,708 59,579 21,000 80,579 (0.94) (0.94) (1.33) (1.33) Consolidated 2021 $ 2020 $ Loss for the year (3,325,061) (4,440,408) Weighted average number of ordinary shares Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 353,929,891 334,828,412 Weighted average number of ordinary shares outstanding during the year used in calculating diluted EPS 353,929,891 334,828,412 NOTE 6: CASH AND CASH EQUIVALENTS Cash at bank and in hand 5,659,691 2,882,400 Cash at bank earns interest at floating rates based on daily bank deposit rates NOTE: 7: TRADE AND OTHER RECEIVABLES CURRENT Other debtors NON-CURRENT Security bonds 281,911 137,424 9,976 5,000 31 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 8: PROPERTY, PLANT AND EQUIPMENT NON-CURRENT Property, plant and equipment At cost Accumulated depreciation Total property, plant and equipment a. Movements in Carrying Amounts Consolidated 2021 $ 2020 $ 15,708,726 (137,046) 15,571,680 4,336,875 (133,670) 4,203,205 Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year. Plant & Equipment Balance at the beginning of the year Additions Depreciation expense Foreign exchange Balance at end of the year Mine Properties – work in progress Balance at the beginning of the year Additions Transfer from Deferred Exploration and Evaluation Expenditure Amortisation expense Foreign exchange Balance at end of the year TOTAL Consolidated 2021 $ 2020 $ 37,435 - (12,373) 6,064 31,126 Consolidated 2021 $ 4,165,772 - 11,569,184 - (194,402) 15,540,554 15,571,680 7,264 52,645 (23,230) 756 37,435 2020 $ 2,513,296 1,652,476 - - - 4,165,772 4,203,207 32 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 9: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE NON-CURRENT Costs carried forward in respect of: Exploration and evaluation phase – at cost Balance at beginning of year Expenditure incurred Foreign currency exchange variation Expenditure written off (i) Transfer to Mine Properties (ii) Carrying amount at end of year Consolidated 2021 $ 2020 $ 13,597,936 12,514,419 580,218 (455,787) (331,498) (11,569,184) 1,243,200 - (159,683) - 1,821,685 13,597,936 (i) (ii) During the 2021 financial year, exploration and evaluation expenditure totalling $331,498 was written off due to tenement relinquishments and the Directors’ assessment of the value of some of the Group’s projects as a result of no further exploration being planned. The Lindi Jumbo project costs have been transferred from Exploration to Development in line with the Group policies as the Company has made the decision to develop the project with the funding secured. Upon transfer, this asset was tested for impairment in accordance with the requirements of AASB 6. The result of this was that no impairment was required to be recorded. Ultimate recovery of exploration and evaluation expenditure carried forward is dependent upon the recoupment of costs through successful development and commercial exploitation, or alternatively, by sale of the respective areas. NOTE 10: TRADE AND OTHER PAYABLES CURRENT Trade payables Sundry payables and accrued expenses Trade payables are non-interest bearing and are normally settled on 30 day terms. 11. BRIDGING LOAN Balance at beginning of period Bridging loan Interest paid Repayments made - cash Repayments made – in lieu of option exercise 33 Consolidated 2021 $ 2020 $ 609,642 506,394 254,697 850,841 1,116,036 1,105,538 Consolidated 2021 $ 2020 $ - - - - - - - 5,000,000 106,332 (4,418,963) (581,037) - NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 On 9 October 2019, unrelated sophisticated shareholders and a director of the Company agreed to provide an unsecured short- term Bridging Debt Facility of $5 million (“Loan”) while the Company finalised a debt-based project funding facility with an International Investment Bank. The Loan was fully repaid on 2 January 2020. The Loan was used to meet due diligence and operating costs of the Company including the continued development of the Lindi Jumbo Project until further project financing was available. NOTE 12: SHARE CAPITAL Consolidated 2021 $ 2020 $ a) Ordinary Shares (i) Issued and paid-up capital 381,133,645 (2020: 349,133,645) fully paid ordinary shares 82,330,019 76,323,619 (iii) Movements in share capital Opening balance Issued on exercise of options Issued for cash – placements 2021 2020 No. of Shares $ No. of Shares $ 349,133,645 76,323,619 316,587,593 71,260,507 - - 30,241,703 4,533,112 32,000,000 6,400,000 2,304,349 530,000 Less costs of issues Closing balance - (393,600) - - 381,133,645 82,330,019 349,133,645 76,323,619 (iii) Holders of ordinary shares have the right to receive dividends as declared and in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held and the amount paid up. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each holder in person or by proxy has one vote on a show of hands. Ordinary shares have no par value and the Company does not have a limited amount of authorised capital. b) Options Movements in Options Opening balance Exercised Issued for nil consideration – Bridge Options Expired Closing balance Consolidated 2021 2020 No. of Options No. of Options 7,000,000 - - - 7,000,000 47,104,910 (30,241,703) 25,000,000 (34,863,207) 7,000,000 Upon exercise, the options have the same rights as fully paid ordinary shares. The balance of 7,000,000 options comprises director options exercisable at $0.20 and expiring on 11 December 2021. 34 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 12: SHARE CAPITAL - continued c) Capital Management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2020. The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and accumulated losses. None of the Group’s entities are subject to externally imposed capital requirements. Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax, dividends and general administrative outgoings. Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the risks associated with each class of capital. NOTE 13: RESERVES Opening Balance 1 July Translation of foreign operations Issue of options Closing Balance 30 June Consolidated 2021 $ 1,370,385 (120,408) - 2020 $ 814,977 (28,583) 583,991 1,249,977 1,370,385 Foreign Currency Translation Reserve The foreign currency translation reserve records exchange differences arising on translation of foreign subsidiary accounts. Opening Balance 1 July Translation of foreign operations Closing Balance 30 June Option Reserve (118,035) (120,408) (238,443) (89,452) (28,583) (118,035) The option reserve records the value of options issued to directors and service providers as part of their remuneration. Opening Balance 1 July Issue of options to financiers Issue of options to directors Closing Balance 30 June NOTE 14: SEGMENT REPORTING Identification of reportable segments Consolidated 2021 $ 1,488,420 - - 2020 $ 904,429 583,991 - 1,488,420 1,488,420 The Company has identified its operating segments based on the internal reports that are reviewed and used by the board of directors in assessing performance and determining the allocation of resources. The Company is managed primarily on the basis of its graphite project in Tanzania, copper projects in Northern Ireland and Scotland, other developing prospects in Tanzania and Namibia and its corporate activities, with the coal exploration in Botswana being exited. Operating segments are therefore determined on the same basis. 35 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 14: Segment Reporting – continued Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics. Types of reportable segments Graphite Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Tanzania are reported in this segment. Gold Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Tanzania, Scotland and Northern Ireland are reported in this segment Lithium Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Tanzania and Namibia are reported in this segment. Base Metals Segment assets, including acquisition cost of exploration licences and all expenses related to the tenements in Northern Ireland and Scotland are reported in this segment. Corporate Corporate, including treasury, corporate and regulatory expenses arising from operating an ASX listed entity. Segment assets, including cash and cash equivalents, and investments in financial assets are reported in this segment. Basis of accounting for purposes of reporting by operating segments Accounting policies adopted Unless stated otherwise, all amounts reported to the Board of Directors as the chief operating decision maker with respect to operating segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Company. Segment assets Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location. Unless indicated otherwise in the segment assets note, deferred tax assets and intangible assets have not been allocated to operating segments. Segment liabilities Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of the segment. Borrowings and tax liabilities are generally considered to relate to the Company as a whole and are not allocated. Segment liabilities include trade and other payables. Unallocated items The following items of revenue, expense, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment: • • • • • net gains on disposal of equity investments; income tax expense; deferred tax assets and liabilities; intangible assets; and discontinuing operations. 36 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 Note 14: Segment Reporting – continued Segment performance 30 June 2021 Segment revenue Segment result Included with segment results: • • Depreciation Interest revenue Segment assets Segment liabilities 30 June 2020 Segment revenue Segment result Included with segment results: Corporate Graphite Gold/Base Metals Lithium $ 38,455 $ - $ - $ - Total $ (2,246,716) (633,487) (428,964) (15,894) (3,325,061) (1,808) (10,565) 955 - - - - - (12,373) 955 469,467 20,918,155 1,527,044 430,277 23,344,943 (573,095) (674,577) (44,226) (1,317) (1,293,215) 68,528 - - - 68,528 (3,085,370) (1,189,296) (148,313) (17,429) (4,440,408) • • • • • Depreciation Interest revenue Share-based payment (583,991) (8,725) (14,595) 6,028 - - - - - - - - (23,320) 6,028 (583,991) Segment assets Segment liabilities 2,830,963 16,163,350 1,487,588 344,066 20,825,967 (491,167) (760,614) (69,894) (1,276) (1,322,951) 37 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 15: CASH FLOW INFORMATION Reconciliation of net cash flow from operating activities with loss after income Tax Loss after income tax Non-cash flows in loss - Foreign exchange gain/(loss) - Exploration written off - Depreciation - Share based payments Decrease /(increase) in trade and other receivables Increase /(decrease) in trade payables and accruals (Decrease)/increase in provisions Net cash used in operating activities Consolidated 2021 $ 2020 $ (3,325,061) (4,440,408) 316,013 331,498 12,373 - (144,487) 10,498 (40,234) 210,387 74,214 23,230 583,991 (37,896) 463,737 110,618 (2,839,400) (3,012,127) NOTE 16: EVENTS AFTER THE BALANCE DATE The following significant changes in the state of affairs of the Company occurred after balance date: 1. Second stage of companion equity completed oversubscribed, being a 1 for 10 non-renounceable Entitlement issue raising A$7.6m including US$4m for the continued development of the Lindi Jumbo project, 2. Third and final stage of US$12m companion equity requirement completed by agreeing a placement of ordinary Shares of up to US$10m with Battery Metals Capital Group LLC, a U.S.-based institutional investor, raising up to US$6m in two tranches with a further US$4m available within 10 months at the Company’s election, 3. Appointment of two new Non-Executive Directors and full time CFO to deliver development, production and growth as the Company transitions from explorer to production. 4. Commencement of construction activities of the Lind Jumbo Graphite Mine. NOTE 17: PARENT ENTITY DISCLOSURES Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Total liabilities EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY Financial performance 2021 $ 2020 $ 392,348 22,151,690 22,544,038 492,310 492,310 2,811,713 17,161,647 19,973,361 470,345 470,345 82,330,047 1,408,913 76,323,647 1,370,385 (61,687,232) (58,191,016) 22,051,728 19,503,016 Total comprehensive loss for the period (1,312,407) (4,815,778) The parent entity has no contingent liabilities or commitments at balance date. 38 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 18: RELATED PARTY TRANSACTIONS Amounts owing to related parties at year end: Other Related Parties Andrew Cunningham Consolidated 2021 $ 2020 $ 28,480 49,019 Transactions between related parties are on normal commercial terms which are no more favourable than those available to other parties unless otherwise stated. Andrew Cunningham was paid fees for the provision of geological services to the Company at an hourly rate as set out in the remuneration report. In 2020, Michael Elliott received $24,301 for interest on the portion of the Bridge Loan he provided to Company, see note 11. The fees payable to Directors and options issued to Directors are disclosed in the Remuneration Report included in this Financial Report. Key management personnel remuneration is disclosed in Note 23. There are no other related party transactions that have occurred throughout the year. Parent Entity: Walkabout Resources Ltd Subsidiaries of Walkabout Resources Ltd: Reveal Resources Pty Ltd Walkabout Resources Australia Pty Ltd Walkabout Resources (Pty) Ltd Wizard Investments (Pty) Ltd Triprop Energy (Pty) Ltd Walkabout Resources Pty Ltd Walkabout Resources Pty Ltd Lindi Jumbo Ltd Aardvark Minerals (Pty) Ltd Shackleton Resources Ltd Antrim Metals Ltd2 JDH Exploration Pty Ltd 2021 2020 Australia Australia Australia Botswana Botswana Botswana Malawi Tanzania Tanzania Namibia Northern Ireland UK UK 100% 100% 100% 70% 40%1 100% 100% 100% 100% 100% - 75% 100% 100% 100% 70% 40%1 100% 100% 100% 100% 100% 50% 75% * Percentage of voting power is in proportion to ownership 1 The Group has consolidated Triprop Energy (Pty) Ltd as the Directors’ consider the Group controls this company through the terms of the farm-in agreement. 2 Antrim Metals Ltd was established as a joint venture entity to explore license areas in Northern Ireland. As at 30 June 2021, the Group no longer held any interest in Antrim Metals Ltd. Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are therefore not disclosed in this note. 39 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 19: FINANCIAL INSTRUMENTS a. Financial Risk Management The consolidated entity’s financial instruments consist of deposits with banks, accounts receivable and payable, loans to a controlled entity and a cash advance to a third party. i. Treasury Risk Management The Company’s funds are held with an Australian “four pillar” bank with the majority residing in a high interest low transaction fee account. The Company’s overall risk management strategy seeks to assist the consolidated group in meeting its financial targets, whilst minimising potential adverse effects on financial performance. Risk management policies are approved and reviewed by the Board on a regular basis. These include the formulation of credit risk policies and future cash flow requirements. Financial Risks The main risks the Group is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk. Foreign currency risk The Group is exposed to fluctuations in foreign currencies arising from the purchase of goods and services in currencies other than the group’s measurement currency. ii. Iii b. Foreign Currency Risk Sensitivity Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. Exchange rate exposures are managed within approved policy parameters, the Group does not engage in forward exchange contracts. The carrying amount of the Group’s foreign currency denominated financial assets and financial liabilities at the reporting date were as follows: Consolidated US Dollars Tanzania Schilling Namibian Dollars Great British Pounds Botswanan Pula Foreign currency risk 2021 $ 5,312,460 62,512 89,149 41,050 15,226 Assets 2020 $ Liabilities 2021 $ 2020 $ 765,624 57,301 54,453 90,557 13,674 - 679,937 466 33,866 2,329 - 766,236 419 69,894 2,379 5,520,397 981,609 716,598 838,928 The following table illustrates the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against the relevant foreign currency. The sensitivity includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. A negative number indicates a decrease in profit and other equity where the Australian dollar strengthens against the respective currency. For a weakening of the Australian dollar against the respective currency there would be an equal and opposite impact on the profit and other equity and the balances below would be positive. Profit or loss impact: US Dollars Tanzania Schilling Namibian Dollars Great British Pounds Botswanan Pula Consolidated 2021 $ 2020 $ 531,246 -61,743 8,868 718 1,290 76,562 -70,894 5,403 2,066 1,130 40 Consolidated 2021 Consolidated 2020 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 19: FINANCIAL INSTRUMENTS CONTINUED c. Liquidity risk Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The following table details the Group’s expected maturity for its non-derivative financial liabilities. These have been drawn up based on undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different period. Less than 1 month 1 – 3 Months 3 months – 1 year 1 – 5 years 5+ years $ $ $ Non-interest bearing 657,017 262,082 196,937 657,017 262,082 196,937 Less than 1 month 1 – 3 Months 3 months – 1 year 1 – 5 years 5+ years $ $ $ Non-interest bearing 123,418 289,017 910,516 123,418 289,017 910,516 d. Credit risk The main exposure to credit risk as at 30 June 2021 relates to three separate advances made to the Company’s wholly owned subsidiaries, Walkabout Resources (Pty) Ltd ($19,139,914), Reveal Resources Pty Ltd ($448,105), Lindi Jumbo Ltd ($12,986,637) and Shackleton Resources Ltd ($2,121,137). These separate advances have been made for the purpose of funding the day to day operations of the subsidiaries and their exploration activities. The loans are unsecured. The risk associated with these advances is exploration risk. These advances will not be repaid if the exploration does not provide an economic deposit. This risk is mitigated by providing the best opportunity to make an economic discovery by utilising exploration professionals of the highest standard and by obtaining the necessary funding. e. Interest Rate Risk The consolidated entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities are detailed in the liquidity risk section of this note. At balance date, the Group is not materially exposed to interest rate risk. f. Fair Value The carrying amount of the Group’s financial assets and liabilities approximate their carrying amount at balance date. 41 $ - - $ - - $ - - $ - - NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 20: SHARE-BASED PAYMENT PLANS The following share-based payment arrangements were in place as at 30 June 2021: Series Date options granted Number of shares under option Exercise price of option Expiry date of option Vesting date Fair value at grant date $ 3 11 December 2018 7,000,000 $0.20 11 December 2021 301,258 11 December 2018 On 15 November 2018, shareholders granted the directors 7,000,000 options with no vesting conditions. NOTE 21: CONTINGENT LIABILITES The Directors are not aware of any contingent liabilities as at the date of this report. NOTE 22: CAPITAL AND LEASING COMMITMENTS Consolidated 2021 $ 2020 $ 33,207 - 33,207 99,476 - 99,476 1,919,958 753,212 2,673,170 1,842,514 1,029,656 2,872,170 a. Property Lease Commitments Payable — minimum lease payments - - not later than 12 months between 12 months and 5 years b. Capital Expenditure Commitments Minimum expenditure commitments for mining tenements: - - not later than 12 months between 12 months and 5 years NOTE 23: DIRECTORS AND EXECUTIVES DISCLOSURES Details of Key Management Personnel Directors Trevor Benson Executive Chairman Allan Mulligan Executive Director Andrew Cunningham Chief Executive Officer/Executive Director, Non-Executive Director Michael Elliott Chairman, Non-Executive Director Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report. 42 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 23: DIRECTORS AND EXECUTIVES DISCLOSURES CONTINUED The totals of remuneration paid to key management personnel of the Group during the year are as follows: Short-term employment benefits Post-employment benefits Total KMP compensation NOTE 24: FUNDING FACILITIES Consolidated 2021 $ 2020 $ 706,453 38,723 745,176 752,292 49,400 801,692 During the year, the Company secured funding to progress to construction and development of the Lindi Jumbo Graphite Mine. This funding comprised the following: 1. Debt Funding Facility of US$20 million with CRDB Bank of Tanzania In April 2021, the Company (via its Tanzanian subsidiary) secured a US$20 million Debt Funding Facility with CRDB Bank of Tanzania. Key terms of the facility are as follows: • • • • • • • Facility Amount - US$20 million Tenor – 42 months including 12-month Grace period Interest rate - 8% per annum with interest during the grace period capitalised and added to the principal Repayment terms - the outstanding Facility and interest shall be repaid in equal quarterly instalments commencing after a 12-month grace period Security - Assignment of Material Contracts, Charge over Accounts of Lindi Jumbo, Corporate Guarantee from Walkabout Resources Ltd, Debenture Deed over all Lindi Jumbo assets, rights and undertakings, Standby Letter of Credit Equity contribution by borrower - US$12 million payment nett of allowable construction credits Key Conditions Precedent - Injection of the Equity Contribution, and the provision of all signed documentation facilitating the assignment of rights, confirmation of titles and interests, signed material agreements (including a signed project management agreement), insurances, loan subordinations and other standard project documentation in line with such debt agreements. At balance date, the conditions precedent to draw down under this facility had not been met (including securing the Companion Equity Raise noted below), therefore no accounting for this transaction was required at that date. 2. Equity The equity component of the funding has been raised in three stages: Stage 1: On 12 May 2021, the Company announced the successful completion of stage one funding, raising A$6.4 million (US$4.67 million) through a placement of 32 million fully paid ordinary shares at A$0.20c per share with Institutional investors in Australia (see Note 12). Stage 2: The Company raised a further A$7.6 million (US$5.54 million) subsequent to balance date through the offering of a 1 for 10 non-renounceable rights issue for eligible shareholders to subscribe for new ordinary shares at A$0.20c per share. The rights issue was underwritten to the amount of A$3.63 million (US$2.65 million) by existing shareholders with the Chairman personally underwriting an amount of $1.6 million (US$1.17 million) (see Notre 16). Stage 3: As announced on 25 June 2021, the Company has entered into a Share Placement Agreement with Battery Metals Capital Group LLC (BMCG) for a placement of ordinary shares via an institutional placement of up to US$10 million. The placement will be made in three tranches – the first tranche raised US$1.7m subsequent to balance date using the Company’s current capacity; the second tranche raised a further $US4.3 million subsequent to balance date, which was approved by shareholders at the general meeting on 24 August 2021; and the third tranche may raise US$4 million no later than 10 months following the second tranche, subject to the Company exercising its option to receive the third tranche and shareholder approval (if required). No accounting for this Share Placement Agreement was required at balance date. 43 1. In the opinion of the directors of Walkabout Resources Ltd (the ‘Company’): DIRECTORS’ DECLARATION a. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including: i. ii. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of their performance for the year then ended; and complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements. b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. 2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021. This declaration is signed in accordance with a resolution of the Board of Directors. Michael Elliott Non-Executive Chairman Dated this 30th day of September 2021 44 INDEPENDENT AUDITOR’S REPORT To the members of Walkabout Resources Ltd Report on the Audit of the Financial Report Opinion We have audited the financial report of Walkabout Resources Ltd (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) 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 then ended; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of 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 (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. 45 Key Audit Matter How our audit addressed the key audit matter Carrying amount of deferred exploration and evaluation expenditure Note 9 of the financial report In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources, the Group capitalises all exploration and evaluation including expenditure, acquisition costs and subsequently applies the cost model after recognition. focussed on Our audit the Group’s assessment of the carrying amount of the capitalised exploration and evaluation asset, as this is one of the most significant assets of the Group. Mine properties - work in progress Note 8 of the financial report The carrying amount of mine properties - work in progress at balance date was $15,540,554 and is being recognised in accordance with AASB 116 Property, Plant and Equipment. focussed on the Group’s Our audit assessment of the carrying amount of the capitalised asset due the significance of this asset to readers of the financial report. Previously, all costs in relation to the Lindi Jumbo Graphite Project were being recognised in accordance with AASB 6 Exploration for and Evaluation of Mineral Resources. Funding facilities Note 24 of the financial report On 25 June 2021, the Company entered into a Share Placement Agreement with Battery Metals Capital Group LLC for a placement of an aggregate amount of US$10,000,000. The accounting treatment and classification of this financial instrument was complex and as such this matter was determined to be a key audit matter. Our procedures included but were not limited to the following: ▪ We obtained an understanding of the key processes with management’s review of the carrying values of each area of interest; associated ▪ We considered the Directors’ assessment of potential indicators of impairment; ▪ We obtained evidence that the Group has current rights to tenure of its areas of interest; ▪ We examined the exploration budget for the year ending 30 June 2022 and discussed with management the nature of planned ongoing activities; and ▪ We examined the disclosures made in the financial report. Our procedures included but were not limited to the following: ▪ We obtained an understanding of management’s of recognising costs in accordance with and 116 Property, Plant AASB Equipment; assessment ▪ We considered the Directors’ assessment of impairment which was required to be carried out upon transfer of costs from Deferred Exploration and Evaluation to Mine Properties and Expenditure performed impairment our assessment; own ▪ We substantiated a sample of costs incurred; and ▪ We examined the disclosures made in the financial report. Our procedures included but were not limited to the following: ▪ We examined understand conditions; the agreement to and terms key the ▪ We reviewed the expert assessment obtained by management relating to the accounting for this transaction; ▪ We evaluated the Group's accounting treatment at inception of the financial 46 instrument applicable Standards; and in accordance with the Accounting Australian ▪ We assessed the adequacy of the the presentation and disclosures financial report. in Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. 47 - - - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Walkabout Resources Ltd for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. HLB Mann Judd Chartered Accountants Perth, Western Australia 30 September 2021 L Di Giallonardo Partner 48 ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES The following additional information is provided as at 23 September 2021. Distribution of Shareholders Fully Paid Ordinary Shares Category (size of holding) Number of Holders Number of Shares 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 – and over 436 530 386 1,176 491 134,108 1,618,552 3,002,517 43,903,734 376,747,816 The number of shareholdings held in less than marketable parcels is 628. The names of the substantial shareholders are: Shareholder Hong Kong Tiande Baorun Trade Co Limited Michael Elliott Voting Rights Number Ordinary 23,043,656 % 5.42 22,202,908 5.22 The voting rights attached to each class of equity security are as follows: Ordinary shares - Each ordinary share is entitled to one vote Options - Options are not entitled to a vote Performance Rights - Performance rights are not entitled to a vote Corporate Governance The 2021 Corporate Governance statement is located on the Company’s website at www.wkt.com.au. Unlisted securities : There are 2 holders of unlisted options exercisable at 20 cents and expiring 11 December 2021 as follows: Name Allan Mulligan Andrew Cunningham Total Holding 4,000,000 3,000,000 7,000,000 % Held 57% 43% 100% 49 ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES 50 NameUnits1HONG KONG TIANDE BAORUN TRADE CO LIMITED23,043,6562MARCOLONGO NOMINEES PTY LTD 17,455,4813BNP PARIBAS NOMINEES PTY LTD 15,733,9534OODACHI PTY LTD

11,730,0005P & M ZUVIC PTY LIMITED 11,000,0006CATHEDRAL FRONT PTY LTD 8,977,3967PANTAI INVESTMENTS PTY LTD 8,000,0008MR JOHN RICHARD TURNER + MRS CLARE FRANCES TURNER 7,053,3869IAN DAVID PENNY6,712,56610CITICORP NOMINEES PTY LIMITED6,709,66711MR ROBERT LINCOLN WESTLAKE6,443,14212GERROA SERVICES PTY LIMITED5,000,00013BNP PARIBAS NOMS PTY LTD 4,634,74014MR NAVEEN TEJPAL + MRS JYOTI TEJPAL 4,144,65115MR NATHAN ALAN JOHN ELL4,050,00016MR ALLY MBARAK NAHDI3,973,20317MRS CATHERINE MARIE ELLIOTT3,902,90818MR JUNYAN ZHOU3,751,00019KJM SECURITY PTY LTD3,670,05420MR DAVID ALAN CLARKSON + MRS HEATHER JOY CLARKSON3,305,500159,291,303266,115,424% Units0.860.78Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)37.44Total Remaining Holders Balance62.561.090.970.950.930.920.881.881.661.581.581.511.185.424.103.702.762.592.1120 Largest Shareholders - Ordinary Shares ADDITIONAL INFORMATION FOR ASX LISTED PUBLIC COMPANIES Schedule of mining tenements and beneficial interests Project / Location Tenement Type Tenement Number Interest at Start of Quarter Interest at End of Quarter Namibia Comment Holding Company Eureka EPL 6309 100% 100% Aardvark Minerals Pty Ltd 100% 70% 100% 70% 100% 100% 100% 100% 0% 0% 50% 75% 75% 0% Lindi Jumbo Ltd Lindi Jumbo / Ali Mbarak Lindi Jumbo Ltd Lindi Jumbo Ltd / Ali Mbarak Walkabout Resources Ltd (Tz) Granted Walkabout Resources Ltd (Tz) Granted Walkabout Resources Ltd (Tz) being transferred Duma Resources Pty Ltd (Tz) Application Recommended Granted (was PL16628/2020) Duma Resources Pty Ltd (Tz) Duma Resources Pty Ltd (Tz) Application Duma Resources Pty Ltd (Tz)) Withdrawn from JV Antrim Metals Ltd (CE) Withdrawn from JV Antrim Metals Ltd (CE)) Koza (UK) Ltd (CE & DfE) Farm-In Farm-In JDH Resources Ltd JDH Resources Ltd Relinquished JDH Resources Ltd Application Shackleton Resources Ltd Lindi Lindi Lindi Lindi Kimoingan Buhingu Amani Amani Amani Amani Tanzania ML PL PL PL PL PL PL PL PL PL 579/2018 9993/2014 0% 70% 11409/2020 100% 11377/2019 70% 11119/2017 100% 11470/2020 100% 11469/2020 100% 16627/2020 11597/2021 16629/2020 Northern Ireland NE Antrim MRO LON01/14 Glenariff MRO LON02/14 Tyrone MPL / MRO KOZ01/16 Scotland St John's Town of Dalry Newton Stewart Rhins of Galloway Gatehouse of Fleet MRO MRO MRO MRO GH CN CG 0% 0% 0% 50% 50% 50% 75% 75% 75% 0% 51 Lindi Jumbo Graphite Project 2012 JORC Mining Reserve – Annual Review as at 30 June 2021 2018 Resource Upgrade A drilling and trenching program was conducted over the northern Inferred Mineral Resource area as well as a new mineralised zone directly to the south of the Gilberts Arc Graphite Deposit. The upgrade and extension program included 17 drillholes for 1,354m and 7 trenches for 654m. The global Mineral Resource increased by 41.3% to 41.8 million tonnes at 10.8% TGC containing 4.5 million tonnes of graphite (Table 1). Fifty one percent (51%) of the mineral resource that will form part of the initial mining and economic studies is now classified as Measured (6.5 Mt @ 12.1% TGC) and Indicated (8.4 Mt @ 10.5% TGC) containing 1.67 million tonnes of graphite. The global mineral resource now includes a new Inferred Resource area which lies directly to the south of the current planned open-pit area and is made up of 6 distinct mineralised domains. This area will not form part of the upcoming mining studies, amended DFS and Reserve upgrade as further work within the area will only be done post-production. Table 1: Resource category breakdown of the Gilbert Arc. Resource Category Tonnes (millions) TGC % Contained Graphite (tonnes) Measured (Including High Grade) Indicated (Including High Grade) Inferred (Including High Grade) Grand Total High Grade Domains 6.5 1.7 8.4 1.5 26.9 1.8 41.8 5.0 12.1 23.4 10.5 21.2 10.5 22.7 10.8 22.5 Note: Appropriate rounding applied. 781,800 393,200 887,300 325,300 2,837,600 411,900 4,506,811 1,127,800 2020 Ore Reserve Update The Resources considered for mining are based on the JORC 2012 Mineral Resource Estimate (see ASX announcement of 19 December 2018). The Ore Reserve is based only on the Measured and Indicated Mineral Resources in the current mining schedule which is summarised in Table 2. Thus, the Inferred Resource zone to the south of the mining pit is not currently included in the mine design reserves and remains available for further consideration or potential expansion opportunities. The Ore Reserve estimate was prepared and signed off by and independent consultancy, Bara International of Johannesburg, South Africa. Table 2: Lindi Jumbo Project Ore Reserve. Ore Reserves Category Tonnes (million) TGC % Contained Graphite (tonnes) Proven Ore Reserves Probable Ore Reserves Total Ore Reserves 2.54 2.97 5.51 19.3 16.7 17.9 489,000 498,000 987,000 2020 Updated Definitive Feasibility Study The main areas of adjustment for the 2019 study update was the application of the updated Mineral Resource (ASX Announcement 19 December 2018) to the mining plan and a revision of Capital expenditure following detailed scope of work contract agreements with contract partners. The mining depletion was completely remodelled following the upgrade of the previous Inferred Resource to the north of the pit into an Indicated Resource category. As a result of the increased LoM grade to 17,9% Total Graphitic Carbon, the average annual mill feed requirement has reduced from a average of 280,000 tonnes per year to an average of 230,000 tonnes per year. 52 Pre-Production direct capital costs were further reduced by 6.4% to US$27.8M from US$29.7M in 2017. An upfront saving of some US$2.5m was achieved through vendor funding of a large portion of the camp infrastructure costs. Capital costs have been determined through a combination of fixed tender pricing, firm quotations and data-base references based on similar operations. The costs presented have a base date of December 2018 and are presented in United States Dollars (US$). The costs presented are definitive costs and include the US$2.1m provision for the Relocation Assistance Programme (RAP), (ASX Announcement 31 January 2019). Furthermore, updated estimates for product pricing was applied to the financial modelling. Walkabout conducts an annual review of its Mineral Resources and Ore Reserves. This process is managed by the Directors and competent person. As of 30 June 2021, the Mineral Resources and Ore Reserves statement remains the same as that stated above. The governance arrangements and internal controls in place with respect to its estimates of mineral resources and ore reserves and the estimation process include oversight of the competent person by the Managing Director and review by the Board. No mining has commenced and no additional mining studies have been completed. Competent Person’s Statement The information in this report that relates to Exploration Results and Exploration Targets is based on and fairly represents information and supporting documentation prepared by Mr Andrew Cunningham (Director of Walkabout Resources Limited). Mr Cunningham is a member of the Australian Institute of Geoscientists and has sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as Competent Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Cunningham consents to the inclusion in this report of the matters based on his information in the form and context in which they appear. The information in this report that relates to Mineral Resources is based on and fairly represents information compiled by Mr Lauritz Barnes, (Consultant with Trepanier Pty Ltd), Mr Aidan Platel (Consultant with Platel Consulting Pty Ltd), Mr Andrew Cunningham (Director of Walkabout Resources Limited) and Ms Bianca Manzi (Bianca Manzi Consulting). Mr Barnes, Mr Platel, Mr Cunningham and Ms Manzi are members of the Australian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and have sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as Competent Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Specifically, Ms Manzi is the Competent Person for the geological database. Mr Barnes is the Competent Person for the resource estimation. Both Mr Platel and Mr Cunningham completed the site inspections. Mr Barnes, Mr Platel, Mr Cunningham and Ms. Manzi consent to the inclusion in this report of the matters based on their information in the form and context in which they appear. The information in this report that relates to Ore Reserves is based on and fairly represents information and supporting documentation prepared by Mr Clive Wyndham Brown who is a Principal Consultant (Mining) at Bara International Ltd. Mr Brown is a Mining Engineer and a Fellow of the South African Institute of Mining and Metallurgy and has sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as Competent Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Brown consents to the inclusion in this report of the matters based on his information in the form and context in which they appear. 53 

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