Announcement PDF O LIMITED OD6 METALS ABN 34 654 839 602 & Controlled Entities Interim Financial Statements For the six months ended 31 December 2023 Corporate Directory DIRECTORS Dr Darren Holden – Non-Executive Chairman Mr Brett Hazelden – Managing Director Mr Piers Lewis – Non-Executive Director Dr Mitch Loan – Non-Executive Director JOINT COMPANY SECRETARY Troy Cavanagh Joel Ives REGISTERED AND PRINCIPAL OFFICE c/- LCP Group Level 1, 50 Kings Park Road West Perth WA 6005 Telephone: +61 8 6189 8515 Email: info@od6metals.com.au AUDITOR Hall Chadwick WA Audit Pty Ltd 283 Rokeby Road Subiaco WA 6008 SHARE REGISTRY LAWYERS Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth WA 6000 AGH Law Level 1, 50 Kings Park Road West Perth WA 6005 STOCK EXCHANGE LISTING BANKERS Australian Securities Exchange (ASX) ASX Code: OD6 Macquarie Bank 235 St George’s Terrace Perth WA 6000 Interim Financial Report 31 December 2023 2 OD6 Metals Limited Directors’ Report 31 December 2023 The Directors of OD6 Metals Limited (“OD6 Metals Limited” or “the Company”) present their report on the Company for the period ended 31 December 2023 (“Period”). DIRECTORS The names of directors in office at any time during or since the end of the year are: • • • • Dr Darren Holden – Non-Executive Chairman (appointed 27 October 2021); Mr Brett Hazelden – Managing Director (appointed 1 April 2022); Mr Piers Lewis – Non-Executive Director (appointed 27 October 2021); and Dr Mitch Loan – Non-Executive Director (appointed 12 April 2022). COMPANY SECRETARY Troy Cavanagh and Joel Ives held the position of company secretary during the financial period. PRINCIPAL ACTIVITIES The Group’s primary purpose is to pursue exploration and potential development opportunities within the resources sector. In particular, the Group was established to undertake exploration of its Splinter Rock Project and Grass Patch Project (Projects), which are located in the Goldfields-Esperance region of Western Australia and are prospective for rare earth elements (REEs), with the aim of delineating and defining economic resources and reserves to develop into revenue generating operational mines. REVIEW OF OPERATIONS During the period OD6 Metals’ operational activities delivered the following achievements: • • • • • • • • • • • • • Maiden 344Mt @ 1,308ppm TREO (at 1,000ppm cut-off grade) Inferred Mineral Resource Estimate (MRE) declared at the Splinter Rock Rare Earth Project. Completed Phase 3 drilling at Splinter Rock, with the subsequent results continuing to return Standout Grades. The initial assay results for Phase 3 drilling at Splinter Rock significantly expanded the Prop Prospect potential, with grades of up to 4,159 ppm Total Rare Earth Oxides (TREO). Repeatedly demonstrated that the observed clay thickness correlates strongly with data obtained from previously completed Airborne Electromagnetic Survey (AEM). Identified extensive clay thicknesses up to 77m, with 77% of holes returned grades >1,000ppm TREO. Confirmed clay Rare Earth Elements (REE) across a 14km by 5km zone at Centre Prospect. Identified a thick high grade clay channel, approximately 2km by 1km and up to 69m thick, extending to the southern end of the resource with grades of 1,400ppm to 2,200ppm TREO. The metallurgical test results confirmed low hydrochloric acid (HCl) consumption - an average of 16 kg HCl/t ore with multiple zones at 6-10 kg HCl/t ore. Announced impressive leach and recovery responses observed at reduced acid strengths, with average 61% MagREO recovery (range 43-87%) at 20g/l HCl Based on the initial results, OD6 Metals acknowledged the real and substantial potential for Mineral Resource expansion. It also stated that the positive acid consumptions and recoveries, when combined with high grades, low stripping ratios, and substantial tonnages, provide considerable confidence in the key economic drivers. Australia’s national science agency, CSIRO, applied machine-learning technology and advanced 3D modelling to provide an enhanced interpretation of OD6 Metal’s Tempest AEM data. That modelling compared well to existing drilling, allowing it to be trained on locally verified data to produce predictions of: o thickness of surface cover, upper clay sediment zone and lower saprolite zone. maps of granite outcrops and depths of clay basin floors; o targets with the thinnest cover (for low stripping ratio); and o prioritised target areas based on multi-factor inputs for on-going exploration work. The Company identified Prospects and expanded basin areas including: o untested northeast Splinter Rock tenements, designated Tighthead and Loosehead Prospects, covering more than 135 km2 at >40 metres expected clay thickness; and o expanded Centre Prospect basin area, increasing from 136 km2 to 154 km2 at > 40 metres clay thickness with large zones of 60 to >80-metre-thick clays. OD6 Metal’s second Annual General Meeting held on 23 November 2023. Interim Financial Report 31 December 2023 3 OD6 Metals Limited Directors’ Report 31 December 2023 OPERATING RESULTS The loss of the Company after providing for income tax amounted to $22,433. FINANCIAL POSITION As at 31 December 2023 the Company had a cash balance of $2,087,650 and a net asset position of $7,974,864. DIVIDENDS PAID OR RECOMMENDED No dividends have been paid, and the directors do not recommend the payment of a dividend for the period ended 31 December 2023. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Other than as disclosed in this report, no significant changes in the state of affairs of the Company occurred during the financial year. EVENTS AFTER THE REPORTING PERIOD The company confirms there were no subsequent events for disclosure after the reporting period. CORPORATE GOVERNANCE STATEMENT The Board of Directors of OD6 Metals Limited (“OD6 Metals Limited” or “the Company”), is responsible for the Corporate Governance of the Company. The Board is committed to achieving and demonstrating the highest standard of corporate governance applied in a manner that is appropriate to the Company’s circumstances. The Board has adopted corporate governance policies and practices consistent with the ASX Corporate Governance Council's Principles of Good Corporate Governance and Best Practice Recommendations ("ASX Principles and Recommendations 4th Edition") where considered appropriate for Group of OD6 Metals Limited size and nature. Further details in respect to the Group’s corporate governance practises and copies of Group’s corporate governance policies and the 2023 Corporate Governance Statement, approved by the Board and applicable as at 08 March 2024 are available of the Group’s website - here. Signed in accordance with a resolution of the Board of Directors. Mr Brett Hazelden, Managing Director Dated 08 March 2024 Perth, Western Australia Interim Financial Report 31 December 2023 4 OD6 Metals Limited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the Period Ended 31 December 2023 Note Other income Grants/R&D Received 3.1 Accounting and audit Depreciation expense Consultants Directors’ fees (excluding executives) Executives’ salaries and wages Exploration expense Administrative expense Listing Fees Legal fees Share based payments Other Loss from continuing operations before income tax expense Income tax expense Loss from continuing operations Loss for the year Other comprehensive income Comprehensive loss attributable to the shareholders of the Company Basic and diluted loss per share (dollar per share) for continuing operations attributable to the shareholders of the Company Basic and diluted loss per share (dollar per share) attributable to the shareholders of the Company 3.2 5.3.3 31-Dec-23 $ 31-Dec-22 $ 37,522 962,698 61,585 - (71,580) (17,507) (9,038) (66,300) (78,227) (102,885) (314,839) (18,420) (11,407) (331,750) (700) (22,433) (22,433) (74,559) (11,536) (8,040) (66,300) (128,774) (3,814) (169,135) (16,524) (9,482) (97,235) (1,185) (524,999) (524,999) - - (22,433) (524,999) (0.02) (0.51) (0.02) (0.51) The above Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. Interim Financial Report 31 December 2023 5 OD6 Metals Limited Condensed Consolidated Statement of Financial Position As at 31 December 2023 Note Assets Current assets Cash and cash equivalents Other current assets Total current assets Non-current assets Exploration and evaluation expenditure Property, plant and equipment Total non-current assets Total assets Liabilities Current liabilities Trade & other payables Provisions Total current liabilities Total liabilities 2.1 2.2 Net assets Equity Share capital Reserves Accumulated loss Total equity attributable to shareholders of the Company 4.1 5.3.4 31-Dec-23 $ 30-Jun-23 $ 2,087,650 154,719 2,242,369 3,515,459 221,593 3,737,052 5,820,772 213,245 6,034,017 8,276,386 4,656,027 218,062 4,874,089 8,611,141 274,477 27,045 301,522 301,522 904,477 41,117 945,594 945,594 7,974,864 7,665,547 9,224,855 1,497,716 (2,747,707) 7,974,864 9,224,855 1,165,966 (2,725,274) 7,665,547 The above Condensed Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. Interim Financial Report 31 December 2023 6 OD6 Metals Limited Condensed Consolidated Statement of Changes in Equity For the Period Ended 31 December 2023 At 1 July 2023 Issued Capital Share Based Payment Reserves Accumulated Losses Total equity $ $ $ $ 9,224,855 1,165,966 (2,725,274) 7,665,547 - - (22,433) (22,433) - - (22,433) (22,433) 9,224,855 331,750 1,497,716 (2,747,707) 331,750 7,974,864 Loss for the reporting period Total comprehensive loss for the reporting period Transactions with owners in their capacity as owners: Share-based payments At 31 December 2023 Share Based Payment Reserves $ Issued Capital $ At 1 July 2022 Total equity $ $ 9,224,855 865,953 (1,368,474) 8,722,334 - - (524,999) (524,999) - - (524,999) (524,999) 9,224,855 97,235 963,188 (1,893,473) 97,235 8,294,570 Loss for the reporting period Total comprehensive loss for the reporting period Transactions with owners in their capacity as owners: Share-based payments At 31 December 2022 Accumulated Losses The above Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. Interim Financial Report 31 December 2023 7 OD6 Metals Limited Condensed Consolidated Statement of Cash Flows For the Period Ended 31 December 2023 31-Dec-23 $ Cash flows from operating activities Interest received Payments to suppliers and employees Net cash (outflow) from operating activities Cash flows from investing activities Payments for acquisition of property plant and equipment Payments for exploration and evaluation expenditure Grant/R&D Received Net cash (outflow) from investing activities Cash flows from financing activities Proceeds from issue of shares Share Issue Costs Repayment of loans Net cash inflow from financing activities Cash and cash equivalents at the beginning of the period Net increase/ (decrease) in cash and cash equivalents Cash and cash equivalents at the end of the period 31-Dec-22 $ 43,438 (799,693) (756,255) 25,302 (528,745) (503,443) (12,690) (1,621,561) 962,697 (671,554) (16,060) (1,648,550) (1,664,610) - (347,000) (347,000) 3,515,459 (1,427,809) 2,087,650 8,357,053 (2,515,053) 5,842,000 The above Condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes Interim Financial Report 31 December 2023 8 OD6 Metals Limited Notes to the Financial Statements 1. Summary of Significant accounting policies The interim report of OD6 Metals Limited for the period ended 31 December 2023 was authorised for issue in accordance with a resolution of the directors on 06 March 2024. 1.1. Basis of Preparation These interim consolidated financial statements are general purpose financial statements prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 ‘Interim Financial Reporting’, Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’). Compliance with AASB 134 ensures compliance with IAS 34 ‘Interim Financial Reporting’. This condensed interim financial report does not include full disclosures of the type normally included in an annual financial report. Therefore, it cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as in the full financial report. The interim report has been prepared on a historical cost basis. Cost is based on the fair value of the consideration given in exchange for assets. The company is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise noted. 1.2. Basis of Measurement The financial report has been prepared on a historical cost basis. 1.3. Functional and Presentation Currency The financial report is presented in Australian dollars. 1.4. Compliance with IFRS The interim financial statements comply with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the interim financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). The following is a summary of the material accounting policies adopted by the entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of accounting has been applied. Interim Financial Report 31 December 2023 9 OD6 Metals Limited Notes to the Financial Statements 1.5. Going Concern This report is prepared on the going concern basis which assumes the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business. For the half year ended 31 December 2023, the Group incurred a loss from operations of $22,433 (31 December 2022: $524,999) and recorded cash outflows from operating activities of $756,255 (31 December 2022: $503,443). As at 31 December 2023, the Group had net working capital of $1,940,847 with cash of $2,087,650 (30 June 2023: $3,515,459) available. The Group’s ability to continue as a going concern is dependent upon it maintaining sufficient funds for its operations and commitments. The Board believes that it has sufficient funding in place to meet its operating objectives. The Directors consider the basis of going concern to be appropriate for the following reasons: o the cash balance of the Company relative to its fixed and discretionary expenditure commitments; o given the Company’s market capitalisation and the underlying prospects for the Company to raise further funds from the capital markets; and o the fact that future exploration and evaluation expenditure is generally discretionary in nature (i.e. at the discretion of the Directors having regard to an assessment of the Company’s eligible expenditure to date and the timing and quantum of its remaining earn-in expenditure requirements). Subject to meeting certain minimum expenditure commitments, further exploration activities may be slowed or suspended as part of the management of the Company’s working capital. Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate. In particular, given the Company's history of raising capital to date, the directors are satisfied of the Company's ability to raise additional funds as and when they are required. Should the Company be unable to raise sufficient funds, there is material uncertainty whether it would continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts or classification of liabilities that might result should the Company be unable to continue as a going concern and meet its debts as and when they fall due. Interim Financial Report 31 December 2023 10 OD6 Metals Limited Notes to the Financial Statements 2. Capital Expenditure 2.1. Exploration & Evaluation Expenditure 31-Dec-23 $ 5,820,772 30-Jun-23 $ 4,656,027 Movement: Opening balance Costs capitalised during the year, net of refunds Costs impaired during the year 4,656,027 1,164,745 - 707,114 3,948,913 - Closing balance 5,820,772 4,656,027 Projects: Grass Patch Splinter Rock Closing balance 1,738,073 4,082,699 5,820,772 1,477,889 3,178,138 4,656,027 31-Dec-23 $ 4,881 (1,297) 12,342 (7,034) 176,870 (26,766) 63,211 (8,962) 213,245 30-Jun-23 $ 4,881 (806) 12,342 (4,687) 164,180 (16,479) 63,211 (4,579) 218,063 31-Dec-23 $ 31-Dec-22 $ Exploration and evaluation 2.2. Property Plant and equipment Office Equipment Accumulated depreciation – Office Equipment Computer Equipment - Cost Accumulated depreciation – Computer Equipment Motor Vehicle Accumulated depreciation – Motor Vehicle Plant & Equipment Accumulated depreciation – Plant & Equipment Net carrying amount 3. Financial Performance 3.1. Other Income Revenue from continuing operations Interest Earned Interest accrued for Term Deposits 15,256 22,266 37,522 25,302 36,283 61,585 3.2. Expenses 31-Dec-23 $ Administration services Consulting Conferences Insurance Investor relations Share Registry Other Interim Financial Report 31 December 2023 (132,880) (3,564) (27,774) (116,120) (9,342) (25,159) (314,839) 11 31-Dec-22 $ (47,884) (13,955) (21,997) (67,450) (11,604) (6,245) (169,135) OD6 Metals Limited Notes to the Financial Statements 4. Funding and risk management 4.1. Share capital Date Balance at 01 July 2022 Number of shares Issue price $ Value $ 102,450,745 9,224,855 - - Balance at 30 June 2023 102,450,745 9,224,855 Balance at 31 December 2023 102,450,745 9,224,855 No changes 5. Related Parties 5.1. Related Parties Details relating to key management personnel, including remuneration paid are in included in the 2023 annual report. The aggregated compensation made to directors of the consolidated entity is set out below: 31-Dec-23 $ Short term benefits Post-employment benefits Share based payments Total compensation 226,300 13,482 247,307 487,089 31-Dec-22 $ 226,300 15,275 241,575 5.2. Other transactions with related parties The Company entered into a geological services agreement with GeoSpy Pty Ltd, an entity controlled by Dr Holden, pursuant to which GeoSpy Pty Ltd invoiced OD6 Metals Limited $30,000 for the period ending 31 Dec 2023. 5.3. Share Based Payments 5.3.1. Options Date of issue Number of options Dividend yield (%) Expected volatility (%) Risk free interest rate (%) Expected life of the option (years) Option exercise price ($) Share price at grant date ($) Expected Vesting Date Fair value per option ($) Total value at grant date ($) Expiry Date Interim Financial Report 31 December 2023 12 KMP incentive options Employee incentive options 08-Dec-23 1,900,000 0% 90% 4.12% 3 $0.27 $0.175 23/11/2023 $0.087 $164,807 09/10/2026 04-Dec-23 750,000 0% 90% 4.06% 3 $0.27 $0.165 04/12/2023 $0.079 $59,693 09/10/2026 OD6 Metals Limited Notes to the Financial Statements 5.3.2. Performance Rights Performance Rights which convert into Shares on a 1:1 basis subject to the satisfaction of the Milestone as set out below. The Performance Rights have the following Milestones and Expiry Dates: Performance Rights Number of Rights Probability Value $ Performance Rights Class A issued to MD 01 April 2022(1) Performance Rights Class B issued to MD 01 April 2022(2) Performance Rights Class C issued to MD 08 December 2023(3) Performance Rights Class D issued to Employees 08 December 2023(4) Closing Balance 31 December 2023 (1) 1,000,000 75% 150,000 1,500,000 50% 150,000 1,000,000 50% 82,500 300,000 50% 24,750 3,800,000 407,250 1,000,000 Class A Performance Rights converting to Shares (1:1 basis) upon the Company announcing to ASX a JORC compliant inferred (or greater) Mineral Resource (as defined in the JORC Code) of not less than 250,000,000 tonnes (of which at least 100,000,000 tonnes must be an indicated Mineral Resource), grading a minimum of 800 ppm total rare earth oxides (TREO), expiring at 5pm (AWST) on the date that is 2 years from the date of the Company’s admission to ASX. (2) 1,500,000 Class B Performance Rights converting to Shares (1:1 basis) upon the Company announcing to ASX the results of a scoping study showing the potential to generate an internal rate of return (IRR) of more than 20% using consensus prices and Board approved assumptions, expiring at 5pm (AWST) on the date that is 3 years from the date of the Company’s admission to ASX. (3) 1,000,000 Class C Performance Rights converting to Shares (1:1 basis) upon the Company announcing to ASX a JORC compliant inferred (or greater) Mineral Resource (as defined in the JORC Code) of not less than 1,000,000,000 tonnes (of which at least 400,000,000 tonnes must be an indicated Mineral Resource), grading a minimum of 800 ppm total rare earth oxides (TREO), expiring at 5pm (AWST) on the date that is 3 years from the issue date. (4) 300,000 Class D Performance Rights converting to Shares (1:1 basis) upon the Company announcing to ASX the results of a Scoping Study (as defined in the JORC Code) showing the potential to generate an internal rate of return (IRR) of more than 20% using consensus prices and Board approved assumptions, expiring at 5pm (AWST) on the date that is 3 years from the issue date. 5.3.3. Recognised share-based payments expense in profit or loss Expense arising from employee options issued Total share-based payments expensed in profit or loss Interim Financial Report 31 December 2023 13 31-Dec-23 $ 331,750 331,750 31-Dec-22 $ 97,235 97,235 OD6 Metals Limited Notes to the Financial Statements 5.3.4. Reserves At 1 July 2023 Share based payment directors and employees Forfeited during the period Total options held in reserve 31-Dec-23 $ 865,966 Number of Options 31,100,371 224,500 1,090,466 2,650,000 33,750,371 31-Dec-23 $ At 1 July 2023 300,000 Number of Performance rights 2,500,000 Share based payment for the managing director Share based payment for the employees Forfeited during the period Total performance shares held in reserve 82,500 24,750 407,250 1,000,000 300,000 3,800,000 Total Reserves 1,497,716 6. Segment information Management has determined the operating segments based on the reports reviewed by the Board of the Directors that are used to make strategic decisions. The Company does not have any material operating segments with discrete financial information. The Company does not have any customers and all its assets and liabilities are primarily related to mining industry and are located within Western Australia. The Board of Directors review internal management reports on a regular basis that is consistent with the information provided in the statement of profit and loss and other comprehensive income, statement of financial position and statement of cashflows. As a result, no reconciliation is required because the information as presented is what is used by the Board to make strategic decisions. 7. Other 7.1. Events occurring after the reporting period The company confirms there were no subsequent events for disclosure after the reporting period. 7.2. Commitments and Contingencies There were no other contingent liabilities as at 31 December 2023, or since that date and the date of this report. Interim Financial Report 31 December 2023 14 OD6 Metals Limited Director’s Declaration In accordance with a resolution of the directors of OD6 Metals Limited, I state that: (1) In the opinion of the directors: (a) the financial statements, notes and the additional disclosures included in the directors’ report designated as audited, of the Group are in accordance with the Corporations Act 2001 including: (i) giving a true and fair view of the Group’s financial position as at 31 December 2023 and of its performance for the period ended on that date; and (ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and (b) (2) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 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 half-year ended 31 December 2023. On behalf of the Board, Darren Holden Chairman 08 March 2024 Interim Financial Report 31 December 2023 15 OD6 Metals Limited Interim Financial Report 31 December 2023 16 OD6 Metals Limited Interim Financial Report 31 December 2023 17 OD6 Metals Limited Interim Financial Report 31 December 2023 18 OD6 Metals Limited