ASX Lodgement of Annual Report

RNS Number : 4325A

Neometals Ltd

23 September 2022

Neometals Ltd

("Neometals" or "the Company")

ASX Lodgement of Annual Report

Emerging sustainable battery materials producer, Neometals Ltd (ASX & AIM: NMT) ("Neometals" or "the Company") advises that a copy of the Company's Annual Report for the year ended 30 June 2022 (the "Annual Report") has been lodged on the ASX along with the Company's 2022 year-end Corporate Governance Statement and Appendix 4G.

The Annual Report, which was sent to shareholders today, is available on the Company's website at https://www.neometals.com.au/ along with copies of each of these other documents.

Set out below is the Chairman's Statement as included in the Annual Report.

Also, set out below is a summary of the Company's audited financial information for the year ended 30 June 2022 as extracted from the Annual Report, being:

· Consolidated Statement of Comprehensive Income;

· Consolidated Statement of Financial Position;

· Consolidated Statement of Changes in Equity;

· Consolidated Statement of Cash Flows; and

· Notes to the consolidated financial statements.

For more information, please contact:

Neometals Ltd
Chris Reed, Managing Director & Chief Executive Officer	+61 8 9322 1182
Jeremy McManus, General Manager - Commercial & Investor Relations	+61 8 9322 1182
Cenkos Securities plc - NOMAD & Joint Broker
Neil McDonald	+44 (0)131 220 9771
Peter Lynch	+44 (0)131 220 9772
Adam Rae	+44 (0)131 220 9778

RBC Capital Markets - Joint Broker	+44 (0) 20 7653 4000
Jonathan Hardy
Jamil Miah

Camarco PR	+ 44(0) 20 3 757 4980
Gordon Poole
Charlotte Hollinshead
Lily Pettifar

Chairman Statement

Dear Shareholders,

2021/2022 was a dynamic period in the Neometals' development journey with several of the Company's core projects approaching near-term financial investment decisions.

Despite continuing COVID 19 headwinds disrupting the Company's international engagements and European business development focus, the Company's agility enabled it to maintain strategic focus. During the financial year Neometals reached a AUD$1 billion market capitalisation before retreating, along with all stocks in the lithium sector.

Specifically, the Company's two European joint venture recycling endeavours (battery materials and vanadium recovery from steel slags) progressed materially towards financial investment decisions, the Company's Australian titanium/vanadium project continued to be developed towards commercial exploitation, the Mt Edwards nickel project was successfully demerged and in-specie distributed for the benefit of the Company's shareholders. The Company completed its UK AIM Stock Exchange dual listing, commercialisation of the Company's ELi technology commenced with Portguals largest chemical company, Bondalti, and the Company's balance sheet and access to capital to fund its operations remained strong.

Strategically, the economic, social and geopolitical backdrops for Neometals' key projects have been extraordinarily supportive for Neometals and its shareholders. The global drive to mitigate climate change has put the spotlight squarely on sustainability and decarbonisation. The Company's three core projects are well positioned to be the beneficiaries of this drive, with new recycling and emissions control regulations, net-zero targets, stimulus packages, and industry investment all providing significant tailwinds. Alongside this annual report Neometals will also be issuing its third Annual Sustainability Report reflecting the strong commitment being made to ESG principles which underpin Neometals' commitment to the communities in which it operates and the people with whom it works.

Finally, the dedication and support of the Company's management team and Board warrant special mention, without all of whom the Company's continuing growth and success would not be possible.

Neometals is clear on its purpose, its values and its strategy. The Company is a sustainable battery materials producer focussed on circular economy principles delivering products and services for a better tomorrow.

In financial year 2022, your Company's Board and management delivered on that purpose for the benefit of its stakeholders and investors generally. The growing awareness of Neometals' and the exciting opportunities before it bode well for another successful year ahead.

In closing, we thank all our stakeholders for their ongoing support.

23 September 2022

Steven Cole

CHAIRMAN

Chris Reed

MANAGING DIRECTOR

Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2022
	Note	2022 $	2021 $
Continuing operations

Other income	5	912,857	35,821,349
Interest income	5	254,047	527,398
Employee expenses	5	(8,778,942)	(6,879,307)
Occupancy expenses		(211,087)	(384,836)
AIM listing fee		(2,986,844)	(134,433)
Finance costs		(76,163)	(63,310)
Other expenses	5	(10,697,790)	(8,780,733)
Marketing expenses		(518,084)	(526,457)
Foreign exchange loss		(20,915)	(95,642)
Impairment reversal on investment in associate	23	7,079,641	1,678,210
Share of loss in associate	23	(318,287)	(99,967)
Share of loss in Joint Venture	22	(872,667)	(85,525)
(Loss)/profit before income tax		(16,234,234)	20,976,747
Income tax benefit/(expense)	8	5,066,295	(4,547,786)
(Loss)/profit for the year from continuing operations		(11,167,939)	16,428,961
Discontinued operations
Profit/(loss) for the year from discontinuing operations	6 and 7	15,528,639	(85,789)
Profit/(loss) for the year from continuing and discontinuing operations		4,360,700	16,343,172
Other comprehensive income		-	-
Total comprehensive profit/(loss) for the year		4,360,700	16,343,172
Earnings/(loss) per share
From continuing and discontinued operations:
Basic (cents per share)	19	0.80	3.00
Diluted (cents per share)	19	0.79	3.00

The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

Consolidated statement of financial position as at 30 June 2022
	Note	2022 $	2021 $
Current assets
Cash and cash equivalents	28 (a)	60,158,159	93,897,137
Trade and other receivables	11	518,007	542,201
Other financial assets	12	2,229,500	1,938,368
Total current ordinary assets		62,905,666	96,377,706
Assets classified as held for sale		-	11,494,537
Total current assets		62,905,666	107,872,243
Non-current assets
Loan to joint ventures	22	350,000	70,000
Exploration and evaluation expenditure	13	41,415,749	36,318,834
Intangibles		999,270	755,081
Investments in joint ventures	22	5,458,508	2,811,339
Investment in associate	23	13,668,977	4,869,566
Other financial assets	12	5,298,971	7,811,000
Right of use assets	21	293,266	563,572
Property, plant and equipment	14	650,132	590,715
Total non-current assets		68,134,873	53,790,107
Total assets		131,040,539	161,662,350
Current liabilities
Trade and other payables	15	2,236,332	5,245,188
Provisions	16	1,053,518	1,272,684
Lease liability	21	371,756	363,512
Liabilities associated with the assets classified as held for sale		-	452,489
Total current liabilities		3,661,606	7,333,873
Non-current liabilities
Provisions	16	-	455,476
Lease liability	21	-	336,398
Deferred tax liability	8	782,904	6,768,334
Total non-current liabilities		782,904	7,560,208
Total liabilities		4,444,510	14,894,081
Net assets		126,596,029	146,768,269
Equity
Issued capital	17	145,564,286	154,634,997
Reserves	18	9,775,943	9,041,400
Accumulated losses		(28,744,200)	(16,908,128)
Total equity		126,596,029	146,768,269

This consolidated statement of financial position should be read in conjunction with the accompanying notes.

	Consolidated statement of changes in equity for the year ended 30 June 2022
		Issued Capital $	Investment revaluation reserve $		Other equity reserve $		Share based payments reserve $		Accumulated losses $		Total $

Balance at 30/06/20		154,437,267		1,019,637		300,349		7,048,144		(33,251,300)		129,554,097
Gain for the period		-	-		-		-		16,343,172		16,343,172
Total comprehensive income for the period		-	-		-		-		16,343,172		16,343,172
Recognition of share-based payments (see note 18)		-	-		-		873,520		-		873,520
Recognition of shares issued under performance rights plan		200,250	-		-		(200,250)		-		-
Issue of dividends		-	-		-		-		-		-
Share issue costs, net of tax		(2,520)	-		-		-		-		(2,520)
Balance at 30/06/21		154,634,997	1,019,637		300,349		7,721,414		(16,908,128)		146,768,269
Gain for the period		-	-		-		-		4,360,700		4,360,700
Total comprehensive income for the period		-	-		-		-		4,360,700		4,360,700
Recognition of share-based payments (see note 18)		-	-		-		1,474,081		-		1,474,081
Recognition of shares issued under performance rights plan		739,538	-		-		(739,538)		-		-
In-Specie Distribution		(9,803,228)	-		-		-		(16,196,772)		(26,000,000)
Share issue costs, net of tax		(7,021)	-		-		-		-		(7,021)
Balance at 30/06/22		145,564,286	1,019,637		300,349		8,455,957		(28,744,200)		126,596,029

This consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated statement of cash flows for the year ended 30 June 2022
	Note	2022	2021
	Note	$	$
Cash flows from operating activities
Research and development refund		1,796,876	2,220,548
Payments to suppliers and employees		(25,626,023)	(13,379,311)
Payments to suppliers - discontinued operations		(1,248,630)	(85,789)
Net cash used in operating activities	28 (b)	(25,077,777)	(11,344,552)
Cash flows from investing activities
Payments for property, plant & equipment		(210,820)	(153,171)
Payments for intellectual property		(244,190)	(152,320)
Payments for exploration and evaluation		(4,882,350)	(1,280,083)
Payments for exploration and evaluation - discontinued operations		(505,680)	(2,548,919)
Payments for tenement acquisitions		-	(100,000)
Receipts from tenement disposals		-	200,000
Interest received		257,359	538,268
Proceeds from divestment of RIM offtake		-	33,000,000
Payments for purchase of investments		(3,741,729)	(3,593,100)
Receipts from sale of investments		2,771,705	5,945,042
Investment in associate		(2,038,056)	-
Investment in joint venture	22	(3,799,838)	(2,896,862)
Net cash (used in) / generated by investing activities		(12,393,599)	28,958,855
Cash flows from financing activities
Share issue costs		(7,022)	(2,520)
Amounts received for security deposits	12	4,000,000	43,000
Lease payments		(328,420)	(683,113)
Interest and other finance costs paid		(53,537)	(60,449)
Net cash generated by / (used in) financing activities		3,611,021	(703,082)
Net (decrease)/increase in cash and cash equivalents		(33,860,355)	16,911,221
Cash and cash equivalents at the beginning of the financial year		93,984,074	77,043,016
Effect of exchange rates on cash balances		34,440	29,837
Cash and cash equivalents at the end of the financial year	28 (a)	60,158,159	93,984,074

This consolidated statement of cash flows should be read in conjunction with the accompanying notes

Notes to the consolidated financial statements

for the year ended 30 June 2022

1 General information

Neometals Ltd is a limited public company incorporated in Australia and listed on the Australian Securities Exchange. The principal activities of the Consolidated Entity are mineral exploration. Neometals Ltd is the ultimate parent.

Registered office and principal place of business

Level 1, 1292 Hay St, West Perth WA 6005

2. Significant accounting policies

Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. The financial statements comprise the consolidated financial statements of the Consolidated Entity, comprising Neometals Ltd and its controlled entities. For the purpose of preparing the financial statements the consolidated entity is a for-profit entity.

Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards ("IFRS").

The financial statements were authorised for issue by the directors of Neometals Ltd on 23 September 2022.

Basis of preparation

The financial report has been prepared on a going concern basis. These accounting policies are consistent with Australian Accounting Standards and with IRFS.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Boards ("AASB") that are relevant to its operations and effective for the current reporting period beginning 1 July 2021.

The financial report has been prepared on the basis of historical cost except for the revaluation of certain non-financial assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

Going concern

The Directors believe that Neometals Ltd will continue as a going concern, and as a result the financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

In the event that the company progress any of the Group's core projects through to construction of a commercial plant, the Board are aware that additional funding will required at that point through debt or equity financing arrangements.

The Directors believe that, based on current conditions and performance assumptions, that Neometals Ltd is sufficiently funded to meet its anticipated near-term funding needs, including required expenditure related to operations over the 12 months from approval of these financial statements.

Standards and interpretations adopted in the current year

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1 July 2021.

New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant to the Group include:

· AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business

· AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material

· AASB 2019-1 Amendments to Australian Accounting Standards - References to the Conceptual Framework

· AASB 2019-5 Amendments to Australian Accounting Standards - Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia.

Standards and interpretations issued but not yet effective

At the date of authorisation of the financial statements, the following Australian Accounting Standards and Interpretations have been issued or amended but are not yet effective and have not been adopted by the Group for the year ended 30 June 2022:

Standard

Effective for annual reporting periods beginning on or after

Expected to be initially applied in the financial year ending

AASB 2014-10 'Amendments to Australian Accounting Standards - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and AASB 2015-10 Amendments to Australian Accounting Standards - Effective Date of Amendments to AASB 10 and AASB 128'

1 January 2022

30 June 2023

AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-Current and AASB 2020-6 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-current - Deferral of Effective Date

1 January 2022

30 June 2023

AASB 17 Insurance Contracts and AASB 2020-5 Amendments to Australian Accounting Standards - Insurance Contracts

1 January 2023

30 June 2024

AASB 2021-2 Amendments to Australian Accounting Standards - Disclosure of Accounting Policies and Definition of Accounting Estimates

1 January 2023

30 June 2024

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June 2022. The Company is assessing the impact of the new standards, however does not expect them to have a material impact on the Company in the current of future reporting periods and on foreseeable future transactions.

Critical accounting judgments and key sources of estimation uncertainty

In the application of the Group's accounting policies, management is required to make judgments, 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 to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Refer to note 3 for a discussion of critical judgments in applying the entity's accounting policies, and key sources of estimation uncertainty.

Significant accounting policies

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Cash and cash equivalents

Cash comprises cash on hand and term deposits with a 30 day cancellation policy. 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.

(b) Employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date.

Functional and presentation currency

Items included in the financial statements of each of the group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in Australian dollar ($), which is Neometals Ltd's functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

All other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within other income or other expenses.

(d) Financial instruments issued by the company

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Financial assets

Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified 'at fair value through profit or loss' in which case transaction costs are expensed immediately.

Financial instruments are subsequently measured at fair value through profit or loss (FVTPL), amortised cost using the effective interest rate method or at cost. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Quoted prices in an active market are used to determine fair value where possible. The group does not designate any interest in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments.

Amortised cost instruments are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.

By default, all other debt investments and equity investments are measured subsequently at fair value through profit or loss (FVTPL).

The Group classifies its financial assets into the following categories: those to be measured subsequently at fair value (either through other comprehensive income 'FVOCI' or through the income statement 'FVTPL') and those to be held at amortised cost. The classification depends on the Group's business model for managing its financial assets and the contractual terms of the cash flows.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on investments in debt and equity instruments that are measured at amortised cost, FVTPL or at FVTOCI. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group recognises lifetime ECL (expected credit loss) when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

There has been no change in the estimation techniques or significant assumptions made during the current reporting period in assessing the loss allowance for these financial assets.

Financial liabilities

Financial liabilities are classified as either financial liabilities 'at fair value through profit or loss' or other financial liabilities.

Financial liabilities at fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss where the financial liability is either held for trading or it is designated as at fair value through profit or loss.

A financial liability is held for trading if:

· It has been incurred principally for the purpose of repurchasing in the near future; or

· It is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

· It is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading is designated as at fair value through profit or loss upon initial recognition if:

· such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

· the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

· it forms part of a contract containing one or more embedded derivatives, and AASB 9 'Financial Instruments' permits the entire combined contract (asset or liability) to be designated as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the balance sheet classification of the related debt or equity instruments or component parts of compound instruments.

(e) Goods and service tax

Other income, expenses and assets are recognised net of the amount of goods and services tax ("GST"), except:

i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or

ii) for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(f) Non-current assets held for sale

Non-current assets and their disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in its former subsidiary after the sale. Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less cost to sell.

(g) Impairment of non-financial assets

At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) 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 (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately.

(h) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the consolidated entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/Consolidated Entity intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the profit and loss statement, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or gain on a bargain purchase.

Tax consolidation

The Company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian taxation law. Neometals Ltd is the head entity in the tax-consolidated group. Income tax expense/benefit, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial statements of the members of the tax consolidated group using a 'group allocation' approach based on the allocation specified in the tax funding arrangement.

The tax funding arrangement requires a notional current and deferred tax calculation for each entity as if it were a taxpayer in its own right, except that unrealised profits, distributions made and received and capital gains and losses and similar items arising on transactions within the tax consolidated group are treated as having no consequence. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax consolidated group are recognised by the Company (as head entity in the tax consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax consolidated group, amounts are recognised as payable to or receivable by the Company and each member of the group in relation to the tax contribution amounts paid or payable between the parent and the other members of the tax consolidated group in accordance with the arrangement.

Where the tax contribution amount recognised by each member of the tax consolidated group for a particular period is different to the aggregate of the current tax liability or asset and any deferred tax asset arising from the unused tax losses and tax credits in respect of that period, the difference is recognised as a contribution from, or distribution to, equity participants.

Research & Development Tax offset

In respect of Research and Development tax offsets, the Income tax approach (AASB 112) of accounting has been utilised, where the tax benefit is presented within the tax line in the Statement of Comprehensive Income .

(i) Exploration and evaluation expenditure

Exploration and evaluation expenditures, excluding general overhead, in relation to separate areas of interest are capitalised in the year in which they are incurred and are carried at cost less accumulated impairment losses 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:

- the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or

- exploration and evaluation activities in the area of interest have not at the reporting 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.

Capitalised exploration costs for each area of interest (considered to be the cash generating unit) are reviewed each reporting date to test whether an indication of impairment exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to determine the extent of the impairment loss (if any). The recoverable amount for capitalised exploration costs has been determined as the fair value less costs to sell by reference to an active market. 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 is made to proceed with development, accumulated expenditure is tested for impairment and transferred to capitalised development and then amortised over the life of the reserves associated with the area of interest once mining operations have commenced.

Development expenditure

Development expenditure is recognised at cost less any impairment losses. Where commercial production in an area of interest has commenced, the associated costs are amortised over the life of the reserves associated with the area of interest. Changes in factors such as estimates of proved and probable reserves that effect unit-of-production calculations are dealt with on a prospective basis.

(j) Payables

Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged to make future payments resulting from the purchase of goods and services.

(k) Principles of consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the Consolidated Entity, being the Company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 10 'Consolidated Financial Statements'. A list of subsidiaries appears in note 24 to the financial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair value of the identifiable net assets acquired exceeds the cost of acquisition, the excess is credited to profit and loss in the period of acquisition. The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. In preparing the consolidated financial statements, all inter-company balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full.

(l) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, costs are determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is calculated on a diminishing value basis so as to write off the net cost or other re-valued amount of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period with the effect of any changes recognised on a prospective basis.

The following estimated useful lives are used in the calculation of depreciation:

Furniture & Fittings 5-20 years

Plant and Equipment 2-10 years

Buildings 10-20 years

An item of property, plant and equipment is derecognised upon disposal when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss.

(m) Intangibles

Trademarks, licences and customer contracts

Separately acquired trademarks and licences are shown at historical cost. Trademarks, licenses and customer contracts acquired in a business combination are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost less accumulated amortisation and impairment losses.

Research and development

Research expenditure is recognised as an expense as incurred. Development expenditure is recognised as an asset as incurred if the following have been demonstrated:

- The technical feasibility of completing the intangible asset so that it will be available for use or sale;

- The intention to complete the intangible asset and use or sell it;

- The ability to use or sell the intangible asset;

- How the intangible asset will generate probable future economic benefits; and

- The ability to measure reliably the expenditure attributable to the intangible asset during its development.

Research and development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

(n) Provisions

Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Provision for onerous contract

Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract.

(o) Income recognition

Other income is measured at the fair value of the consideration received or receivable.

Dividend and interest revenue

Dividend revenue from investments is recognised when the shareholder's right to receive the payment has been established. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(p) Share-based payments

Equity-settled share-based payments to employees and others providing services to the Group are measured at fair value at the date of grant.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Consolidated Entity's estimate of shares that will eventually vest, with a corresponding increase in equity.

Equity-settled share-based payments transactions with parties other than employees are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counter party renders the service. The fair value of performance rights are measured using a Monte Carlo Simulation.

(q) Leased assets

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise fixed lease payments (including in-substance fixed payments), less any lease incentives receivable.

The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

(s) Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

The results and assets and liabilities of associates or joint ventures are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with AASB 5. Under the equity method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.

An investment in an associate or a joint venture is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost of the investment over the Group's share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment is acquired.

The requirements of AASB 9 are applied to determine whether it is necessary to recognise any impairment loss with respect to the Group's investment in an associate or a joint venture. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date when the investment ceases to be an associate or a joint venture, or when the investment is classified as held for sale. When the Group retains an interest in the former associate or joint venture and the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial recognition in accordance with AASB 9. The difference between the carrying amount of the associate or joint venture at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate or joint venture is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation to that associate or joint venture on the same basis as would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity method is discontinued.

The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate. There is no re-measurement to fair value upon such changes in ownership interests.

When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognised in other

comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group's consolidated financial statements only to the extent of interests in the associate or joint venture that are not related to the Group.

3. Critical accounting judgments and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 2, management is required to make judgments, 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 various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3.1 Critical judgments in applying the entity's accounting policies

The following are the critical judgments that management has made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

(a) Recovery of capitalised exploration and evaluation expenditure

The Group capitalises exploration and evaluation expenditure incurred on ongoing projects. The recoverability of this capitalised exploration expenditure is entirely dependent upon returns from the successful development of mining operations or from surpluses from the sale of the projects or the subsidiary companies that control the projects. At the point that it is determined that any capitalised exploration expenditure is definitely not recoverable, it is written off.

(b) Share-based payments

Equity-settled share-based payments granted are measured at fair value at the date of grant. The fair value of share options is measured by use of the Monte Carlo model and requires substantial judgement. Management has made its best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural considerations.

The fair value of performance rights issued during the period was made with reference to the Company's closing share price on the date of grant. Management has been required to estimate the probability that the Company will meet the performance criteria determined by the board.

4. Parent entity disclosure
Financial Position	2022 $	2021 $
Assets
Current assets	55,115,437	93,717,178
Non-current assets	35,308,379	32,165,354
Total assets	90,423,816	125,882,532
Liabilities
Current liabilities	3,224,412	5,896,458
Non-current liabilities	782,904	660,491
Total liabilities	4,007,316	6,556,949
Net Assets	86,416,500	119,325,583
Equity
Issued capital	145,564,286	154,634,998
Retained earnings	(68,904,092)	(43,331,178)
Reserves
Share based payments	8,756,306	8,021,763
Total equity	86,416,500	119,325,583
Financial Performance
Profit for the year	6,392,622	24,089,657
Other comprehensive income	-	-
Total comprehensive (loss) / income	5,392,622	24,089,657
Guarantees entered into on behalf of subsidiaries ⁽ⁱ⁾	-	4,000,000

(i) Neometals Energy Pty Ltd, a wholly owned subsidiary of the Company, was party to a gas transmission agreement with DBNGP (WA) Transmission Pty Ltd. The parent entity has provided security for a bank guarantee required under the contract for $4.0 million. The agreement was paid out in full during the year resulting in the guarantee no longer being required. Refer to note 11 for details.

5. (Loss)/profit for the year continuing operations
	Note		2022	2021
			$	$
(a) Income
Income from operations consisted of the following items:
Other income:
Proceeds from divestment of RIM offtake ⁽ⁱ⁾			-	30,000,000
Net fair value gain on financial assets ⁽ⁱⁱ⁾			810,079	4,780,371
Other income			102,778	1,040,978
Interest revenue			254,047	527,398
Total			1,166,904	36,348,747
(b) Profit / (loss) before income tax
Profit / (loss) before income tax has been arrived at after charging the following expenses:

Employee benefits expense:
Equity settled share-based payments		10	(1,474,081)	(873,520)
Superannuation expense			(509,427)	(401,560)
Employee salaries			(6,795,434)	(5,604,227)
Total			(8,778,942)	(6,879,307)

Impairments:
Impairment reversal of associate		23	7,079,641	1,678,210
Total			7,079,641	1,678,210

Other expenses ⁽ⁱⁱⁱ⁾
Consultant fees			(4,740,532)	(1,093,491)
Legal fees			(1,048,363)	(1,109,728)
Research and development expense			(1,450,138)	(3,127,325)
Depreciation of non-current assets			(457,126)	(598,613)
Insurances			(411,720)	(393,788)
Accounting fees			(305,577)	(201,643)
ASX fees			(204,975)	(69,986)
Other expenses			(2,079,359)	(2,186,159)
Total			(10,697,790)	(8,780,733)


(i) On 3 June 2021, Neometals Ltd accepted an offer from Reed Industrial Minerals Pty Ltd (RIM) to relinquish its Mt Marion spodumene offtake option rights for the sum of A$30 million (ex GST). (ii) Refer to note 12 for further details on financial assets. (iii) In prior years some professional and other expenses were presented as Administration expenses. To better reflect the nature of the expenses, they have been presented as other expenses.

6. Gain on demerger

			30 June 2022 $
Shares issued on demerger - in specie distribution¹			26,000,000
Less: net assets disposed²			(11,938,961)
Less: demerger costs			(1,248,630)
Attributable tax benefit			2,716,230
Gain on demerger³			15,528,639

1. On 18 August 2021, Neometals Ltd shareholders approved the demerger of Widgie Nickel Limited ("Widgie Nickel"), a dedicated nickel exploration and development company holding Neometals' Mt Edwards nickel assets, via a $26 million capital reduction and in-specie distribution of 100% of Widgie Nickel's shares. Neometals distributed the Widgie Nickel shares to eligible Neometals shareholders, pro rata to their shareholding in Neometals on the record date of 24 August 2021. The $26 million was the fair value of the shares distributed to shareholders and has been accounted for in accordance with interpretation 17. $9.8 million of the in specie distribution relates to a return of capital, with the remaining $16.2 million being classed as a deemed dividend.

2. Expenditure incurred by the demerged entities for the period up to the time of the demerger amounted to $197,750. This amount is included within the consolidated statement of profit or loss.

3. Per Class Ruling 2021/72, demerger rollover relief applied such that any capital gain from Capital Gains Tax (CGT) event A1 on the disposal of shares in Widgie Nickel Limited is disregarded for the Neometals Tax Consolidated Group. Furthermore, an exit allocable cost amount ("ACA") calculation was prepared, with the exit ACA being a positive balance such that CGT event L5 did not arise. Accordingly, there were no CGT implications for Neometals Ltd.

7. Discontinued operations

(i) On 1 July 2021, Neometals announced intention to demerge Mt Edwards Nickel Project into a new company "Widgie Nickel Limited". Therefore, at 30 June 2021, Mt Edwards Lithium Pty Ltd was classified as a non-current asset held for sale. The results of the discontinued operation which have been included in the financial statements for the year were as follows:

	2022	2021
Results of discontinued operations	$	$
Gain/(loss) from discontinued operations	15,528,639	(85,789)
Cash flows from discontinued operations
Cashflows from investing activities	(505,680)	(2,548,919)
Cashflows from operating activities	(197,750)	(85,789)
Effect on the financial position of the group
Assets classified as held for sale	-	11,494,537
Liabilities associated with the assets classified as held for sale	-	(452,489)

8. Income taxes

	2022 $	2021 $
(a) Income tax benefit recognised in profit or loss
Tax benefit comprises:
Deferred tax (benefit) / expense relating to temporary differences	(4,251,030)	6,771,314
Other	981,831	(2,980)
Total tax (benefit) / expense	(3,269,199)	6,768,334

The prima facie income tax expense on pre-tax accounting profit
from continuing operations reconciles to the income tax benefit in the
financial statements as follows:
(Loss) / profit before income tax	(16,234,234)	20,976,747
Income tax calculated at 30%	(4,870,270)	6,293,024

Effect of income and expenses that are not deductible in determining taxable profit	1,601,071	475,310
Tax losses not recognised	-	-
Income tax (benefit) / expense recognised	(3,269,199)	6,768,334

Refund of prior year R&D claim	(1,797,096)	(2,220,548)
Income tax (benefit) / expense recognised inclusive of R&D claim	(5,066,295)	4,547,786

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable income under Australian tax law. There has been no change in the corporate tax rate during the reporting period.

(b) Deferred tax balances

The net deferred tax balance as presented in the statement of financial position is detailed below:

	2022 $	2021 $
Deferred tax liabilities	(16,724,164)	(15,331,073)
Deferred tax assets	15,941,260	8,562,739
Net deferred tax balance	(782,904)	(6,768,334)
(c) Deferred tax assets not brought to account

At 30 June 2022 the amount of tax losses not recognised was $1,861,059 (June 2021: $1,861,059).

Tax Consolidation

Relevance of tax consolidation to the consolidated entity

The Company and its wholly-owned Australian resident entities have formed a tax-consolidated group and are therefore taxed as a single entity. The head entity within the tax-consolidated group is Neometals Ltd. The members of the tax-consolidated group are identified at note 24.

Nature of tax funding arrangements and tax sharing agreements

Entities within the tax-consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement, Neometals Ltd and each of the entities in the tax consolidation group has agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax assets of the entity. Such amounts are reflected in amounts receivable from or payable to each entity in the tax consolidated group, and are eliminated on consolidation. The tax sharing agreement entered into between the members of the tax-consolidated group provides for the determination of the allocation of income tax liabilities between the entities should the head entity default on its payment obligations or if an entity should leave the tax-consolidated group. The effect of the tax sharing agreement is that each member's tax liability for tax payable by the tax-consolidated group is limited to the amount payable to the head entity under the tax funding arrangement.

9. Key management personnel compensation

Details of key management personnel compensation are provided on pages 30-43 of the Directors' Report.

The aggregate compensation made to key management personnel of the Group is set out below:

	2022 $	2021 $

Short-term employee benefits	2,642,526	2,502,996
Post-employment benefits	132,137	136,960
Share-based payments	845,253	534,054
Total	3,619,916	3,174,010

10. Share based payments

Neometals Ltd has an ownership based remuneration scheme for executives and employees.

Performance Rights Plan ("PRP")

In accordance with the provisions of the PRP, as approved by shareholders at the Company's AGM on 25 November 2020, employees, Non-Executive Directors and consultants may be offered performance rights at such times and on such terms as the board considers appropriate.

General terms of performance rights granted under the PRP:

· The performance rights will not be quoted on the ASX.

· Performance rights can only be granted to employees, Non-Executive Directors and consultants of the Company.

· Performance rights are transferable to eligible nominees.

· Performance rights not exercised on or before the vesting date will lapse.

· All shares allotted upon the vesting of performance rights rank equally in all respects to all previously issued shares.

· Performance rights confer no right to vote, attend meetings, participate in a distribution of profit or a return of capital or another participating rights or entitlements on the grantee unless and until the performance rights vest.

10. Share based payments (continued)

The following share-based payment arrangements in relation to performance rights were in existence at the end of the period:

2022	Grant date	Number	Vesting date	Expiry date	Grant date share price		Probability factor		Fair value at grant date
Chris Reed¹	2-Sep-19	1,233,021	30/06/2022	31/12/2022	0.154	n/a		0.12
Jason Carone¹	2-Sep-19	493,335	30/06/2022	31/12/2022	0.154	n/a		0.12
Mike Tamlin¹	2-Sep-19	559,711	30/06/2022	31/12/2022	0.154	n/a		0.12
Darren Townsend¹	2-Sep-19	538,184	30/06/2022	31/12/2022	0.154	n/a		0.12
Staff and consultants¹	2-Sep-19	1,957,911	30/06/2022	31/12/2022	0.154	n/a		0.12
Chris Reed	7-Dec-20	1,656,754	30/06/2023	31/12/2023	0.230	n/a		0.18
Jason Carone	7-Dec-20	666,055	30/06/2023	31/12/2023	0.230	n/a		0.18
Mike Tamlin	7-Dec-20	755,670	30/06/2023	31/12/2023	0.230	n/a		0.18
Darren Townsend	7-Dec-20	726,605	30/06/2023	31/12/2023	0.230	n/a		0.18
Staff and consultants	7-Dec-20	3,805,618	30/06/2023	31/12/2023	0.230	n/a		0.18
Chris Reed	11-Oct-21	574,049	30/06/2024	31/12/2024	0.855	n/a		0.76
Jason Carone	11-Oct-21	235,885	30/06/2024	31/12/2024	0.855	n/a		0.76
Mike Tamlin	11-Oct-21	262,094	30/06/2024	31/12/2024	0.855	n/a		0.76
Darren Townsend	11-Oct-21	262,094	30/06/2024	31/12/2024	0.855	n/a		0.76
Staff and consultants	11-Oct-21	1,327,348	30/06/2024	31/12/2024	0.855	n/a		0.76
Steven Cole	11-Oct-21	61,611	30/06/2022	30/06/2022	0.855	n/a		0.81
Doug Ritchie	11-Oct-21	55,450	30/06/2022	30/06/2022	0.855	n/a		0.81
Natalia Streltsova	11-Oct-21	55,450	30/06/2022	30/06/2022	0.855	n/a		0.81
Jenny Purdie	11-Oct-21	55,450	30/06/2022	30/06/2022	0.855	n/a		0.81
Les Guthrie	11-Oct-21	11,090	30/06/2022	30/06/2022	0.855	n/a		0.81
Total		15,293,385

The valuation of the Non-executive Directors performance rights has been based on the amount of their fees that have been forgone calculated using a 5-day VWAP. The fair value of other KMP performance rights issued have been independently valued by a third party using a Monte Carlo simulation to determine fair value. The total expense recognised for the period arising from share-based payment transactions and accounted for as equity-settled share-based payment transactions is $1,474,081 (2021: $873,520).

1) 80% of these performance rights have vested at 30 June 2022. 20% remain unvested and will be retested at 31 December 2022.

The following reconciles the outstanding performance rights granted at the beginning and end of the financial year:

	2022	2021
	Performance Rights No.	Performance Rights No.
Balance at beginning of the financial year	16,016,135	11,098,052
Granted during the financial year as compensation	2,900,521	8,243,263
Vested during the financial year ⁽ⁱ⁾	(3,025,130)	(834,352)
Lapsed during the financial year ⁽ⁱⁱ⁾	(598,141)	(2,490,828)
Balance at the end of the financial year	15,293,385	16,016,135

(i) 3,025,130 shares in the Company were issued on vesting of performance rights (2021: 834,352).

(ii) 589,141 performance rights lapsed during the financial year (2021: 2,490,828).

11. Trade and other receivables

	2022 $	2021 $
Current
Other receivables	337,685	285,448
Prepayments	180,322	256,753
Total	518,007	542,201

12. Other financial assets
	2022 $	2021 $
Current
Financial assets measured at FVTPL⁽ⁱ⁾	2,229,500	1,938,368
Total Current	2,229,500	1,938,368
Non-current
Financial assets measured at FVTPL⁽ⁱⁱ⁾	4,429,896	3,611,000
Convertible note⁽ⁱⁱⁱ⁾	669,075	-
Barrambie Gas term deposit ^(iv)	-	4,000,000
Rental bond term deposit	200,000	200,000
Total Non-current	5,298,971	7,811,000
Total	7,528,471	9,749,368

(i) The Group has invested in a portfolio of listed shares which are held for trading. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. The valuation technique and key inputs used to determine the fair value are quoted bid prices in an active market.

(ii) The Group has invested in a portfolio of non-listed shares which are not actively traded. Within this balance, Neometals has an equity interest in Critical Metals Limited. As (unadjusted) quoted prices in active markets are unavailable, consideration is given to precedent transactions involving the sale of the company's shares, as a basis to assess the value of the equity investment.

(iii) The Group has invested US$500,000 in a financing round for private US start up, Tyfast Energy Corp. The investment is by way of convertible note providing the Group with the ability to obtain a minority equity stake in Tyfast.

(iv) Neometals Energy Pty Ltd, a wholly owned subsidiary of the Company, was a party to a gas transmission agreement with DBNGP (WA) Transmission Pty Ltd (DBP) in relation to the Barrambie Project. As part of the agreement the Group was required to provide security by way of a $4.0 million bank guarantee. The agreement was paid out in full during the year resulting in the term deposit no longer being required.

13. Exploration and evaluation expenditure


		Consolidated
		Capitalised exploration and evaluation expenditure $
Gross carrying amount
Balance at 30 June 2020		49,819,641
Additions		3,659,265
Balance transferred to asset held for sale		(11,399,352)
Balance at 30 June 2021		42,079,554
Additions		5,096,915
Balance transferred to asset held for sale		-
Balance at 30 June 2022		47,176,469

Accumulated amortisation and impairment
Balance at 1 July 2020		5,760,720
		-
Balance at 1 July 2021		5,760,720
		-
Balance at 30 June 2022		5,760,720
Net book value
As at 30 June 2021		36,318,834
As at 30 June 2022		41,415,749

The recovery of exploration expenditure carried forward is dependent upon the discovery of commercially viable mineral and other natural resource deposits, their development and exploration, or alternatively their sale.

14. Property, plant and equipment

	Consolidated
	Plant and equipment at cost $
Gross carrying amount
Balance at 1 July 2020	2,380,746
Additions	184,576
Disposals	(683,574)
Transfers to property, plant and equipment	(15,952)
Write offs	(843,599)
Balance at 30 June 2021	1,022,197
Additions	210,818
Balance at 30 June 2022	1,233,015

Accumulated depreciation
Balance at 1 July 2020	368,815
Disposals and write offs	(102,708)
Depreciation expense	165,375
Balance at 30 June 2021	431,482
Depreciation expense	151,401
Balance at 30 June 2022	582,883

Net book value
As at 30 June 2021	590,715
As at 30 June 2022	650,132

15. Trade and other payables

	2022 $	2021 $
Trade payables	916,809	975,405
Accrued expenses	1,319,523	1,354,900
GST Payable	-	2,914,883
	2,236,332	5,245,188

The average credit period on purchases is 30 days. No interest is charged on the trade payables. The Group has financial risk management policies in place to help ensure that all payables are paid within the settlement terms.

16. Provisions
	2022 $	2021 $
Current
Annual leave	682,334	517,977
Long service leave	371,184	286,009
Other (a)	-	468,698
Total current	1,053,518	1,272,684
Non-current
Other (a)	-	455,476
Total non-currant	-	455,476
Total	1,053,518	1,728,160

(a) Detail of movement in other provisions

The onerous contract relates to a contract entered into by Neometals Energy Pty Ltd, a wholly owned subsidiary of the Company, for the Company's Barrambie Project. The contract with DBNGP (WA) Transmission Pty Ltd for gas transmission, commenced on 1 July 2010. The provision in the accounts represents the present value of the remaining gas transmission obligations under the contract for gas transmission not expected to be utilised or on sold. This agreement was paid out in full during the year resulting in the removal of the provision related to the onerous contract.

17. Issued capital

2022

2021

548,376,395 fully paid ordinary shares (2021: 545,351,266)

145,564,286

154,634,997

	2022		2021
	No.	$	No.	$
Fully paid ordinary shares
Balance at beginning of financial year	545,351,266	154,634,997	544,516,913	154,437,267
Share issue costs	-	(7,021)	-	(2,520)
Return of capital		(9,803,228)	-	-
Other share based payments	3,025,129	739,538	834,353	200,250
Balance at the end of the financial year	548,376,395	145,564,286	545,351,266	154,634,997

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Share options

At balance date there were no share options in existence over ordinary shares (2021: nil).

Performance rights

At balance date there were 15,293,385 performance rights in existence over ordinary shares (2021: 16,016,135).

18. Reserves

The share-benefits reserve arises on the grant of share options and performance rights for the provision of services by consultants and to executives and employees under the employee share option plan, performance rights plan, employment contracts or as approved by shareholders. Amounts are transferred out of the reserve and into issued capital when the options are exercised or when shares are issued pursuant to the terms of the performance rights. Further information about share-based payments to employees is provided in note 9 to the financial statements.

	2022 $	2021 $
Share based payments reserve:
Balance at the beginning of the financial year	7,721,414	7,048,144
Increase in share based payments	1,474,081	873,520
Amounts transferred to share capital on exercise	(739,538)	(200,250)
Balance at the end of the financial year	8,455,957	7,721,414
Convertible note reserve:
Balance at the beginning of the financial year	300,349	300,349

Balance at the end of the financial year	300,349	300,349
Investment revaluation reserve:
Balance at the beginning of the financial year	1,019,637	1,019,637
Balance at the end of the financial year	1,019,637	1,019,637
Total Reserves	9,775,943	9,041,400

19. Earnings per share

	2022 Cents per share	2021 Cents per share
Basic earnings per share:
Continuing operations	(2.04)	3.01
Continuing and discontinued operations	0.80	3.00
Diluted earnings per share:
Continuing operations	(2.04)	3.01
Continuing and discontinued operations	0.79	3.00

Basic and diluted profit / (loss) per share

The profit / (loss) and weighted average number of ordinary shares used in the calculation of basic and diluted profit / (loss) per share are as follows:

	2022 $	2021 $
Profit / (loss) ^(a)
Continuing operations	(11,167,939)	16,428,961
Continuing and discontinued operations	4,360,700	16,343,172

	2022 No.	2021 No.
Weighted average number of ordinary shares for the purpose of basic profit / (loss) per share	548,285,227	545,351,266
Weighted average number of ordinary shares for the purpose of diluted profit / (loss) per share	550,375,191	545,351,266

(a) Profit / (loss) used in the calculation of profit / (loss) per share reconciles to net profit / (loss) in the consolidated statement of comprehensive income.

20. Commitments for expenditure

(a) Exploration and evaluation expenditure commitments

The Consolidated Entity holds mineral exploration licences in order for it to undertake its exploration and evaluation activities. To continue to hold tenure over these areas the Group is required to undertake a minimum level of expenditure on or in relation to the leases. Minimum expenditure commitments for the exploration and mining leases for the 2022 financial year are outlined in the table below.

2022

2021

Exploration expenditure commitments

Not longer than 1 year⁽ⁱ⁾

676,885

1,448,020

(i) Due to the nature of this expenditure, in that the expenditure commitments may be reduced by the relinquishment of tenements, estimates for the commitment have not been forecast beyond June 2022.

In addition, $1,458,000 has been committed to the Primobius joint venture as part of ongoing funding requirements.

21. Leases

	Leasing arrangements
	Leases relate to the lease of commercial premises in West Perth, Welshpool and a photocopier. The lease agreement for the Company's West Perth premises was entered into on 1 July 2019 for a 48 month period expiring on 30 June 2023. The lease of the Canadian branch premises was entered into on 1 May 2016 for a 60 month period expiring on 30 April 2021. The lease of a photocopier is for a period of 48 months expiring in June 2022. The commitments are based on the fixed monthly lease payment.
		30 June 2022
	Right-of-use assets	Buildings		Equipment		Total
		$		$		$

	Cost	878,200		9,044		887,244
	Accumulated Depreciation	(593,978)		-		(593,978)
	Carrying Amount	284,222		9,044		293,266

		30 June 2022
	Lease liability	Buildings		Equipment		Total
		$		$		$

	Current	362,712		9,044		371,756
	Non-current	-		-		-
	Total	362,712		9,044		371,756

			30 June 2021
	Right-of-use assets		Buildings		Equipment		Total
			$		$		$

	Cost		850,982		17,473		868,455
	Accumulated Depreciation		(296,146)		(8,737)		(304,883)
	Carrying Amount		554,836		8,736		563,572

			30 June 2021
	Lease liability		Buildings		Equipment		Total
			$		$		$

	Current		354,468		9,044		363,512
	Non-current		336,398		-		336,398
	Total		690,866		9,044		699,910

					2022 $		2021 $
	Amounts recognised in profit and loss
	Depreciation expense on right-of-use asset				305,725		440,566
	Interest expense on lease liabilities				19,783		33,259
Total					325,508		473,825

22. Joint arrangements

Name of operation

Principal activity

Interest

2022

2021

Reed Advanced Materials Pty Ltd⁽ⁱ⁾

Evaluation of lithium hydroxide process

The Consolidated Entity's interest in assets employed in the above joint ventures is detailed below.

(i) Reed Advanced Materials Pty Ltd ("RAM")

On 6 October 2015 Neometals and Process Minerals International Pty Ltd entered into a shareholders agreement for the purposes of establishing and operating a joint venture arrangement through RAM to operate a business of researching, designing and developing the capabilities and technology relating to the processing of lithium hydroxide. Following the execution of the shareholders agreement RAM was held 70:30 between Neometals and Process Minerals International.

Summarised financial information for the joint venture:	2022 $	2021 $
Carrying value of investment in the joint venture	1	1
Loan to joint venture	350,000	70,000

Share of loss of joint venture not recognised in profit or loss	(176,242)	(66,727)

Reed Advanced Materials Pty Ltd Summary Balance Sheet	2022 $	2021 $
Current assets	199,505	64,498
Non-current assets	612,399	534,024
Current liabilities	(38,954)	(16,501)
Non-current liabilities	(2,681,568)	(2,251,568)


Name of operation	Principal activity	Interest
Name of operation		2022 %	2021 %
Primobius GmbH⁽ⁱ⁾	Lithium battery recycling project	50	50

Consolidated Entity's interest in assets employed in the above joint ventures is detailed below.

(ii) Primobius GmbH

On 31 July 2020, Neometals and SMS group GmbH entered into a formal agreement to establish a 50:50 JV('Primobius GmbH') to commercialise Neometals proprietary lithium battery recycling process.

Summarised financial information for the joint venture:	2022 $	2021 $
Neometals carrying value of investment in the joint venture	5,458,508	2,811,339

Neometals share of loss of joint venture recognised in profit or loss	(872,667)	(85,525)

Primobious GmbH Summary Balance Sheet	2022 $	2022 $
Current assets	3,489,421	2,868,142
Non-current assets	9,280,979	3,658,262
Current liabilities	(2,438,582)	(678,386)
Non-current liabilities	(20,826)	(7,911)

23. Investment in associate

Hannans Limited

Name of operation

Principal activity

Interest

2022

2021

Hannans Limited

Exploration of nickel and lithium

32.43%

31.74

The above associate is accounted for using the equity method in this consolidated financial report.

Summarised information for the associate:

	2022 $	2021 $
Opening carrying value of investment in associate	4,869,566	3,531,048
Shares purchased / (disposed of) at fair value	2,038,056	(239,725)
Share of loss of associate recognised in profit or loss ⁽ⁱ⁾	(318,287)	(99,967)
Impairment reversal ⁽ⁱⁱ⁾	7,079,641	1,678,210
Closing carrying value of investment in associate^(III)	13,668,976	4,869,566

(i) The equity accounted share of the associate's loss as adjusted as if applying the same accounting policies as Neometals is credited against the carrying value of the investment in the associate.

(ii) In the current financial year, the impairment previously recognised in the carrying value of the investment in associate has been reversed to reflect the historical cost base, net of share of loss.

(iii) The fair value of the Groups investment in Hannans as at 30 June 2022 on a per share basis is $17,746,812 (2021: $4,869,566)

2022

No.

2021

No.

Shares held in Hannans Limited

845,086,264

749,164,028

24. Subsidiaries

Name of entity	Country of incorporation	Ownership interest
Name of entity	Country of incorporation	2022 %	2021 %
Parent entity
Neometals Ltd	Australia

Subsidiaries
Australian Titanium Pty Ltd (formerly Australian Vanadium Corporation (Holdings) Pty Ltd)	Australia	100	100
Alphamet Management Pty Ltd (formerly Australian Vanadium Corporation (Investments) Pty Ltd)	Australia	100	100
Inneovation Pty Ltd (formerly Australian Vanadium Exploration Pty Ltd)	Australia	100	100
Neometals Energy Pty Ltd (formerly Barrambie Gas Pty Ltd)	Australia	100	100
Neomaterials Pty Ltd (formerly GMK Administration Pty Ltd)	Australia	100	100
Neometals Investments Pty Ltd (formerly Gold Mines of Kalgoorlie Pty Ltd)	Australia	100	100
Urban Mining Pty Ltd (formerly Mount Finnerty Pty Ltd)	Australia	100	100
Adamant Technologies Pty Ltd	Australia	100	100
Mt Edwards Lithium Pty Ltd	Australia	-	100
Avanti Materials Ltd	Australia	100	100
ACN 630 589 507 Pty Ltd	Australia	100	100
Ecometals Pty Ltd	Australia	100	100

All of these companies are members of a tax consolidated group. Neometals Ltd is the head entity of the tax consolidated group.

25. Segment information

Basis for segmentation

AASB 8 Operating Segments requires the presentation of information based on the components of the entity that management regularly reviews for its operational decision making. This review process is carried out by the Chief Operating Decision Maker ("CODM") for the purpose of allocating resources and assessing the performance of each segment. The amounts reported for each operating segment is the same measure reviewed by the CODM in allocating resources and assessing performance of that segment.

For management purposes, the Group operates under three operating segments comprised of the Group's lithium, titanium/vanadium and 'other segments' which comprises other minor exploration projects and mineral process technology businesses. The titanium/vanadium operating segment is separately identified given it possess different competitive and operating risks and meets the quantitative criteria as set out in the AASB 8. The 'other segments' category is the aggregation of all remaining operating segments given sufficient reportable operating segments have been identified.

The segment information reported on the next page does not include any amounts for this discontinued operation for the current and prior periods, which is described in more detail in note 7.

For the year ended 30 June 2022

	Reportable operating segments	Lithium $	Titanium $	Other $	Corporate $	Total $
Revenue from external customers		-	-	-	-	-
Cost of sales		-	-	-	-	-
Gross profit/(loss)		-	-	-	-	-
Other income		-	75,000	820,079	2,068,921	2,964,000
Share of loss of JV and associate		(872,667)	-	(318,287)	-	(1,190,954)
Impairment reversal on investment in associate		-	-	7,079,641	-	7,079,641
Depreciation and Amortisation		-	(68,758)	-	(388,307)	(457,065)
Total expenses		(2,410,535)	(5,766,136)	(45,050)	(16,408,135)	(24,629,856)
Profit/(loss) before tax		(3,283,202)	(5,759,894)	7,536,383	(14,727,521)	(16,234,234)
Loss for the year from discontinued operations		-	-	-	15,528,639	15,528,639
Income tax expense		-	-	-	5,066,295	5,066,295
Consolidated profit/(loss) after tax		(3,283,202)	(5,759,894)	7,536,383	5,867,413	4,360,700

As at 30 June 2022

Reportable operating segments	Lithium $	Vanadium /Titanium $	Other $	Corporate $	Total $
Increase/(decrease) in segment assets	5,785,912	5,550,676	(531,070)	(41,427,327)	(30,621,809)
Total segment assets	6,310,395	42,382,531	21,836,556	60,511,057	131,040,539
Total assets	6,310,395	42,382,531	21,836,556	60,511,057	131,040,539

For the year ended 30 June 2021

Reportable operating segments	Lithium $	Vanadium /Titanium $	Other $	Corporate $	Total $
Revenue from external customers	-	-	-	-	-
Cost of sales	-	-	-	-	-
Gross profit/(loss)	-	-	-	-	-
Other income	30,078,874	5,399	4,780,371	1,484,103	36,348,747
Expenditure written off / impairments	-	(740,893)	1,578,243	-	837,350
Depreciation and amortisation	-	(206,891)	-	(391,722)	(598,613)
Share of loss of JV and associate	(85,525)	-	(99,967)	-	(185,492)
Total expenses	(2,161,077)	(3,982,170)	(63,349)	(9,218,649)	(15,425,245)
Profit/(loss) before tax	27,832,272	(4,924,555)	6,195,298	(8,126,268)	20,976,747
Loss for the year from discontinued operations	-	-	(85,789)	-	(85,789)
Income tax benefit	-	-	-	(4,547,786)	(4,547,786)
Consolidated profit/(loss) after tax	27,832,272	(4,924,555)	6,109,509	(12,674,054)	(16,343,172)

As at 30 June 2021

Reportable operating segments	Lithium $	Vanadium /Titanium $	Other $	Corporate $	Total $
Increase/(decrease) in segment assets	(10,894,693)	(91,488)	16,038,260	6,259,280	11,311,359
Total segment assets	524,483	36,831,855	10,873,089	101,938,386	150,167,813
Assets classified as held for sale	-	-	11,494,537	-	11,494,537
Total assets	524,483	36,831,855	22,367,626	101,938,386	161,662,350

Geographical information

The Group operates in a single geographical area being Australia (country of domicile).

26. Related party disclosures

(a) Equity interests in related parties

Equity interests in subsidiaries

Details of the percentage of ordinary shares held in subsidiaries are disclosed in note 24 to the financial statements.

Equity interests in joint arrangements

Details of the percentage of ordinary shares held in joint arrangements are disclosed in note 22 to the financial statements.

(b) Key management personnel remuneration

Details of Key Management Personnel remuneration are disclosed on pages 36-44 of the Remuneration Report.

Fully paid ordinary shares of Neometals Ltd

2022	Balance at	Balance on	Received on	Net other	Balance at	Balance
	01/07/2021	appointment	exercise of	change	30/06/2022	held
			perf rights			nominally
	No.	No.	No.	No.	No.	No.
Non-executive directors
S. Cole	1,682,198	-	207,962	-	1,890,160	-
D. Ritchie	134,908		49,911	25,000	209,819	-
N. Streltsova	134,908		49,911	40,000	224,819	-
D. Reed ⁽ⁱ⁾	39,588,900	-	-	(2,000,000)	37,588,900	-
J. Purdie	215,187	-	83,185	31,700	330,072	-
L. Guthrie	163,675	-	41,592	15,000	220,267	-
Executive director
C. Reed	6,707,189	-	668,271	(493,288)	6,882,172	-
Other executives
M. Tamlin	229,189	-	306,664	-	535,853	-
J. Carone	400,000	-	245,725	(130,725)	515,000	-
D. Townsend	272,405	-	294,870	(316,218)	251,057	-
Total	49,528,559	-	1,948,091	(2,828,531)	48,648,119	-

⁽ⁱ⁾ David Reed retired from his position of Non-Executive Director on 30 November 2021

2021	Balance at	Balance on	Received on	Net other	Balance at	Balance
	01/07/2020	appointment	exercise of	change	30/06/2021	held
			perf rights			nominally
	No.	No.	No.	No.	No.	No.
Non-executive directors
S. Cole	1,396,731	-	285,467	-	1,682,198	-
D. Ritchie	66,396	-	68,512	-	134,908	-
N. Streltsova	66,396	-	68,512	-	134,908	-
D. Reed	46,188,900	-	-	(6,600,000)	39,588,900	-
J. Purdie	101,000	-	114,187	-	215,187	-
L. Guthrie	85,605	-	47,675	30,395	163,675	-
Executive director
C. Reed	10,428,170	-	-	(3,720,981)	6,707,189	-
Other executives
M. Tamlin	229,189	-	-	-	229,189	-
J. Carone	1,100,000	-	-	(700,000)	400,000	-
D. Townsend	163,605	-	-	108,800	272,405	-
Total	59,825,992	-	584,353	(10,881,786)	49,528,559	-

Share options of Neometals Ltd

No options were issued to related parties during the current period (2021: nil).

Performance rights of Neometals Ltd

In the current reporting period the Company granted 1,573,173 (2021: 4,237,645) performance rights to executives and KMP pursuant to the Company's Performance Rights Plan.

Further details of performance rights granted are contained in note 8 to the financial statements.

Performance rights granted to related parties

The following tables summarises information relevant to the current financial year in relation to the grant of performance rights to KMP as part of their remuneration. Performance rights are issued by Neometals Ltd.

Name	During the Financial Year
	Grant date	No.	No.	Fair value at grant date	Earliest exercise date	Consideration payable on exercise
	Grant date	granted	vested	Fair value at grant date	Earliest exercise date	Consideration payable on exercise
KMP:
N. Streltsova	11/10/2021	55,450	55,450	45,000	30/06/2022	-
D. Ritchie⁽¹⁾	11/10/2021	55,450	55,450	45,000	30/06/2022	-
S. Cole⁽¹⁾	11/10/2021	61,611	61,611	50,000	30/06/2022	-
J. Purdie	11/10/2021	55,450	55,450	45,000	30/06/2022	-
L. Guthrie	11/10/2021	11,090	11,090	9,000	30/06/2022	-
C. Reed⁽²⁾	11/10/2021	574,049	-	436,277	30/06/2024	-
J. Carone⁽²⁾	11/10/2021	235,885	-	179,273	30/06/2024	-
M. Tamlin⁽²⁾	11/10/2021	262,094	-	199,191	30/06/2024	-
D. Townsend⁽²⁾	11/10/2021	262,094	-	199,191	30/06/2024	-
Total		1,573,173	239,051	1,207,932		-

(1) At 30 June 2022 Non-Executive Directors became entitled to securities whose vesting conditions were the subject to the rules of the Performance Rights Plan.

(2) The number of performance rights that will actually vest, if any, is determined by the Company's performance based on Neometals relative and absolute TSR compared to the comparative group of companies over a 3 year period and Business Plan strategic objectives.

Details of performance rights held by KMP and of shares issued during the financial year as a result of the vesting of performance rights:

	Grant date	Fair value of rights at grant date	No.	Vested during the financial year	Forfeited/ lapsed during the financial year	Ordinary shares issued on exercise of rights
			granted

		$		No.	No.	No.
KMP:
C. Reed⁽¹⁾	10/08/2018	209,252	835,339	-	167,068	668,271
J. Carone⁽¹⁾	10/08/2018	76,943	307,156	-	61,431	245,725
M. Tamlin⁽¹⁾	10/08/2018	96,024	383,330	-	76,666	306,664
D. Townsend⁽¹⁾	10/08/2018	92,331	368,587	-	73,717	294,870
C. Reed⁽¹⁾	2/09/2019	141,797	1,233,021	986,417	-	-
J. Carone⁽¹⁾	2/09/2019	56,734	493,335	394,668	-	-
M. Tamlin⁽¹⁾	2/09/2019	64,367	559,711	447,769	-	-
D. Townsend⁽¹⁾	2/09/2019	61,891	538,184	430,547	-	-
N. Streltsova⁽²⁾	7/12/2020	12,000	49,911	-	-	49,911
D. Ritchie⁽²⁾	7/12/2020	12,000	49,911	-	-	49,911
S. Cole⁽²⁾	7/12/2020	50,000	207,962	-	-	207,962
J. Purdie⁽²⁾	7/12/2020	20,000	83,185	-	-	83,185
L. Guthrie⁽²⁾	7/12/2020	10,000	41,592	-	-	41,592
C. Reed⁽¹⁾	7/12/2020	299,872	1,656,754	-	-	-
J. Carone⁽¹⁾	7/12/2020	120,556	666,055	-	-	-
M. Tamlin⁽¹⁾	7/12/2020	136,776	755,670	-	-	-
D. Townsend⁽¹⁾	7/12/2020	131,516	726,605	-	-	-
C. Reed⁽¹⁾	11/10/2021	436,277	574,049	-	-	-
J. Carone⁽¹⁾	11/10/2021	179,273	235,885	-	-	-
M. Tamlin⁽¹⁾	11/10/2021	199,191	262,094	-	-	-
D. Townsend⁽¹⁾	11/10/2021	199,191	262,094	-	-	-
N. Streltsova⁽³⁾	11/10/2021	45,000	55,450	55,450	-	-
D. Ritchie⁽³⁾	11/10/2021	45,000	55,450	55,450	-	-
S. Cole⁽³⁾	11/10/2021	50,000	61,611	61,611	-	-
J. Purdie⁽³⁾	11/10/2021	45,000	55,450	55,450	-	-
L. Guthrie⁽³⁾	11/10/2021	9,000	11,090	11,090	-	-
Total		2,799,991	10,529,481	2,498,452	378,882	1,948,091

(1) The number of performance rights that will actually vest, if any, is determined by the Company's performance based on Neometals TSR compared to the comparative group of companies over the 3-year period as set out in the employee's employment contract. As a result of the testing of the Company's performance over this period 1,515,530 rights vested and shares were issued (2021: nil).

(2) Under the Performance Rights Plan, Non-Executive Directors were invited to forgo part of their fees for their services in exchange for performance rights. At 30 June 2022 all performance rights have vested. As a result of the testing of the Company's performance over this period 432,561 rights vested and shares were issued (2021: 584,352).

(3) Under the Performance Rights Plan, Non-Executive Directors were invited to sacrifice part of their fees for their services in exchange for performance rights. At 30 June 2022 all performance rights have vested.

The performance rights granted entitle the grantee to one fully paid ordinary share in Neometals Ltd for nil cash consideration on satisfaction of the vesting criteria.

(d) Transactions with other related parties

Other related parties include:

· The parent entity;

· Associates;

· Joint ventures in which the entity is a venturer;

· Subsidiaries;

· Key Management Personnel of the Group; and

· Other related parties.

The Group has provided loans to its joint ventures, Reed Advanced Materials Pty Ltd and Primobius GmbH (see note 22)

Transactions involving the parent entity

The directors elected for wholly-owned Australian entities within the Group to be taxed as a single entity from 1 July 2003.

No other transactions occurred during the financial year between entities in the wholly owned Group.

(e) Controlling entities

The ultimate parent entity of the Group is Neometals Ltd, a company incorporated and domiciled in Australia.

27. Auditors remuneration

Details of the amounts paid or payable to the auditor for the audit and other assurance services during the year are as follows:

	2022 $	2021 $
Audit services - Deloitte Touche Tohmatsu
Fees to the group auditor for the audit or review of the statutory financial reports of the Company, subsidiaries and joint operations	113,250	73,648
Fees for other assurance and agreed-upon procedures under other legislation or contractual arrangements - Australia	65,491	40,950
Fees for other assurance and agreed-upon procedures under other legislation or contractual arrangements - United Kingdom	760,515	-
Total remuneration of Deloitte Touche Tohmatsu	939,256	114,598

28. Notes to the statement of cash flows

(a) Reconciliation of cash and cash equivalents

For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial year as shown in the Cash Flow Statement is reconciled to the related items in the statement of financial position as follows:	2022 $	2021 $

Cash and cash equivalents from continuing operations	60,158,159	93,897,137
	60,158,159	93,897,137

(b) Reconciliation of profit / (loss) for the period to net cash flows from operating activities

	2022 $	2021 $
(Loss) / Profit for the year	4,360,700	16,343,171
Impairment (reversal)/expense	(7,079,641)	(1,678,210)
Profit on disposal of financial assets	(576,661)	(3,232,962)
Profit on the disposal of tenements	-	(200,000)
Profit on the divestment of RIM offtake	-	(30,000,000)
Share of loss in associate	318,287	99,967
Share of loss in Joint Venture	872,667	85,525
Net (profit) / loss on financial assets measured at FVTPL	(233,418)	(1,547,409)
Interest received on investments	(254,047)	(527,398)
Finance costs recognised in profit or loss	76,163	63,310
Depreciation and amortisation of non-current assets	872,790	598,613
Equity settled share-based payment	1,474,081	873,520
Gain on disposal of discontinued operation	(15,528,639)	-
Net foreign exchange (gain)/loss	(34,441)	(29,837)
(Increase) / decrease in assets:
Current receivables	(266,938)	(165,238)
Other	29,404	6,730
Increase / (decrease) in liabilities:
Current payables	(3,000,612)	622,702
Deferred tax liability	(5,432,830)	6,768,334
Provisions	(674,642)	574,630
Net Cash used in operating activities	(25,077,777)	(11,344,552)

29. Financial instruments

(a) Financial risk management objectives

The Consolidated Entity does not enter into derivative financial instruments for speculative or hedging purposes.

(b) Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.

The following tables detail the Group's exposure to interest rate risk:

2022	Weighted average effective interest rate %	Variable interest rate %	Maturity dates			Non interest bearing $	Total $
2022	Weighted average effective interest rate %	Variable interest rate %	Less than 1 year $	1-5 years $	More than 5 years $	Non interest bearing $	Total $
Financial assets:
Cash and cash equivalents AUD	0.40%	-	59,009,480	-	-	-	59,009,480
Cash and cash equivalents EUR	0.00%	-	531,719	-	-	-	531,719
Cash and cash equivalents USD	0.00%	-	704,839	-	-	-	704,839
Cash and cash equivalents GBP	0.00%	-	112,121	-	-	-	112,121
Bond term deposits ⁽ⁱ⁾	0.40%	-	200,000	-	-	-	200,000
Cash deposits trust	0.00%	-	2,078,476	-	-	-	2,078,476
Trade and other receivables	0.00%	-	-	-	-	518,007	518,007

Financial liabilities:
Trade payables⁽ⁱⁱ⁾	-	-	-	-	-	2,236,332	2,236,332
Lease liability	3.50%	-	371,756	-	-	-	371,756

(i) The balances represent two term deposits that are restricted in their use and are classified in the current reporting period as other financial assets. Additional information on all other term deposits is provided at notes 12 and 28(b). The financial assets have contractual maturities of less than one year, however they are classified as non-current in the statement of financial position as they are not accessible to the Group due to restrictions placed on accessing the funds. (ii) Non interest bearing liabilities are due within 30 days.
2021	Weighted average effective interest rate %	Variable interest rate %	Maturity dates			Non interest bearing $	Total $
2021	Weighted average effective interest rate %	Variable interest rate %	Less than 1 year $	1-5 years $	More than 5 years $	Non interest bearing $	Total $
Financial assets:
Cash and cash equivalents AUD	0.33%	-	97,304,363	-	-	-	97,304,363
Cash and cash equivalents CAD	0.00%	-	34,652	-	-	-	34,652
Cash and cash equivalents USD	0.00%	-	535,029	-	-	-	535,029
Barrambie Gas term deposit ⁽ⁱ⁾	0.00%	-	297,156	-	-	-	297,156
Bond term deposits ⁽ⁱ⁾	0.29%	-	4,000,000	-	-	-	4,000,000
Cash deposits trust	0.40%	-	200,000	-	-	-	200,000
Trade and other receivables	0.73%	-	2,073,227	-	-	-	2,073,227
	0.00%	-	-	-	-	542,201	542,201
Financial liabilities:
Trade payables	-	-	-	-	-	5,245,188	5,245,188
Lease liabilities	3.50%	-	363,512	336,398	-		699,910

(i) The balances represent two term deposits that are restricted in their use and are classified in the current reporting period as other financial assets. Additional information on all other term deposits is provided at notes 12 and 28(b). The financial assets have contractual maturities of less than one year, however they are classified as non-current in the statement of financial position as they are not accessible to the Group due to restrictions placed on accessing the funds.

(d) Credit risk management

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has adopted a policy of only dealing with credit-worthy counterparties and obtaining sufficient collateral where appropriate as a means of mitigating the risk of financial loss from defaults. The consolidated entity exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

The consolidated entity does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics other than the Joint Venture. The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

(e) Liquidity risk management

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 and banking facilities, and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The undiscounted lease liabilities balance is $371,756, split between $371,756 with a maturity date of less than 1 year and $nil with a maturity date of 1-5 years.

In addition to financial liabilities in note 15, the Company is required to meet minimum spend commitments to maintain the tenure over the Company's mineral exploration areas as described in note 20.

(f) Fair value

The carrying amount of financial assets measured at amortised cost recorded in the financial statements approximates their respective fair values.

Financial assets carried at fair value through profit or loss comprise investments predominantly in Australian listed equities. Their fair value is determined using key inputs of quoted bid prices in an active market multiplied by the number of shares held, which is Level 1 in the fair value heirachy. Where quoted prices in an active market are unable to be used to determine fair value, alternative valuation methods are used to most accurately represent the equities fair value which for the investments held by the entity include other observable inputs and is therefore categorised as level 2 on the fair value hierarchy. The group does not have

29. Financial instruments (continued)

any instruments or investments measured using level 3 of the fair value hierarchy. Other that the investments held at fair value, the group does not hold any instruments that are measured at fair value. There have been no transfers between fair value classes during the year. The sensitivity analysis below has been calculated based on the exposure to equity price risk at the end of the reporting period for financial assets carried at fair value through profit or loss. A 25 percent increase and decrease has been used to assess the sensitivity of the equity price risk and represents management's assessment of a reasonably possible change in equity pricing.

If equity prices had been 25 percentage higher/lower and all other variables were held constant, the Group's profit for the year ended 30 June 2022 would decrease/increase by $557,375 (2021: 484,592).

(g) Capital management

The board's policy is to endeavour to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Group sources any additional funding requirements from either debt or equity markets depending on the market conditions at the time the funds are sourced and the purpose for which the funds are to be used. The Group is not subject to externally imposed capital requirements.

(h) Interest rate risk management

The Group is exposed to interest rate risk as the Group has funds on deposit as security for the head office lease and the Neometals Energy Pty Ltd onerous contract outlined at note 16.

The sensitivity analysis below has been calculated based on the exposure to interest rates at the end of the reporting period. A 50 basis point increase and decrease has been used when reporting the interest rate risk and represents management's assessment of the potential change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Group's profit for the year ended 30 June 2022 would decrease/increase by $301,791 (2021: decrease/increase $490,856). This is mainly attributable to the Group's exposure to interest rates on the maturity of its term deposits.

30. Events after the reporting period

No other matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect the operations, results of operations or state of affairs of the Group in subsequent financial years.

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END

FR SEUSMDEESELU

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Neometals Ltd Npv (Di) (NMT)

Friday, 17th May 2024

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