ASX and MEDIA RELEASE

27 August 2021

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Alkane Delivers Profit After Tax of A$55.7 Million for FY2021

Alkane Resources Ltd results for the year ended 30 June 2021 are attached. The table below is a summary of the financial results:

	June 2021	June 2020	Change	Change
	(A$’000)	(A$’000)	(A$’000)	%
Gold revenue	127,833	72,549	55,284	76%
Gold production (ounces)	56,958	33,507	23,451	70%
Gold sales (ounces)	55,929	32,995	22,934	70%
Sale price ($/oz)	2,286	2,199	87	4%
TGO profit before tax	57,791	30,362	27,429	90%
Company profit after tax1	55,701	12,762	42,939	336%
Company profit after tax – continuing operations1	33,567	13,345	20,222	152%
Company profit after tax –discontinuing operations1	22,134	(583)	22,717	3897%

1. Profit for the business excluding the ASM business which was demerged in July 2020.

The profit was driven by Tomingley performance and the highly successful demerger of Australian Strategic Materials.

Excellent production and cost performance at the Tomingley Gold Operation resulted in 56,958 ounces of gold produced at an all in sustaining cost (AISC) of A$1,320 per ounce.

The demerger and listing of Australian Strategic Materials (ASX: ASM) resulted in a profit after tax for Alkane of $22.1 million. ASM’s market capitalisation went on to rise through $1 billion at the end of the financial year and is now in excess of $1.5 billion.

As at 30 June 2021 the company’s cash, bullion and listed investments totalled A$73.9 million, with A$19.0 million in cash, bullion on hand at fair value of A$7.7 million and A$47.2 million of listed investments at market value.

CONTACT INVESTORS MEDIA

: NIC EARNER, MANAGING DIRECTOR, ALKANE RESOURCES LTD, TEL +61 8 9227 5677

: NATALIE CHAPMAN, CORPORATE COMMUNICATIONS MANAGER, TEL +61 418 642 556

: JOHN GARDNER, CITADEL-MAGNUS, TEL +61 413 355 997

Level 4, 66 Kings Park Rd, West Perth WA 6005, AUSTRALIA (PO Box 768, West Perth WA 6872, AUSTRALIA) Telephone: +61 8 9227 5677 Facsimile: +61 8 9227 8178 www.alkane.com.au [email protected]

Disclaimer

This report contains certain forward looking statements and forecasts, including possible or assumed reserves and resources, production levels and rates, costs, prices, future performance or potential growth of Alkane Resources Ltd, industry growth or other trend projections. Such statements are not a guarantee of future performance and involve unknown risks and uncertainties, as well as other factors which are beyond the control of Alkane Resources Ltd. Actual results and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors. Nothing in this report should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities.

This document has been prepared in accordance with the requirements of Australian securities laws, which may differ from the requirements of United States and other country securities laws. Unless otherwise indicated, all ore reserve and mineral resource estimates included or incorporated by reference in this document have been, and will be, prepared in accordance with the JORC classification system of the Australasian Institute of Mining, and Metallurgy and Australian Institute of Geoscientists.

This document has been authorised for release to the market by Nic Earner, Managing Director.

ABOUT ALKANE ‐ www.alkane.com.au ‐ ASX: ALK

Alkane Resources is poised to become Australia’s next multi-mine gold producer.

The Company’s current gold production is from the Tomingley Gold Operations in Central West New South Wales, where it has been operating since 2014 and is currently expediting a development pathway to extend the mine’s life beyond 2030.

Alkane has an enviable exploration track record and controls several highly prospective gold and copper tenements. Its most advanced exploration projects are in the tenement area between Tomingley and Peak Hill, which have the potential to provide additional ore for Tomingley’s operations.

Alkane’s exploration success includes the landmark porphyry gold-copper mineralisation discovery at Boda in 2019. With a major drill program ongoing at Boda, Alkane is confident of further consolidating Central West New South Wales’ reputation as a significant gold production region.

Alkane’s gold interests extend throughout Australia, with strategic investments in other gold exploration and aspiring mining companies, including ~19.8% of Genesis Minerals (ASX: GMD) and ~9.7% of Calidus Resources (ASX: CAI).

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Alkane Resources Ltd Appendix 4E Preliminary final report

1. Company details

Name of entity: Alkane Resources Ltd ABN: 35 000 689 216 Reporting period: For the year ended 30 June 2021 Previous period: For the year ended 30 June 2020

2. Results for announcement to the market

				$'000
Revenue from ordinary	up	76%	to
activities				127,833
Profit after tax attributable	up
to the owners of Alkane
Resources Ltd
‐ From continuing
operations		152%	to	33,567
‐ From discontinued
operations				22,134

The revenue increase was as a result of increased gold production and increased gold price during the year. Gold poured during the current year was 56,958oz (2020: 33,507oz). The revenue recognised in the previous year was mainly related to the processing of low‐ grade stockpiles as the underground mine was being developed and commenced production in February 2020.

Comments

The profit for the consolidated entity form continuing operations after providing for income tax amounted to $33,567,000 and from discontinued operations amounted to $22,134,000 totalling to $55,701,000 (30 June 2020: $12,762,000).

3. Net tangible assets

	Reporting	Previous
	period	period
	Cents	Cents
Net tangible assets per ordinary security	22.39	26.28

4. Loss of control over entities

Name of entities (or group of entities) Australian Strategic Materials Ltd and its controlled entities Date control lost 20 July 2020

$'000

Contribution of such entities to the reporting entity's profit/(loss) from ordinary activities before income tax during the period (where material) 22,134

Profit/(loss) from ordinary activities before income tax of the controlled entity (or group of entities) whilst controlled during the whole of the previous period (where material) (583)

Alkane Resources Ltd Appendix 4E Preliminary final report

5. Dividends

Current period

There were no dividends paid, recommended or declared during the current financial period.

Previous period

There were no dividends paid, recommended or declared during the previous financial period.

6. Details of associates

Associates

Genesis Minerals Ltd (“Genesis”)

7. Audit qualification or review

Details of audit/review dispute or qualification (if any):

The financial statements have been audited and an unmodified opinion has been issued.

8. Attachments

Details of attachments (if any):

The Annual Report for the year ended 30 June 2021 of Alkane Resources Ltd is attached.

9. Signed

Signed _________

Date: 27 August 2021

Alkane Resources Ltd ABN 35 000 689 216

Annual Report for the year ended 30 June 2021

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Alkane Resources Ltd
Contents
30 June 2021
Corporate directory	2
Directors' report	3
Auditor's independence declaration	21
Consolidated statement of profit or loss and other comprehensive income	22
Consolidated balance sheet	24
Consolidated statement of changes in equity	25
Consolidated statement of cash flows	26
Notes to the consolidated financial statements	27
Directors' declaration	62
Independent auditor's report to the members of Alkane Resources Ltd	63

Alkane Resources Ltd Corporate directory 30 June 2021

Directors I J Gandel (Non‐Executive Chairman) N P Earner (Managing Director) D I Chalmers (Technical Director) A D Lethlean (Non‐Executive Director) G M Smith (Non‐Executive Director) Joint company secretaries D Wilkins J Carter Registered office and principal Level 4, 66 Kings Park Road, West Perth WA 6005 place of business Telephone: 61 8 9227 5677 Facsimile: 61 8 9227 8178 Share register Advanced Share Registry Limited 110 Stirling Highway, Nedlands WA 6009 Auditor PricewaterhouseCoopers Brookfield Place, 125 St Georges Terrace, Perth WA 6000 Stock exchange listing Alkane Resources Ltd shares are listed on the Australian Securities Exchange (Perth) (ASX code: ALK) and the OTC International (OTC code: ALKEF) Ordinary fully paid shares Website http://www.alkane.com.au E‐mail address [email protected]

Alkane Resources Ltd Directors' report 30 June 2021

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity' or the 'group') consisting of Alkane Resources Ltd (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2021.

Directors

The following persons were directors of Alkane Resources Ltd (Alkane) during the whole of the financial year and up to the date of this report, unless otherwise stated:

I J Gandel N P Earner D I Chalmers A D Lethlean G M Smith

The Board continues its efforts to seek to appoint additional independent members who will bring complimentary skill sets and diversity to the group's leadership.

Information on Directors and Company Secretaries

Ian Jeffrey Gandel ‐ Non‐Executive Chairman

LLB, BEc, FCPA, FAICD

Appointed Director 24 July 2006 and Chairman 1 September 2017

Mr Gandel is a successful Melbourne based businessman with extensive experience in retail management and retail property. He has been a director of the Gandel Retail Trust and has had an involvement in the construction and leasing of Gandel shopping centres. He has previously been involved in the Priceline retail chain and the CEO chain of serviced offices.

Mr Gandel has been an investor in the mining industry since 1994. Mr Gandel is currently a substantial holder in a number of publicly listed Australian companies and, through his private investment vehicles, now holds and explores tenements in his own right in Western Australia. Mr Gandel is currently non‐executive chairman of Alliance Resources Ltd (appointed as a director on 15 October 2003 and in June 2016 was appointed non‐executive chairman). Mr Gandel is currently non‐executive chairman of Australian Strategic Materials Limited (appointed 18 March 2014) (This company was demerged and admitted to the Australian Securities Exchange (ASX) on 29 July 2020). He is also Non‐Executive chairman of Octagonal Resources Ltd (appointed 10 November 2010) (this company sought delisting from the ASX in February 2016 and converted to Pty Ltd status in April 2016).

Mr Gandel is a member of the Audit Committee and a member of the Remuneration and Nomination Committees.

Nicolas Paul Earner ‐ Managing Director

BEng (hons)

Appointed Managing Director 1 September 2017

Mr Earner is a chemical engineer and a graduate of the University of Queensland with over 25 years' experience in technical and operational optimisation and management, and has held a number of executive roles in mining and processing.

Mr Earner joined Alkane Resources Ltd as Chief Operations Officer in August 2013 with responsibility for the safe and efficient management of the company's operations at Tomingley Gold Operations (TGO) and Dubbo (Dubbo Project). Under his supervision, the successful development of TGO transitioned to profitable and efficient operations. His guidance also drove the engineering and metallurgical aspects of the Dubbo Project, prior to its transition into the separately listed Australian Strategic Materials.

Prior to his appointment as the group's Chief Operations Officer in August 2013 he had roles at Straits Resources Ltd, Rio Tinto Coal Australia's Mount Thorley Warkworth coal mine and BHP/WMC Olympic Dam copper‐uranium‐gold operations.

Mr Earner is currently a non‐executive director of Genesis Minerals Limited (appointed 24 October 2019) and Australian Strategic Materials Limited (appointed 1 September 2017) (this company was demerged and admitted to the ASX on 29 July 2020).

Alkane Resources Ltd Directors' report 30 June 2021

David Ian Chalmers ‐ Technical Director

MSc, FAusIMM, FAIG, FIMM, FSEG, MSGA, MGSA, FAICD

Appointed Technical Director 1 September 2017. Resigned as Managing Director 31 August 2017.

Mr Chalmers, Alkane Resources Ltd's Technical Director, is a geologist and graduate of the Western Australia Institute of Technology (Curtin University) and has a Master of Science degree from the University of Leicester in the United Kingdom. He has worked in the mining and exploration industry for over 50 years, during which time he has had experience in all facets of exploration and mining through feasibility and development to the production phase. Mr Chalmers was Technical Director of Alkane until his appointment as Managing Director in 2006, overseeing the group's minerals exploration efforts across Australia and the development and operations of the Peak Hill Gold Mine (NSW). During his time as Chief Executive he steered Alkane through the discovery, feasibility, construction and development of the now fully operational Tomingley Gold Operations; the discovery and ultimate sale of the McPhillamys gold deposit; the recent discovery of the gold deposits immediately south of Tomingley and the porphyry gold‐copper discovery at Boda. Mr Chalmers also managed the process development and global marketing effort for the Dubbo Project, advancing it to the threshold of development.

Mr Chalmers is currently a non‐executive director of Australian Strategic Materials Limited (appointed 18 March 2014) (this company was demerged and admitted to the ASX on 29 July 2020).

Mr Chalmers is a member of the Nomination Committee.

Anthony Dean Lethlean ‐ Non‐Executive Director

BAppSc (Geology)

Appointed Director 30 May 2002

Mr Lethlean is a geologist with over 10 years mining experience including 4 years underground on the Golden Mile in Kalgoorlie. In later years, he has worked as a resource analyst with various stockbrokers and investment banks including CIBC World Markets. He was a founding director of Helmsec Global Capital Limited which seeded, listed and funded a number of companies in a range of commodities. He retired from the Helmsec group in 2014. He is also a director of corporate advisory Rawson Lewis and a non‐executive director of Alliance Resources Ltd (appointed 15 October 2003).

Mr Lethlean is the senior independent Director, Chairman of the Audit Committee and Risk Committee and a member of the Remuneration and Nomination Committee.

Alkane Resources Ltd Directors' report 30 June 2021

Gavin Murray Smith ‐ Non‐Executive Director

B.Com, MBA, MAICD

Appointed Director 29 November 2017

Mr Smith is an accomplished senior executive and non‐executive director within multinational business environments. He has more than 35 years' experience in Information Technology, Business Development, and General Management in a wide range of industries and sectors. Mr Smith has worked for the Bosch group for the past 29 years in Australia and Germany and is current Chair and President of Robert Bosch Australia. In this role Mr Smith has led the restructuring and transformation of the local Bosch subsidiary. Concurrent with this role, he is a non‐executive director of the various Bosch subsidiaries, joint ventures, and direct investment companies in Australia and New Zealand. In addition, Mr Smith is the Chair of the Internet of Things Alliance Australia (IoTAA), the peak body for organisations with an interest in the IoT.

Mr Smith is currently a non‐executive director of Australian Strategic Materials Limited (appointed 12 December 2017) (this company was demerged and admitted to the ASX on 29 July 2020).

Mr Smith is a member of the Audit Committee, Risk Committee and Chair of Remuneration and Nomination Committees.

Dennis Wilkins ‐ Joint Company Secretary

B.Bus, ACIS, AICD

Appointed company secretary 29 March 2018

Mr Wilkins is the founder and principal of DWCorporate Pty Ltd, a corporate advisory firm servicing the natural resources industry.

Since 1994 he has been a director of, and involved in the executive management of, several publicly listed resource companies with operations in Australia, PNG, Scandinavia and Africa. Since July 2001 Mr Wilkins has been running DWCorporate Pty Ltd, where he advises on the formation of, and capital raising for, emerging companies in the Australian resources sector.

Mr Wilkins is currently a director of Key Petroleum Limited.

James Carter

Appointed company secretary 20 May 2020.

Mr Carter is a CPA and Chartered Company Secretary with over 25 years international experience in the resources industry. He has held senior finance positions across listed resources companies since 2001.

Principal activities

During the financial year the principal activities of the consolidated entity consisted of:

mining operations at the Tomingley Gold Operation;
exploration and evaluation activities on tenements held by the group; and
pursuing strategic investments in gold exploration companies.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Result for the year

The profit for the consolidated entity after providing for income tax amounted to $55,701,000 (30 June 2020: $12,762,000) of which continued operations amounted to $33,567,000 and discontinued operations amounted to $22,134,000.

This result included a profit before tax of $57,791,000 (30 June 2020: $30,362,000) in relation to Tomingley Gold Operations.

Alkane Resources Ltd Directors' report 30 June 2021

Review of operations

Tomingley Gold Operations ('TGO')

Tomingley Gold Operations (TGO) is a wholly owned subsidiary of Alkane, located near the village of Tomingley, approximately 50km southwest of Dubbo in Central Western New South Wales. The gold processing plant was commissioned in January 2014 and has been operating at the design capacity of 1Mtpa since late May 2014. Mining is based on four gold deposits (Wyoming One, Wyoming Three, Caloma One and Caloma Two).

TGO continues to perform well and is processing underground stope material with recovery as expected. The cutback in the northeast of the Caloma pit is mining ore. Reconciliations of mined material show that the grade mined is higher than forecast.

Gold recovery of 88.8% for the period was in line with the expectations (2020: 88.1%). Average grade milled increased to 2.14g/t in the current year (2020: 1.45g/t). In the prior year, average grade milled was lower as a result of processing both medium and low grade stockpiles as the operation transitioned from open cut to underground.

Production for the period was 56,958 ounces of gold (2020: 33,507 ounces of gold) with all in sustaining costs of $1,320 per ounce (2020: $1,357 per ounce). The average sales price achieved for the year increased to $2,286 per ounce (2020: $2,199 per ounce). Gold sales of 55,929 ounces (2020: 32,995 ounces) resulted in sales revenue of $127,833,000 (2020: $72,549,000).

Bullion on hand increased by 1,015 ounces from 30 June 2020 to 3,246 ounces (fair value of $7,633,000 at year end).

Alkane’s intention is to develop the Roswell and San Antonio deposits, which are located 3 – 5km south of Tomingley, as soon as possible.

Alkane has commenced the approval process for this development. Consultations with regulators, landholders and other stakeholders, as well as on ground assessments needed for the Environmental Impact statement, continues. The Environmental Impact Statement is being prepared for submission in the current September quarter. The expected timing of Project Approval is mid‐2022.

Alkane Resources Ltd Directors' report 30 June 2021

Tomingley Gold Operations ('TGO') (continued)

The table below summarises the key operational information:

		Sep Quarter	Dec Quarter	Mar Quarter	Jun Quarter	FY	FY
TGO Production	Unit	2020	2020	2021	2021	2021	2020
Open cut
Waste mined	BCM's	‐	390,159	429,443	399,177	1,218,779	50,473
Ore mined	Tonnes	‐	2,755	10,953	57,638	71,347	5,331
Stripping Ratio	Ratio	‐	243.5	67.4	13.7	32.8	9.5
Grade mined(2)	g/t	‐	0.40	1.15	0.56	0.64	2.37
Underground
Ore mined	Tonnes	181,831	180,642	169,444	174,971	706,889	335,879
Grade mined	g/t	1.85	3.41	2.88	2.37	2.63	2.37
Ore Milled	Tonnes	254,423	235,217	237,455	201,437	928,531	838,743
Head Grade	g/t	1.56	2.50	2.40	2.16	2.14	1.45
Gold Recovery	%	88.4	88.1	91.0	87.1	88.8	88.1
Goldpoured(3)	Ounces	11,499	15,919	16,040	13,500	56,958	33,507
Revenue summary
Gold sold	Ounces	11,945	16,613	15,844	11,526	55,929	32,995
Average price realised	A$/Oz	2,261	2,302	2,203	2,401	2,286	2,199
Gold revenue	A$M	27.0	38.2	34.9	27.7	127.8	72,549
Cost summary
Surface works	A$/Oz	‐	‐	‐	83	17	50
Mining	A$/Oz	606	336	389	545	452	272
Processing	A$/Oz	446	290	295	398	347	517
Site support	A$/Oz	126	94	119	174	125	158
C1 Cash Cost(1)	A$/Oz	1,178	720	803	1,199	940	997
Royalties	A$/Oz	63	71	70	89	73	56
Sustaining capital	A$/Oz	183	326	172	540	296	205
Gold in circuit movement	A$/Oz	66	25	(103)	(243)	(58)	‐
Rehabilitation	A$/Oz	19	19	19	22	20	26
Corporate	A$/Oz	66	41	35	62	49	73
All‐in Sustaining Cost(1)	A$/Oz	1,575	1,201	997	1,669	1,320	1,357
Bullion on hand	Ounces	1,781	1,083	1,275	3,246	3,246	2,231
Stockpiles
Ore for immediate milling	Tonnes	139,025	96,029	41,487	71,938	71,938	207,414
Stockpile grade(2)	g/t	0.74	1.43	1.23	0.95	0.95	0.83
Containedgold	Ounces	3,319	4,403	1,811	2,856	2,856	5,566

(1) All in Sustaining Cost (AISC) comprises all site operating costs, royalties, mine exploration, sustaining capex, sustaining mine development and an allocation of corporate costs on the basis of ounces sold since 1 July 2020 (AISC was prepared on a production basis using gold poured ounces in the previous period). AISC does not include share‐based payments, production incentives or net realisable value provision for product inventory.

(2) Based on the resource models.

(3) Represents gold sold at site, not adjusted for refining adjustments which results in minor differences between the movements in bullion on hand and the difference between production and sales.

Tomingley Gold Extension Project

An extensive exploration program focussed on the immediate area to the south of the Tomingley mine has continued as part of the plan to source additional ore feed, either at surface or underground. On the back of strong results from exploration and resource drilling to the immediate south of Tomingley, the Company is expediting the process to move to mine development.

Alkane has commenced the approval process for the Roswell and San Antonio development deposits located to the immediate south of TGO. Consultations with regulators, landholders and other stakeholders, as well as on ground assessments needed for the Environmental Impact Statement, continues.

Alkane Resources Ltd Directors' report 30 June 2021

Tomingley Gold Extension Project (continued)

Feasibility plans that include both open cut and underground mines at Roswell and San Antonio have been prepared and released as part of a Tomingley Life of Mine Plan, that shows extension of the mine life beyond 2030 (on approval).

Exploration

The extensive exploration program focused on the immediate area to the south of the TGO mine has continued as part of the plan to source additional ore feed, either at surface or underground. During the year the program continued to focus on both increasing the drilling density within the Roswell and San Antonio prospects as well as testing strike and depth extensions.

Roswell infill drilling is complete and an Indicated Resource has been released. Further drilling around the Roswell resource continues. At San Antonio an Indicated Resource has also been released.

Regional drilling of the San Antonio to Peak Hill corridor focused on stratigraphy south of the El Paso target where earlier exploration had returned encouraging results.

Northern Molong Porphyry Project (gold‐copper)

Initial drill testing of the Boda prospect was completed during the year and results demonstrated continuity to the south of the broad gold‐copper mineralised alteration envelope.

A major RC and diamond core drilling program totalling over 30,000 metres has been completed, with received results released. A further program continues around Boda with reconnaissance work also underway throughout the NMPP.

Corporate

In accordance with its strategy of investing part of its cash balance in junior gold mining companies and projects that meet its investment criteria, namely potential investments that have high exploration potential and/or require near term development funding, the Company continues to hold its investment in gold exploration and development companies Calidus Resources Ltd (ASX:CAI) and Genesis Minerals Ltd (ASX:GMD).

Significant changes in the state of affairs

On 20 July 2020, Australian Strategic Materials Ltd (“ASM”) was demerged with its cash reserves and no bank debt. All interests in the Dubbo Project and associated assets (including land and water rights), together with ASM’s investment in South Korean metals technology company RMR Tech Corporation was 100% owned by ASM following the demerger. A net gain of $22,134,000 has been recognised on demerger of the ASM business.

On 17 July 2020, Alkane Resources Ltd, and Australian Strategic Materials Ltd entered into a restructure deed as part of the demerger to capitalise $113,000,000 and forgive $4,731,000 of loans to Australian Strategic Materials Ltd.

In early 2020 with the outbreak of Coronavirus Disease 2019 (“COVID‐19” or “the coronavirus”) unprecedented measures put in place by the Australian Government, as well as governments across the globe, to contain the coronavirus have had a significant impact on the economy. Management continues to maintain high vigilance around COVID‐19.

As at the date these financial statements were authorised, Management was not aware of any material adverse effects on the financial statements as a result of the coronavirus.

There were no other significant changes in the state of affairs of the consolidated entity during the financial year.

Matters subsequent to the end of the financial year

No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Alkane Resources Ltd Directors' report 30 June 2021

Likely developments and expected results of operations

The group intends to continue efforts at TGO to be focussed on continued safe operation of the underground mine, and exploration, evaluation and project approval of several of its other tenements to secure additional ore feed. Exploration and evaluation activities will continue on existing tenements and opportunities to expand the group's tenement portfolio will be pursued with a view to ensuring there is a pipeline of development opportunities for consideration.

Refer to the Review of Operations for further detail on planned developments.

Environmental regulation

The group is subject to significant environmental regulation in respect of its exploration and evaluation, development and mining activities.

The group aspires to the highest standards of environmental management and insists its staff and contractors maintain that standard. A significant environmental incident is considered to be one that causes a major impact or impacts to land biodiversity, ecosystem services, water resources or air, with effects lasting greater than one year. There were no significant environmental incidents reported at any of the group's operations.

Meetings of directors

The number of meetings of the company's Board of Directors ('the Board') and of each board committee held during the year ended 30 June 2021, and the number of meetings attended by each director were:

Meetings of committees

							Remuneration and	Remuneration and
	Meetings of directors		Audit Committee		Risk Committee		Nomination	Committee*
	Attended	Held	Attended Held		Attended Held		Attended	Held
I J Gandel	12	12	2	2	‐	‐	‐	‐
A D Lethlean	12	12	2	2	2	2	‐	‐
D I Chalmers	12	12	‐	‐	‐	‐	‐	‐
G Smith	12	12	2	2	2	2	‐	‐
N Earner	12	12	‐	‐	2	2	‐	‐

Held: represents the number of meetings held during the time the director held office or was a member of the committee during the year.

While the Remuneration Committee did not formally meet during the year, informal discussions between committee members were undertaken. The informal discussions resulted in recommendations which were duly implemented

Alkane Resources Ltd Directors' report 30 June 2021

Remuneration report

The directors are pleased to present Alkane Resources Ltd's remuneration report which sets out remuneration information for the company's Non‐Executive Directors, Executive Directors and other Key Management Personnel ('KMP').

The report contains the following sections:

(a) Key Management Personnel "KMP" disclosed in this report
(b) Remuneration governance
(c) Use of remuneration consultants
(d) Executive remuneration policy and framework
(e) Statutory performance indicators
(f) Non‐Executive Director remuneration policy
(g) Voting and comments made at the company's 2020 Annual General Meeting
(h) Details of remuneration
(i) Service agreements
(j) Details of share based payments and performance against key metrics
(k) Shareholdings and share rights held by Key Management Personnel
(l) Other transactions with Key Management Personnel

(a) Key Management Personnel ('KMP') disclosed in this report

Non‐Executive and Executive Directors

I J Gandel D I Chalmers N P Earner G M Smith A D Lethlean

Other Key Management Personnel

J Carter Chief Financial Officer/ Joint Company Secretary S Parsons Executive General Manager ‐ Operations (commenced this role 19 April 2021)

(b) Remuneration governance

The company has established a Remuneration Committee to assist the Board in fulfilling its corporate governance responsibilities with respect to remuneration by reviewing and making appropriate recommendations to the Board on:

the overall remuneration strategy and framework for the company;
the operation of the incentive plans which apply to the Executive team, including the appropriateness of key performance indicators and performance hurdles; and
the assessment of performance and remuneration of the Executive directors, Non‐Executive Directors and other Key Management Personnel.

The Remuneration Committee is a Committee of the Board and at the date of this report the members were I J Gandel, A D Lethlean and G M Smith all of whom were non‐executive (with Mr Smith and Mr Lethlean being independent).

Their objective is to ensure that remuneration policies and structures are fair, competitive and aligned with the long‐term interests of the company and its shareholders.

The company's annual Corporate Governance Statement provides further information on the role of this Committee, and the full statement is available at URL: http://www.alkane.com.au/company/governance.

(c) Use of remuneration consultants

The Remuneration Committee of the Board commissioned Godfrey Remuneration Group to assist in industry benchmarking review to ensure remuneration remains market competitive.

Alkane Resources Ltd Directors' report 30 June 2021

(d) Executive remuneration policy and framework

In determining executive remuneration, the Board (or the Remuneration Committee as its delegate) aims to ensure that remuneration practices:

are competitive and reasonable, enabling the company to attract and retain key talent while building a diverse, sustainable and high achieving workforce;
are aligned to the company’s strategic and business objectives and the creation of shareholder value;
promote a high performance culture recognising that leadership at all levels is a critical element in this regard;
are transparent; and
are acceptable to shareholders.

The Executive remuneration framework has three components:

Total Fixed Remuneration (TFR);
Short‐Term Incentives (STI); and
Long‐Term Incentives (LTI).

(i) Executive remuneration mix

The company has in place Executive incentive programs which provide the mechanism to place a material portion of Executive pay "at risk".

(ii) Total fixed remuneration

A review is conducted of remuneration for all employees and Executives on an annual basis, or as required. The Remuneration Committee is responsible for determining Executive TFR.

(iii) Incentive arrangements

The company may utilise both short term and long term incentive programs to balance the short and long term aspects of business performance, to reflect market practice, to attract and retain key talent and to ensure a strong alignment between the incentive arrangements of Executives and the creation and delivery of shareholder return.

Performance rights have been used in the current period to incentivise the company’s executive and KMP. The performance rights plan was approved by shareholders at the 2016 Annual General Meeting.

Short‐term incentives

The Executives have the opportunity to earn an annual Short‐Term Incentive (STI) if predefined targets are achieved.

The Executive STI is provided in the form of rights to ordinary shares in the Company that vest at the end of the twelve month period provided the predefined targets are met. On vesting, the rights automatically convert into one ordinary share each. The Executives do not receive any dividends and are not entitled to vote in relation to the rights to shares during the vesting period. If an Executive ceases to be employed by the group within the performance period (the service condition), the rights will be forfeited, except in limited circumstances that are approved by the Board on a case‐by‐case basis.

STI awards for the Executive team in the 2021 financial year were based on the scorecard measures and weighting as disclosed below. Targets were approved by the Remuneration Committee through a rigorous process to align to the Company's strategic and business objectives.

Performance metrics	Weighting
	%
Production performance at TGO	25%
Cost performance at TGO	25%
Safety Performance, Environment & Social Licence	25%
Planning, Approval SAR	10%
Resource Growth	15%

The Committee has the discretion to adjust short term incentives downwards in light of unexpected or unintended circumstances.

Alkane Resources Ltd Directors' report 30 June 2021

Long‐ term incentives

The LTI is designed to focus Executives on delivering long term shareholder returns. Eligibility for the plan is restricted to Executives and nominated Senior Managers, being the employees who are most able to influence shareholder value. Under the plan, participants have an opportunity to earn up to 100% of their total fixed remuneration (calculated at the time of approval by the Remuneration Committee) comprised of performance rights. In previous periods performance rights were granted in two tranches each year. Each tranche of performance rights has separate vesting conditions being share price growth and company milestone events, with the executives' LTI weighted more heavily to the share price growth tranche. The LTI vesting period is three years. In FY2021 LTI's were issued with vesting conditions linked to total shareholder return with a vesting period of three years.

The performance rights will be provided in the form of rights to ordinary shares in Alkane Resources Ltd that will vest at the end of the three year vesting period provided the predefined targets are met. On vesting, the rights automatically convert into one ordinary share each. Participants do not receive any dividends and are not entitled to vote in relation to the rights to shares prior to the vesting period. If a participant ceases to be employed by the group within this period, the rights will be forfeited, except in limited circumstances that are approved by the Board on a case‐by‐case basis.

Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in the plan.

Targets are generally reviewed annually and set for a forward three year period. Performance related targets reflect factors such as the expectations of the group’s business plans, the stage of development of the group’s projects and the industry business cycle. The most appropriate target benchmark will be reviewed each year prior to the granting of rights.

The Remuneration Committee is responsible for determining the LTI to vest based on an assessment of whether the predefined targets are met. To assist in this assessment, the Committee receives detailed reports on performance from management. The Committee has the discretion to adjust LTI's downwards in light of unexpected or unintended circumstances.

(iv) Clawback policy for incentives

Under the terms and conditions of the company’s incentive plan offer and the plan rules, the Board (or the Remuneration Committee as its delegate) has discretion to determine forfeiture of unvested equity awards in certain circumstances (e.g. unlawful, fraudulent or dishonest behaviour or serious breach of obligations to the company). All incentive offers and final outcomes are subject to the full discretion of the Board (or the Remuneration Committee as its delegate).

(v) Share trading policy

The trading of shares issued to participants under any of the company’s employee share plans is subject to, and conditional upon, compliance with the company’s employee share trading policy. Executives are prohibited from entering into any hedging arrangements over unvested rights under the company’s employee incentive plans. The company would consider a breach of this policy as gross misconduct which may lead to disciplinary action and potentially dismissal.

(e) Statutory performance indicators

The company aims to align Executive remuneration to the company’s strategic and business objectives and the creation of shareholder wealth. The table below shows measures of the group’s financial performance over the last five years as required by the Corporations Act 2001 . However, these are not necessarily consistent with the specific measures in determining the variable amounts of remuneration to be awarded to KMP. As a consequence, there may not always be a direct correlation between the statutory key performance measures and the variable remuneration rewarded.

	30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017	30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017	30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017	30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017	30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017
Revenue ($'000)	127,833	74,397	95,852	129,974	117,792
Profit/(loss) for the year attributable to owners ($'000)	55,701	12,762	23,293	24,471	(28,937)
Basic earnings/(loss) per share (cents)	5.6	2.4	4.6	4.8	(5.8)
Dividend payments ($'000)	‐	‐	‐	‐	‐
Share price at period end (cents)	1.15	1.21	0.46	0.23	0.24
Total KMP incentives as a percentage of profit/(loss) for the	2.1%	8.3%	3.3%	3.0%	0.3%
year(%)

Alkane Resources Ltd Directors' report 30 June 2021

(f) Non‐Executive Director remuneration policy

On appointment to the Board, all Non‐Executive Directors enter into a Service Agreement with the company in the form of a letter of appointment. The letter summarises the Board policies and terms, including remuneration, relevant to the office of Director.

Non‐Executive Directors receive a Board fee and fees for chairing or participating on Board Committees. Non‐Executive Directors appointed do not receive retirement allowances. Fees provided are inclusive of superannuation and the Non‐Executive Directors do not receive performance‐based pay.

Fees are reviewed annually by the Remuneration Committee taking into account comparable roles and market data obtained from independent data providers.

The maximum annual aggregate Directors’ fee pool limit (inclusive of applicable superannuation) is $700,000 and was approved by shareholders at the Annual General Meeting on 16 May 2013.

Details of Non‐Executive Director fees in the year ended 30 June 2021 are as follows:

	$ per annum
Base fees
Chair*	191,000
Other Non‐Executive Directors*	95,000
Additional fees*
Audit Committee ‐ chair	12,500
Audit Committee ‐ member	7,500
Remuneration Committee ‐ chair	12,500
Remuneration Committee ‐ member	7,500

For services in addition to ordinary services, Non‐Executive Directors may charge per diem consulting fees at the rate specified by the Board from time to time for a maximum of 4 days per month over a 12 month rolling basis. Any fees in excess of this limit are to be approved by the Board.

Remuneration for directors changed on the 1 of October 2020. From 1 July 2020 until 30 September 2020 the Chair base fee was $129,400 and other non‐executive directors base fee was $77,600. From 1 July 2020 to 30 September 2020 the Committee fees were for chair $7,800 and for member $5,200.

(g) Voting and comments made at the company's 2020 Annual General Meeting

The company received more than 99% of “yes” votes on its remuneration report for the financial year ended 30 June 2020. The company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices.

Alkane Resources Ltd Directors' report 30 June 2021

(h) Details of remuneration

The following table shows details of the remuneration expense recognised for the directors and the KMP of the group for the current and previous financial year measured in accordance with the requirements of the accounting standards.

30 June 2021	Fixed remuneration	Variable Remuneration Rights to deferred shares(d) Total $
	Cash Salary(a) Annual and long service leave(b) Post‐ employment benefits(c) $ $ $
Executive Directors N P Earner D I Chalmers	576,942 28,234 23,058 309,105 142,783 21,694	707,441 1,335,675 148,333 621,915
Other KMP D Woodall(g) A MacDonald(g) J Carter S Parsons(f)	26,344 ‐ 2,503 28,769 ‐ 2,660 362,300 17,546 25,000 87,586 11,105 5,065	‐ 28,847 29,438 60,867 244,604 649,450 39,866 143,622
Total Executive Directors and other KMP	1,391,046 199,668 79,980	1,169,682 2,840,376
Total NED remuneration(e)	376,661 ‐ 24,965	‐ 401,626
Total KMP remuneration expense	1,767,707 199,668 104,945	1,169,682 3,242,002

30 June 2020	Fixed remuneration	Variable Remuneration Rights to deferred shares(d) Total $ $
	Cash Salary(a) Annual and long service leave(b) Post‐ employment benefits(c) $ $ $
Executive Directors N P Earner D I Chalmers	484,142 28,214 23,058 244,645 29,443 19,255	748,241 1,283,655 90,312 383,655
Other KMP D Woodall(g) A MacDonald(g) D Wilkins J Carter	121,180 10,720 11,512 359,136 15,566 23,023 309,049 ‐ ‐ 345,000 17,792 25,000	‐ 143,412 104,770 502,495 ‐ 309,049 119,548 507,340
Total Executive Directors and other KMP	1,863,152 101,735 101,848	1,062,871 3,129,606
Total NED remuneration(e)	300,419 ‐ 20,589	‐ 321,008
Total KMP remuneration expense	2,163,571 101,735 122,437	1,062,871 3,450,614

(a) Short‐term benefits as per Corporations Regulation 2M.3.03(1) Item 6.

(b) Other long‐term benefits as per Corporations Regulation 2M.3.03(1) Item 8. The amounts disclosed in this column represent the movements in the associated provisions. They may be negative where a KMP has taken more leave than accrued during the year.

(d) Rights to deferred shares granted under the executive STI and LTI schemes are expensed over the performance period, which includes the year to which the incentive relates and the subsequent vesting period of the rights.

Rights to deferred shares are equity‐settled share‐based payments as per the Corporations Regulations 2M.3.03(1) Item11. These include negative amounts for the rights forfeited during the year.

Details of each grant of share right are provided in the table in section (j). Shareholder approval was received in advance to the grant of share rights where required.

(e) Refer below for details of Non‐Executive Directors' (NED) remuneration.

(f) Mr Parsons was appointed an Executive General Manager ‐ Operations on 19 April 2021. Before this appointment he was the group's General Manager Operations.

(g) D Woodall and A MacDonald ceased to be KMP after the demerger of ASM from Alkane Resources on the 20th of July 2020.

Alkane Resources Ltd Directors' report 30 June 2021

(h) Details of remuneration (continued)

30 June 2021 Non‐Executive Directors I J Gandel A D Lethlean G M Smith Total Non‐Executive Directors 30 June 2020 Non‐Executive Directors I J Gandel A D Lethlean G M Smith Total Non‐Executive Directors	Cash salary and fees Superannuation Total $ $ $ 163,333 15,517 178,850 99,452 9,448 108,900 113,876 ‐ 113,876 376,661 24,965 401,626 Cash salary and fees Superannuation Total $ $ $ 130,045 12,355 142,400 82,366 8,234 90,600 88,008 ‐ 88,008	Cash salary and fees Superannuation Total $ $ $ 163,333 15,517 178,850 99,452 9,448 108,900 113,876 ‐ 113,876
		376,661 24,965 401,626
	300,419 20,589 321,008

Remuneration for the directors was changed on the 1st of October 2020. Refer to footnote in section (f) for details.

The relative proportions of remuneration expense recognised during the year that are linked to performance and those that are fixed are as follows:

	Fixed
	remuneration			At risk ‐ LTI			At risk ‐ STI
	2021	2020		2021	2020		2021	2020
	%	%		%	%		%	%
Executive Directors of Alkane
Resources Ltd
D I Chalmers	76%		76%	14%		24%	10%		‐
N P Earner	47%		42%	40%		58%	13%		‐
Other Key Management Personnel
J Carter	62%		76%	26%		24%	12%		‐
S Parsons	72%		‐	11%		‐	17%		‐

D Wilkins was a KMP in the prior year. However, he is not involved in decision‐making activities regarding overall running of the group in the current year. He is not an employee of the company and therefore not eligible to participate in incentive programs. Instead, a fee for services was paid as set out previously.

Mr Parsons was appointed an Executive General Manager ‐ Operations on 19 April 2021.

(i) Service agreements

Remuneration and other terms of employment for KMP are formalised in service agreements. Details of these agreements are as follows:

			Termination
Name and Position	Term of agreement	TFR(1)	payment(2)
D I Chalmers ‐ Technical Director	On‐going commencing 1 September 2017	$330,800	6 months
N Earner ‐ Managing Director	On‐going commencing 1 September 2017	$600,000	see note 2 below
J Carter ‐ Chief Financial Officer	On‐going commencing 1 October 2018	$388,725	3 months
S Parsons ‐ Executive General Manager –	On‐going commencing 1 October 2015	$443,475	1 month
Operations

Alkane Resources Ltd Directors' report 30 June 2021

(i) Service agreements (continued)

(1) Total Fixed Remuneration (TFR) is for the year ended 30 June 2021 and is inclusive of superannuation but does not include long service leave accruals. TFR is reviewed annually by the Remuneration Committee.
(2) Specified termination payments are within the limits set by the Corporations Act 2001. The termination benefit provision for the Managing Director was approved at the Annual General Meeting on 29 November 2017. Mr Earner may resign with 3 months' notice; or
Alkane may terminate the Executive Employment agreement with 3 months' notice; or
Where Mr Earner resigns as a result of a material diminution in the position, Mr Earner will be entitled to payment in lieu of 12 months' notice and short term incentives and long term incentives granted or issued but not yet vested.

(j) Details of share based payments and performance against key metrics

Details of each grant of share rights affecting remuneration in the current or future reporting period are set out below.

	Date ofgrant	Number of rights granted	Fair value of share rights at the date of grant	Share rights at fair value	Performance period end	Share based payment expense currentyear
Name			$	$		$
I Chalmers
FY2019 LTI ‐ Performance Rights ‐ Tranche 1	21/11/2018	305,785	0.050	15,289	16/07/2020	5,096
FY2019 LTI ‐ Performance Rights ‐ Tranche 2	21/11/2018	65,525	0.215	14,088	16/07/2020	3,131
FY2020 LTI ‐ Performance Rights ‐ Tranche 1	22/11/2019	198,624	0.419	83,223	30/06/2022	27,741
FY2020 LTI ‐ Performance Rights ‐ Tranche 2	22/11/2019	42,562	0.623	26,519	16/07/2020	11,786
FY2021 LTI ‐ Performance Rights	11/11/2020	174,903	0.748	130,827	31/08/2023	36,202
FY2021 STI ‐ Performance Rights	11/11/2020	‐	‐	101,721	11/11/2021	64,377
N Earner
FY2019 LTI ‐ Performance Rights ‐ Tranche 1	21/11/2018	2,497,245	0.050	124,862	16/07/2020	41,621
FY2019 LTI ‐ Performance Rights ‐ Tranche 2	21/11/2018	535,124	0.215	115,052	16/07/2020	25,567
FY2020 LTI ‐ Performance Rights ‐ Tranche 1	22/11/2019	1,622,252	0.419	679,724	30/06/2022	226,575
FY2020 LTI ‐ Performance Rights ‐ Tranche 2	22/11/2019	347,625	0.623	216,590	16/07/2020	96,262
FY2021 LTI ‐ Performance Rights	11/11/2020	687,346	0.748	514,135	31/08/2023	142,267
FY2021 STI ‐ Performance Rights	11/11/2020	‐	‐	276,750	11/11/2021	175,149
Other Key Management Personnel
J Carter
FY2019 LTI ‐ Performance Rights ‐ Tranche 1	18/10/2018	1,841,591	0.059	108,654	16/07/2020	36,218
FY2019 LTI ‐ Performance Rights ‐ Tranche 2	18/10/2018	394,626	0.220	86,818	16/07/2020	19,293
FY2020 LTI ‐ Performance Rights ‐ Tranche 1	02/09/2019	604,146	0.236	142,578	30/06/2022	47,526
FY2020 LTI ‐ Performance Rights ‐ Tranche 2	02/09/2019	129,460	0.406	52,596	16/07/2020	23,376
FY2021 LTI ‐ Performance Rights	11/11/2020	205,530	0.748	153,736	31/08/2023	42,541
FY2021 STI ‐ Performance Rights	11/11/2020	‐	‐	119,533	11/11/2021	75,650
S Parsons
FY2020 LTI ‐ Performance Rights ‐ Tranche 1	02/09/2019	306,451	0.236	72,322	30/06/2022	4,755
FY2021 LTI ‐ Performance Rights	11/11/2020	214,214	0.748	160,232	31/08/2023	10,536
FY2021 STI ‐ Performance Rights	11/11/2020	‐	‐	124,584	11/11/2021	24,575
A MacDonald(01/07/18‐20/07/2020)
FY2019 LTI ‐ Performance Rights ‐ Tranche 1	18/10/2018	976,601	0.059	57,619	16/07/2020	19,206
FY2019 LTI ‐ Performance Rights ‐ Tranche 2	18/10/2018	139,514	0.220	30,693	16/07/2020	10,231

Alkane Resources Ltd Directors' report 30 June 2021

(j) Details of share based payments and performance against key metrics (continued)

(a) The value at grant date for share rights granted during the year as part of remuneration is calculated in accordance with AASB 2 Share Based Payments. Differences will arise between the number of share rights at fair value in the table above and the STI and LTI percentages mentioned in section (d) due to different timing of valuation of rights as approved by the Remuneration Committee and at grant. Refer to note 30 for details of the valuation techniques used for the rights plan.
(b) Share rights only vest if performance and service targets are achieved. The determination is usually made at the conclusion of the statutory audit.
(c) Shares for the deferred portion of the 2021 STI will be granted on 11 November 2021. The number of shares will depend on the Alkane Resources Ltd share price over the five days prior to the grant date.

The determination of the number of rights that are to vest or be forfeited during a financial year is made by the Remuneration Committee after the statutory audit has been substantially completed. As such, the actual determination is made after the balance sheet date. Where there are rights that have vested or been forfeited, details will be included in the Remuneration Report as the relevant performance period will conclude at the end of the relevant financial year.

Performance against key metrics

On 16th July 2020 at the Extraordinary General Meeting in relation to the demerger of ASM business, Alkane's shareholders also voted on the following changes to Long‐term incentives.

a) all Alkane Performance Rights with a Dubbo Project (DP) performance condition will be cancelled with no consideration payable to the holders of those performance rights; and

b) all FY2018 and FY2019 Alkane Performance Rights with a Total Shareholder Return (TSR) performance condition will vest in full, thereby entitling the holder to one Alkane share for each such Alkane Performance Right exercised.

The vesting and cancellation of the FY2018 performance rights was reported in the 2020 financial report.

The remaining FY2020 LTI Tranche 1 performance targets relate to share price performance growth as per below:

TSR compound annualgrowth rate(CAGR)	% Performance rights vesting
Less than 10% CAGR	Nil
Above 10% CAGR up to 15% CAGR	Pro rata vesting from 0% ‐ 50%
At 15% CAGR	50%
Above 15% CAGR up to 30% CAGR	Pro rata vesting from 50% ‐ 100%
At 30% CAGR	100%

The STI performance metrics for the year are detailed in section (d)(iii) of the Remuneration Report.

The Company's TSR for FY2021 will be compared to the S&P/ASX All Ordinaries Gold (Sub industry) XGD (Gold Index). TSR and number of performance rights will vest as follows:

	Proportion of
	performance
Shareholder return comparison	rights that vest
	%
TSR is less than Gold Index TSR	‐
TSR is equal to Gold Index TSR	25%
TSR is >5% and <10% to Gold Index TSR	50%
TSR is equal to or >10% to Gold Index TSR	100%

Alkane Resources Ltd Directors' report 30 June 2021

(k) Shareholdings and share rights held by Key Management Personnel

Shareholding

The number of shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Ordinary shares I J Gandel A D Lethlean D I Chalmers N P Earner G Smith D Woodall A MacDonald J Carter S Parsons	Balance at the start of the year 136,021,143 720,086 4,671,140 165,000 331,875 35,000 1,460,000 ‐ ‐	Received as part of remuneration ‐ ‐ 1,016,745 8,462,496 ‐ ‐ 2,013,418 1,841,591 488,300	Additions 14,771,363 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐	Disposals/ other ‐ ‐ ‐ (5,000,000) ‐ (35,000) (3,473,418) (1,841,591) (238,300)	Balance at the end of the year 150,792,506 720,086 5,687,885 3,627,496 331,875 ‐ ‐ ‐ 250,000
	143,404,244	13,822,550	14,771,363	(10,588,309)	161,409,848

D Woodall and A MacDonald ceased to be KMP after the demerger of ASM from Alkane Resources on the 20th of July 2020.

Performance rights holding

The number of performance rights over ordinary shares in the company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Performance rights over ordinary shares D I Chalmers ‐ Performance rights N P Earner ‐ Performance rights J Carter ‐ Performance rights A MacDonald ‐ Performance rights S Parsons ‐ Performance rights	Balance at the start of the year 612,496 5,002,246 2,969,823 1,185,872 965,054	Granted 174,903 687,346 205,530 ‐ 214,214	Vested (305,785) (2,497,245) (1,841,591) (976,601) (488,300)	Expired/ forfeited/ other (108,087) (882,749) (524,086) (209,271) (170,303)	Balance at the end of the year 373,527 2,309,598 809,676 ‐ 520,665
	10,735,491	1,281,993	(6,109,522)	(1,894,496)	4,013,466

On 16th July 2020 at the Extraordinary General Meeting in relation to the demerger to the ASM business, the shareholders also voted for early vesting of the FY2019 Tranche 1, the cancellation of the FY2019 Tranche 2 performance rights and the cancellation of the FY2020 Tranche 2 performance rights.

(l) Other transactions with Key Management Personnel

There were no other transactions with KMP's during the financial year ended 30 June 2021.

There were no unissued ordinary shares of Alkane Resources Ltd under performance rights outstanding at the date of this report.

This concludes the remuneration report, which has been audited.

Alkane Resources Ltd Directors' report 30 June 2021

Indemnity and insurance of officers

Alkane Resources Ltd has entered into deeds of indemnity, access and insurance with each of the Directors. These deeds remain in effect as at the date of this report. Under the deeds, the company indemnifies each Director to the maximum extent permitted by law against legal proceedings or claims made against or incurred by the Directors in connection with being a Director of the company, or breach by the group of its obligations under the deed.

The liability insured is the indemnification of the group against any legal liability to third parties arising out of any Directors or Officers duties in their capacity as a Director or Officer other than indemnification not permitted by law.

No liability has arisen under this indemnity as at the date of this report.

The group has not otherwise, during or since the financial year, indemnified nor agreed to indemnify an officer of the group or of any related body corporate, against a liability incurred as such by an officer.

During the year the company has paid premiums in respect of Directors' and Executive Officers' Insurance. The contracts contain prohibitions on disclosure of the amount of the premiums and the nature of the liabilities under the policies.

Proceedings on behalf of the company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

Non‐audit services

The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the group is important.

The directors are satisfied that the provision of non‐audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The directors, in accordance with advice provided by the audit committee, are of the opinion that the services as disclosed in note 24 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:

all non‐audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

Rounding of amounts

The company is of a kind referred to in ASIC Legislative Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the 'rounding‐off' of amounts in the directors' report and financial report. Amounts in this report have been rounded off in accordance with that ASIC Legislative Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Alkane Resources Ltd Directors' report 30 June 2021

This report is made in accordance with a resolution of directors.

On behalf of the directors

==> picture [211 x 46] intentionally omitted <==

_________ N P Earner Managing Director

27 August 2021 Perth

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Auditor’s Independence Declaration

As lead auditor for the audit of Alkane Resources Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit, and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Alkane Resources Limited and the entities it controlled during the period.

==> picture [122 x 53] intentionally omitted <==

Helen Bathurst Perth Partner 27 August 2021 PricewaterhouseCoopers

PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Alkane Resources Ltd Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2021

Note Continuing operations Revenue 2 Cost of sales 3 Gross profit Other income Interest income Net gain on derecognition of financial assets 13 Total revenue Expenses Other expenses 3 Finance costs 3 Share of loss of associates accounted for using the equity method 13 Net (loss)/gain on disposal of property, plant and equipment Total expenses Profit before income tax expense from continuing operations Income tax expense 4 Profit after income tax expense from continuing operations Profit/(loss) after income tax benefit from discontinued operations 5 Profit after income tax (expense)/benefit for the year attributable to the owners of Alkane Resources Ltd 19 Other comprehensive income/(loss) Items that will not be reclassified subsequently to profit or loss Changes in the fair value of equity investments at fair value through other comprehensive income, net of tax Items that may be reclassified subsequently to profit or loss Cash flow hedges transferred to profit or loss, net of tax 21 Net change in the fair value of cash flow hedges taken to equity, net of tax 21 Other comprehensive income/(loss) for the year, net of tax Total comprehensive income for the year attributable to the owners of Alkane Resources Ltd Total comprehensive income for the year is attributable to: Continuing operations Discontinued operations	2021 $'000 127,833 (66,341)	2020 $'000 72,549 (41,940)
	61,492	30,609
	667 94 2,698	141 625 ‐
	131,292	73,315
	(12,219) (2,835) (870) (957)	(10,677) (553) (240) 9
	(16,881)	(11,461)
	48,070 (14,503)	19,914 (6,569)
	33,567 22,134	13,345 (583)
	55,701 2,045 1,017 (459)	12,762 (251) 278 (487)
	2,603	(460)
	58,304	12,302
	36,170 22,134	12,885 (583)
	58,304	12,302

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

accompanying notes

Alkane Resources Ltd Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2021

	Note	2021	2020
		$'000	$'000
		Cents	Cents
Earnings per share for profit from continuing operations attributable to the owners of
Alkane Resources Ltd
Basic earnings per share	31	5.64	2.44
Diluted earnings per share	31	5.60	2.37
Earnings per share for profit/(loss) from discontinued operations attributable to the
owners of Alkane Resources Ltd
Basic earnings per share	31	3.72	(0.11)
Diluted earnings per share	31	3.69	(0.10)
Earnings per share for profit attributable to the owners of Alkane Resources Ltd
Basic earnings per share	31	9.37	2.33
Diluted earnings per share	31	9.28	2.26

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

Alkane Resources Ltd Consolidated balance sheet As at 30 June 2021

Note Assets Current assets Cash and cash equivalents 6 Trade and other receivables 7 Inventories 8 Derivative financial instruments Assets of disposal group classified as held for distribution to owners 5 Total current assets Non‐current assets Property, plant and equipment 11 Exploration and evaluation 12 Investments accounted for using the equity method 13 Financial assets at fair value through other comprehensive income 9 Deferred tax 4 Derivative financial instruments Other financial assets 10 Total non‐current assets Total assets Liabilities Current liabilities Trade and other payables 14 External borrowings 15 Provisions 16 Other liabilities Liabilities directly associated with assets classified as held for distribution to owners 5 Total current liabilities Non‐current liabilities External borrowings 15 Provisions 16 Deferred tax 4 Other liabilities Total non‐current liabilities Total liabilities Net assets Equity Issued capital 17 Reserves 18 Retained profits 19 Total equity	2021 $'000 18,991 1,894 11,648 521	2020 $'000 48,337 2,940 7,647 172
	33,054 ‐	59,096 139,538
	33,054	198,634
	99,411 57,794 15,944 18,471 ‐ ‐ 11,541	62,322 32,745 14,385 ‐ 10,947 64 8,614
	203,161	129,077
	236,215	327,711
	11,082 3,294 3,660 143	9,425 2,090 2,659 64
	18,179 ‐	14,238 26,565
	18,179	40,803
	5,922 15,363 4,737 449	4,515 14,873 ‐ 134
	26,471	19,522
	44,650	60,325
	191,565	267,386
	218,079 (65,178) 38,664	258,876 3,413 5,097
	191,565	267,386

The above consolidated balance sheet should be read in conjunction with the accompanying notes

Alkane Resources Ltd Consolidated statement of changes in equity For the year ended 30 June 2021

Share capital $'000 220,111 (922)	Share‐based payments reserve $'000 2,981 ‐	Other reserves $'000 (629) ‐	Retained Profits $'000 (8,587) 922	Total equity $'000 213,876 ‐
219,189 ‐ ‐	2,981 ‐ ‐	(629) ‐ (460)	(7,665) 12,762 ‐	213,876 12,762 (460)
‐ 39,442 ‐ 245	‐ ‐ 1,225 ‐	(460) ‐ ‐ 296	12,762 ‐ ‐ ‐	12,302 39,442 1,225 541
258,876	4,206	(793)	5,097	267,386
Share capital $'000 258,876 ‐ ‐	Share‐based payments reserve $'000 4,206 ‐ ‐	Other reserves $'000 (793) ‐ 3,676	Retained Profits $'000 5,097 55,701 ‐	Total equity $'000 267,386 55,701 3,676
‐ (31) 2,577 (43,237) ‐ (106)	‐ ‐ (893) ‐ ‐ ‐	3,676 ‐ ‐ (92,435) 22,134 (1,073)	55,701 ‐ ‐ ‐ (22,134) ‐	59,377 (31) 1,684 (135,672) ‐ (1,179)
218,079	3,313	(68,491)	38,664	191,565

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

Alkane Resources Ltd Consolidated statement of cash flows For the year ended 30 June 2021

Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers (inclusive of GST) Interest received Finance costs paid Royalties and selling costs Other receipts Net cash from operating activities 34 Cash flows from investing activities Payments for investments Payments for property, plant and equipment and development expenditure Proceeds from disposal of property, plant and equipment Payments for exploration expenditure Payments for security deposits Purchase of biological assets Proceeds from the sale of biological assets Transaction costs relating to ASM demerger Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares 17 Cost of share issue 17 Proceeds from borrowings Repayment of borrowings Principal elements of lease payment Net cash from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Less cash classified as held for distribution to owners at the beginning of the period Cash and cash equivalents at the end of the financial year 6	2021 $'000 128,035 (51,879)	2020 $'000 72,347 (44,059)
	76,156 99 (1,614) (4,047) 522	28,288 986 (127) (1,490) 879
	71,116	28,536
	(14,664) (59,477) 1,522 (26,642) (2,927) ‐ ‐ (538)	(8,966) (46,122) 1 (20,132) (217) (457) 118 (1,525)
	(102,726)	(77,300)
	‐ (31) 8,150 (5,783) (72)	40,665 (1,223) 7,885 (1,264) ‐
	2,264	46,063
	(29,346) 66,881 (18,544)	(2,701) 69,582 ‐
	18,991	66,881

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

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note	1. Segment information	28
Note	2. Revenue	29
Note	3. Expenses	29
Note	4. Income tax	31
Note	5. Discontinued operations	34
Note	6. Cash and cash equivalents	37
Note	7. Trade and other receivables	37
Note	8. Inventories	38
Note	9. Financial assets at fair value through other comprehensive income	39
Note	10. Other financial assets	39
Note	11. Property, plant and equipment	39
Note	12. Exploration and evaluation	41
Note	13. Investments accounted for using the equity method	42
Note	14. Trade and other payables	43
Note	15. External borrowings	43
Note	16. Provisions	44
Note	17. Issued capital	45
Note	18. Reserves	46
Note	19. Retained profits	46
Note	20. Critical accounting judgements, estimates and assumptions	47
Note	21. Financial risk management	48
Note	22. Capital risk management	50
Note	23. Key management personnel disclosures	51
Note	24. Remuneration of auditors	51
Note	25. Contingent assets	51
Note	26. Contingent liabilities	51
Note	27. Commitments	51
Note	28. Events after the reporting period	52
Note	29. Related party transactions	52
Note	30. Share‐based payments	53
Note	31. Earnings per share	55
Note	32. Parent entity information	56
Note	33. Deed of cross guarantee	57
Note	34. Reconciliation of profit after income tax to net cash from operating activities	57
Note	35. Significant accounting policies	58

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 1. Segment information

The consolidated entity is currently with one operating segment: gold operations. The ASM business has been accounted for as Discontinued Operations since 30 June 2020 and was previously reported in the Critical Metals segment. Information about this discontinued segment is provided in note 5. The operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers) in assessing performance and in determining the allocation of resources.

Costs that do not relate to the gold operating segment have been identified as unallocated costs. Corporate assets and liabilities that do not relate to the gold operating segment have been identified as unallocated. The group has formed a tax consolidation group and therefore tax balances are disclosed under the unallocated grouping. The group utilises a central treasury function resulting in cash balances being included in the unallocated segment.

Gold Operations $'000 127,833 ‐	Unallocated $'000 ‐ 94	Total $'000 127,833 94
127,833	94	127,927
57,791 Gold Operations $'000 (21,028) ‐ 3,226 ‐	12,413 Unallocated $'000 (226) (1,331) ‐ (14,503)	70,204 Total $'000 (21,254) (1,331) 3,226 (14,503)
(17,802)	(16,060)	(33,862)
122,856 (35,618)	113,359 (9,032)	236,215 (44,650)
87,238	104,327	191,565
Gold Operations $'000 72,549 ‐	Unallocated $'000 ‐ 625	Total $'000 72,549 625
72,549	625	73,174
30,362	(10,448)	19,914

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 1. Segment information (continued)

Gold Operations $'000 (9,072) ‐ 2,203 (147) ‐	Unallocated $'000 (79) (329) ‐ ‐ (6,569)	Total $'000 (9,151) (329) 2,203 (147) (6,569)
(7,016)	(6,977)	(13,993)
77,834 (30,890)	110,339 (2,870)	188,173 (33,760)
46,944	107,469	154,413
	2021 $'000 127,833	2020 $'000 72,549

Note 2. Revenue

(a) Revenue

Revenue is recognised when control of a good or service transfers to a customer. Control is generally determined to be when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service.

(b) Gold Sales

Revenue from the sale of goods is recognised when the group satisfies its performance obligations under its contract with the customer by transferring such goods to the customer's control. Control is generally determined to be when the customer has the ability to direct the use and obtain substantially all of the remaining benefits from that good.

Note 3. Expenses

Cost of sales Cash costs of production Inventory product movement Depreciation and amortisation Royalties and selling costs	2021 $'000 44,393 (3,226) 21,028 4,146	2020 $'000 33,137 (2,203) 9,072 1,934
	66,341	41,940

(a) Cash costs of production

Cash costs of production include ore and waste mining costs, processing costs and site administration and support costs. Cash costs of production include $20,401,000 of employee remuneration benefits (2020: $13,085,000).

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 3. Expenses (continued)

(b) Inventory product movement

Inventory product movement represents the movement in the balance sheet inventory ore stockpile, gold in circuit and bullion on hand.

Refer to note 8 for further details on the group's accounting policy for inventory.

(c) Inventory product provision for net realisable value

Inventory must be carried at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to complete processing and to make a sale. The net realisable value provision equals the decrement between the net realisable value and the carrying value before provision.

Refer to note 8 for further details on the group's accounting policy for inventory.

Other expenses Corporate administration Employee remuneration and benefits expensed Share based payments Professional fees and consulting services Restructuring provision Exploration expenditure provided for or written off Directors' fees and salaries expensed Depreciation Non‐core project expenses	2021 $'000 2,363 3,836 1,684 1,881 ‐ 1,331 751 226 147	2020 $'000 3,387 2,361 1,225 2,321 147 329 660 79 168
	12,219	10,677

(d) Finance Costs

Finance costs Interest Expense Put Options Other	2021 $'000 408 1,906 521	2020 $'000 177 317 59
	2,835	553

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 4. Income tax

(a) Income tax expense Total current tax expense Income tax expense is attributable to: Profit from continuing operations Loss from discontinued operations	2021 $'000 ‐	2020 $'000 ‐
	14,503 ‐	6,569 (248)
	14,503	6,321

(b) Reconciliation of income tax expense/(benefit) to prima facie tax payable

Profit from continued operations before income tax expense Profit/(loss) from discontinued operations before income tax expense Profit before income tax expense Tax at the Australian tax rate of 30% (2020 ‐ 30%) Tax benefits of deductible equity raising costs Non‐deductible share based payments Non‐deductible expenses Non‐assessable income Non‐assessable gain on disposal of subsidiaries Other deductible expenses Movement in unrecognised temporary differences Over/(under) Provision for Prior Year	2021 $'000 48,070 22,134	2020 $'000 19,914 (831)
	70,204	19,083
	21,061 (116) 505 8 (8) (6,801) (4) (126) (16)	5,725 (123) 367 112 ‐ ‐ ‐ ‐ 240
	14,503	6,321

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 4. Income tax (continued)

(c) Deferred tax assets

Tax losses $'000 ‐ 7,065 ‐	Rehabilitation Provision and assets $'000 3,617 (296) ‐	Property, plant and equipment $'000 16,352 (2,888) ‐	R&D Tax incentive credits $'000 1,072 179 ‐	Other $'000 1,358 150 541	Total $'000 22,399 4,210 541
7,065	3,321	13,464	1,251	2,049	27,150
7,065 ‐	3,321 ‐	12,420 1,044	1,251 ‐	1,934 115	25,991 1,159
7,065	3,321	13,464	1,251	2,049	27,150
Tax losses $'000 7,065 2,343 ‐ ‐	Rehabilitation Provision and assets $'000 3,321 331 ‐ ‐	Property, plant and equipment $'000 13,463 (3,227) ‐ (1,044)	R&D Tax incentive credits $'000 1,251 180 ‐ ‐	Other $'000 2,050 544 (346) (115)	Total $'000 27,150 171 (346) (1,159)
9,408	3,652	9,192	1,431	2,133	25,816

(d) Deferred tax liabilities

The balance comprises temporary differences attributable to: Exploration expenditure Property, plant & equipment Other Gross recognised deferred tax liabilities Set‐off of deferred tax assets	2021 $'000 (17,314) (11,440) (1,799)	2020 $'000 (36,995) (4,744) (507)
	(30,553)	(42,246)
	25,816	27,150
	(4,737)	(15,096)

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 4. Income tax (continued)

Net recognised deferred tax assets/(liabilities) are attributable to: Losses and temporary differences carried forward for continued operations Losses and temporary differences carried forward for discontinued operations Exploration Expenditure Movements $'000 At 1 July 2019 31,168 Charged/(credited) ‐ ‐ to profit or loss 5,827 At 30 June 2020 36,995 Recognised deferred tax liabilities are attributable to: Temporary differences in respect of continued operations 9,795 Temporary differences in respect of discontinued operations 27,200 36,995 At 1 July 2020 36,995 Charged/(credited) ‐ ‐ to profit or loss 7,518 ‐ directly to equity ‐ ‐ demerger of subsidiaries (27,200) At 30 June 2021 17,313 (e) Deferred tax recognised directly in equity	Property, plant and equipment $'000 ‐ ‐ 4,744	2021 $'000 (4,737) ‐	2020 $'000 10,947 (26,043)
		(4,737)	(15,096)
		Other $'000 548 ‐ (41)	Total $'000 31,716 ‐ 10,530
36,995	4,744	507	42,246
9,795 27,200	4,744 ‐	505 2	15,044 27,202
36,995	4,744	507	42,246
36,995 ‐ 7,518 ‐ (27,200)	4,744 ‐ 6,697 ‐ ‐	507 ‐ 459 836 (3)	42,246 ‐ 14,674 836 (27,203)
17,313	11,441	1,799	30,553

Relating to equity raising costs Relating to revaluations of investments/financial instruments	2021 $'000 106 1,073	2020 $'000 (245) (296)
	1,179	(541)

(f) Unrecognised temporary differences and tax losses

Unrecognised tax losses Deductible temporary differences Potential tax benefit at 30% (2020: 30%)	2021 $'000 18,378 ‐	2020 $'000 18,378 513
	18,378	18,891
	5,513	5,667

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 4. Income tax (continued)

The potential benefit of carried forward tax losses will only be obtained if taxable income is derived of a nature and amount sufficient to enable the benefit from the deductions to be realised. In accordance with the Group’s policies for deferred taxes, a deferred tax asset is recognised only if it is probable that sufficient future taxable income will be generated to offset against the asset.

Determination of future taxable profits requires estimates and assumptions as to future events and circumstances including commodity prices, ore resources, exchange rates, future capital requirements, future operational performance, the timing of estimated cash flows, and the ability to successfully develop and commercially exploit resources.

Tax legislation prescribes the rate at which tax losses transferred from entities joining a tax consolidation group can be applied to taxable incomes and this rate is diluted by changes in ownership, including capital raisings. As a result, the reduction in the rate at which the losses can be applied to future taxable incomes, the period of time over which it is forecast that these losses may be utilised has extended beyond that which management considers prudent to support their continued recognition for accounting purposes. Accordingly, no deferred tax asset has been recognised for certain tax losses. Recognition for accounting purposes does not impact the ability of the Group to utilise the losses to reduce future taxable profits.

Alkane Resources Ltd and its wholly‐owned Australian controlled entities have implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

Deferred tax assets relating to deductible temporary differences can only be recognised to the extent that it is probable that future taxable profits will be available against which the deductible temporary difference can be utilised. Recognition for accounting purposes does not impact the ability of the Group to utilise the deductible temporary differences to reduce future taxable profits.

Note 5. Discontinued operations

(a) Demerger ‐ ASM

ASM Group

On 17 June 2020, the Group publicly announced the demerger of Alkane's critical metals and materials business and assets (the ASM Business) from the remainder of Alkane's business.

Australian Strategic Materials Ltd (ASM) was admitted to the ASX on 29 July 2020 and will operate the ASM Business; and Alkane will continue to own and operate the remainder of Alkane's business being, principally, its Australian gold business.

Following the Demerger, Alkane will be an Australian focussed gold company, with existing production from its Tomingley Operations and the opportunity to grow its production base through organic exploration and discovery (including the Boda discovery) and through further strategic acquisitions. Corporately, Alkane will continue to have an experienced board and management team, the remainder of its cash position.

ASM was demerged with its cash reserves and no bank debt. All interests in the Dubbo Project and associated assets (including land and water rights), together with ASM’s investment in South Korean metals technology company RMR Tech Corporation, has been 100% owned by ASM following the Demerger.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 5. Discontinued operations (continued)

The group recognised a net fair gain on demerger as follows:

Fair value of ASM demerger(i) Carrying value of net assets of ASM Less transaction costs	30 June 2021 $'000 135,672 (113,000)
	22,672
	(538)
	22,134

(i) Based on the first five trading days after the demerger date volume weighted average price (“VWAP “) of ASM ($1.14) multiplied by the number of ASM shares (119,049,778 ordinary shares). The demerger distribution is accounted for a reduction in equity, split between share capital $43,237,000 and demerger reserve of $92,435,000. The amount treated as a reduction in share capital has been calculated by reference to the market value of Alkanes' shares and the market value of ASMs' shares post demerger. The difference between the fair value of the distribution and the capital reduction amount is the demerger dividend.

(b) Discontinued operation ‐ ASM

Financial performance information

Discontinued other income Gain on demerger Total other income Share of loss of Joint Venture Professional fees and consulting services General and administration expenses Pastoral company expenses Audit fees Transaction costs Total expenses Profit/(loss) before income tax expense Income tax expense Income tax benefit Gain on disposal after income tax benefit Profit/(loss) after income tax benefit from discontinued operations	2021 $'000 ‐ 22,672	2020 $'000 1,073 ‐
	22,672	1,073
	‐ ‐ ‐ ‐ ‐ (538)	(10) (624) (381) (848) (41) ‐
	(538)	(1,904)
	22,134 ‐	(831) ‐
	‐	248
	‐	248
	22,134	(583)

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 5. Discontinued operations (continued)

Carrying amounts of assets and liabilities held for distribution to the owners

Cash and cash equivalents Trade and other receivables Consumables Biological assets Investments accounted for using the equity method Property, plant and equipment Exploration and evaluation assets Other non‐current assets Total assets Trade and other payables Provisions Deferred tax Total liabilities Net assets	2021 $'000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐	2020 $'000 18,544 233 5 783 1,721 27,567 90,665 20
	‐	139,538
	‐ ‐ ‐	344 178 26,043
	‐	26,565
	‐	112,973

The major classes of assets and liabilities of the ASM business classified as held for distribution to the owners as at 30 June 2020 were demerged from the consolidated entity on 20 July 2020, thus nil balances on the ASM balance sheet for the current year.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 5. Discontinued operations (continued)

Cash flows of ASM businesses

Operating Investing Financing Cash at the beginning of the period Net cash at the end of the period	2021 $'000 ‐ ‐ ‐ ‐	2020 $'000 (222) (4,894) (3,308) 26,968
	‐	18,544

Accounting policy for discontinued operations

A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held for distribution to owners and that represents a separate major line of business or geographical area of operations, is part of a single co‐ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the statement of profit or loss.

Note 6. Cash and cash equivalents

Current assets Cash at bank Reconciliation to cash and cash equivalents at the end of the financial year The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement of cash flows as follows: Balances as above Cash and cash equivalents ‐ classified as held for distribution by owners Balance as per statement of cash flows Cash at bank at balance date weighted average interest rate was 0.01% (2020: 0.67%).	2021 $'000 18,991	2020 $'000 48,337
	18,991 ‐	48,337 18,544
	18,991	66,881

Cash and cash equivalents include cash on hand and deposits held at call with financial institutions and other short‐term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Note 7. Trade and other receivables

Current assets Trade receivables Prepayments GST and fuel tax credit receivable	2021 $'000 43 963 888	2020 $'000 1,057 922 961
	1,894	2,940

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 7. Trade and other receivables (continued)

(i) Classification as receivables

Receivables are recognised initially at fair value and then subsequently measured at amortised cost, less provision for credit losses. As at 30 June 2021 the group has determined that the expected provision for credit losses is not material.

In determining the recoverability of a trade or other receivables using the expected credit loss model, the group performs a risk analysis considering the type and age of outstanding receivables, the creditworthiness of the counterparty, contract provisions, letter of credit and timing of payment.

(ii) Fair value of receivables

Due to the short‐term nature of the current receivables, their carrying amount is assumed to be the same as their fair value.

(iii) Impairment and risk exposure

Information about the impairment of receivables, their credit quality and the group’s exposure to credit risk, foreign currency risk and interest rate risk can be found in note 21.

Note 8. Inventories

Current assets Ore stockpiles Gold in circuit Bullion on hand Consumable stores	2021 $'000 1,571 2,398 4,537 3,142	2020 $'000 934 1,940 2,407 2,366
	11,648	7,647

(i) Assigning costs to inventories

Costs are assigned to ore stockpiles, gold in circuit and bullion on hand on the basis of weighted average costs. Inventories must be carried at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. At balance date ore stockpiles, gold in circuit, bullion on hand and consumable stores were carried at cost.

No provision was recorded at 30 June 2021 to write down inventories to their recoverable value (2020: $nil).

Consumable stores include diesel, explosives and other consumables items. These items are carried at cost.

(ii) Amounts recognised in profit or loss

Consumable inventories recognised as an expense during the year ended 30 June 2021 amounted to $2,240,000 (2020: $6,920,000). These were included in costs of production.

Product inventory movement during the year ended 30 June 2021 amounted to an expense of $3,226,000 (2020: $2,203,000) and is disclosed as part of cost of sales in note 3.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 9. Financial assets at fair value through other comprehensive income

Non‐current assets Listed securities Calidus Resources Ltd (ASX: CAI) Sky Metals Ltd (ASX: SKY)	2021 $'000 17,811 660	2020 $'000 ‐ ‐
	18,471	‐

Calidus Resources Ltd was reclassified from Investments accounted for using the equity method during the year. Refer to note 13 for further information.

Note 10. Other financial assets

Non‐current assets Security deposits	2021 $'000 11,541	2020 $'000 8,614

The above deposits are held by financial institutions or regulatory bodies as security for rehabilitation obligations as required under the respective exploration and mining leases or as required under agreement totalling $11,541,000 for the current period (2020: $8,614,000 backed by security deposits).

All interest bearing deposits are held in Australian dollars and therefore there is no exposure to foreign currency risk. Please refer to note 21 for the group’s exposure to interest rate risk. The fair value of other financial assets is equal to its carrying value.

Note 11. Property, plant and equipment

Land and buildings $'000 22,326 ‐ 12,206 (703)	Plant and equipment $'000 90,060 468 11,932 (1,901)	Capital WIP $'000 1,687 24,662 (24,138) ‐	Mine properties $'000 205,682 34,963 ‐ ‐	319,755 60,093 ‐ (2,604)
11,503	10,499	524	34,963	57,489
33,829	100,559	2,211	240,645	377,244
(12,787) (289) ‐	(75,908) (6,595) 854	‐ ‐ ‐	(168,738) (14,370) ‐	(257,433) (21,254) 854
(289)	(5,741)	‐	(14,370)	(20,400)

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 11. Property, plant and equipment (continued)

(13,076)	(81,649)	‐	(183,108)	(277,833)
20,753	18,910	2,211	57,537	99,411
Land and buildings $'000 40,379 ‐ 8,403 (26,456)	Plant and equipment $'000 80,448 ‐ 11,445 (1,833)	Capital WIP $'000 3,728 18,873 (20,794) (120)	Mine properties $'000 174,479 30,257 946 ‐	Total $'000 299,034 49,130 ‐ (28,409)
(18,053)	9,612	(2,041)	31,203	20,721
22,326	90,060	1,687	205,682	319,755
(12,674) (121) 8	(73,322) (3,306) 720	‐ ‐ ‐	(162,000) (6,738) ‐	(247,996) (10,165) 728
(113)	(2,586)	‐	(6,738)	(9,437)
(12,787)	(75,908)	‐	(168,738)	(257,433)
9,539	14,152	1,687	36,944	62,322

All property, plant and equipment are stated at historical cost less accumulated depreciation and impairment charges. Historical cost includes:

expenditure that is directly attributable to the acquisition of the items;
direct costs associated with the commissioning of plant and equipment including pre‐commissioning costs in testing the processing plant;
where the asset has been constructed by the group, the cost of all materials used in construction, direct labour on the project and project management costs associated with the asset; and
the present value of the estimated costs of dismantling and removing the asset and restoring the site on which it is located.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated using the straight‐line method to allocate their cost over their estimated useful lives as follows:

Buildings Plant and equipment Mining properties Office equipment Furniture and fittings Motor vehicles Software

units of production units of production units of production 3‐5 years 4 years 4‐5 years 2‐3 years

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 11. Property, plant and equipment (continued)

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the statement of comprehensive income.

Mine properties

Mine properties represent the accumulation of all exploration, evaluation and development expenditure incurred by the group in relation to areas of interest for which the technical feasibility and commercial viability of the extraction of mineral resources are demonstrable.

When further development expenditure is incurred in respect of a mine property after the commencement of production, such expenditure is carried forward as part of the mine property only when it is probable that the additional future economic benefits associated with the expenditure will flow to the group. Otherwise, such expenditure is classified as part of the cost of production. Mine properties are amortised on a units of production basis over the economically recoverable resources of the mine concerned.

Commercial production of the underground mine was declared in February 2020. Amortisation of mine properties commenced with commercial production and is being charged using units of production method.

Note 12. Exploration and evaluation

Opening balance Expenditure during the year Amounts provided for or written off Exploration and evaluation classified as available for distribution to owners	2021 $'000 32,745 27,040 (1,991) ‐	2020 $'000 103,894 17,964 (329) (88,784)
	57,794	32,745

(a) Amounts recognised in profit or loss

Exploration and evaluation costs are carried forward on an area of interest basis. Costs are recognised and carried forward where rights to tenure of the area of interest are current and either:

the expenditures are expected to be recouped through successful development and exploitation of the area of interest; or
● 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 exploration and evaluation activities in, or in relation to, the area of interest are continuing.

Exploration and evaluation assets are tested for impairment when reclassified to development tangible or intangible assets, or whenever facts or circumstances indicate impairment. An impairment loss is recognised for the amount by which the exploration and evaluation assets carrying amount exceeds their recoverable amount. The recoverable amount is the higher of the exploration and evaluation assets fair value less costs of disposal and their value in use.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mine properties under development. No amortisation is charged during the exploration and evaluation phase.

Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 12. Exploration and evaluation (continued)

There may exist, on the group's exploration properties, areas subject to claim under native title or containing sacred sites or sites of significance to Aboriginal people. As a result, exploration properties or areas within tenements may be subject to exploration or mining restrictions.

Note 13. Investments accounted for using the equity method

Non‐current assets Investment in associates Reconciliation Reconciliation of the carrying amounts at the beginning and end of the current and previous financial year are set out below: Opening carrying amount Additions OCI Reclassification Closing carrying amount Share of profit/(loss) of equity accounted for investments Share of losses ‐ associates	2021 $'000 15,944	2020 $'000 14,385
	14,385 14,663 (109) (12,995)	7,616 7,110 (341) ‐
	15,944	14,385
	2021 $'000 (870)	2020 $'000 (240)

Interests in associates

Interests in associates and joint venture are accounted for using the equity method of accounting. Information relating to the investments that are material to the consolidated entity are set out below:

		Ownership	interest
	Principal place of business /	2021	2020
Name	Country of incorporation	%	%
Genesis Minerals Ltd (GMD)	Australia	19.84%	15.51%
Calidus Resources Ltd (CAI)	Australia	9.65%	12.99%

On 1 April 2021, Alkane’s percentage of holding in Calidus reduced below 10% to a balance of 9.65%, which no longer gives Alkane the right to appoint one Nominated Director (out of five) to the Board. Calidus was reclassified to financial assets at fair value through other comprehensive income, a $2,698,000 derecognition gain resulted.

On 24 October 2019, Nic Earner (Alkane’s Managing Director) was appointed as a non‐executive director to the Genesis Board. Alkane’s 20% representation on the board out of five of directors entitles the Company significant influence in policy‐making processes including participation in decisions about dividends and other distributions.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 14. Trade and other payables

Current liabilities Trade payables Other payables	2021 $'000 2,760 8,322	2020 $'000 4,588 4,837
	11,082	9,425

Trade and other payables represent liabilities for goods and services provided to the group prior to the end of the financial period which are unpaid. Current trade and other payables are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented in current liabilities unless payment is not due within 12 months from the reporting date.

The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short‐term nature.

Note 15. External borrowings

Hire purchase liabilities are secured over the assets to which they relate, the carrying value of which exceeds the value of the hire purchase liability. The Group does not hold title to the equipment under the hire purchase pledged as security.

Current liabilities External borrowings Non‐current liabilities Hire purchase liabilities Refer to note 21 for further information on financial risk management. *Financing arrangements* Unrestricted access was available at the reporting date to the following lines of credit: Total facilities Bank overdraft Used at the reporting date Bank overdraft Unused at the reporting date Bank overdraft	2021 $'000 3,294	2020 $'000 2,090
	5,922	4,515
	2021 $'000 20,000	2020 $'000 ‐
	‐	‐
	20,000	‐

Refer to note 21 for further information on financial risk management.

Financing arrangements

Unrestricted access was available at the reporting date to the following lines of credit:

Accounting policy for borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 16. Provisions

Current liabilities Employee benefits Non‐current liabilities Employee benefits Rehabilitation	2021 $'000 3,660	2020 $'000 2,659
	232 15,131	122 14,751
	15,363	14,873

(i) Provisions

Provisions are recognised when the group has a present legal or constructive obligation, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre‐tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised in finance charges.

(ii) Information about individual provisions and significant estimates

Employee benefits

The provision for employee benefits relates to the group's liability for long service leave and annual leave.

The current portion of this liability includes all of the accrued annual leave. The entire amount of the provision of $2,490,000 (2020: $1,833,000) is presented as current, since the group does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.

next 12 months.
			2021		2020
			$'000		$'000
Current leave obligations expected to be settled after	12	months		973		595

The liability for long service leave not expected to vest within 12 months after the end of the period in which the employees render the related service is recognised in the non‐current provision for employee benefits and measured at the present value of expected future payments to be made in respect of services provided up to the end of the reporting period. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on corporate bonds with terms and currencies that match as closely as possible, the estimated future cash outflows. Where the group does not have an unconditional right to defer settlement for any annual or long service leave owed, it is classified as a current provision regardless of when the group expects to realise the provision.

Rehabilitation and mine closure

The group has obligations to dismantle and remove certain items of property, plant and equipment and to restore and rehabilitate the land on which they sit.

A provision is raised for the estimated cost of settling the rehabilitation and restoration obligations existing at balance date, discounted to present value using an appropriate pre‐tax discount rate.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 16. Provisions (continued)

Where the obligation is related to an item of property, plant and equipment, its cost includes the present value of the estimated costs of dismantling and removing the asset and restoring the site on which it is located. Costs that relate to obligations arising from waste created by the production process are recognised as production costs in the period in which they arise.

The discounted value reflects a combination of management's assessment of the nature and extent of the work required, the future cost of performing the work required, the timing of cash flows and the discount rate. An increase in the provision due to the passage of time of was recognised in finance charges in the statement of comprehensive income of $59,000 (2020: $127,000).

The provisions are reassessed at least annually. A change in any of the assumptions used to determine the provisions could have a material impact on the carrying value of the provision.

Movements in rehabilitation and mine closure provision during the financial year are set out below:

2021 Shares 595,388,800	2021 $'000 14,751 321 ‐ 59 ‐	2020 $'000 14,456 1,276 (1,881) 127 773
	15,131	14,751
	2021 $'000 218,079	2020 $'000 258,876
Date 1 July 2019 30 June 2020 30 June 2021	Shares 506,096,222 ‐ 73,937,085 ‐ ‐ 580,033,307 ‐ 15,215,584 139,909 ‐ ‐ 595,388,800	$'000 220,111 (922) 40,665 (1,223) 245
		258,876 (43,237) 2,416 161 (31) (106)
		218,079

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 17. Issued capital (continued)

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Note 18. Reserves

The following table shows a breakdown of the balance sheet line item ‘Reserves’ and the movements in these reserves during the year. A description of the nature and purpose of each reserve is provided below the table.

Financial assets at fair value through other comprehensive income reserve Hedging reserve ‐ cash flow hedges Share‐based payments reserve Demerger reserve	2021 $'000 1,943 (134) 3,313 (70,300)	2020 $'000 (101) (692) 4,206 ‐
	(65,178)	3,413

Financial assets at fair value through other comprehensive income reserve

The cash flow hedge reserve is used to recognise the effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges. Amounts are subsequently either transferred to the initial cost of inventory or reclassified to profit or loss as appropriate.

Hedging reserve ‐ cash flow hedges

The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is determined to be an effective hedge.

Share‐based payments reserve

The reserve is used to recognise the grant date fair value of shares issued to directors and KMP, as well as the grant date fair value of deferred rights granted but not yet vested.

Demerger reserve

The demerger reserve is used to recognise the gain on ASM demerger and demerger dividend. Refer to note 5 for further details.

Note 19. Retained profits

Retained profits/(accumulated losses) at the beginning of the financial year Adjustment for reclassification Transfer gain on demerger Accumulated losses at the beginning of the financial year ‐ restated Profit after income tax (expense)/benefit for the year Retained profits at the end of the financial year	2021 $'000 5,097 ‐ (22,134)	2020 $'000 (8,587) 922 ‐
	(17,037) 55,701	(7,665) 12,762
	38,664	5,097

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 20. Critical accounting judgements, estimates and assumptions

The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the group’s accounting policies.

Carrying value of non‐current assets

Non‐current assets include capitalised exploration and evaluation expenditures and mine properties. The group has capitalised significant exploration and evaluation expenditure on the basis either that such expenditure is expected to be recouped through future successful development (or alternatively sale) of the areas of interest concerned or on the basis that it is not yet possible to assess whether it will be recouped and activities are planned to enable that determination.

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the group decides to exploit the related lease itself, or, if not, whether it successfully recovers the related exploration asset through sale. The future recoverability of mine properties is dependent on the generation of sufficient future cash flows from operations (or alternately sale). Factors that could impact the future recoverability of exploration and evaluation and mine properties include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices and exchange rates.

Estimates of recoverable quantities of resources and reserves also include assumptions requiring significant judgment as detailed in the resource and reserve statements.

An impairment review is undertaken to determine whether any indicators of impairment are present. The group has not recorded an impairment charge or reversal against either the gold operations cash generating units in the current financial year.

Depreciation of property, plant and equipment

Non‐current assets include property, plant and equipment. The group reviews the useful lives of depreciable asset at each reporting date or when there is a change in the pattern in which the asset's future economic benefits are expected to be consumed, based on the expected utilisation of the assets. Depreciation and amortisation are calculated using the units of production method based on ounces of gold produced.

Rehabilitation and mine closure provisions

These provisions represent the discounted value of the present obligation to restore, dismantle and rehabilitate certain items of property, plant and equipment and to rehabilitate exploration and mining leases. The discounted value reflects a combination of management's assessment of the nature and extent of the work required, the future cost of performing the work required, the timing of cash flows and the discount rate. Changes to one or more of these assumptions is likely to result in a change to the carrying value of the provision and the related asset or a change to profit and loss in accordance with the group's accounting policy stated in note 16.

Net realisable value and classification of inventory

The group's assessment of the net realisable value and classification of its inventory requires the use of estimates, including the estimation of the relevant future commodity or product price, future processing costs and the likely timing of sale.

Share‐based payments

The group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value for share appreciation rights and performance rights component tranche 1 is determined with the assistance of an external valuer. The number of performance rights issued under the long term incentive plan tranche 2 component are adjusted to reflect management’s assessment of the probability of meeting the targets and service condition. The related assumptions are set out in note 30. The accounting estimates and assumptions relating to equity settled share based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact expenses and equity.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 20. Critical accounting judgements, estimates and assumptions (continued)

Income tax

The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

In addition, the group has recognised deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority against which the unused tax losses can be utilised. Utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are recouped. Refer to note 4 for the current recognition of tax losses.

Exploration and evaluation costs

Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices.

Where economic recoverable reserves for an area of interest have been identified, and a decision to develop has occurred, capitalised expenditure is classified as mine development.

To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which the determination is made.

Note 21. Financial risk management

Financial risk management objectives

The group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The group uses derivative financial instruments including gold forward and gold put option contracts to mitigate certain risk exposures.

This note presents information about the group's exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.

The Board of Directors' has overall responsibility for the establishment and oversight of the risk management framework. Management monitors and manages the financial risks relating to the operations of the group through regular reviews of the risks and mitigating strategies.

(a) Market risk

(i) Foreign currency risk

The group's sales revenue for gold are largely denominated in US dollars and the majority of operating costs are denominated in Australian dollars, hence the group's cash flow is significantly exposed to movement in the A$:US$ exchange rate. The group mitigates this risk through the use of derivative instruments, including but not limited to a combination of Australian dollar denominated gold forward contracts and put options to hedge a portion of future gold sales.

The Australian dollar denominated gold forward contracts are entered into and continue to be held for the purpose of physical delivery of gold bullion. As a result, the contracts are not recorded in the financial statements. Refer to notes 27 for further information.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 21. Financial risk management (continued)

(ii) Commodity price risk

The group's sales revenues are generated from the sale of gold. Accordingly, the group's revenues are exposed to commodity price fluctuations, primarily gold. The group mitigates this risk through the use of derivative instruments, including but not limited to Australian dollar denominated gold forward contracts.

(iii) Interest rate risk

The group's main interest rate risk arises through its cash and cash equivalents and other financial assets held within financial institutions. The group minimises this risk by utilising fixed rate instruments where appropriate.

Summarised market risk sensitivity analysis

			Interest rate risk	Interest rate risk	Interest rate risk
		Impact on profit/(loss)			after tax
		30 June	2021		30 June 2020
	Carrying	+100BP		‐100BP	Carrying	+100BP		‐100BP
	amount				amount
	$000	$000		$000	$000	$000		$000
Financial assets
Cash and cash equivalents	18,991		133	(133)	48,337		338		(338)
Receivables*		43	‐	‐	2,028		‐		‐
Other financial assets	11,541		79	(79)	8,614		60		(60)
Financial liabilities
Trade and otherpayables	(19,956)		‐	‐	(9,425)		‐		‐
Total increase/(decrease) inprofit		‐	212	(212)	‐		399		(399)

The receivables balance excludes prepayments and tax balances which do not meet the definition of financial assets and liabilities.

There is no exposure to foreign exchange risk or commodity price risk for the above financial assets and liabilities.

(b) Credit risk

The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward‐looking information that is available.

In determining the recoverability of a trade or other receivable using the expected credit loss model, the group performs a risk analysis considering the type and age of the outstanding receivables, the creditworthiness of the counterparty, contract provisions, letter of credit and timing of payment.

Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposure to customers, including outstanding receivables and committed transactions.

(i) Risk management

The group limits its exposure to credit risk in relation to cash and cash equivalents and other financial assets by only utilising banks and financial institutions with acceptable credit ratings.

(ii) Credit quality

Tax receivables and prepayments do not meet the definition of financial assets. The group assesses the credit quality of the customer, taking into account its financial position, past experience and other factors.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 21. Financial risk management (continued)

(c) Liquidity risk

Liquidity risk is the risk that the group will not be able to meet its financial liabilities as they fall due. The group's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the group's reputation. The Board of Directors' monitors liquidity levels on an ongoing basis.

The group's financial liabilities generally mature within 3 months, therefore the carrying amount equals the cash flow required to settle the liability.

Financing arrangements

Unused borrowing facilities at the reporting date:

	2021	2020
	$'000	$'000
Bank overdraft	20,000		‐

The facility can be drawn for periods up to 3 months prior to the final repayment date, which is 2 January 2022. The final repayment date may be extended for a further 12 months, upon request by the Company.

Hedge accounting

Movements in hedging reserves during the current and previous financial year are set out below:

Balance at 1 July 2019 Change in fair value of hedging instrument recognised in other comprehensive income Reclassified from other comprehensive income to profit or loss Deferred tax Balance at 30 June 2020 Change in fair value of hedging instrument recognised in other comprehensive income Reclassified from other comprehensive income to profit or loss Deferred tax Balance at 30 June 2021	Cashflow hedges $'000 779 487 (278) (296)
	692 220 (1,017) 239
	134

Note 22. Capital risk management

The group's objectives when managing capital are to safeguard the ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the group may return capital to shareholders, pay dividends to shareholders, issue new shares or sell assets.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 23. Key management personnel disclosures

The aggregate compensation made to directors and other members of KMP of the consolidated entity is set out below:

Short‐term employee benefits Post‐employment benefits Long‐term benefits Share‐based payments	2021 $'000 1,767 105 200 1,170	2020 $'000 2,164 122 102 1,063
	3,242	3,451

Note 24. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by PricewaterhouseCoopers, the auditor of the company:

	2021		2020
	$'000		$'000
Audit services ‐ PricewaterhouseCoopers
Audit or review of the financial statements		139		115
Other services ‐ PricewaterhouseCoopers
Other advisory services		153		175
Other assurance services		35		‐
		188		175
		327		290

Note 25. Contingent assets

The group has entered into forward gold sales contracts which are not accounted for on the balance sheet. A contingent asset of $537,000 (2020: liability $14,178,000) existed at the balance date in the event that the contracts are not settled by the physical delivery of gold. Refer to the commitment’s disclosure note 27 for more information.

Note 26. Contingent liabilities

The group has contingent liabilities estimated up to the value of $3,223 , 000 (2020: $8,330,000 including amount of $3,670,000 related to land acquisition surrounding the Dubbo Project) for the potential acquisition of several parcels.

Note 27. Commitments

(a) Exploration and mining lease commitments

In order to maintain current rights of tenure to exploration and mining tenements, the group will be required to outlay the amounts disclosed in the below table. These amounts are discretionary, however if the expenditure commitments are not met then the associated exploration and mining leases may be relinquished.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 27. Commitments (continued)

Within one year	2021 2020 $'000 $'000 941 1,505

(b) Physical gold delivery commitments

As part of its risk management policy, the group enters into derivatives including gold forward contracts and gold put options to manage the gold price of a proportion of anticipated gold sales.

Alkane purchased gold forward sales and put options as part of a risk mitigation strategy on any potential downward price pressure while Tomingley was processing the low grade stockpiles during the year.

The gold forward sales contracts disclosed below did not meet the criteria of financial instruments for accounting purposes on the basis that they met the normal purchase/sale exemption because physical gold would be delivered into the contract. Accordingly, the contracts were accounted for as sale contracts with revenue recognised in the period in which the gold commitment was met. The balances in the table below relate to the value of the contracts to be delivered into by transfer of physical gold.

30 June 2021 Fixed forward contracts Within one year 30 June 2020 Fixed forward contracts Within one year	Gold for physical delivery Ounces 24,000	Contracted gold sale price per ounce ($) 2,307	Value of committed sales $'000 55,368
	Gold for physical delivery Ounces 17,770	Contracted Gold sale price per ounce ($) 1,836	Value of committed sales $'000 32,619

(c) Capital commitments

Capital commitments committed for the year at the end of the reporting period but not recognised as liabilities amounted to $11,462,000 (2020: $8,787,000, including amount related to the discontinued operation of $3,200,000).

Note 28. Events after the reporting period

Note 29. Related party transactions

Parent entity

Alkane Resources Ltd is the parent entity of the group.

Associates

Interests in associates are set out in note 13.

Key management personnel

Disclosures relating to key management personnel are set out in note 23 and the remuneration report included in the directors' report.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 29. Related party transactions (continued)

Transactions with other related parties

Nuclear IT, a director‐related entity, provides information technology consulting services to the group which includes the coordination of the purchase of information technology hardware and software. These terms are documented in a service level agreement and represent normal commercial terms.

	2021		2020
	$'000		$'000
Purchase of computer hardware and software		126		88
Consulting fees and services		304		310
Total		430		398

Note 30. Share‐based payments

Share‐based compensation benefits are provided to employees via the group's incentive plans. The incentive plans consist of short term and long term incentive plans for Executive Directors and other Executives and the employee share scheme for all other employees. Information relating to these plans is set out in the remuneration report and below.

The fair value of rights granted under the short term and long term incentive plans is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the rights granted, which includes any market performance conditions and the impact of any non‐vesting conditions but excludes the impact of any service and non‐market performance vesting conditions.

Non‐market vesting conditions and the impact of service conditions are included in assumptions about the number of rights that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of rights that are expected to vest based on the non‐market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in the statement of comprehensive income, with a corresponding adjustment to equity.

The initial estimate of fair value for market based and non‐vesting conditions is not subsequently adjusted for differences between the number of rights granted and number of rights that vest.

When the rights are exercised, the appropriate number of shares are transferred to the employee. The proceeds received net of any directly attributable transaction costs are credited directly to equity.

Under the employee share scheme, shares issued by the group to employees for no cash consideration vest immediately on grant date. On this date, the market value of the shares issued is recognised as an employee benefits expense with a corresponding increase in equity.

The fair value of deferred shares granted to employees for nil consideration under the employee share scheme is recognised as an expense over the relevant service period, being the year to which the incentive relates and the vesting period of the shares. The fair value is measured at the grant date of the shares and is recognised in equity in the share‐based payment reserve. The number of shares expected to vest is estimated based on the non‐market vesting conditions. The estimates are revised at the end of each reporting period and adjustments are recognised in profit or loss and the share‐based payment reserve.

Executive directors and other executives

The company’s remuneration framework is set out in the remuneration report, including all details of the performance rights and share appreciation rights plans, the associated performance hurdles and vesting criteria.

Participation in the plans is at the discretion of the Board of Directors and no individual has a contractual right to participate in the plans or to receive any guaranteed benefits. Participation is currently restricted to senior Executives within the group.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 30. Share‐based payments (continued)

The following tables illustrate the number and weighted average fair value of, and movements in, share rights during the year.

Performance Rights Outstanding at the beginning of the year Issued during the year Vested during the year Lapsed/Cancelled during the year Outstanding at the end of the year	2021	2020
	Number of Weighted average performance rights fair value 12,092,879 $0.18 1,492,626 $0.75 (6,785,208) $0.06 (2,134,033) $0.32 4,666,264 $0.47	Number of Weighted average performance rights fair value 18,476,061 $0.18 3,853,701 $0.37 (8,430,376) $0.24 (1,806,507) $0.34 12,092,879 $0.18

The number of Performance Rights to be granted is determined by the Remuneration Committee with reference to the fair value of each Performance Right which is generally the volume weighted average price for the month preceding the start of the performance period. This will differ from the fair value reported in the table above which is determined at the time of grant.

The following table lists the inputs to the models used.

							Weighted
							average share
							price at grant
				Expected stock	Risk free rate	Expected	date
			Dividend yield	volatility		life
Grant date	Performance hurdle		%	%	%	years	$
	Services condition	and
18/10/2018	market condition		‐	66%	2.14%	3.0	$0.22
	Services condition	and
21/11/2018	market condition		‐	65%	2.14%	2.9	$0.22
	Services condition	and
02/09/2019	market condition		‐	67%	0.69%	2.8	$0.40
	Service condition	and
22/11/2019	market condition		‐	65%	0.73%	2.6	$0.63
	Service condition	and
11/11/2020	market condition		‐	72%	0.19%	3.0	$1.08

Expenses arising from share‐based payment transactions.

Performance rights Employee share scheme	2021 $'000 1,523 161	2020 $'000 1,225 ‐
	1,684	1,225

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 31. Earnings per share

Earnings per share for profit from continuing operations Profit after income tax attributable to the owners of Alkane Resources Ltd Basic earnings per share Diluted earnings per share Earnings per share for profit/(loss) from discontinued operations Profit/(loss) after income tax attributable to the owners of Alkane Resources Ltd Basic earnings per share Diluted earnings per share Earnings per share for profit Profit after income tax attributable to the owners of Alkane Resources Ltd Basic earnings per share Diluted earnings per share Weighted average number of ordinary shares Weighted average number of ordinary shares used in calculating basic earnings per share Adjustments for calculation of diluted earnings per share: Performance rights Weighted average number of ordinary shares used in calculating diluted earnings per share	2021 $'000 33,567	2020 $'000 13,345
	Cents 5.64 5.60 2021 $'000 22,134	Cents 2.44 2.37 2020 $'000 (583)
	Cents 3.72 3.69 2021 $'000 55,701	Cents (0.11) (0.10) 2020 $'000 12,762
	Cents 9.37 9.28 Number 594,734,110 5,201,943	Cents 2.33 2.26 Number 547,023,712 17,141,368
	599,936,053	564,165,080

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 32. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Profit after income tax Total comprehensive income *Balance sheet* Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Financial assets at fair value through other comprehensive income reserve Share‐based payments reserve Demerger reserve Accumulated losses Total equity	Parent 2021 2020 $'000 $'000 15,195 14,091	Parent 2021 2020 $'000 $'000 15,195 14,091
	15,195	14,091
	Parent 2021 2020 $'000 $'000 50,669 203,910
	144,462	254,611
	3,875	2,801
	9,776	3,040
	218,077 1,945 3,313 (70,300) (18,349)	258,876 (101) 4,206 ‐ (11,410)
	134,686	251,571

Determining the parent entity financial information

The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements, except as set out below.

(i) Tax consolidation legislation

Alkane Resources Ltd and its wholly‐owned Australian controlled entities have implemented the tax consolidation legislation. Refer to note 4 for further details.

(ii) Share‐based payments rights

The grant by the company of rights to equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

(iii) Investment in subsidiaries

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

Capital commitments ‐ Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021 (2020: $nil).

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 33. Deed of cross guarantee

The following group entities have entered into a deed of cross–guarantee. Under the deed of cross–guarantee, each body has guaranteed that the debts to each creditor of each other body which is a party to the deed will be paid in full in accordance with the deed:

Alkane Resources Limited (the Holding Entity)
Tomingley Holdings Pty Ltd and Tomingley Gold Operations Pty Ltd (the wholly‐owned subsidiaries, which are eligible for the benefit of the ASIC Instrument)

By entering into the deed, the wholly‐owned entities have been relieved from the requirement to prepare financial statements and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission.

The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other parties to the deed of cross guarantee that are controlled by Alkane Resources Ltd, they also represent the 'Extended Closed Group'.

The statement of profit or loss and other comprehensive income and balance sheet (excluding ASM business, which is separately disclosed in note 5 are substantially the same as the consolidated entity as stated in the Consolidated Statement of Profit or Loss and Other Comprehensive Income and therefore have not been separately disclosed.

Note 34. Reconciliation of profit after income tax to net cash from operating activities

Profit after income tax (expense)/benefit for the year Adjustments for: Depreciation and amortisation Net loss/(gain) on disposal of property, plant and equipment Share of loss ‐ associates Share‐based payments Investment paid for by tenement transfer Exploration costs provided for or written off Gain from demerger of ASM Group Finance charges Realised loss on expiry put option derivatives Demerger costs reclassified Gain on derecognition of equity investment Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Increase in inventories Increase/(decrease) in trade and other payables Increase in deferred tax liabilities Decrease in other provisions Increase/(decrease) in fair value of biological assets Net cash from operating activities	2021 $'000 55,701 21,254 957 870 1,684 (660) 1,991 (22,672) 51 938 538 (2,698) 301 (4,002) 1,217 14,503 ‐ 1,143	2020 $'000 12,762 9,231 (9) 250 1,225 ‐ 329 ‐ 126 258 1,525 ‐ (749) (3,134) 143 6,320 (81) 340
	71,116	28,536

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 34. Reconciliation of profit after income tax to net cash from operating activities (continued)

Net debt reconciliation

This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.

Cash and cash equivalents Borrowings ‐ repayable within one year Borrowings ‐ repayable after one year Net cash Borrowings Cash repayable within one year $'000 $'000 Opening net cash 18,991 (3,778)	2021 $'000 18,991 (3,778) (5,922)	2020 $'000 48,337 (2,659) (4,515)
	9,291	41,163
	Borrowings repayable after one year $'000 (5,922)	Net cash $'000 9,291

Note 35. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Consolidated Entity.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001 , as appropriate for for‐ profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Historical cost convention

The financial statements have been prepared under the historical cost convention, except for certain financial assets and liabilities which are measured at fair value.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 20.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 35. Significant accounting policies (continued)

Parent entity information

In accordance with the Corporations Act 2001 , these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 32.

Tax consolidated legislation

Alkane Resources Ltd and its wholly‐owned Australian controlled entities have implemented the tax consolidation legislation.

The head entity, Alkane Resources Ltd, and the controlled entities in the Tax Consolidated Group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the Tax Consolidated Group continues to be a stand alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, Alkane Resources Ltd also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the Tax Consolidated Group.

The entities have also entered into a tax funding agreement under which the wholly‐owned entities fully compensate Alkane Resources Ltd for any current tax payable assumed and are compensated by Alkane Resources Ltd for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Alkane Resources Ltd under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly‐owned entities financial statements.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Alkane Resources Ltd ('company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Alkane Resources Ltd and its subsidiaries together are referred to in these financial statements as the 'consolidated entity' or the 'group'.

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de‐consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The financial statements are presented in Australian dollars, which is Alkane Resources Ltd's functional and presentation currency.

Accounting policy for lease liabilities

A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are incurred.

Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right‐ of use asset, or to profit or loss if the carrying amount of the right‐of‐use asset is fully written down.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 35. Significant accounting policies (continued)

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.

Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.

Impairment of financial assets

The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12‐month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss.

Impairment of non‐financial assets

The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

Alkane Resources Ltd Notes to the consolidated financial statements 30 June 2021

Note 35. Significant accounting policies (continued)

Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares; by
the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

the profit attributable to owners of the Company, excluding any costs of servicing equity, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

Rounding of amounts

The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding‐off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.

Alkane Resources Ltd Directors' declaration 30 June 2021

In the directors' opinion:

the financial statements and notes set out on pages 22 to 61 are in accordance with the Corporations Act 2001 including:
(a) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(b) giving a true and fair view of the consolidated entity's financial position as at 30 June 2021 and of its performance for the financial year ended on that date; and
the financial statements and notes also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 35 to the financial statements;
there are reasonable grounds to believe that Alkane Resources Limited will be able to pay its debts as and when they become due and payable.
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 33 to the financial statements.

The directors have been given the declarations required by section 295A of the Corporations Act 2001 .

Signed in accordance with a resolution of directors.

On behalf of the directors

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_________ N P Earner Managing Director 27 August 2021 Perth

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Independent auditor’s report

To the members of Alkane Resources Limited

Report on the audit of the financial report

Our opinion

In our opinion:

The accompanying financial report of Alkane Resources Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

What we have audited

The Group financial report comprises:

the consolidated balance sheet as at 30 June 2021
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the consolidated statement of profit or loss and other comprehensive income for the year then ended
the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information
the directors’ declaration.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

PricewaterhouseCoopers, ABN 52 780 433 757 Brookfield Place, 125 St Georges Terrace, PERTH WA 6000, GPO Box D198, PERTH WA 6840 T: +61 8 9238 3000, F: +61 8 9238 3999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

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Our audit approach

An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates.

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Materiality Audit scope Key audit matters
● For the purpose of our audit we ● Our audit focused on where ● Amongst other relevant topics, used overall Group materiality the Group made subjective we communicated the following of $2,403,000, which judgements; for example, key audit matter to the Audit represents approximately 5% significant accounting Committee: of the Group’s profit before tax estimates involving − Estimate of rehabilitation and from continuing operations. assumptions and inherently mine closure provision.
● We applied this threshold, uncertain future events. ● These are further described in together with qualitative ● The accounting processes are the Key audit matters section of considerations, to determine structured around a Group our report. the scope of our audit and the finance function at its head nature, timing and extent of our office in Perth. audit procedures and to evaluate the effect of misstatements on the financial report as a whole.
We chose Group profit before tax from continuing operations because, in our view, it is the benchmark against which the performance of the Group is most commonly measured.
We utilised a 5% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context.

*Key audit matter*	*How our audit addressed the key audit matter*	*How our audit addressed the key audit matter*
*Estimate of rehabilitation and mine closure*	We	performed the following procedures, amongst
*provision*	others:
(Refer to rehabilitation and mine closure provision in	●	Developed an understanding of how the Group
note 16 and Critical accounting estimates,		identified the relevant methods, assumptions or
judgements and assumptions in note 20)		sources of data, and the need for changes in
As a result of its mining and processing activities at		them, that are appropriate for developing the
Tomingley Gold, the Group incurs obligations to		rehabilitation and mind closure provision in the
restore and rehabilitate the environment disturbed by		context of the Australian Accounting Standards
its operations. Rehabilitation activities are governed	●	Evaluated the competence, capabilities and
by a combination of legislative requirements and the		objectivity of experts used by the Group in
Group’s policies.		calculating the nature and extent of rehabilitation
This was a key audit matter as determining the		work required
provision for rehabilitation and mine closure requires	●	Examined the Group’s assessment of significant
the use of significant estimates and judgements by		changes in future cost estimates from the prior
the Group in assessing the magnitude, nature and		year
extent of rehabilitation work to be performed, and in	●	Evaluated the basis for cost estimations made by
determining:		the Group, in light of the budgets and forecasts
● the expected future cost of performing the work		approved by the Board
● the timing of when the rehabilitation activities are	●	On a sample basis, tested the provision amount
expected to take place, and		to comparable data sourced from external parties
● economic assumptions such as the discount rate		and management’s experts
used to discount this estimate to net present	●	Tested the mathematical accuracy of the
value.		calculation of the discounted cash flows prepared
		by the Group

Considered the appropriateness of the discount rates and inflation rates utilised in calculating the provision by comparing them to current market consensus
● Evaluated the reasonableness of the disclosures made in the financial statements, including those related to estimation uncertainty, against the requirements of Australian Accounting Standards.

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Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we obtained included the Corporate directory and Directors’ report. We expect the remaining other information to be made available to us after the date of this auditor's report.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at:

https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our auditor's report.

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Report on the remuneration report

Our opinion on the remuneration report

We have audited the remuneration report included in pages 10 to 18 of the directors’ report for the year ended 30 June 2021.

In our opinion, the remuneration report of Alkane Resources Limited for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

PricewaterhouseCoopers

Helen Bathurst Partner

Perth 27 August 2021

AI assistant

Alkane Resources — Annual Report 2021

48579_rns_2021-08-26_afadba47-b401-4878-b585-394d66aaf3a6.pdf

ASX and MEDIA RELEASE

27 August 2021

Alkane Delivers Profit After Tax of A$55.7 Million for FY2021

Disclaimer

This document has been authorised for release to the market by Nic Earner, Managing Director.

ABOUT ALKANE ‐ www.alkane.com.au ‐ ASX: ALK

1. Company details

2. Results for announcement to the market

Comments

3. Net tangible assets

4. Loss of control over entities

5. Dividends

Current period

Previous period

6. Details of associates

Associates

7. Audit qualification or review

Details of audit/review dispute or qualification (if any):

8. Attachments

Details of attachments (if any):

9. Signed

Alkane Resources Ltd ABN 35 000 689 216

Directors

Information on Directors and Company Secretaries

Ian Jeffrey Gandel ‐ Non‐Executive Chairman

Nicolas Paul Earner ‐ Managing Director

David Ian Chalmers ‐ Technical Director

MSc, FAusIMM, FAIG, FIMM, FSEG, MSGA, MGSA, FAICD

Anthony Dean Lethlean ‐ Non‐Executive Director

BAppSc (Geology)

Gavin Murray Smith ‐ Non‐Executive Director

Dennis Wilkins ‐ Joint Company Secretary

James Carter

Principal activities

Dividends

Result for the year

Review of operations

Tomingley Gold Operations ('TGO')

Alkane Resources Ltd Directors' report 30 June 2021

Tomingley Gold Operations ('TGO') (continued)

Tomingley Gold Extension Project

Tomingley Gold Extension Project (continued)

Exploration

Northern Molong Porphyry Project (gold‐copper)

Corporate

Significant changes in the state of affairs

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Environmental regulation

Meetings of directors

Meetings of committees

Remuneration report

(a) Key Management Personnel ('KMP') disclosed in this report

(b) Remuneration governance

(c) Use of remuneration consultants

(d) Executive remuneration policy and framework

(i) Executive remuneration mix

(ii) Total fixed remuneration

(iii) Incentive arrangements

Short‐term incentives

Long‐ term incentives

(iv) Clawback policy for incentives

(v) Share trading policy

(e) Statutory performance indicators

(f) Non‐Executive Director remuneration policy

(g) Voting and comments made at the company's 2020 Annual General Meeting

(h) Details of remuneration

(h) Details of remuneration (continued)

(i) Service agreements

(i) Service agreements (continued)

(j) Details of share based payments and performance against key metrics

(j) Details of share based payments and performance against key metrics (continued)

Performance against key metrics

(k) Shareholdings and share rights held by Key Management Personnel

Shareholding

Performance rights holding

(l) Other transactions with Key Management Personnel

Alkane Resources Annual Report 2021