CHALICE MINING LIMITED - Annual Report 2021

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Annual Report 2021 Chalice Mining Limited

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Directors

Auditors

Tim Goyder Chairman

HLB Mann Judd Level 4, 130 Stirling Street, PERTH Western Australia 6000

Alex Dorsch Managing Director and Chief Executive Officer

Home Exchange

Morgan Ball Lead Independent Director

Australian Securities Exchange Ltd

Stephen Quin Non-Executive Director

Level 40, Central Park, 152-158 St Georges Terrace PERTH Western Australia 6000

Garret Dixon Non-Executive Director

Linda Kenyon Non-Executive Director

OTCQB Exchange

12th Floor, 300 Vesey Street, NEW YORK, NY, UNITED STATES 10282

Stephen McIntosh Non-Executive Director

Company Secretary

Jamie Armes

Share Registry

Computershare Investor Services Pty Ltd

Principal Place of Business & Registered Office

Level 11, 172 St Georges Terrace, PERTH Western Australia 6000

Level 3, 46 Colin Street, WEST PERTH Western Australia 6005

Tel: 1300 850 505

Tel: (+61) (8) 9322 3960 Email: [email protected]

ASX Listing

ASX Code: CHN

Web: www.chalicemining.com ABN: 47 1 16 648 956

OTCQB Listing

OTCQB Code: CGMLF

We acknowledge the Traditional Owners of the land on which our operations exist and on which we work. We recognise their continuing connection to land, waters and culture. We pay our respects to their Elders past, present and emerging.

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	FY2021 Highlights	4
	Chairman’s Letter	6
	Managing Director’s Letter	8
	The Chalice Way	11
	FY2022 Strategy	12
	Operating and Financial Review	14

	Julimar Nickel-Copper-PGE Project	16
	Pyramid Hill Gold Project	22
	Generative Exploration and Strategic Investments	24
	Financial Review	26
	Competent Person and Qualifying Person Statement	28
	Forward Looking Statements	29

	Sustainability Report	30
	Tenement Schedule	56
	Directors’ Report	58
	Auditor’s Independence Declaration	87
	Financial Statements	88
	Notes to the Financial Statements	92
	Directors’ Declaration	118
	Independent Auditor’s Report	119
	ASX Additional Information	123

2 Annual Report 2021

Annual Report 2021 3

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~650% Total Shareholder Return

– one of the top performing companies on the ASX

$115 million raised from largely institutional investors – strong balance sheet and capital discipline maintained

Significant growth in of our worldclass Julimar Ni-Cu-PGE Project in WA. Seven new high-grade zones were discovered at the Gonneville Deposit over an area of >1.8km x 0.9km, confirming the tier-1 scale of the discovery

~120,000m of resource drilling was completed at Julimar in FY2021, with the Company on track to deliver a maiden Mineral Resource Estimate in Q4 CY2021

Several multi-kilometre EM-soil targets defined through first-pass reconnaissance exploration activities along the ~26km Julimar Complex . ~24km of the maficultramafic intrusive complex remains untested with drilling

Zero reportable environmental incidents

100% compliance of all environmental licence conditions

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Chalice was included in the S&P/ASX 200 index in June 2021

Awarded ‘Explorer of the Year’ by MiningNews and ‘Best Emerging Company’ by the Diggers and Dealers Mining Forum

Gonneville emerging as a worldclass, strategic deposit of critical ‘green metals’ – metals needed to to decarbonise the global economy and address climate change

Expanded our holdings in

the new West Yilgarn Ni-CuPGE Province to >8,000km[2] , leveraging our competitive ‘first mover’ advantage in the largely unexplored province

Several new high-grade gold intersections and two new regional targets defined at the Pyramid Hill Gold Project in Victoria

Approval of first Conservation Management Plan (CMP) and submission of second CMP to enable further exploration activities within the Julimar State Forest

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Zero lost time injuries

Zero fatalities

~$0.5M local procurement spend

Julimar Project Stakeholder Engagement Plan implemented – proactive information sharing campaigns and key stakeholder briefings completed

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by Chalice plus ~$1.5M spend by direct Chalice contractors in the local shires surrounding the Julimar Project

New highly regarded independent Non-Executive Directors appointed, Garret Dixon and Stephen McIntosh and, subsequent to year-end, Linda Kenyon

All corporate governance policies updated to meet ASX Corporate Governance Principles 4[th] edition

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Risk and Sustainability, Technical and Nomination Board Committees established

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4 Annual Report 2021

Annual Report 2021

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Chairman’s
Letter
Dear Fellow Shareholder,
It is a great pleasure to report on what has been Chalice’s ability to prosper and deliver for
one of the best years in Chalice’s history. our shareholders is a credit to our team’s
commitment – and has also highlighted to the
When Chalice was formed in 2006, a small but wider industry the immense wealth creation
highly motivated founding team set out to build that can be achieved as a result of genuine
an ambitious, technically-driven and disciplined discovery success. The accolades that have
exploration company. Since then, we have been awarded to Chalice and its superb
been dedicated to making a world-class geological team are well-deserved.
mineral discovery and, over the past 18 months,
the Company has well and truly delivered on A core component of Chalice’s business strategy
that goal! from well before the Julimar discovery has been
to maintain rigorous capital discipline and a
In June 2021, Chalice joined the ASX-200, strong balance sheet, allowing us to execute
Australia’s leading share market index – ambitious exploration programs. Following the
becoming one of the first mineral exploration tremendous success at Julimar this year, we
companies ever to reach this milestone. This raised $115 million, largely from institutional
remarkable achievement was driven by the investors, underpinning continued exploration
spectacular and rapidly evolving PGE-Ni- activities at the Project.
Cu-Co-Au discovery at our Julimar Project in
Western Australia. And, notwithstanding our greatly expanded
exploration budget, we have maintained the
Since the discovery of Julimar in March 2020, same high degree of discipline in our expenditure
shareholders have enjoyed exceptional returns as we always have, with a continued focus on
– making Chalice one of the best-perfoming long-term value creation and ensuring that a
stocks on the ASX despite the volatility and large proportion of the funds we raise go directly
challenges which have been experienced from into the ground.
time to time during the COVID-19 pandemic.
In July, Chalice announced its intention to
The discovery has been a game-changer for pursue a demerger of its Australian gold
the industry and has re-written the geological assets, subject to shareholder and regulatory
understanding of the State of Western Australia. approvals. This demerger will allow Chalice to
The first major discovery of palladium – arguably focus on the Julimar discovery and the greater
the PGE discovery Australia has never had – it is West Yilgarn Ni-Cu-PGE Province in Western
hard to recall a discovery which has had such Australia, while creating a new company
profound implications for the junior exploration focused on progressing a compelling portfolio
sector. of gold opportunities.
6 Annual Report 2021
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I believe this to be sound strategy, providing an appropriate structure to unlock the full potential of our portfolio and maximise returns to our shareholders. If approved, we will deliver a standalone, ASX-listed gold company targeting Tier-1 discoveries in Victoria and Western Australia. The new company will hold the districtscale Pyramid Hill Gold Project in Victoria, where I see another exciting and unique opportunity to make a world-class discovery in a safe jurisdiction.

We continued to add depth, experience and capability to the Chalice Board during the year, with the addition of highly-regarded NonExecutive Directors Garret Dixon and Stephen McIntosh. It has been incredibly rewarding to be able to attract this level of talent to the business and to see their growing contribution over the course of the year.

We were also delighted recently to welcome highly-experienced former senior Wesfarmers executive Linda Kenyon to the Chalice Board as Non-Executive Director. Linda’s appointment marked another broader and very pleasing milestone, marking the first time ever that all ASX200 companies have had female representation at the Board level.

We will shortly say farewell to Stephen Quin, who has signalled his intention to step down from the Board in November 2021. On behalf of everyone at Chalice, I would like to sincerely thank Stephen for his significant contribution, guidance and service to the Company over the past 11 years.

Our success and rapid growth in FY2021 has emphasised the magnitude of our corporate responsibilities in a rapidly changing company landscape. The choice to ‘do the right thing’ and ‘act like an owner’ has always been integral to how Chalice has conducted business but, as we grow from junior explorer to mid-tier developer, so too does the breadth of our environmental and social responsibilities.

The fundamental importance of these responsibilities, and our continued focus on

fulfilling them, are summarised throughout this Report and I am pleased to see these efforts continuing to increase over the year.

As a born-and-bred West Australian, I am immensely proud that the globally-significant Julimar discovery sits right on Perth’s doorstep. Our team has worked tirelessly to engage and establish relationships with key local stakeholders, and we are passionate about continuing to build trust and make genuine contributions to the region. I believe that Chalice has the opportunity to be a leader in demonstrating how mining can co-exist with local communities and other land uses.

I remain very positive about the outlook for metals – particularly the ‘green metals’ that are required to power a decarbonised global economy. This steep demand growth trajectory is overlaid on a looming supply shortage and, more importantly, a shortage of Tier-1 discoveries that has plagued the industry in recent decades. The next few years are likely to provide an exciting backdrop for the Company.

In closing, I would like to extend my appreciation to all the hard-working people at Chalice. I know we have an enviable and rare mix of tenacity, experience and dynamism across our team; as a result, Chalice is well positioned to progress its journey to the project definition phase. Lastly, I would like to thank all our shareholders for their continued support. I am confident that your Company is in great shape and that our leadership group led by our Managing Director and CEO has the determination, capability and financial resources to deliver further growth.

I look forward to 2022.

Yours faithfully,

Tim Goyder Chairman

Annual Report 2021 7

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Managing Director and CEO’s Letter

Dear Fellow Shareholder,

The globally significant Julimar discovery and the newly-defined West Yilgarn Province underpins what we see as an incredibly exciting future growth pathway for Chalice.

I am pleased to report on what has been another tremendous year of growth and achievement for Chalice. Like Tim, I am incredibly proud of what our team has been able to deliver and I am humbled by the level of recognition we have received – with the Company being awarded multiple accolades over the course of the year.

We will continue to explore and define the Julimar Project to maximise shareholder value and optionality. We are also committed to scaling-up our greenfield exploration activities across the largely unexplored West Yilgarn Ni-CuPGE Province, with the aim of making another major discovery in FY2022. Concurrently, we will also continue to evaluate and invest in assets that complement our portfolio.

Thanks to our success over the past 18 months, Chalice is in superb shape – with a clear vision and strategic direction, a world-class asset and an exceptional growth pipeline in the heart of a new globally significant mineral province in Western Australia.

In executing our strategic growth plan, we increased our focus during the year on enhancing our sustainability initiatives, caring for and supporting our people and nurturing our company culture.

Our vision to become a globally-recognised explorer and developer has been refined over the course of the year to focus specifically on ‘green metals’ – the critical suite of metals which are required to decarbonise the global economy and address climate change.

We are a values-driven business and our five core values of Integrity, Ownership, Urgency, Alignment and Advancement continue to guide our actions. The ‘Chalice Way’ remains as strong as ever, and we continue to preserve and nurture our generative exploration and entrepreneurial skill-set as well as complement those skills with high-calibre project development expertise.

It is becoming clear that green metals like nickel, copper, cobalt, palladium and platinum have an incredibly important role to play in an electrified world powered by renewables and green hydrogen, but new major discoveries of these metals are becoming increasingly rare. We have set our strategic ambitions accordingly.

The planned demerger of our gold portfolio in late 2021 will facilitate a logical split of commodity focus, allowing Chalice to focus on its green metals portfolio – with a clearly defined purpose to discover, define and deliver world-class sustainable green metal projects in Australia.

During the past year, we commenced building a world-class project definition team capable of taking Julimar from a discovery through to ‘development-ready’ status.

We have welcomed a number of exceptional people to our senior leadership group and have

appointed a number of highly-qualified and experienced metallurgy, health and safety, environment, stakeholder management, business development and legal professionals – positioning the Company to execute our near-term goal of scoping the initial stages of development for the Julimar Project and completing feasibility studies.

Our sustainability strategy is being carefully formulated to ensure it is both impactful and genuine – with the dual objective of adopting world best practices while also ensuring we have the ability to execute. Our commitment to the environment and community is already clearly demonstrated in our operations and in the surrounding regions and it has been fantastic to hear feedback from key stakeholders affirming this view.

We are committed to best-practice environmental standards, building trustbased and open relationships with key stakeholders and delivering long-term benefits to the communities in which we operate. Our achievements in this area and our ambitions for the future are reflected in the pages of our firstever Sustainability Report.

We achieved a number of important operational milestones during the course of the year across our portfolio. At Julimar, we rapidly scaled up the resource definition drill program and extended the mineralisation at Gonneville over an area of >1.8km x 0.9km and to a depth of 0.8km. The exceptional growth in the scale of the deposit meant that we continually increased the size of our drill program and rig count. Notwithstanding the vast amount of drilling that has been required, we remain on track to report a maiden Mineral Resource Estimate in Q4 CY2021.

In addition, following the approval of our first Conservation Management Plan, we secured access and completed first-pass reconnaissance exploration and targeting over the entirety of the >26km long Julimar Complex. The mineralisation already identified at Gonneville and the compelling targets defined along strike have positioned the Julimar Project as one of the most significant new Ni-Cu-PGE exploration projects globally.

We also remained committed and active on the other exploration projects in the Chalice portfolio, refining large-scale gold prospects under cover in Victoria at the Pyramid Hill Project

– leading us to the decision to demerge our gold assets. We have also commenced early-stage exploration within the completely untested West Yilgarn Province at the Barrabarra and South West Projects, with some tantalising early results.

I continue to be inspired by our incredibly talented and hard-working geological team as they systematically and efficiently vector towards our next major discovery.

There have been very few investment opportunities like Chalice in the mining sector in recent years, where a Company has unlocked a new mineral province and positioned itself as the strategic first mover. As a Board, we remain committed to overseeing an aggressive but disciplined approach to unlocking the full potential of our green metals portfolio.

2022 is shaping up to be another exciting year for Chalice, with initial drill testing of the largescale Hartog and Baudin Targets at Julimar, the Ephesus Target at Hawkstone and the Recherche Target at Barrabarra all planned in the coming months. On top of that, we look forward to reporting our maiden Mineral Resource Estimate and Scoping Study for the Gonneville deposit at Julimar and executing the planned demerger and IPO of our gold portfolio.

In closing, I would like to extend my gratitude to my fellow directors and the entire team at Chalice. Our success is a product of our exceptional people and their collective efforts.

I would also like to thank our shareholders for their continued support and I look forward to bringing you further updates as we embark on another exciting year.

Yours faithfully,

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Alex Dorsch Managing Director and Chief Executive Officer

8 Annual Report 2021

Annual Report 2021 9

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To become a globally recognised specialist
‘green metal’ explorer and developer
Urgency
Integrity Ownership
Act today,
Do the right thing Think like an owner
not tomorrow
Alignment
Advancement
If Chalice succeeds,
Improve every day
we all succeed
Sustainability Generative Exploration
Deliver a sustainability Make a major (>US$1Bn
strategy by end FY2022 NPV) discovery
+ achieve inclusion in
relevant benchmark ESG
index by end FY2024 People & Culture
Our people and organisational
culture are key to delivering on
our vision and purpose. We aim to
hire and retain the best people,
preserve our high performance
culture and promote work-life
balance
Project Definition Business Development
Mature our discoveries to Add synergistic assets to
PFS completion in <3 years, complement the current
maximising shareholder portfolio
value and optionality
To discover, define and deliver world-class sustainable ‘green metal’ projects
in Australia. These metals are needed to:
Manufacture green
Produce and store Produce and store green mobility technologies
hydrogen for use in fuel such as battery, hydrogen
renewable energy , such
cells, green steel, fertilisers fuel cell and hybrid
as wind, solar, geothermal
and other industrial electric vehicles and
and grid-scale storage;
processes; and, automotive pollution
control devices
10 Annual Report 2021 Annual Report 2021 11
Our Vision
Values
Strategic Pillars
Purpose
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Deliver a sustainability strategy

based on responsible practices and shared value. Maintain our social licence to operate

Define comprehensive baseline environmental standards for the Julimar Project

Make another major ‘green

metal’ discovery within the portfolio

Define a maiden JORC Mineral Resource Estimate for the Gonneville PGE-Ni-Cu-Co-Au Deposit

Assess and define the processing flowsheet alternatives for the various mineralisation styles at Gonneville

Complete proposed gold demerger to deliver a standalone, ASX-listed gold company targeting tier-1 discoveries in Victoria and Western Australia

Continue to build our team with a focus on internal resourcing. Nurture our culture of ownership, sustainable success and ideation

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Build trust-based and inclusive relationships with our external stakeholders. Increase engagement and investment with the communities in which we operate to achieve long term positive impacts

Unlock new targets and insights within the new West Yilgarn Ni-Cu-PGE Province

Secure access to the Julimar State Forest for initial low-impact drilling

Deliver a Scoping Study for the initial stage of development at Gonneville, advancing the project to maximise shareholder value and optionality

Evaluate and acquire synergistic assets to complement our portfolio

Preserve our generative

exploration capability whilst continuing to build a core project study team

12 Annual Report 2021

Annual Report 2021

Hawkstone Ni-Cu-Co Project (85-100%) Warrego North Au-Cu Project (25-70%)

Nulla South & Gibb Rock Au Projects (20-100%)

Operating and Financial Review

Chalice’s flagship asset is the Julimar Ni-CuPGE Project in Western Australia - host to our transformational discovery in early 2020, which has also defined the new West Yilgarn Ni-CuPGE Province.

a strategic review of Chalice’s portfolio which concluded that a demerger of the Company’s gold projects (including the district-scale, 100%-owned Pyramid Hill Gold Project in Victoria) is the optimal structure to maximise value for our shareholders.

Chalice is rapidly advancing the Julimar Project towards a maiden resource and to scoping study stage, whilst also exploring several projects for new major ‘green metal’ discoveries within the new West Yilgarn Ni-Cu-PGE Province (South West, Barrabarra and Narryer) and elsewhere in WA (Hawkstone, Auralia and Holt Rock).

A demerger would allow Chalice to focus on its Julimar Ni-Cu-PGE Project and the new West Yilgarn Province in Western Australia. The Chalice portfolio also includes a strategic investment in Caspin Resources Limited (ASX; CPN) as well as several early-stage royalties and non-operated joint ventures.

Chalice intends to pursue a demerger of its Australian gold assets, subject to shareholder and regulatory approvals. The decision follows

Narryer Ni-Cu-PGE Project (100%) Barrabarra Ni-Cu-PGE West Yilgarn Project (100%) Ni-Cu-PGE Province Jullimar Ni-Cu-PGE Project (100%)

Barrabarra Ni-Cu-PGE Mt Jackson Au Project (100%) Project (100%) Auralla Ni-Cu-PGE Jullimar Ni-Cu-PGE Project (100%) Project (100%) Viking Au Project (70%) South West Ni-Cu-PGE Holt Rock Ni-Cu-PGE Project (70-100%) Project (100%)

Key Project

Generative Projects (targeting and reconnaissance) Proposed gold demerger

Royalties

Nyanzaga, Tanzania – A$5 million payment receivable upon commercial production from Orecorp Limited (ASX: ORR)

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East Cadillac, Quebec – 1.0% NSR partial

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Kinebik, Quebec – 1.0% NSR

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Ardeen, Ontario – 0.1% - 1% NSR partial

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Cameron, Ontario – 1.0% NSR partial

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Jericho, WA – 1.0% NSR capped

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Bunjarra Well, WA – 1.0% NSR capped

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Key Investments

~7M shares (~9.3%) in Caspin Resources (ASX: CPN)

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Pyramid Hill Gold Project (100%)

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Location	Avon Region, Western Australia
Development Stage	Advanced Exploration - maiden discovery in March 2020
Acquired	Staked in 2018
Ownership	100%
Project Area	>2,000km²

Overview

Chalice made a major greenfield Platinum Group Element (PGE)-Nickel-Copper-CobaltGold discovery at the Julimar Project, ~70km north-east of Perth in March 2020. The maiden discovery at the Project was named Gonneville and defined the new West Yilgarn Ni-Cu-PGE Province in WA, interpreted to extend over a 1,200km x 100km area along the western margin of the Yilgarn Craton.

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As part of Chalice’s global search for high-potential nickel sulphide exploration opportunities, Chalice interpreted the possible presence of a layered mafic-ultramafic intrusive complex (the ‘Julimar Complex’) based on high-resolution airborne magnetics in 2018. The Gonneville discovery was made at the very southern end of the Julimar Complex, which is interpreted to extend over ~26km of strike length and is still largely untested by drilling. The Project has direct access to major highway, rail, power and port infrastructure in one of the world’s most attractive mining jurisdictions – Western Australia (Figure 1).

Figure 1. Julimar Complex, Gonneville discovery, Project tenure and nearby infrastructure.

Exploration and Evaluation

A 160,000m resource definition drill program continued at Gonneville on private farmland during 2021, to test the extent of the mineralised system and to define a maiden Mineral Resource Estimate (MRE) which is anticipated to be released in Q4 CY2021 (Figure 2).

Drilling to date at Gonneville has established that the >1.8km x 0.9km intrusive ‘sill’ hosts at least 12 shallow zones of high-grade (>1g/t Pd cut-off grade) PGE-Ni-Cu-Co+/-Au sulphide mineralisation in fresh rock (G1-G12), a substantial PGE-rich oxide zone, as well as widespread zones of PGE-dominant mineralisation associated with disseminated sulphides (Figure 3). The Gonneville Intrusion remains open to the north and has been confirmed to extend beyond a depth of ~800m (open at depth).

Drilling is being completed on a nominal 40m x 40m spaced grid, in order to maximise classification of resources in the Indicated category to a depth of ~220m below surface, and to define a combination of Indicated and Inferred category resources below this depth.

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Figure 2. Gonneville Intrusion Plan View – key recent drill results and high-grade G1-G12 zone outlines over interpreted geology at 160m RL (~80m below surface).

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Figure 3. Gonneville Intrusion 3D View (looking North-West) – key recent drill results and high-grade zones.

16 Annual Report 2021

Annual Report 2021 17

Mining, processing, geotechnical, infrastructure, marketing and environmental studies have commenced and the Company anticipates that a scoping study for the initial stages of project development at Gonneville will be completed in H1 CY2022.

Mineralogy and lithogeochemical analysis (Gonneville)

Detailed analysis continued during the year, which has indicated the presence of several distinct geological domains within the Gonneville Intrusion.

Resource definition drilling (Gonneville)

The recognition of these domains has significantly improved the understanding of the controls on mineralisation, supported the geological interpretation of north-east striking and west-north-west dipping high-grade zones and provided insights into the overall genesis of the Gonneville Intrusion.

319 RC holes for 76,000m were completed during the year. Step-out drilling continued on an initial 80m x 40m spaced grid and infill drilling continued on a nominal 40m x 40m spacing over the high-grade G1-G12 zones.

138 diamond holes (including diamond tails on RC pre-collars) for 39,000m were also completed. Step-out drilling continued testing the extent of the high-grade zones along strike and down-dip and infill drilling commenced on selected locations on a nominal 40m x 40m spacing.

Six drill rigs are currently on site completing the 160,000m resource definition drill program.

Table 1: Interpreted maximum dimensions and status of high-grade zones at Gonneville.

Zone	Current	Current	Status


G1	450m	280m	Merges with G2 at depth

G2	800m	500m	Open down-plunge to the north

G3	465m	280m	Open to the north
G4	1,250m	650m	Open to the north and down-dip
G5	650m	200m	Merges with G2 at the northern end

G6	875m	400m	Open down plunge to the north
G7	275m	350m	Closed of


G8	1,000m	250m	Open to the north and down-dip

G9	1,000m	200m	Open along strike and down-dip
G10	350m	300m	Closed of
G11	900m	250m	Open to the north and down-dip
G12	650m	450m	Open along strike and down-dip

Table 2: Highlight drill intersections during the year included:

	Drill intersection (hole no.)	Zone
	50m @ 1.8g/t Pd, 0.5g/t Pt, 0.9g/t Au, 0.2% Ni, 1.1% Cu, 0.02% Co from 112m (JRC089) 34.5m @ 2.8g/t Pd, 0.7g/t Pt, 0.4g/t Au, 0.2% Ni, 1.9% Cu, 0.02% Co from 139.8m (JD019)	G4 G4
	39m @ 3.8g/t Pd, 0.6g/t Pt, <0.01g/t Au, 0.3% Ni, 0.2% Cu, 0.02% Co from 290m (JD023)	G2
	25.7m @ 4.1g/t Pd, 2.5g/t Pt, 0.7g/t Au, 0.2% Ni, 0.8% Cu, 0.02% Co from 418.1m (JD006)	G4
	14.4m @ 7.7g/t Pd, 1.7g/t Pt, 0.1g/t Au, 1.2% Ni, 0.6% Cu, 0.07% Co from 36.7m (JD016)	G1
	13.4m @ 6.3g/t Pd, 1.1g/t Pt, <0.01g/t Au, 1.3% Ni, 0.7% Cu, 0.07% Co from 405.7m (JD032)	G2
	26.3m @ 3.8g/t Pd, 0.9g/t Pt, <0.01g/t Au, 0.5% Ni, 0.2% Cu, 0.04% Co from 80.7m (JD010)	G2
	33m @ 2g/t Pd, 0.4g/t Pt, 0.5g/t Au, 0.3% Ni, 0.8% Cu, 0.02% Co from 236m (JRC060)	G6
	22.7m @ 4.4g/t Pd, 0.7g/t Pt, <0.01g/t Au, 0.5% Ni, 0.3% Cu, 0.04% Co from 83m (JD014) 11m @ 13g/t Pd, 1.3g/t Pt, 0.3g/t Au, 0.1% Ni, 0.1% Cu, 0.01% Co from 78m (JRC121)	G2 G11

Metallurgical testwork (Gonneville)

Leaching testwork also continued on oxide mineralisation samples, with initial results indicating 76% Pd and 95% Au extraction into solution. Further work is underway to determine effect on PGE recovery over a range of grind sizes and temperatures, as well as the optimal techniques to recover metals from solution.

Several phases of testwork and analysis were completed during the year, which included locked cycle sequential flotation testwork on composite metallurgical samples from various mineralised zones within the Gonneville Intrusion (G1-G6 zones).

Results have provided initial encouragement that the sulphide-hosted mineralisation at Gonneville will be amendable to conventional flotation under standard conditions.

Metallurgical testwork to determine comminution material properties is ongoing.

Table 3: Locked cycle testwork results on a G1-G2 zone composite (head grade 3.7g/t Pd, 0.7g/t Pt, 0.15g/t Au, 0.63% Ni, 0.36% Cu, 0.04% Co), cycle no. 5.

Copper-PGE-Au Concentrate Cu Recovery Pd grade Pd recovery Pt grade Pt grade Au grade Au recovery Cu grade (%) (%) (g/t) (%) (g/t) (g/t) (g/t) (%) 24.7 80.9 173 60.2 22.1 37.6 1.98 90.8 Nickel-PGE concentrate Ni Pd grade Pd recovery Pt grade Pt recovery Co grade Co recovery Ni (%) (%) (g/t) (%) (g/t) (%) (%) (%) 12.2 70.7 24.1 26.1 6.9 36.3 1.0 73.0 TOTAL PGE Recovery Pd: 86.3% Pt: 73.9%

18 Annual Report 2021

Annual Report 2021 19

Property acquisitions

Eight private farming properties were acquired at Gonneville, covering a total area of ~21km[2] . Properties have been acquired to secure freehold title over all known current mineralisation at Gonneville, as well as to secure surrounding land in the vicinity of the deposit for potential siting of mining infrastructure in future years.

Regional exploration and access

Reconnaissance soil sampling, ground EM surveys and ground gravity surveys were completed along the ~26km long Julimar Complex, which defined numerous targets for drill testing (Figure 4, Figure 5).

The Hartog Target is a ~6.5km long airborne EM anomaly immediately north of Gonneville, with ~30 low to moderate conductance ground EM targets and several co-incident nickel-copper soil anomalies – making it a very exciting and compelling drill target. The results at Hartog are considered comparable to those at Gonneville pre-discovery, highlighting the prospectivity of the target.

These activities were governed by the first Conservation Management Plan (CMP) for the Julimar State Forest, which was approved in late 2020.

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Figure 4. Julimar Complex Plan View – Bouguer residual gravity image and >700ppm Cr soil contour over regional bouguer gravity.

Flora and fauna baseline surveys were completed over a ~2,000ha area in the southern part of the Julimar Complex, including over the Hartog and Baudin Targets. Survey results were consistent with the previous understanding of flora and fauna in the area, with no new species of significance or habitats identified.

A second (CMP) was submitted to the Department of Biodiversity, Conservation and Attractions in Q2 2021, which covers initial lowimpact drilling activities at the Hartog and Baudin Targets within the Julimar State Forest. Access approval for drilling activities remains pending.

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Figure 6. Track mounted rig in operation at Gonneville in February 2021.

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Figure 5. Julimar Complex Plan View – palladium, nickel and copper soil geochemistry results over Airborne EM (flown in September 2020).

Forward Plan

Chalice’s Julimar Project strategy is to concurrently advance studies for an initial development at Gonneville and to define the full extent of mineralisation along the ~26km long Julimar Complex.

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Figure 7. Julimar Project timeline CY2021.

Resource definition drilling (Gonneville)

Studies (Gonneville)

Several external and internal studies are underway which will assess development scenarios for the Gonneville deposit.

RC/diamond drilling is expected to continue until ~Q1 2022, subject to results. The Company anticipates that its maiden Mineral Resource Estimate will be released in Q4 CY2021.

Regional exploration and access

Several deep geological holes are planned in Q3 CY2021 to test the down-plunge extension of the high-grade zones towards the north-west.

Infill soil sampling and follow-up Moving Loop EM (MLEM) surveys are underway at the BaudinJansz-Drummond Targets within the Julimar State Forest and on private farmland.

Geotechnical, metallurgical, hydro-geological and infrastructure drilling (Gonneville)

Dieback, cultural heritage and confirmatory spring flora surveys are planned across the Hartog-Baudin Targets in the Julimar State Forest in September 2021.

AC/RC/diamond drilling to support studies for Gonneville will commence progressively following the resource definition drill program in ~Q1 2022.

Baseline flora and fauna surveys across the Baudin-Jansz-Drummond Targets in Julimar State Forest are planned to commence in Q4 2021.

Metallurgical testwork (Gonneville)

Results from phase 2 sequential flotation tests on high-grade sulphide composites are expected to be completed in Q4 CY2021, and further metallurgical testwork will continue in 2022. Bulk flotation tests on disseminated sulphide composites and testwork to determine comminution properties of several composites is ongoing. Initial waste rock characterisation testwork is also underway.

First-pass low-impact drilling utilising small trackmounted diamond rigs is planned to commence as soon as access and permitting approvals have been received. A total of 72 drill sites are planned across the ~10km strike length, with the ability to drill multiple angled holes at each site.

No mechanised vegetation clearance is required to complete this first pass of drilling and this technique is already being utilised successfully in vegetated areas of private farmland at Gonneville.

1 Conservation Management Plan – a plan outlining Chalice’s proposed exploration approach within the Julimar State Forest.
2 Access to the Julimar State Forest for drilling activities has not yet been granted. The Company continues to engage with relevant government entities to progress its CMP approval and the above timeline is an estimate only.

20 Annual Report 2021

Annual Report 2021 21

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Location	Bendigo Region, Victoria, Australia


Development Stage	Exploration


Acquired	Staked in 2017
Ownership	100% - proposed demerger asset
Project Area	~5,700km²

Overview

yet is considered highly prospective for highgrade orogenic gold deposits. Chalice’s central Muckleford area extends to the north-west of the high-grade historical >22Moz Bendigo Goldfield. The Mt William area extends to the north-east of one of the world’s highest-grade producing gold mines, the >9Moz Fosterville Gold Mine owned by Kirkland Lake Gold (NYSE / TSX: KL | ASX: KLA).

The 100%-owned Pyramid Hill Gold Project was staked in late 2017 and covers a district-scale area in the North-Central region of Victoria. The project covers three key districts: Muckelford, Mt William and Percydale which collectively cover parts of the Stawell, Bendigo and Melbourne geological zones. (Figure 8).

Due to the presence of transported Murray Basin cover, the project is sparsely explored and

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Figure 8. Pyramid Hill Gold Project tenure, regional structures, gold deposits, occurrences and Chalice prospects.

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Figure 9: Karri Prospect Plan View – key diamond and AC drilling results over 1VD gravity.

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Figure 10: Ironbark Prospect Plan View – key drilling results over magnetics.

Exploration

Chalice has continued systematic exploration drilling activities at the Pyramid Hill Gold Project throughout the 2020-2021 field season. The latest round of drilling has delivered exciting results, confirming the belt-scale potential of the project within the prolific Bendigo Zone.

A total of 21 diamond holes for 7,300m and 1,120 AC holes for 117,000m have been completed at the project since its initial staking in late 2017.

A second phase of diamond drilling was completed during the year at the Karri Prospect (11 holes for 3,840m), which intersected several high-grade gold zones in highly prospective, tightly folded, Castlemaine Group stratigraphy, under 50-70m of Murray Basin cover (Figure 9).

A second phase of AC drilling (329 holes for 34,705m) was also completed at the Ironbark Prospect during the year and an initial phase of reconnaissance AC drilling was completed on new target areas at the southern end of the Muckleford area (NW of Bendigo/Fosterville) and at the western end of the Mt William area (NE of Fosterville) (Figure 10).

Several encouraging shallow primary gold zones were intersected at Ironbark and several new prospects have been defined in the Muckleford area.

Forward Plan

Planning is underway in preparation for the next round of exploration drilling at Pyramid Hill, which is expected to commence in Q4 CY2021. Future diamond and/or AC drilling programs are planned at the Karri, Ironbark, Banksia and Wandoo prospects. Initial reconnaissance AC drilling is also planned over new targets on recently granted tenure.

Chalice intends to pursue a demerger and IPO of Pyramid Hill and its other gold projects in Q4 2021, subject to finalising the transaction structure and obtaining all necessary shareholder and regulatory approvals.

22 Annual Report 2021

Annual Report 2021 23

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----- Start of picture text -----

Narryer
Burtville
Youanmi
Terrane
Terrane
West Yilgarn Province
Barrabarra
YILGARN CRATON
Kurnalpi
Terrane
Kalgoorlie
Julimar Terrane
PERTH
South West
Terrane
South West
Figure 11. Chalice’s tenure in the West Yilgarn Province,
Western Australia.
South West Nickel-Copper-PGE Project,
WA (70-100%)
During the year, Chalice executed an earn-in
agreement with Venture Minerals (“Venture”,
ASX: VMS), whereby Chalice may earn up to
a 70% interest in the South-West Nickel-Copper
Project by spending $3.7 million on exploration
over 4 years (with a minimum commitment of
$300,000).
The South West Nickel Project includes a ‘Julimar
look-alike’ Ni-Cu-PGE target, a ~20km long
interpreted mafic-ultramafic complex with a
strong magnetic signature and massive sulphide
occurrence (the Thor Target).
erTerrane
ry
N
ar
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Chalice holds an unrivalled >8,000km[2] land position in the newly defined West Yilgarn NiCu-PGE Province, Australia’s most exciting new mineral region.

Chalice holds several generative exploration projects which are typically conceptual in nature where low-cost prospect generation can contribute to a diversified pipeline of future projects in the Chalice portfolio (Figure 11).

This generative exploration model is a core competency of the Company and a key part of its organic growth strategy. In addition to its operated generative exploration projects, the Company holds several non-operated joint venture, strategic equity investment and earlystage royalty interests.

Activities across key generative exploration projects during the year are summarised below.

A MLEM survey commenced over selected airborne EM targets associated with strong and discrete magnetic anomalies interpreted as potential ultramafic-mafic intrusions. Work to date has identified up to six low to moderate conductance anomalies (100-1500S).

Currently defined EM anomalies are planned to be followed up with infill MLEM and soil geochemistry in Q3 CY2021 to define potential drill-ready targets.

Barrabarra Nickel-Copper-PGE Project, WA (100%)

The Barrabarrra Nickel-Copper-PGE Project includes a ~15km long interpreted layered mafic-ultramafic complex, with a similar geophysical signature to the Julimar Complex and anomalous Ni-Cu in soils.

A MLEM program was undertaken over the Recherche target during the year, which defined three low conductance (100-150S) anomalies, two of which are broadly coincident with a significant ~4km x ~0.6km Cu-Cr +/- Ni-Pd soil anomaly.

Planning is underway for first-pass AC drill testing of the soil geochemical anomaly and EM conductors, which is expected to commence in Q4 CY2021 due to access constraints.

Hawkstone Nickel-Copper-Cobalt Project, WA (100%)

The Hawkstone Nickel-Copper-Cobalt Project covers an area of ~1,600km[2] in the west Kimberley region of Western Australia. The Project covers several known areas of Ruins and Hart Dolerite, both of which are considered highly prospective for magmatic nickel sulphides as well as other related metals.

A maiden RC drill program of 11 holes for 2,043m was completed during the year to test priority ground MLEM targets in the Waterford and King Sound areas.

Weakly disseminated sulphides were intersected in Ruins Dolerite containing anomalous nickel and copper, which is viewed as encouraging for the broader Ni-Cu sulphide prospectivity of these intrusions.

Due to surface access constraints, the two highest priority conductors at the Ephesus Target were not able to be drilled. Diamond drilling at this target commenced in September 2021.

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Figure 12: RC Drilling at the Hawkstone Project, WA.

Viking Gold Project, WA (70-100%)

The Viking Gold Project, located east-south-east of Norseman, includes several historical highgrade gold intersections in oxide, that have never been tested at depth in fresh rock.

A Conservation Management Plan (CMP) for drilling activities has been approved and a ~3,000m RC drill program is anticipated to commence in Q4 CY2021 subject to permit approvals. The Viking Project is planned to form part of the proposed gold demerger in Q4 CY2021.

Strategic Investments

Caspin Resources Limited (ASX: CPN)

Chalice acquired a strategic interest in Caspin Resources in December 2020. Caspin holds a 400km[2] exploration licence area located ~50km north of Julimar, where several earlystage drilling results have indicated PGE-Ni-CuCo sulphide mineralisation within ultramafic to mafic intrusions, which appear to have similar parentage to the Gonneville discovery.

At the date of this report, the Company holds a 9.3% interest in Caspin which is valued at approximately $10M at 30 June 2021.

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Annual Report 2021 25

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Financial Performance

The Group reported a net loss after income tax of $ 43.2 million predominately due to the conservative approach of exploration and evaluation expenditures being expensed against profit and loss as incurred.

The loss for the year ended 30 June 2021 was greater than the net loss of $2.7 million for the year ended 30 June 2020 largely due to an expansion in exploration and evaluation activities at the Julimar Project resulting in expenditure increasing to $37.3 million from $9.6 million in 2020 (Table 4).

2021 $’000 2020 $’000	2021 $’000 2020 $’000
Julimar, Western Australia 31,443	3,051
Pyramid Hill, Victoria 3,445	4,280
Hawkstone, Western Australia 843	571
Acquisition of exploration project – fair value adjustment -	1,086
Other generative projects 1,593 37,324	634 9,622

Table 4: Exploration and Evaluation Expenditure by Project

Corporate and administration costs increased from $3.2 million to $6.8 million primarily due to an additional $2.0 million in payroll taxes incurred from the vesting in full of 5,930,787 performance rights in August 2021. Other increases in corporate and administration costs relate to the rapid growth in scale of the Company’s activities over the period.

Share based payments increased from $0.5 million to $3 million primarily due the issue of 700,000 share options to directors during the year. The fair value of the unlisted options on grant date was approximately $1.9 million (or $2.723 per option) using a Black-Scholes option valuation methodology. The fair value of the options on grant date was significantly higher than the fair value of $0.748 per option determined at the date of directors’ resolution as the Company’s share price increased significantly between those two dates resulting in a higher expense.

The Group incurred nil profit from discontinued operations for the year ended 30 June 2021, compared to a $8.7 million gain as a result of

the completion of the disposal of the subsidiary, Chalice Gold Mines (Quebec) Inc (“CGMQ”) in the prior financial year.

Financial Position

At 30 June 2021, the Company remains well funded to execute its corporate strategy outlined on page 12. The Group had net assets of $162.7 million (2020: $55.5 million) and an excess of current assets over current liabilities of $105.4 million (2020: $52.9 million).

Current assets increased by 116% to $118.6 million (2020: $54.9 million) primarily due to an increase in cash on hand following a placement and share purchase plan to raise $115 million during the year (before costs). Refer to the statement of cash flows discussed below for further details regarding the movements of cash equivalents at 30 June 2021.

Non-current assets increased from $0.6 million to $44.1 million due to the acquisition of eight private properties at the Julimar Project.

Current liabilities at 30 June 2021 increased by 560% from $2 million in 2020 to $13.2 million at 30 June 2021. The increase in liabilities is primarily due to the consideration payable for one private property at the Julimar Project, which had not settled at 30 June 2021 for $4.7 million, and the provision for payroll tax payable of $2 million.

Statement of Cash Flows

Cash and cash equivalents at 30 June 2021 were $99.9 million (2020: $45.7 million). The increase in cash of $54.2 million is predominately due to a share placement, which was undertaken in December 2021 to institutional and sophisticated investors raising $100 million (before costs) and a Share Purchase Plan in January 2021 raising $15 million (before costs).

This was offset by the exploration and evaluation expenditures at the Julimar Project and the acquisition of the private properties for cash consideration of $20.7 million, with remaining non-cash consideration settled through the issue of fully paid ordinary shares to the value of $17.3 million.

26 Annual Report 2021

Annual Report 2021 27

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Minerals Resources and Ore Reserves, and is a Qualified Person under National Instrument 43-101 – ‘Standards of Disclosure for Mineral Projects’. The Qualified Person has verified the data disclosed in the Annual Report, including sampling, analytical and test data underlying the information contained in this release. Mr Kendall consents to the inclusion in the Annual Report of the matters based on his information in the form and context in which it appears.

The information in this Annual Report that relates to Exploration Results for the Pyramid Hill Project and the Hawkstone Project is based on and fairly represents information and supporting documentation prepared by Dr. Kevin Frost BSc (Hons), PhD, a Competent Person, who is a Member of the Australian Institute of Geoscientists. Dr. Frost is a full-time employee of the Company, holds securities in the Company and has sufficient experience that is relevant to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves, and is a Qualified Person under National Instrument 43-101 – ‘Standards of Disclosure for Mineral Projects’. The Qualified Person has verified the data disclosed in the Annual Report, including sampling, analytical and test data underlying the information contained in this release. Dr. Frost consents to the inclusion in the Annual Report of the matters based on his information in the form and context in which it appears.

The Information in this Annual Report that relates to Metallurgical Test Work Results for the Julimar Nickel-Copper-PGE Project is extracted from the following ASX announcements:

‘More positive results from ongoing metallurgical test work at Julimar”, 16 February 2021

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The above announcements are available to view on the Company’s website at www. chalicemining.com. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions in the market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s and Qualifying Persons findings are presented have not been materially modified from the original market announcements.

The information in this Annual Report that relates to Exploration Results in relation to the Julimar Nickel-Copper-PGE Project is based on and fairly represents information and supporting documentation compiled by Mr. Bruce Kendall BSc (Hons), a Competent Person, who is a Member of the Australian Institute of Geoscientists. Mr. Kendall is a full-time employee of the Company, holds securities in the Company and has sufficient experience that is relevant to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results,

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This Annual Report may contain forward-looking information, including forward looking information within the meaning of Canadian securities legislation and forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 (collectively, forward-looking statements). These forward-looking statements are made as of the date of this report and Chalice Mining Limited (the Company) does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements relate to future events or future performance and reflect Company management’s expectations or beliefs regarding future events and include, but are not limited to, the Company’s strategy, the completion of the intended demerger, the estimated timing of drilling in the Julimar State Forest, the fair value of investments ultimately realised, the estimation of mineral reserves and mineral resources, the realisation of mineral resource estimates, estimation of metallurgical recoveries, the forecast timing of the estimation of mineral resources, the likelihood of exploration success at the Company’s projects, the prospectivity of the Company’s exploration projects, the existence of additional EM anomalies within the Julimar Project, the forecast timing of the completion of the Gonneville Scoping Study, the timing of future exploration activities on the Company’s exploration projects, planned expenditures and budgets and the execution thereof, the timing and availability of drill results, potential sites for additional drilling, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage.

In certain cases, forward-looking statements can be identified by the use of words such as, “aim”, “anticipates”, “complete”, “considered”, “define”, “deliver”, “emerging”, “expected”, “intends”, “highly”, “interpreted”, “may”, “objectives”, “plan” or “planned”, “potential”, “proposed”, “will” or variations of such words and phrases or statements that certain actions, events or results may, could, would, might or will be taken, occur or be achieved or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forwardlooking statements.

Such factors may include, among others, risks related to actual results of current or planned exploration activities; assay results of soil samples; whether

geophysical and geochemical anomalies are related to economic mineralisation or some other feature; obtaining appropriate access to undertake additional ground disturbing exploration work on EM anomalies located in the Julimar State Forrest; the results from testing EM anomalies; results of planned metallurgical test work Including results from other zones not tested yet, scaling up to commercial operations; changes in project parameters as plans continue to be refined; changes in exploration programs and budgets based upon the results of exploration, future prices of mineral resources; grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; movements in the share price of investments and the timing and proceeds realised on future disposals of investments, the impact of the COVID 19 epidemic, the receipt of appropriate regulatory approvals associated with the proposed demerger, finalisation of legal, financial and taxation advice associated with the demerger as well as those factors detailed from time to time in the Company’s interim and annual financial statements, all of which are filed and available for review on SEDAR at sedar.com, ASX at asx.com.au and OTC Markets at otcmarkets.com.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Designated Foreign Issuer Status

The Company was previously listed on the TSX and upon listing, the Company became a reporting issuer in the province of Ontario. However, in accordance with National Instrument 71-102 – Continuous Disclosure and Other Exemptions Relating to Foreign Issuers (“NI 71-102”), the Company will be a “designated foreign issuer” (as defined by NI 71-102) for the balance of the current financial year and until such time as it ceases to satisfy the requirements to be a designated foreign issuer. As such, the Company will not be subject to the same ongoing reporting requirements as most other reporting issuers in Canada. Generally, the Company will comply with Canadian ongoing reporting requirements if it complies with the regulatory requirements of the ASX, which is a “foreign regulatory authority” (as defined by NI 71-102) and files any documents required to be filed with or furnished to the ASX on SEDAR.

28 Annual Report 2021

Annual Report 2021 29

Sustainability Report

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A Message from the Chair of Risk and Sustainability Committee

I am pleased to present Chalice’s first Sustainability Report, a milestone which reflects not only the significant growth of Chalice as a Company but also the progress of our sustainability journey.

measure performance on issues of sustainability and recording achievements against those benchmarks.

Since its formation, the Committee has been focused on developing Chalice’s ESG strategy and roadmap, which identified that four pillars underpin delivery of our strategy and are essential to achieving our vision. In essence, we seek to minimise our environmental footprint through strong environmental stewardship, provide a safe and healthy workplace for our employees and contractors, create value for our stakeholders, play our part in managing climate change risk, and preserve cultural heritage.

Our vision is to deliver sustained shared value for both stakeholders and shareholders through responsible sustainability practices. While this vision is simplistic in its nature, it is underpinned by a strong understanding that sustainability must be integrated into everything we do.

The Report outlines how we aim to achieve this goal, and reflects our belief that a strong focus on Environmental, Social and Governance (ESG) matters are integral to how we operate and our overall business strategy.

This maiden report is recognition of the initial steps and achievements we have made, whilst also setting the tone for our future. By further embedding sustainability into our decision making we will continue to strengthen our performance and truly deliver value to all our stakeholders.

The strategic importance of sustainability has been recognised through a number of new initiatives established over the course of the year - perhaps the most poignant being the establishment of the Risk and Sustainability Committee. Central to this Committee’s role is the provision of oversight and guidance across the Company on sound environmental, social and governance principles and practices and risk management. This includes establishment of enhanced standards, goals, and targets as well as setting the benchmarks Chalice uses to

Yours faithfully,

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Garret Dixon

Chair of Risk and Sustainability Committee

Our Vision and Sustainability Pillars

Deliver sustained shared value, for both stakeholders and shareholders, through responsible sustainability practices

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Healthy and Safe Workforce Strong Environmental Stewardship
Manage Climate Change Risk Create Value for Stakeholders
Preserving Cultural Heritage
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Annual Report 2021 31

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In targeting our impact on these SDGs, Chalice aims to deliver sustained, shared valued for both our shareholders and stakeholders through responsible sustainability practices. To achieve this, we have put in place a number of governance measures and systems across our organisation.

The United Nations Sustainable Development Goals (SDGs) promote action in areas that are critical to ending poverty, protecting the environment and improving the prosperity of all people through economic, social and technological progress. The goals are relevant for all countries and all sectors of society, including business.

As we grow as a Company, we will expand our commitment in these areas with appropriate performance metrics which will be measured to ensure they form an integral part of our approach and overall business strategy.

Chalice recognises the importance of playing our part in helping achieve the SDGs by their target date of 2030. Of the 17 SDGs, we have identified nine immediate areas of focus (pictured above) and have formulated a strategy aimed at achieving best practice in these areas.

Chalice’s Sustainability Report focuses on the following environmental, social and governance topics that were identified as being critical for the current stage of the Company’s projects. These are the issues that we believe substantially impact our business performance and the decisions we make.

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Health and Safety
Climate Change
Community Benefit
Cultural Heritage
Biodiversity Conservation
Water Stewardship
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Materiality is reviewed on an annual basis by the Board Risk and Sustainability Committee. In FY2021, Chalice applied a materiality process underpinned by the GRI Standards to inform the scope and level of disclosures identified in this Report.

Material topics were selected by considering feedback from stakeholders and subject matter experts as well as through examining industry benchmarks. Topics were then evaluated by the full Chalice Board to ensure they were aligned to business and stakeholder priorities.

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32 Annual Report 2021
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Annual Report 2021 33

Corporate Governance

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The Chalice Board is committed to best practice corporate governance systems and policies. Chalice has developed a Corporate Governance Manual which forms the basis of a comprehensive system of control and accountability.

To the extent they are considered to be appropriate to the Company, the Board has adopted the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 4th edition (“Principles and Recommendations”). The 2021 Corporate Governance Statement and Appendix 4G is available on our website along with information on our full suite of corporate governance practices - chalicemining.com/corporate-governance.

The Chalice Code of Conduct commits employees, officers and directors to conducting themselves with integrity, honesty and fairness in all business practices and to observing the rule and spirit of the legal and regulatory environment in which the Company operates. Key Chalice advisers, consultants and contractors are made aware of the expectations set out in the Code.

Through the Risk and Sustainability Committee, the Board oversees the sustainability strategy, measures performance and considers sustainability risks and opportunities. Oversight

and implementation of the sustainability strategy is the responsibility of the Managing Director and CEO, who in turn delegates specific implementation responsibilities to the General Manager – Environment and Community, as well as other Key Management Personnel.

Risk Management

Risk management at Chalice is overseen by the Board of Directors. The Board, Key Management Personnel, and the Risk and Sustainability Committee review the risk profile of the business and implement and monitor controls to effectively manage risks.

Chalice has a strong focus on the identification of material risks and the implementation and monitoring of the controls to mitigate those risks. Material risks (Critical Risks) are considered those with major or extreme consequence (irrespective of probability) as well as those with major or extreme residual risk rating. Risk ratings are determined in accordance with ISO 31000:2018 recommended risk management practices.

Further information can be found in the Risk and Sustainability Committee Charter and Risk Management Policy available at chalicemining.com/corporate-governance.

Whilst Chalice is in the exploration and evaluation phase, the risk management process focuses on Critical Risks which have the potential to materially impact on the ability to execute Chalice’s long-term strategy. These Critical Risks are comprised of categories such as Economic, Strategic, Operational, Environmental, Legal and Governance.

As part of the Chalice continuous improvement cycle for Risk Management, all material risks are reviewed by Chalice KMP and the Risk and Sustainability Committee.

The current critical risks are summarised below:

Inability to operate on our key projects

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A major health and safety incident

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Adverse project outcomes due to unfavourable technical results or misallocation of capital expenditure

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Major data loss or IT security breach

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Chalice undertakes reviews of mitigations and controls to ensure their effectiveness.

In addition to the Critical Risks detailed above, the Company has a range of controls in place to mitigate risks related to equity, commodity or market fluctuations, climate change, breaches of the Code of Conduct, the COVID-19

pandemic, health and wellbeing of personnel, environmental regulation, heritage regulation, supply chain disruption and internal financial controls. Key financial risks and controls are detailed in the Notes to the Financial Statements section of this report.

In accordance with ISO 31000:2018 for Risk Management, the focus for Chalice in FY2022 is to further develop processes to manage Critical Risks as part of our overarching HSEC Management System.

This will assist Chalice in ensuring accountability and suitable control effectiveness activities are in line with our risk appetite. The intent of this is to mature our risk management approach as the Company develops.

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Chalice Corporate Governance System
Stakeholders
Government
Community Shareholders Traditional Owners Industry
& Regulators
Board of Directors
Board Committees
Risk & Sustainability Audit Nomination Remuneration Technical
Committee Committee Committee Committee Committee
Corporate Culture Risk Management
Policies &
and Values & Internal
Procedures
‘The Chalice Way’ Control System
Managing Director and CEO
Employees
Contractors and
Consultants
36 Annual Report 2021 Annual Report 2021 37
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Healthy and Safe Workplace

Chalice recognises that employee and contractor health and safety lies at the core of our business. Maintaining high health and safety performance requires the right mindsets and behaviours, which together with our systems contribute to our strong safety culture. Our primary objectives are to maintain a culture of integrity and ownership, to provide a safe working environment at all Chalice locations and to maintain the health and wellbeing of our employees and contractors.

Chalice is committed to ensuring occupational health and safety standards are implemented and owned by the workforce. Our Health, Safety, Environment and Community (HSEC) Management System governs our day-to-day activities, ensuring appropriate standards are adopted, hazards are identified, controlled, managed and monitored appropriately.

The Chalice HSEC Management System and processes are continually reviewed to ensure we have the ability to adapt to a growing exploration and project development portfolio.

COVID-19 Pandemic

We are pleased to report that the COVID-19 pandemic has had minimal impact on Chalice’s workforce and operations to date. There were zero cases of infection in Chalice’s employees and contractors through the year. Travel and social restrictions imposed to limit the spread of the virus also had minimal impact on Chalice’s operational schedule.

The Company remains vigilant and appropriate protocols have been put in place to minimise the risk to our employees and contractors across our various operational locations in Australia.

Chalice actively monitors and acts on the advice issued by state health authorities, including implementing travel restrictions, occupational hygiene and social distancing measures as required.

Chalice encourages its employees and contractors to get vaccinated as soon as possible, to protect themselves and the wider community and prevent transmission of the virus.

Safety Performance

In 2021, there were no work-related fatalities or lost-time injuries at any of Chalice’s operations. This is a testament to the safety culture and systems in place.

Whilst there were no significant safety incidents during the year, there were two high potential near misses (incidents which could feasibly have resulted in major or extreme consequence outcomes). The two incidents were investigated by both contractor and Chalice personnel and all recommendations and corrective controls identified have been implemented to avoid recurrence.

The investigation of near misses and implementation of corrective actions reflects Chalice’s proactive, continuous improvement approach to safety.

FY2021

	Fatalities	0
	Lost-time injuries	0
	Lost Time Injury Frequency Rate (LTIFR)	0.0

	High-potential near misses	2

Occupational Health and Hygiene

Chalice has implemented a number of occupational health and hygiene management programs during the year as the scale of our activities has grown.

This has included appropriate protocols for managing the health risks associated with the COVID-19 pandemic, ergonomic assessments and training in safe manual work and management systems for fibrous material.

“Management of health and safety is fundamental, it is simply not acceptable for employees to be working in unsafe or unhealthy environments.” Garret Dixon, Chair Risk and Sustainabilty Committee

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Chalice is aware of the significant fire risk in the areas surrounding our operations during the summer months, particularly at Julimar and Pyramid Hill. Chalice is committed to ensuring that Total Fire Bans and Vehicle Movement Bans are strictly adhered to at all times for the safety of our workforce and local communities. We monitor and comply with all notices issued by Fire Rescue Victoria and Western Australia’s Department of Fire and Emergency Services (DFES). As part of our commitment to ongoing team training and community support, all field staff and contractors underwent fire training in 2020.

The Wooroloo bushfires in the Perth hills area in early 2021, which impacted our local community at Julimar who lost property and livestock, are a timely reminder of the devastation caused by bushfires. Whilst our Julimar Project site was outside of the warning areas, the Chalice operations team was well prepared. The team monitored and compiled with all DFES updates.

Chalice has robust fire prevention and response procedures in place related to fire ban and movement ban restrictions ahead of the 2021/22 fire season. Chalice also maintains its properties to a very high standard, managing fuel load and fire breaks to ensure bushfire risks are mitigated as much as reasonably practicable. Similar initiatives have been undertaken at our Victoria-based operations.

Recognising the benefits of an ergonomic program, in FY2021 Chalice enlisted the help of PerformEx in running Ergonomic Back Care Training with our team members at the Julimar Project. This training provides awareness of the risks and hazards associated with manual work and teaches our workforce how to correctly lift and handle loads as well as safe body positioning to reduce stress on the joints and muscles.

In follow-up to this initial training Chalice has now implemented a Workwell Program. The program will deliver regular site-based exercise physiologist support for preventative programs including ergonomic assessments, health and musculoskeletal assessments and injury management support for any work related and non-work related injuries. It is envisaged this will significantly reduce musculoskeletal injury risk within our workforce.

Sustainability Pillar FY2021 Achievement FY2022 Performance Target

Healthy and Safe Zero fatalities Workforce Zero lost time injuries Implementation of Goal Fibrous Materials Monitoring and Zero lost-time Sampling Program at injuries or fatalities Julimar Project

Zero fatalities or permanent disabilities LTIFR of <3.0* Below Occupational Exposure Limit (OEL) for fibrous material

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*Industry benchmark

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“Local communities in proximity to our projects are important stakeholders for Chalice, as the long-term success of our projects rely on local ownership and support for mine development.”

Create Value for Stakeholders

Photo: Chalice was a proud supporter of the 2020 Christmas Street Festival.

Community Engagement

community newsletter. Chalice’s Community Liaison Manager and several of our field staff are based locally, which helps us to understand community issues and engage genuinely with local businesses, clubs and community groups.

Chalice recognises the importance of engaging early, actively and transparently in order to build respectful and collaborative relationships with the communities where we operate. This ensures we deliver a meaningful and ongoing social and economic benefit to the people and enterprises around our operations.

Chalice’s stakeholder engagement at the Julimar Project has also included local government and State Government briefings throughout 2021. These briefing sessions are aimed at providing a sound understanding of the status of the project, the upcoming activities and future direction of the Company.

We strive for best practice consultation and engagement with stakeholders and communities, which has been demonstrated at our Julimar Project in Western Australia and at our Pyramid Hill Project in Victoria since we began exploration activities in those areas. This consultation and engagement aims to understand community issues and desired outcomes as well as proactively address potential issues in a timely manner.

We have also committed to several local community initiatives and are continuing to prioritise local procurement options. We currently have ~50 local contractors and suppliers working with us at Julimar, providing services and products such as food, fuel, consumables and earthworks. Our site office at Gonneville and our field base at Avalon in West Toodyay are also supplied and serviced by local businesses.

Since mid-2019, when Chalice began exploring at the Julimar Project, we have kept the community informed of our progress through a number of initiatives, including in person information sessions and through a regular

Key Stakeholder	Interest	Engagement Activities
Shareholders	Returns to shareholders, capital gain, sustainability and corporate governance performance, corporate strategy, risk management	» ASX announcements » fnancial reporting » annual / general meetings » investor calls / webinars » roadshows » website » media » social platforms
Employees	Company performance, job security, remuneration, professional development, safety, culture, job satisfaction and general wellbeing	» meetings » face to face performance discussions » social events » communication alerts and posters » safety training
Local Communities: » Groups and individuals in close proximity or impacted by our operations	Employment, business opportunities, environmental, cultural heritage and land access management, economic and social contribution, social licence to operate	» face to face meetings » group presentations » community site tours » community investment » newsletters and factsheets » website » local media
Government and Regulatory Agencies: » State, Federal and Local	Regulatory compliance, regulatory approvals, social and economic impacts, employment, environmental and land management	» meetings » formal and informal correspondence » site visits and inspections » compliance reporting » ASX announcements, » website
Traditional Owners: » South West Aboriginal Land and Sea Council » Whadjuk People » Yued People	Cultural heritage and land access management and employment opportunities	» meetings » formal and informal correspondence » compliance reporting » heritage agreements » heritage surveys

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Chalice was pleased to sponsor Toodyay’s Christmas Street Party in December 2020 which was organised by Toodyay’s Community Resource Centre. The main street was a buzz of activity with local market stalls, great food, rides and attractions, late night shopping, face painting and live music. Chalice team members and their families joined in the festivities and enjoyed getting to know the local community.

In September 2020, Chalice was given an opportunity to introduce the Julimar Project at the Toodyay Chamber of Commerce and Industry (TCCI) Sundowner. We were welcomed by a strong crowd from Toodyay’s business community who had plenty of questions for our MD and CEO, Alex Dorsch. Much of the feedback centred around the significant potential for the Julimar Project to deliver jobs, skills and economic diversification to the region. We look forward to meeting again with the TCCI and building trust based relationships with the community.

In addition, Chalice continued to engage with key stakeholders throughout the year, including regular meetings and site visits with local Shires and briefings with community and environmental groups.

Sustainability Pillar	FY2021 Achievement	FY2022 Target
Create value for stakeholders	» ~$0.5M in local procurement in the Toodyay Shire, including community sponsorships and donations » Plus ~$1.5M additional local spend by direct Chalice contractors » Implementation of stakeholder engagement plan	» Ongoing direct and in-kind contributions to support local organisations » Complete an economic impact assessment for the Julimar Project » Prioritise local procurement for the Julimar Project within the Toodyay and Chittering Shires » Formulate a framework for a local community partnership for the Julimar Project » Establish opportunities to engage with Aboriginal businesses and suppliers
Goal
Create enduring socio-economic beneft where we operate

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As well as supporting local procurement and employment, Chalice partners with local organisations for a number of community initiatives that are aligned to our core values. To date, these have been supported through sponsorship, donations and in-kind support.

While our operations are in the exploration and development phase, Chalice has prioritised three areas for community investment:

Education to advance and improve regional educational opportunities.

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Environment to protect and rehabilitate the environment.

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Community connection to support local opportunities, events and groups to strengthen our community connection within the region.

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Chalice has established Community Investment Guidelines in order to assess and prioritise funding. Forming the basis of this framework is our aim to focus on local community partnering initiatives

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which are consistent with our core values of Integrity, Alignment and Advancement.

In 2021, Chalice partnered with:

Toodyay District High School, WA

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Toodyay Agricultural Show, WA

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Toodyay Christmas Street Party 2020, WA

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Toodyay Football Club, WA

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Marsupial Mammas and Pappas – Wildlife Rehabilitation, WA

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Bolgart Golf Club, WA

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Bears Lagoon/Serpentine Football Club, VIC

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Calivil Bowls Club, VIC

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Cultural Heritage

Sustainability Pillar FY2021 Achievement FY2022 Target Preserving Cultural Full compliance with all Complete all planned cultural heritage Heritage heritage requirements surveys for the Julimar Project under on all sites. Standard Heritage Agreement(s). Goal Build relationships through engagement with Traditional Owner Groups. Ensure heritage values and significant sites are identified and protected during exploration activities.

Noongar Standard Heritage Agreements in 2018. These agreements require Chalice to engage with the South West Aboriginal Land and Sea Council (SWALSC) before undertaking physical works or operations on the tenements, which may trigger the requirement for a cultural heritage survey to be conducted.

The Julimar Project is located within the South West Native Title area, which was recently the subject of the South West Native Title Settlement between the Western Australian Government and the Noongar peoples. The Whadjuk and the Yued people are the original custodians of the lands in the Julimar State Forest, which is subject to the Yued Indigenous Land Use Agreement and the Whadjuk People Indigenous Land Use Agreement.

As we extend our exploration activities into the Julimar State Forest, cultural heritage surveys are underway within proposed exploration drilling areas with both Yued and Whadjuk Traditional Owner representatives.

Chalice entered into heritage agreements with the Yued Agreement Group and Whadjuk People Agreement Group in the form of two separate

Chalice proudly supported a number of community initiatives including, L-R; Toodyay Cricket Club; Marsupial Mammas & Pappas Wildlife Rehabilitation; Toodyay Football Club; 2021 Toodyay International Food Festival.

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“Thorough environmental baselines are vital to holistically assessing the potential impact of our activities and balancing them through

Strong Environmental Stewardship

Chalice has commited to rigorous standards and governing frameworks to ensure responsible environmental practices are followed in all our operations. We take our environmental responsibilities seriously and are committed to achieving excellence in environmental management through understanding the sensitivities of the areas where we operate and reducing the impacts of our operations.

Sustainability Pillar FY2021 Achievement FY2022 Target Strong environmental Zero significant or reportable Zero reportable stewardship environmental incidents environmental incidents 100% compliance with Design and implement tenement conditions and baseline surface and Conservation Management groundwater studies for Plan (CMP) requirements Julimar Project Goal Approval of first CMP for Continue baseline Julimar Project environmental studies Maintain existing biodiversity Baseline environmental for Julimar Project values in exploration areas surveys conducted at Develop Biodiversity Assess biodiversity values Gonneville and across Strategy for Julimar potentially affected by proposed exploration areas Project future mine operations within State Forest Understand and responsibly Baseline noise monitoring manage water as a shared conducted at Julimar resource Project

Environmental management measures are applied proactively across all our exploration programs through procedures and standards established within our ISO14001 aligned HSEC Management System.

Our core environmental management procedures include:

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Ground disturbance
Drill site rehabilitation
Weed and pest control
Spill mitigation and response
Dieback management
Threatened species management
and monitoring
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the Conservation Management Plan is to assess the risks of our proposed activities and detail controls to minimise potential environmental impacts as well as ensure protection of Julimar State Forest conservation values.

In addition to Chalice’s environmental governance, all of Chalice’s exploration activities are governed by regulatory permits that contain stringent conditions to protect the environment. Additionally, Conservation Management Plans are required by the Western Australian Department of Biodiversity Conservation and Attractions to support exploration activities in State Forest areas. Chalice currently operates under Conservation Management Plans for exploration programs at the Viking, Julimar and South West projects.

In assessing risk levels and appropriate controls, priority has been given to higher order controls and management measures within the hierarchy of controls (i.e. avoidance and substitution). The higher up the hierarchy of control the greater protection management measures or controls provide and therefore the more effective they are in reducing residual risk.

The Company has also submitted a second Conservation Management Plan governing our proposed low-impact drilling activities at the Hartog and Baudin Targets in the Julimar State Forest. These activities form a key part of our wider Julimar exploration plan. The objective of

During FY2021, the Company complied with all relevant environmental laws and the obligations under applicable legislation and permits.

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Non Ground Disturbing Exploration Activities

In January 2021, Chalice began surface soil sampling and geophysical surveys within the Julimar State Forest. These low impact and nonground disturbing exploration activities were governed by a Conservation Management Plan that was endorsed by the Minister for Environment in December 2020. Importantly, the activities required no clearing or ground disturbance and hence have had negligible

impact on vegetation and fauna.

Undertaking exploration within the Julimar State Forest in a staged manner has enabled Chalice to progressively assess potential mineralisation while also minimising disturbance in the Julimar State Forest by targeting smaller specific areas for drilling.

Chalice takes a proactive approach to environmental management with regular environmental surveys undertaken to assess flora and vegetation, fauna, and to map areas of potential dieback (Phytophthora).

In April and May 2021, baseline flora and fauna surveys were conducted by teams of botanists and zoologists across the Hartog and Baudin Targets covering an area of over 2,000 hectares. The purpose of these surveys was to gather information specific to the Hartog and Baudin targets to support planning of the exploration program, to avoid and mitigate impacts to conservation values of the Julimar State Forest, and enable the development of the Conservation Management Plan. Survey methodology was consistent with relevant Environmental Protection Authority technical guidance and Index of Biodiversity Surveys for

Assessments data standards.

Further dieback and confirmatory spring flora surveys are underway across the Hartog-Baudin Targets in the Julimar State Forest.

The survey results identified that our proposed drilling program presents a low-risk to conservation:

No Threatened Ecological Communities (TEC) or Priority Ecological Communities (PEC) occur across Hartog and Baudin targets.

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Proposed drilling footprint does not disturb any vegetation community by more than 1.4% of its extent within the survey area.

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Manage Climate Change Risk

Certain critical metals and minerals are essential inputs in the technologies and infrastructure required to make the transition to a low carbon future. The scarcity of these metals means that there is currently a concerted global effort to secure new sources of supply and ensure those new sources of supply are mined sustainably.

“To hit net-zero (carbon emissions) globally by 2050, would require six times more mineral inputs in 2040 than today”[1]

The quantities of these critical minerals required in order to transition to a low carbon future are significant and in the case of metals like nickel, require mining output to be increased by c. 20 times above current levels to achieve net-zero emissions by 2050.2

“The shift to a clean energy system is set to drive a huge increase in the requirements for these minerals, meaning that the energy sector is emerging as a major force in mineral markets.”[3]

Our Julimar discovery includes several metals that are considered critically important to decarbonisation technologies:

Nickel, cobalt and copper which are used in the manufacturing of lithium-ion batteries, commonly used in electric vehicles and other personal electronic devices; and Palladium and platinium which are extensively used to reduce polluants (including greenhouse gases) from exhaust streams, but are also used in the manufacturing of hydrogen electrolysers (in the production of green hydrogen) and hydrogen fuel cells.

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This suite of critical metals hosted in a very large deposit at Julimar makes the project globally significant as a potential contributor to a lowcarbon future.

As the Julimar Project progresses to the study and development phase, the carbon emissions from a mining development as well as the potential risks from a changing climate (which may affect water availability and temperatures) will be assessed in detail. Lowcarbon technologies such as renewable energy sources, low-emissions vehicle fleets and carbon sequestering will be evaluated as part of the future mining studies.

In addition to the climate change mitigation potential of the Julimar Project, the project also has strong strategic drivers which are directly aligned with both the Australian Government’s Critical Minerals Strategy and the Western Australian Government’s Future Battery Industry Strategy.

Sustainability Pillar	FY2021 Achievement	FY2022 Target
Manage Climate Change Risks	» Organisational carbon assessment completed	» Defne benchmark carbon targets in engineering design for Julimar Pre-Feasibility Study
Goal
Assess and benchmark carbon intensity of our projects

1, 3 International Energy Agency - The Role of Critical Minerals in Clean Energy Transitions Report, 2021 2 International Energy Agency - Net Zero by 2050 Report, 2021

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Palladium

Nickel

Highly versatile but rare metal used to remove nitrogen oxides (NOx) from exhausts / hydrogen / ammonia streams. NOx are 300x more potent than CO2 as a greenhouse gas

The key battery cathode material in electric vehicles, high nickel NMC 811 batteries are the favoured chemistry

EV-driven nickel demand is forecast to increase 19x by 2040; lack of new sulphide discoveries worldwide in recent years has created a significant forecast supply shortage

~11Moz p.a. palladium market in deficit for nine consecutive years; supply dominated by Russia

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Platinum

Copper

Highly effective catalyst (similar to Pd) in hydrogen applications, including green hydrogen production and fuel cells

Used extensively in the green energy industry including in renewables, electricity distribution, energy storage and electric vehicles

Ongoing deficit and supply challenges; supply dominated by South Africa

Copper demand is forecast to outstrip supply by mid2021; lack of new large-scale discoveries worldwide

Source: Johnson Matthey PGM Market Report 2021, BNEF Electric Vehicle Outlook 2020, Nickel Institute, S&P Global CM Copper Feb 2021.

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Chalice engaged the expertise of certified Life Cycle Assessment practitioners from Perspektiv to conduct an organisational carbon assessment of the Company’s activities. The assessment complies with National Greenhouse and Energy Reporting (NGER) guidelines and the Australian Standard for Organisation Level Quantification and Reporting of Greenhouse Gas Emissions (AS ISO 14064.1).

To put this into context, this equates to the emissions from about 1,000 cars with average usage over a year. Scope 3 indirect emissions form the majority of these emissions at 92%, primarily associated with contractor drilling activities. Scope 1 emissions and indirect Scope 2 emissions are mainly from consumption of fuel for transport and grid electricity.

This assessment marks a first baseline for Chalice’s organisational carbon footprint which will be used to identify carbon-reducing initiatives.

Chalice’s total identified greenhouse gas emissions for 2021 amount to 4,797 tCO2-e.

GHG emissions per activity [tCO2-e]

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57
124
6
91
208
360
2,229.2
1,722
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Drilling (Scope 3) Gas (Scope 1)
Travel (Scope 3) Fuel (Scope 1)
Waste Collection (Scope 3) Aglime (Scope 1)
Others (Scope 3) Electricity (Scope 2)
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Julimar is emerging as a very large, strategic deposit of critical ‘ green metals ’ in a world-class jurisdiction. These metals are needed to decarbonise the global economy

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As at 20 September 2021

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Location	Project	Tenement No. Registered Holder Nature of Interest
Western Australia	Hawkstone	E04/1169 Waterford Bay Pty Ltd 100% of the hard-rock mineral rights
		E04/2405 Waterford Bay Pty Ltd 100% of the hard-rock mineral rights
		E04/2563 Kimberley Alluvials Pty Ltd 100% of the hard-rock mineral rights
		E04/2299 Strategic Metals Pty Ltd 0% - Farm-in agreement, right to earn up to 85% interest E04/2325 Strategic Metals Pty Ltd
	Gibb Rock	E70/4869 CGM (WA) Pty Ltd 95%
		E70/5194 CGM (WA) Pty Ltd 100%
	Nulla South	E77/2353 to E77/2354 CGM (WA) Pty Ltd 20% interest
	Julimar	E70/5118 to E70/5119 CGM (WA) Pty Ltd 100%
	Julimar (regional)	E70/5350 CGM (WA) Pty Ltd 100%
		E70/5358 to E70/5361 CGM (WA) Pty Ltd 100%
		E70/5367 CGM (WA) Pty Ltd 100%
		E70/5369 CGM (WA) Pty Ltd 100%
		E70/5373 CGM (WA) Pty Ltd 100%
	Auralia	E69/3636 to E69/3637 CGM (WA) Pty Ltd 100%
		E69/3700 CGM (WA) Pty Ltd 100%
	Barrabarra	E70/5263 to E70/5264 CGM (WA) Pty Ltd 100%
		E70/5355 to E70/5356 CGM (WA) Pty Ltd 100%
		E70/5535 CGM (WA) Pty Ltd 100%
		E70/5550 to E70/5551 CGM (WA) Pty Ltd 100%
		E70/5624 CGM (WA) Pty Ltd 100%
		E70/5666 to E70/5667 CGM (WA) Pty Ltd 100%
		E70/5695 CGM (WA) Pty Ltd 100%
		E59/2451 CGM (WA) Pty Ltd 100%
	Viking	E63/1963 Metal Hawk Ltd 0% - Earn-in agreement, right to earn up to 70% interest
	Mt Jackson	E77/2577 CGM (WA) Pty Ltd 100%
	South West	E70/5086 Nebula Pty Ltd 100%
		E70/5532 Nebula Pty Ltd 100%
		E70/5685 CGM (WA) Pty Ltd 100%
		E70/4837 Venture Lithium Pty Ltd 0% - Earn-in agreement, right to earn up to 70% interest
		E70/5067 Venture Lithium Pty Ltd 0% - Earn-in agreement, right to earn up to 70% interest
		E70/5421 Venture Lithium Pty Ltd 0% - Earn-in agreement, right to earn up to 70% interest
	Holt Rock	E70/5536 CGM (WA) Pty Ltd 100%
	Wubin	E70/5357 CGM (WA) Pty Ltd 100%
	Narryer	E09/2436 CGM (WA) Pty Ltd 100%
		E09/2446 to E09/2447 CGM (WA) Pty Ltd 100%

Location Project	Tenement No. Registered Holder Nature of Interest
Victoria Pyramid Hill	EL006661 CGM (WA) Pty Ltd 100%
	EL006669 CGM (WA) Pty Ltd 100%
	EL006737 to EL006738 CGM (WA) Pty Ltd 100%
	EL006864 CGM (WA) Pty Ltd 100%
	EL006898 CGM (WA) Pty Ltd 100%
	EL006901 CGM (WA) Pty Ltd 100%
	EL006960 CGM (WA) Pty Ltd 100%
	EL007040 CGM (WA) Pty Ltd 100%
	EL007120 to EL007121 CGM (WA) Pty Ltd 100%
	EL007322 CGM (WA) Pty Ltd 100%
Northern Territory Warrego North	EL23764 CGM (WA) Pty Ltd (51%) & Meteoric Resources NL (49%) Earn-in agreement, right to earn up to 70% interest
	EL31608 CGM (WA) Pty Ltd 100% - Farm-out agreement, TC Resources NT Pty Ltd has the right to earn up to 75% interest
	EL31610 CGM (WA) Pty Ltd 100% - Farm-out agreement, TC Resources NT Pty Ltd has the right to earn up to 75% interest
Queensland Flinders River	EPM26861 CGM Lithium Pty Ltd 100%
	EPM26866 CGM Lithium Pty Ltd 100%

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The Directors present their report together with the consolidated financial statements of Chalice Mining Limited (formerly Chalice Gold Mines Limited) (“Chalice” or “the Company”) and its subsidiaries (together “the Group”) for the financial year ended 30 June 2021 and the independent auditor’s report thereon.

The names and details of the Company’s directors in office during the financial year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

1. DIRECTORS

Directors’ Report

Timothy (Tim) R B Goyder Non-executive Chairman (previously Executive Chairman to 31 August 2020)

Tim has considerable experience in the resource industry as an executive and investor. He has been involved in the formation and management of a number of successful publicly listed and private companies.

Tim has been a director of Chalice since 2005 (16 years) and transitioned to Non-executive Chairman from 1 September 2020. Tim previously held the position of Executive Chairman.

Other current directorships of listed companies:

Chairman of DevEx Resources Limited (since 2002) and Liontown Resources Limited (since 2006).

Former directorships of listed companies in the last three years:

Strike Energy Limited (2017 to 2018).

Alexander (Alex) C Dorsch BEng (Hons), BFin Managing Director and Chief Executive Officer

Alex joined Chalice in 2017 and was appointed Managing Director in November 2018. Alex has lead Chalice through an exceptional recent growth period and was recognised as ‘New/Emerging Leader of the Year’ by MiningNews and ‘CEO of the Year’ by Kitco in 2020. Alex has diverse experience in a variety of leadership roles across the resources sector, as a management consultant, engineer, project manager and corporate advisor. Prior to joining Chalice, he was working as a Specialist consultant with the global management consultancy McKinsey & Company. He commenced his engineering career with resources giant BHP in Adelaide, and then spent over six years as an engineer in oil and gas exploration.

Alex holds a Bachelor of Mechanical Engineering (first class Honours) and a Bachelor of Finance from the University of Adelaide.

Other current directorships of listed companies:

None

Former directorships of listed companies in the last three years: None

Morgan S Ball B.Com, CA, FFin

Lead Independent Non-executive Director

Morgan is a Chartered Accountant with more than 30 years of Australian and international experience in the resources, logistics and finance industries. Morgan is currently Chief Financial Officer of ASX Listed Northern Star Resources Limited and was previously the Chief Financial Officer of Saracen Mineral Holdings Limited prior to its merger with Northern Star Resources Limited. Prior to this, Morgan was Managing Director of ASX listed BCI Minerals Ltd (ASX:BCI) from 2013 to 2016.

Morgan is Chairman of the Audit and Nomination Committees, and a member of the Remuneration Committee. Morgan was appointed to the Board as an Independent Non-executive Director on 24 June 2016 (5 years). Other current directorships of listed companies: None

Former directorships of listed companies in the last three years: Arrow Minerals Limited (2019 to 2020)

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Stephen P Quin

PGeo, FGAC, FSEG, MIOM3 Independent Non-executive Director

Garret J Dixon

BEng, Civil (Hons), MBA , and is a member of the AICD Independent Non-executive Director (Appointed 21 August 2020)

Stephen M McIntosh

Bsc, Msc (Hons) Independent Non-executive Director (Appointed 20 February 2021)

Stephen is a geologist with 40 years’ experience in the mining and exploration industry. Stephen is based in Vancouver, Canada, and until December 2020, spent 10 years as the President & CEO of Midas Gold Corp. and is currently a director of Kutcho Copper Corp (since December 2017), a TSX-V listed resource development company. Stephen was previously President and COO of TSX listed copper producer Capstone Mining Corp. and, up until its merger with Capstone, President and CEO of TSX-V listed copper producer Sherwood Copper Corp. Prior to joining Sherwood, Stephen spent 18 years as Vice President and subsequently Executive Vice President of TSX listed Miramar Mining Corporation, a Canadian focused gold producer and developer. Stephen has extensive experience in the resources sector, and in the financing, development and operation of production companies. Stephen is Chairman of the Remuneration Committee and a member of the Audit and Technical Committees. Stephen has been an Independent Nonexecutive Director since 2010 (11 years).

Stephen has advised his intention to step-down as a director at the 2021 Annual General Meeting.

Other current directorships of listed companies:

Kutcho Copper Corp (since 2017)

Former directorships of listed companies in the last three years: Midas Gold Corp. (2011 to 2020)

Garret has extensive experience in the resources and mining contracting sectors in Australia and overseas. His work in both private and ASX listed companies spans more than three decades, having worked in senior executive roles for major mine owners, mine operators and contractors. Garret recently held the position of Executive VP Alcoa & President Bauxite where he was responsible for the global bauxite mining business for the NYSE listed Alcoa Corporation. His career also includes the role of Executive General Manager of civil construction and contract mining group Henry Walker Eltin Ltd and Managing Director of ASX listed Gindalbie Metals Ltd.

Garret is the Chairman of the Risk and Sustainability Committee and a member of the Audit, Technical and Nomination Committees. Garret has been an Independent Non-executive Director since 21 August 2020.

Other current directorships of listed companies:

BCI Minerals Ltd (since 2020, Dynamic Drill & Blast Holdings Ltd (since 2020) and MLG OZ Limited (since 2021)

Former directorships of listed companies in the last three years:

Watpac Ltd (2014 to 2019) Fenix Resources Ltd (2020 to 2021)

Stephen is an internationally recognised figure in the mining industry, with a global career spanning over 33 years. Most recently he was a member of the Executive Committee for Rio Tinto and held the position of Group Executive, Growth & Innovation and Health, Safety, Environment & Security. Prior to this, Stephen was Rio’s global Head of Exploration and has been involved in the discovery, evaluation and development of multiple major projects across a diverse range of commodities.

Linda is a highly experienced corporate lawyer, governance professional and former senior executive with a career spanning 32 years at Wesfarmers Limited. Linda was a member of Wesfarmers Executive Leadership Team and was Wesfarmers Company Secretary for 17 years. During this time she played a meaningful role in mergers and acquisitions, capital raisings and other significant commercial and property transactions.

Linda J Kenyon LLB, BJuris FGIA FCG Independent Non-executive Director (Appointed 24 August 2021)

Linda holds a Bachelor of Laws and Bachelor of Jurisprudence degrees from the University of Western Australia. Linda is a Fellow of the Governance Institute of Australia and a member of the Australian Institute of Company Directors.

Linda is a member of the Risk and Sustainability Committee. Linda has been an Independent Non-executive Director since 24 August 2021.

Other current directorships of listed companies: None

Former directorships of listed companies in the last three years: None

2. COMPANY SECRETARY

Jamie joined Chalice as Company Secretary in August 2019. For the past 17 years he has acted as Company Secretary and held finance roles in various ASX listed companies, primarily within the mining and exploration industry providing corporate governance and financial reporting advice. Jamie is a Chartered Accountant and graduated from the University of Tasmania with a Bachelor of Business in 1993.

Jamie Armes

B.Bus, CA

3. DIRECTORS’ INTERESTS

The relevant interest of each director in the shares, rights or options over such instruments issued by Chalice and other related bodies corporate, as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001 , at the date of this report is as follows:

Ordinary shares T R B Goyder 38,070,475	Options over ordinary shares 250,000	Performance rights 735,294
A C Dorsch(1) 4,887,770	1,000,000	1,354,483
S P Quin 120,851 M B Ball 382,763 G J Dixon -	150,000 - 150,000	- - -
S M McIntosh(2) 7,000 L J Kenyon -	- -	- -

(1) In August 2021, the Board resolved, subject to shareholder approval at the Company’s 2021 AGM to offer 65,531 performance rights to Mr Dorsch or his nominee.

(2) In February 2021, the Board resolved, subject to shareholder approval at the Company’s 2021 AGM to issue Mr McIntosh 150,000 share options on terms as disclosed in the Remuneration Report on page 67.

Stephen is the Chairman of the Technical Committee and a member of the Remuneration and the Risk and Sustainability Committees.

Other current directorships of listed companies:

None

Former directorships of listed companies in the last three years:

None

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4. COMMITTEE STRUCTURE AND MEMBERSHIP

In February 2021, with the appointment of Mr McIntosh to the Board, a review of the structure and membership of Board committees was undertaken. Following this review, the Board resolved to separate risk oversight from the Audit Committee and establish a separate Risk and Sustainability Committee. In addition, a Technical Committee was also established.

In May 2021, the Board resolved to establish a Nomination Committee, separating this function from the Board.

Directors were members of a committee for the entire period unless otherwise noted in Section 5, Board and Committee Meetings.

The Company has the following Board Committees:


	Audit	Risk &	Remuneration	Technical	Nomination
		Sustainability

Chair:	M S Ball	G J Dixon	S P Quin	S M McIntosh	M S Ball
Members:	G J Dixon	L J Kenyon(1)	M S Ball	S P Quin	T R B Goyder
	S P Quin	S M McIntosh	S M McIntosh	G J Dixon	G J Dixon

(1) Subsequent to year end, on 24 August 2021, Ms Kenyon was appointed as a member of the Risk & Sustainability Committee and Mr Ball retired from the committee.

5. BOARD AND COMMITTEE MEETINGS

The number of meetings of the Board of Directors and of the committees of Board and the individual attendance by Directors at those meetings which they were eligible to attend, during the year, is summarised below:

				Committee Meetings

	Board	Audit	Risk &	Remuneration	Technical	Nomination
	Meetings		Sustainability
Number of Meetings(1)	9	2	2	2	2	1

T R B Goyder(2)	9/9	-	-	-	-	1/1
A C Dorsch	9/9	-	-	-	-	-
S P Quin(3)	9/9	2/2	-	2/2	2/2	-
M S Ball(4)	8/9	2/2	2/2	2/2	-	1/1
G J Dixon(5)	8/8	2/2	2/2	1/1	2/2	1/1
S M McIntosh(6)	3/3	-	2/2	1/1	2/2	-

(1) Number of meetings attended by the Director/total of meetings eligible to attend.
(2) Mr Goyder was appointed as a member of the Nomination Committee on its establishment on 13 May 2021. Refer to Section 4, Committee Structure and Membership for details.
(3) Mr Quin was appointed as a member of the Technical Committee on 20 February 2021 following a review of the structure of committees and membership. Refer to Section 4, Committee Structure and Membership for details.
(4) Mr Ball was appointed as a member of the Risk and Sustainability Committee on 20 February 2021 following a review of the structure of committees and membership and was appointed as Chair of the Nomination Committee on its establishment on 13 May 2021. Mr Ball retired as a member of the Risk and Sustainability Committee on 24 August 2021. Refer to Section 4, Committee Structure and Membership for details.
(5) Mr Dixon was appointed to the Board as an Independent Director, a member of the Audit Committee and Remuneration Committee on 21 August 2020. Mr Dixon retired as a member of the Remuneration Committee and was appointed as Chair of the Risk and Sustainability Committee and a member of the Technical Committee on 20 February 2021, following a review of the structure of committees and membership. Mr Dixon was appointed as a member of the Nomination Committee on its establishment on 13 May 2021. Refer to Section 4, Committee Structure and Membership for details.
(6) Mr McIntosh was appointed to the Board as an Independent Director, Chair of the Technical Committee, member of the Risk and Sustainability Committee and Remuneration Committee on 20 February 2021.

6. PRINCIPAL ACTIVITIES

The principal activities of the Group during the financial year were the exploration and evaluation of the Julimar Nickel-Copper-PGE Project in Western Australia, and the exploration in Victoria at the Pyramid Hill Gold Project. In the opinion of the Directors, there were no significant changes to the principal activities of the Group during the financial year under review that are not otherwise disclosed in this report.

7. OPERATING AND FINANCIAL REVIEW

Please refer to pages 14 to 55 of this Annual Report for information on the Group with respect to a review of operations during the year ended 30 June 2021 and comments on the financial position, business strategies, likely developments, and prospects for future financial years.

8. SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Other than disclosed in the Operating and Financial Review and elsewhere in this Directors’ Report, there were no other significant changes in the state of affairs of the Company that occurred during the year.

9. REMUNERATION REPORT – AUDITED

The Directors present the Remuneration Report for the Company and its controlled entities for the year ended 30 June 2021. This Remuneration Report for the Group forms part of the Directors’ Report and has been prepared in accordance with section 300A of the Corporations Act 2001.

Executive Summary

Since the discovery of Julimar in March 2020, Chalice has undergone a period of significant growth in its operational activities, business complexity, staff numbers and market capitalisation. Prior to the Julimar discovery, the Company had a market capitalisation of $44 million. In just 12 months, Chalice was included in the S&P/ASX 300 and in June 2021 achieved inclusion in the S&P/ASX 200. At 30 June 2021 the market capitalisation of the Company was approximately $2.5 billion.

The Company’s rapid expansion has occurred during a period of increased activity within the minerals exploration and mining sectors, particularly in Western Australia, creating a highly competitive labour market.

It is within the above context that the Board reviewed remuneration in August 2020, and further reviewed

remuneration in August 2021 to ensure that:

« Remuneration Benchmarking, and comparator groups used to assess performance reflect comparable organisations;
Remuneration remains competitive to attract, motivate and retain Key Management Personnel (KMP);
«
The remuneration framework remains appropriate for the increasing size and complexity of the Company’s operations and associated KMP responsibilities; and
«
« Executive KMP are incentivised to focus on long term performance and short term milestones, to achieve the Board’s goal of delivering sustainable, long-term superior returns to shareholders and stakeholders.

The key changes resulting from these remuneration reviews were:

« Introduction of a cash short-term incentive (STI) for FY2021;
« Increase in Executive KMP Fixed Annual Remuneration (FAR) for FY2021 and FY2022;
« Increase in the proportion of “at risk” remuneration to enhance the alignment between shareholders and Executive KMP;
« Ensuring performance measures for STIs and LTIs remain appropriate and correlate to the Company’s strategic objectives that have been developed to deliver shareholder and stakeholder value;
« For FY2022, STI performance measures relate to project and ESG objectives;
« Increase in Non-executive Director fees to reflect additional time commitments and the introduction of additional Board committees; and
« For FY2022 onwards, to cease offering Non-executive Directors options as part of their remuneration (previously offered as remuneration to preserve cash).

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9.1 Key Management Personnel

The Report discloses the FY2021 remuneration arrangements and outcomes for the people listed below, who are those individuals within the Company who have been determined to be Key Management Personnel (KMP) in the financial year to 30 June 2021. KMP are those people who have the authority and responsibility for planning, directing and controlling the Group’s activities, either directly or indirectly.

	Name	Position	Term
Executive KMP Alex Dorsch Richard Hacker Kevin Frost Bruce Kendall Soolim Carney		Managing Director and Chief Executive Officer Chief Financial Officer General Manager – Exploration General Manager – Development General Manager – Environment & Community	Full year Full year Full year Full year From 15 March 2021
Non-Executive Directors Tim Goyder Morgan Ball Stephen Quin Garret Dixon Stephen McIntosh		Executive Chairman Non-executive Chairman Non-executive Director Non-executive Director Non-executive Director Non-executive Director	Until 31 August 2020 From 1 September 2020 Full year Full year From 21 August 2020 From 20 February2021

After the reporting date, on 24 August 2021, Ms Linda Kenyon was appointed as a Non-executive director.

Other than disclosed above, there were no changes in KMP after the reporting date and before the financial report was authorised for issue.

9.2 Remuneration governance

Role of the Board

The Board is responsible for setting Chalice’s remuneration framework and remuneration policy to ensure that it is aligned with the Group’s strategic objectives, values, and risk appetite. This includes approving the remuneration arrangements of non-executive directors, the Managing Director and Chief Executive Officer (MD&CEO) and Executive KMP. In addition, the Board is responsible for approving all performance targets set on awards of short-term and long-term incentives made to the Managing Director and other Executive KMP.

Under a formal charter, the Board has established a Remuneration Committee to review and make recommendations to the Board on remuneration arrangements.

The Board can exercise discretion to ensure the quantum of remuneration is appropriate in light of individual and Group performance, for example by amending short-term and long-term incentive vesting outcomes.

Remuneration Committee

The Remuneration Committee assists the Board with the Group’s remuneration policies and is primarily responsible for the consideration and recommendation of remuneration practices. The Remuneration Committee currently comprises three independent Non-executive Directors:

Name	Position	Term

Stephen Quin Morgan Ball Stephen McIntosh Garret Dixon	Chair Member Member Member	Full year Full year From 20 February 2021 From 21 August 2020 to
		20 February2021

Some of the responsibilities include:

« Staying abreast of relevant market practices and as appropriate, taking independent advice to ensure that Chalice’s Remuneration Framework is fit for purpose and aligned to market expectations
« Reviewing and making recommendations to the Board on the remuneration arrangements of the MD&CEO and Executive KMP;
« Reviewing and making recommendations to the Board in relation to setting the level of Non-executive Director fees;
« Reviewing and making recommendations to the Board on incentive and equity-based remuneration plans for the MD&CEO, Executive KMP and other employees, including the appropriateness of performance hurdles and the measurement of performance hurdles;
« Recommending the Remuneration Policy to the Board;
« Supporting the alignment of the Group’s remuneration practices to its values and strategic objectives; and
« Interacting with the Audit and Risk and Sustainability Committees to ensure linkage with remuneration, risk management and reporting obligations.

The Remuneration Committee meets throughout the year when appropriate. The MD&CEO attends relevant Remuneration Committee meetings by invitation, where management input is required. The MD&CEO provides recommendations to the Remuneration Committee on the remuneration arrangements of his direct reports and all other employees. The Remuneration Committee has implemented processes to ensure conflicts of interest are managed appropriately.

Use of remuneration consultants

To ensure the Remuneration Committee is fully informed when making remuneration decisions, the Remuneration Committee may seek external advice, as it requires, on remuneration policies and practices. Remuneration consultants can be engaged by, and report directly to, the Remuneration Committee. In selecting remuneration consultants, the Remuneration Committee will consider potential conflicts of interest and independence from the Group’s KMP.

Given the recent growth of the Company, the Remuneration Committee sought advice from The Reward Practice in relation to remuneration benchmarking for Executive KMP and Non-executive Directors. This work did not involve providing the Remuneration Committee with any remuneration recommendations as defined by the Corporations Act 2001 . As a result, the Remuneration Committee developed a recommendation for changes to the quantum and structure of KMP remuneration.

Remuneration report approval at 2020 Annual General Meeting (AGM)

The Remuneration Report for the financial year ended 30 June 2020 received positive shareholder support at the 2020 AGM with a vote of 99.7% in favour.

Securities Trading Policy

All Chalice KMP and employees are subject to the Company’s Securities Trading Policy which sets out the governance approach for dealing in the Company’s securities. A copy is available at - www.chalicemining.com/corporate governance

This policy prohibits:

« the dealing (or procurement of another person to deal) with Chalice’s securities or the securities of another company where they are in possession of inside information;
« dealing with Chalice securities during blackout periods;
« short-term dealing or entering into forward contracts; and
« hedging Chalice securities.

The responsibilities of the Remuneration Committee’s role, objectives and responsibilities are outlined in its charter, which is available at www.chalicemining.com/corporate-governance

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9.3 Non-executive Director remuneration

Policy & Approach

The Company’s Constitution and the ASX Listing Rules specify that the maximum aggregate fees paid to nonexecutive directors for their roles as directors is determined by shareholders. The latest determination was at the 2020 AGM, whereby Shareholders approved a maximum aggregate amount of $650,000 per annum (including superannuation).

The fee structure for Non-executive Directors is reviewed annually by the Remuneration Committee and approved by the Board. The fee structure is set at:

« attract and retain highly qualified directors with appropriate skills and experience;
« reflect the time commitment and responsibilities of the role; and
« be competitive with comparator companies.

Other than the payment of statutory superannuation benefits, Non-executive Directors are not entitled to receive retirement benefits.

To preserve independence, remuneration for Non-executive Directors is not linked to the performance of the Company. Non-executive Directors are eligible participants under the Employee Securities Incentive Plan (“ESIP”) approved by shareholders at the 2019 AGM. Unlisted options issued to Non-executive Directors during the financial year were issued under the terms of the ESIP and are not subject to performance hurdles. It is the policy of the Company that Non-executive Directors are not awarded performance rights under the ESIP.

Reviews of Remuneration – FY 2021

In August 2020, and on the transition of Mr Goyder from Executive Chairman to Non-executive Chairman, the Board reviewed the fees payable to Non-executive Directors having regard to external benchmark information and the rapidly changing scale of the Company’s operations. As a result of this review the Board approved:

« an increase in Non-executive Director fees and set the Non-executive Chairman fee, effective 1 August 2020, but at less than benchmark data indicated; and
« as a means of conserving cash during the exploration stage and at a time when expenditures were ramping up rapidly and cash was limited, unlisted options be awarded to Non-executive directors in recognition of the lower cash component. The issue of the options was subject to shareholder approval, which was obtained at the 2020 AGM.

Details of these fee changes are set out below.

Changes to Non-Executive Remuneration for FY 2022

In August 2021, the Board reviewed the remuneration paid to Non-executive Directors, having regard to the Company’s inclusion in the S&P/ASX200, external benchmark information and the increasing time commitments being placed on Board Committee members.

As a result of this review the Board:

« approved a slight increase in Non-executive Director and Committee fees, effective 1 July 2021; and
« determined that the award of unlisted options to Non-executive Directors would cease in line with investor expectations to maintain the independence of Non-executive Directors and given the high volatility of the share price.

Details of these fee changes are set out in the following table.

Non-executive Director Fees and Other Benefits

Fees are shown in the table below (inclusive of superannuation). Fees shown for 30 June 2020 are for comparative purposes:

	30 June 2022	30 June 2021	30 June 2020
	Effective 1 July 2021	Effective 1 August 2020	$
Base Fees (annual) Non-Executive Chairman (from 1 Sept 2020)	$ 150,000	$ 150,000	-
Non-executive Directors	70,000	60,000	40,000
Committee Fees (annual) Chairperson of Committee	15,000	6,000	6,000
Member of Committee	7,500	4,000	4,000
Share Based Remuneration Unlisted options	No.	No.(2)	No.(1)
T Goyder	-	250,000	-
S Quin	-	150,000	500,000
M Ball	-	150,000	500,000
G Dixon (appointed 21 August 2020)	-	150,000	-
S McIntosh(appointed 20 February2021)(3)	-	150,000	-

(1) Exercise price $0.21, expiry date 30 November 2022. Shareholder approval obtained 27 November 2019.

(2) Exercise price $2.20, expiry date 30 June 2023. Shareholder approval obtained 25 November 2020.

(3) Subject to shareholder approval to be sought at 2021 AGM. Exercise price $6.72, expiry date 19 February 2024, vesting 19 February 2022.

The remuneration of Non-executive Directors for the years ended 30 June 2021 and 30 June 2020 is detailed below.

Non-executive Director Remuneration

		Post-	Long-
		employment	term	Share-based				Performance
Short-term Benefits		Benefits	Benefits	Payments			Total	Related
Non-executive Directors Fees	Non- monetary Benefits(5)	Super- annuation	Leave(6)	Options(1)(2)	Performance Rights(7)
$	$	$	$	$		$	$	%
Directors T R B Goyder(3) 2021 161,949	8,919	15,385	(7,490)	680,750		84,073	943,586	9
2020 200,000	4,308	19,000	-	-		70,043	293,351	24
G J Dixon(4) 2021 55,682	6,984	5,290	-	329,493		-	397,449	-
2020 -	-	-	-	-		-	-	-
S P Quin 2021 69,833	11,756	-	-	408,450		-	490,039	-
2020 50,000	7,746	-	-	30,065		-	87,811	-
M S Ball 2021 68,960	8,119	2,007	-	408,450		-	487,536	-
2020 45,662 S M McIntosh(2) 2021 23,934	4,308 2,914	4,338 2,274	- -	30,065 257,478		- -	84,373 286,600	- -
2020 -	-	-	-	-		-	-	-
Total 2021 380,358	38,692	24,956	(7,490)	2,084,621		84,073	2,605,210
2020 295,662	16,362	23,338	-	60,130		70,043	465,535

(1) On 21 August 2020, as a prudent means to conserve cash at a time of rapidly increasing expenditures and limited cash, the Board resolved to issue 700,000 unlisted options expiring 30 June 2023 to Non-executive Directors, subject to shareholder approval that was obtained on 25 November 2020. At the time of the Board resolution, the 5 day VWAP of Chalice’s shares was $1.39. Based on this 5 day VWAP an exercise price of $2.20 was set representing a 58% premium.

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A valuation of the options was undertaken using a Black-Scholes option methodology at the time Board resolved to issue the options resulting in an estimated aggregate value of $523,600 (or $0.748 per option).

By the grant date of 25 November 2020, the closing price of Chalice’s shares had increased significantly to $3.78. Based on the grant date assumptions the aggregate fair value of the options, as shown in the above table is significantly higher at approximately $1.9 million (or $2.723 per option). This fair value is not related to or indicative of the benefit (if any) that the individual may in fact receive. The assumptions underpinning the valuation are set out in Note 18 to the financial statements.

(2) Mr McIntosh was appointed as Non-executive Director on 20 February 2021. On his appointment as a Non-executive Director, and in order to align his remuneration with other Non-executive directors the Board resolved to issue to Mr McIntosh, 150,000 unlisted options with an exercise price of $6.72, expiring 19 February 2024, vesting 19 February 2022. The issue of the options is subject to shareholder approval to be sought at the 2021AGM.

At the time of the Board resolution, the 5 day VWAP of Chalice’s shares was $4.48. Based on this 5 day VWAP an exercise price of $6.72 was set representing a 50% premium.

In accordance with Australian Accounting Standards these options have been valued using a Black-Scholes option methodology using an estimated share price of $7.42 for the future grant date (being the date shareholder approval is obtained) and recognised from commencement over the vesting period. The assumptions underpinning the valuation are set out in Note 18 to the financial statements.

(3) On 1 September 2020, Mr Goyder transitioned from Executive Chairman to Non-executive Chairman. No termination payments (other than the payment of accrued annual leave and long service leave) were paid to Mr Goyder on ceasing to be Executive KMP.

(4) Mr Dixon was appointed as Non-executive Director on 21 August 2020.

(5) Non-monetary benefits include the cost of the Company providing directors and officers insurance, car parking and movement in annual leave during the year (T Goyder only), statutory Canadian employment insurance obligations (S Quin only).

(6) Long-term benefits, relates to movements in long service leave during the year.

(7) On transition to Non-executive Chairman, the Board determined that performance rights previously issued to Mr Goyder whilst Executive Chairman would be retained on their original terms of issue in recognition of 15 years of service to the Company. The fair value of performance rights is calculated at the date of grant using the Black-Scholes and Monte Carlo Simulation model and recognised over the period in which the minimum service conditions are fulfilled (the vesting period). The fair value is not related to or indicative of the benefit (if any) that the individual may in fact receive. The assumptions underpinning this valuation are set out in Note 18 to the financial statements.

9.4 Executive KMP remuneration

9.4.1 Policy & Approach

The Company’s remuneration policy is structured to attract, retain and incentivise executives whilst ensuring alignment to the Company’s strategy and stakeholder interests.

Remuneration principles and components of remuneration

The Company has adopted the following principles in its remuneration framework for Executive KMP:

Setting aggregate remuneration at a level which provides the Company with the ability to attract and retain executives of a high calibre at a cost which is acceptable to shareholders; and
Executive KMP interests being aligned with shareholders and measured against Company performance and ESG objectives by:
« providing fair, consistent and competitive compensation and rewards to attract and retain high calibre employees;
« ensuring that total remuneration is competitive with its peers by market standards and companies from which talent could potentially be sourced from or lost to; and
« incorporating in the remuneration framework variable remuneration consisting of short and long-term incentives linked to the strategic goals and performance of the Company and aligned with stakeholder interests.

The following table is an overview of the components of the remuneration framework for Executive KMP:

	Element	Executives
	Fixed remuneration Base salary	✓
	Superannuation Other benefits	✓ ✓(1)
	Variable at risk remuneration Short term incentives (STI) - Cash Longterm incentives(LTI)- Performance Rights	✓ ✓

(1) Other benefits relate to car parking, directors and officer’s insurance and income protection insurance for executives.

(a) Fixed annual remuneration

Fixed annual remuneration (FAR) comprises of salary including statutory superannuation. The level of FAR is set to provide a base level of remuneration which is both appropriate for the position and competitive in the market. The Company aims to set FAR in accordance with market rates and the Board may use its discretion to pay above this to attract and retain key employees in achieving the Company’s strategic goals.

FAR is reviewed at appropriate times (and no less than on an annual basis) by the Remuneration Committee and approved by the Board having regard to the Company and individual performance, relevant comparable remuneration for similarly capitalised companies in the mining industry and independently compiled market data. Executives receive their fixed remuneration in the form of cash.

The fixed remuneration for Executive KMP is detailed further in this Remuneration Report.

(b) Variable Remuneration – Short Term Incentives (STI)

Due to the significant growth of the Company, in August 2020, the Remuneration Committee determined that it was appropriate to establish a formal performance-based Short-term Incentive Plan (STIP). This recommendation was approved by the Board, effective 1 July 2020. Previously, variable remuneration was exclusively awarded as long-term incentives (LTI).

Executive KMP are incentivised in the shorter term (12 months) through the payment of a cash bonus upon the achievement of predefined company-wide performance targets linked to annual business objectives and the delivery of the Company’s strategy.

The maximum STI bonus percentage for the year ended 30 June 2021 was set at 25% of an Executive KMP’s FAR. The quantum of the STI awarded to each Executive KMP is based on achieving group performance measures which are aligned to five key strategic priorities set by the Board for the period 1 July 2020 to 30 June 2021.

The performance measures are assessed after the end of the financial year. If performance against any measurement objective is assessed as not being met or below threshold, no outcome is awarded for that measure. The determination as to whether the performance measures have been met by the Company and the calculation of the amount payable under the STIP is at the absolute discretion of the Board.

(c) Variable Remuneration – Long Term Incentives (LTI)

The Company provides LTIs to Executive KMP with the objective of aligning the interests of Executive KMP with shareholders and retaining talent. LTIs are provided in the form of performance rights (which is a right to convert into ordinary shares after achievement of applicable criteria and targets) issued under the shareholder approved Employee Securities Incentive Plan (ESIP). The Board has the discretion to make annual awards of performance rights with the level of the award dependent on an Executive KMP’s position within the Company and their fixed annual remuneration. Subject to the performance criteria set out in the terms of the LTIs, performance rights may convert into ordinary fully paid shares in the Company. If the performance criteria are not achieved by the measurement date, the performance rights lapse with no shares being issued.

The performance objectives for LTIs are developed to achieve the Company’s strategic objectives and milestones are aligned with sustainable Company performance and shareholder returns.

The Company adopted the ESIP at the 2019 AGM. The ESIP was developed to combine and replace the previous Employee Share Option Plan (ESOP) and Long-Term Incentive Plan (LTIP). A summary of the ESIP is set out below:

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Key Design Feature

Design

Eligibility

All full-time employees and permanent part-time employees (including Executive Directors and Non-executive Directors) of the Company are eligible participants. Shareholder approval is required before any director or their related party can participate in the ESIP. It is the policy of the Company that Non-executive Directors are not awarded performance rights under the ESIP.

Award quantum The award quantum will be determined in consideration of total remuneration of the individual, market relativities and business affordability. The ESIP does not set out a maximum number of performance rights that may be issuable to any one person, however, the total number of performance right offers made in reliance on ASIC Class Order 14/1000 at any time during the previous 3 year period cannot exceed 5% of the total number of shares on issue at the date of the offer.

Performance The performance conditions that must be satisfied in order for the performance rights to conditions vest are determined by the Board. The performance conditions may include one or more of the following:

« Employment for a minimum period of time;
« Achievement of specific objectives by the participant and/or the Company. This may include the achievement of share price targets, total shareholder return and other major long-term strategic milestone targets; or
« Such other performance objectives as the Board may determine.

Vesting Vesting may occur at the end of a defined performance period, usually three years, and upon the achievement of the performance conditions (vesting conditions). The Board determines whether vesting conditions are satisfied or otherwise waived. There is no retesting of performance conditions.

Term and lapse The term of the performance rights is determined by the Board in its discretion, however they will ordinarily have a three year term. Performance Rights are subject to lapsing if performance conditions are not met by the relevant measurement date or expiry dates (if no other measurement date is specified) or if employment is terminated for cause or in circumstances as described below.

Clawback/malus Where the Board determines that a participant has acted fraudulently or dishonestly; or wilfully breached his or her duties to the Group, the Board may in its discretion deem all unvested Convertible Securities held by that Participant to have been forfeited.

Price Payable by Participant

No consideration payable.

Change of Control If a change of control event occurs in relation to the Company, or the Board determines that such an event is likely to occur, the Board may in its discretion determine the manner in which any or all of the participant's performance rights will be dealt with, including, without limitation, in a manner that allows the Participant to participate in and/or benefit from any transaction arising from or in connection with the change of control event.

Cessation of Where a participant who holds performance rights ceases employment with the Employment Company, all unvested performance rights will automatically be forfeited by the participant, unless the Board otherwise determines in its discretion to permit some or all of the performance rights to vest.

Examples of the circumstances when the Board may decide to exercise its discretion to permit some or all of the performance rights to vest include, without limitation, where a participant becomes a leaver due to death, redundancy, permanent disability, mental incapacity or retirement.

The Board may decide (on any conditions which it thinks fit) that some or all of the participant's performance rights will not be forfeited upon ceasing employment but will be forfeited at the time and subject to the conditions it may specify by written notice to the participant.

Remuneration Mix

Given the above framework elements, set-out in the following tables below are the proportions of remuneration for Executive KMP based on when maximum incentive opportunities are achieved and the “at risk” elements as a proportion of FAR.

Changes to Executive KMP Remuneration Mix for FY2022

In August 2021, the Remuneration Committee reviewed the remuneration mix paid to Executive KMP and having regard to external benchmark information obtained on comparator companies. The Remuneration Committee determined to increase the maximum “at risk” elements of Executive KMP remuneration to support the delivery of Chalice’s short-term goals and longer term and strategic objectives. The remuneration mix for Executive KMP continues to have a significant “at-risk”, performance based component to ensure a focus on these principles and to drive value for shareholders and stakeholders.

STI and LTI Opportunities as a Percentage of FAR

	From 1 July 2021	From 1 July 2021	30 June 2021	30 June 2021
	STI	LTI	STI		LTI
% of FAR		% of FAR	% of FAR	%	of FAR
Managing Director Other Executive KMP	50% 25%	100% 75%	25% 25%		75% 50%
S Carney(1)	32%	120%	-		-

Remuneration mix based on maximum incentive opportunity

	From 1 July 2021			30 June 2021
FAR	STI	LTI	FAR	STI	LTI
%	%	%	%	%	%
Managing Director 40%	20%	40%	50%	13%	38%
Other Executive KMP 50%	13%	38%	57%	14%	29%
S Carney(1) 40%	13%	47%	-	-	-

(1) S Carney was appointed on 15 March 2021. Under the Remuneration Policy, Executive KMP that commence after 1 October, have their STI and LTI incentive opportunity for the following year increased by a pro-rata amount based on the date of their commencement. In addition, the Board awarded S Carney, as a recent hire, a one-time, non-recurring additional 30% increase in maximum LTI opportunity as a recruitment and long-term retention incentive.

9.4.2 Executive KMP Remuneration Outcomes

Link between performance and Executive KMP remuneration

The remuneration of Executive KMP is designed to provide a direct link between remuneration outcomes and Company performance over the short term (12 months) and long-term (>3 years). Incentive based, “at risk” remuneration will only be awarded on the achievement of performance objectives, which are formulated as “stretch” targets. These performance objectives target the alignment of Executive KMP remuneration with Company performance. The performance objectives are designed by the Board to be consistent with the Company’s strategic goals that are set with the ultimate aim of delivering returns to shareholders and stakeholders.

The following table provides a summary of the key financial results for the Company for the financial year ending 30 June 2021 and the previous five financial years. The share price has been adjusted to reflect the capital return of $0.04 per share in December 2018:

	Share price at 30 June Change in Share price during period Market capitalisation Long term - 3 Year TSR to 30 June	2017 $0.11 (21%) $31m 3%	2018 $0.10 (9%) $26m 33%	2019 $0.12 20% $32m (8%)	2020 $0.995 729% $302m 794%	2021 $7.42 646% $2,574m 6,797%
	Loss after Income Tax($‘000)	$4,681	$15,949	$10,166	$2,659	$43,193

Fixed Annual Remuneration

In August 2020, the Board reviewed the remuneration of Executive KMP, in accordance with the process outlined on page 65, and having regard to the external benchmark information obtained, the increasing scale of the Company’s operations and the associated complexity of the roles of Executive KMP. As a result of this review,

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the Board approved the following changes shown in the table below; FAR shown for 2020 is for comparative purposes.

Changes to Executive KMP Fixed Annual Remuneration for FY2022

In August 2021, the Board reviewed the remuneration paid to Executive KMP, in accordance with the process outlined on page 65, and having regard to the Company’s inclusion in the S&P ASX200, external benchmark information obtained, the further increasing scale of the Company’s operations and the associated complexity of the roles of Executive KMP. As a result of this review, the Board approved the changes shown below:


Name	Position	30 June 2022	30 June 2021	30 June 2020
		$	$	$
Alex Dorsch	Managing Director & CEO	500,000	355,000	320,000
Richard Hacker Kevin Frost	Chief Financial Officer General Manager – Exploration	350,000 350,000	305,896 305,000	305,896 290,178
Bruce Kendall	General Manager – Development	350,000	300,000	280,003
Soolim Carney	General Manager – Environment &	325,000	271,694	-
	Community

Short Term Incentives (STIs)

STI Performance and Outcomes

Subsequent to the year ended 30 June 2021, an assessment was undertaken of the 2021 STI performance measures. Below is a summary of the STI outcomes that relate to the performance period from 1 July 2020 to 30 June 2021, including commentary on achievements and the award percentage.

	Objective and Target Outcome and Commentary on Performance	Objective and Target Outcome and Commentary on Performance
1. 2.	Environment, Social and Governance A proportional STI payment shall be made according to the number of conditions below being met between 1 July 2020 and 30 June 2021: « Zero fatalities « Lost Time Injury Frequency Rate (LTIFR) for Chalice staff of <1.8 « Zero reportable environmental incidents « No material breach of any Programme of Work (POW) conditions (drilling permits) « Zero community or landowner incidents « No material breach of the Company’s Code of Conduct a. 100% allocation if no breach b. 50% allocation if one breach c. 0% allocation if more than one breach	(25% weighting) The Board assessed the ESG outcomes and determined: « No fatalities « LTIFR for Chalice staff of nil « No reportable environmental incidents « No material POW breaches « No community or landowner incidents « No material Code of Conduct breach Based on this assessment, it was assessed that the maximum award weighting of 25% was achieved.
	Maiden Mineral Resource at Gonneville Define a maiden JORC Mineral Resource Estimate (MRE) for Gonneville of a Board determined target size in the Measured and Indicated categories. In addition, management shall deliver to the Board an internal financial model which shall include updates to known inputs including commodity prices, grades, tonnages, costs, recoveries etc., which shows the potential to generate a Board approved target return and using Board approved assumptions.	(30% weighting) At the commencement of the performance period, the Board determined a MRE and internal rate of return target for Gonneville that it considered was of a size and confidence category to align with the Company’s strategic goals and priorities. During the year, the Board resolved that, as a result of ongoing exploration success at Gonneville, to defer the timing of the delivery of the MRE release beyond the end of the STI performance measurement period to allow additional drilling to be undertaken that was not

	Objective and Target	Outcome and Commentary on Performance
		envisaged at the commencement of the performance
		period.
		The Board considers that this decision unfairly disadvantaged Executive KMP as it resulted in the MRE
		performance objective being unobtainable.
		Accordingly, the Board utilised its discretion to
		determine the likelihood that the MRE performance
		objective was achieved at 30 June 2021 based on the
		quantum of drilling completed at that time and,
		therefore, it was assessed that the maximum award
		weighting of 30% was achieved.
		The Company does not disclose the targets associated
		with this objective at this time due to the commercially
		sensitive nature of the information. To do so would also
		constitute the provision of forward-looking statements
		without having a reasonable basis.
		The Company considers that the commercial sensitivity
		of these targets will be removed upon the release of a MRE and scoping study for Gonneville and will provide
		applicable retrospective disclosure in future
		remuneration reports when legally permissible.

3. Significant New Discovery (outside of Gonneville)

Significant New Discovery (outside of Gonneville) (15% weighting) Make a significant new discovery (outside of The Company did not make a significant discovery Gonneville), reportable according to the DMIRS outside of Gonneville during the performance ‘Reporting Mineral Discoveries (Minerals of measurement period resulting in 0% being achieved for Economic Interest) – Guidance Note’, which shows this objective. the potential to be economic based on consensus commodity prices and other board approved assumptions.

(Maximum 15% weighting)

4. Absolute Total Shareholder Return

A proportional STI payment shall be made which is The Absolute TSR objective is tested by measuring the directly proportional to the TSR from 1 July 2020 to Company’s TSR performance over the performance 30 June 2021. The proportion paid is calculated as: measurement period against predetermined targets set « 0% allocation if TSR <10% by the Board.

« 0% allocation if TSR <10%
- On 30 June 2021, the absolute TSR portion of the 2021 STI award was tested. Chalice achieved a TSR of 646%, resulting in the maximum award weighting of 15% being achieved.
« Pro-rata allocation (0 to 75%) if TSR between 10-50%
« Pro-rata allocation (75 to 100%) if TSR between 50-75%
« 100% allocation if TSR >75%

5. Relative Total Shareholder Return

(Maximum 15% weighting)

A proportional STI payment shall be made where the TSR exceeds the median TSR, between 1 July 2020 and 30 June 2021, of the peer group (Schedule 2).

The Relative TSR measure compares Chalice’s TSR against that of companies in a peer group selected at the commencement of the performance measurement period.

On 30 June 2021, the relative TSR portion of the 2021 STI award was tested. Chalice was ranked at the 92[nd] percentile, resulting in the maximum award weighting of 15% being achieved.

« 0% allocation if TSR below 50th percentile
« Pro-rata allocation if TSR between 50th and 75th percentile

The comparators companies include the following ASX and TSX listed companies: Panoramic Resources Limited, Flinders Mines Limited, Liontown Resources Limited, New Century Resources Limited, Emerald Resources NL, Rand Mining Limited, Atrum Coal Limited, Greenland Minerals Limited, Stavely Minerals Limited, Lion One Metals Limited, Magnetic Resources NL, Oklo Resources Limited.

« 100% allocation if TSR above 75th percentile

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The following table sets out the actual STI outcomes for Executive KMP for the year ended 30 June 2021:

Name Maximum STI	Actual STI Outcome Cash STI Outcome
Opportunity (% of FAR)	$ (% of maximum) (% of FAR)
Alex Dorsch(1) 25% Richard Hacker 25% Kevin Frost 25% Bruce Kendall 25% Soolim Carney(2) -	85% 21.25% 75,438 85% 21.25% 65,003 85% 21.25% 64,813 85% 21.25% 63,750 - - -

(1) In August 2021, the Board approved the payment of a “one off” discretionary $50,000 cash bonus (inclusive of superannuation) to Mr Dorsch, Managing Director. This discretionary bonus was paid in addition to Mr Dorsch’s award under the Company’s STIP and was paid in recognition of outstanding performance in the period with a 646% increase in the Company’s share price in the 12 months to 30 June 2021 and inclusion in the S&P/ASX200. No discretionary cash bonuses were paid to any other Executive KMP during the year.

(2) Ms Carney was not awarded a 2021 STI opportunity, consistent with the Remuneration Policy, due to being appointed as an Executive KMP on 15 March 2021. Executive KMP that commence during the performance period have their STI incentive opportunity for the following year increased by a pro-rata amount based on the date from their commencement.

Changes to Executive KMP STIs for FY2022

As noted in the remuneration mix on page 71, Executive KMP will continue to be provided STIs. The Board has adopted revised STI performance measures following recommendations received from the Remuneration Committee.

These performance measures include, health, safety, environment, community and heritage objectives (weighting 12.5%), sustainability objectives (weighting 10%), project definition objectives (weighting 30%), Generative exploration objectives (weighting 30%) and Business development objectives (weighting 10%). The measurement date for the FY2022 STI is 30 June 2022.

Long-term Incentives (LTIs), LTI Performance and Outcomes - 2018/2019 Performance Rights

The table below outlines the performance rights granted to KMP for the 2018/2019 financial year. In August 2021, the Board, following a recommendation from the Remuneration Committee, determined that the 2018/2019 Performance Rights vested in full due to the achievement of the performance conditions measured over the three years ended 30 June 2021.

Upon vesting, the performance rights were exercised into an equivalent number of fully paid ordinary shares in accordance with their terms.

Annual Award	KMP	Number of Rights	Measurement Date	Expiry date
2018/2019	Tim Goyder(1) Alex Dorsch Richard Hacker	871,751 1,045,931 762,514	30 June 2021 30 June 2021 30 June 2021	30 June 2022 30 June 2022 30 June 2022
	Kevin Frost	847,738	30 June 2021	30 June 2022

(1) On 1 September 2020, Mr Goyder ceased to act as Executive Chairman and transitioned to Non-executive Chairman. The Board determined that performance rights previously issued to Mr Goyder whilst an Executive KMP would be retained on the original terms of issue, in recognition of Mr Goyder’s 15 years of service to the Company.

The following table outlines key performance objectives which were determined to have been met in full during the measurement period.

Performance Condition	Outcome and Commentary on Performance
Strategic Objectives Undertake a significant acquisition or corporate transaction: acquire one or more assets or undertake a corporate transaction with potential to generate an IRR of at least 20% using consensus commodity prices and board approved cost assumptions. AND/OR	(50% weighting) The Board assessed the Strategic Objectives and determined that the Gonneville discovery at the Julimar Project is of sufficient significance to achieve the strategic

Performance Condition

Outcome and Commentary on Performance

Value generation through:

objective of making a significant discovery which has the potential to be economic. The Company cautions that the internal assessment of potential economics, does not imply that the Gonneville discovery will be economically viable in the future. Insufficient work has been undertaken to provide reasonable grounds as to the economic viability of the discovery and the accuracy of the assumptions utilised.

« making a significant new discovery which shows the potential to be economic based on consensus commodity prices and board approved cost assumptions; or
« substantially increasing the Company’s resource base; or
« conducting economic/feasibility studies which show the potential to generate an IRR of at least 20% using consensus commodity prices and board approved cost assumptions; or
« the sale of an asset(s) at a significant profit.

The Company does not disclose the outcomes associated with this objective at this time due to the commercially sensitive nature of the information. To do so would constitute the provision of forward-looking statements without a reasonable basis.

NB: The determination as to whether the above objectives have been met will be done by the Board of the Company in a timely manner, acting reasonably and in good faith.

Absolute TSR objectives

(Maximum 25% weighting)

The performance conditions for performance rights issued will be measured by comparing the Company’s share price (which to the extent reasonable takes into account value generated through demerger and special dividends) with an absolute share price at the end of the financial year that is 3 years after that date (vesting date). The performance rights will vest on a pro-rata basis as follows:

The Absolute TSR objective is tested by measuring the Company’s TSR performance over the performance measurement period against predetermined targets set by the Board. On 30 June 2021, the absolute TSR performance condition was tested. Chalice achieved a TSR of 6,797%, over the three-year measurement period, resulting in the maximum award of 25% being achieved.

« Share price below 15% p.a. increase (equates to CHN share price <21c in 3 years) – 0% weighting
« Between 15% p.a. and 20% p.a. (21c – 24c) – weighting pro rata between 8.25% and 25%
« At or above 20% p.a. (>24c) – 25% weighting

Relative TSR objectives

(Maximum 25% weighting)

The Relative TSR measure compares Chalice’s TSR against that of the comparator companies selected at the commencement of the performance measurement period.

The performance conditions for performance rights issued will be measured by comparing the Company’s TSR with that of an appropriate comparator group of companies as determined by the Remuneration Committee over the period from the grant of the performance rights, to the end of the financial year that is 3 years after that date (measurement date). The performance rights will vest depending on the Company’s percentile ranking within the comparator group on the relevant vesting date as follows: The comparators companies include the following ASX and TSX listed companies: Belo Sun Mining Corporation, Equatorial Resources Limited, Bluestone Resources Inc., Probe Metals Inc., OreCorp Limited, Intrepid Mines Limited, S2 Resources Limited, Bauxite Resources Limited, Strategic Metals Ltd., Cartier Resources Inc., Torq Resources Inc., NuLegacy Gold Corporation, Alexandria Minerals Corporation, QMX Gold Corporation, Catalyst Metals Limited, Navarre Minerals Limited, and Meteoric Resources NL.

On 30 June 2021, the relative TSR performance condition was tested. Chalice achieved a TSR of 6,797%, over the three-year measurement period ranking it at the 100th percentile, resulting in the maximum award of 25% being achieved.

« Below 50th Percentile
« Between 50th and 75th percentile
« At or above 75th percentile

LTIs Issued During FY2021 Under the Executive KMP Remuneration Framework

During the year ended 30 June 2021, 759,188 2020/2021 Performance Rights were granted to Executive KMP under the ESIP on the following basis:

	Component Approach Performance Period 3years(1 July2020 – 30 June 2023)

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Component

Approach

Award Opportunity A face value allocation methodology is used to determine the LTI opportunity based on the following: Managing Director - 75% of FAR Other Executive KMP - 50% of FAR

The performance rights were granted for no consideration as they from part of the remuneration package for Executive KMP. Each performance right is an entitlement to a receive a fully paid ordinary share in Chalice at no cost on satisfaction of the performance conditions set by the Board. The performance rights will not vest (and the underlying shares will not be issued) unless the performance conditions set by the Board have been satisfied at the measurement date.

Delivery of Awards

The number of performance rights granted was determined by dividing the Executive KMP’s LTI opportunity (calculated as a percentage of FAR) by the 20-day volume weighted average price prior to the first trading day of the performance period.

The following table outlines performance conditions and the weightings of each condition.

No. 2020/2021 Performance Conditions and Weightings

1. ESG and H&S objectives (Maximum weighting 15%)

A proportional LTI payment shall be made according to the number of conditions below being met between 1 July 2020 and 30 June 2023:

« Zero fatalities*
« LTIFR for Chalice staff of <1.8
« Zero reportable environmental incidents (including spills, loss of containment, etc.)
« No material breach of any POW conditions (drilling permits)
« Zero community or landowner incidents resulting in the permanent loss of land access on a material private property or the immediate halting of all operations on any site
« No material breach of the Company’s Code of Conduct
100% allocation if no breach
67% allocation if one breach

No. 2020/2021 Performance Conditions and Weightings

For example: achieving both a) and/or b) on a single asset, OR achieving a) on two separate assets, would classify as this condition met.

4. Absolute TSR measure - (Maximum weighting 17.5%)

A proportional LTI payment shall be made which is directly proportional to the Total Shareholder Return (TSR) from 1 July 2020 to 30 June 2023. The proportion paid is calculated as:
« 0% allocation if 3-yr TSR <30%
« Pro-rata allocation if 3-yr TSR between 30-100%
« 100% allocation if 3-yr TSR >100%

If the 20-trading day VWAP until 30 June 2023 exceeds 200% of the 20-trading day VWAP until 1 July 2020, the performance measure would be deemed to have been met. The 20-day VWAP of the Company at 1 July 2020 is $0.95. If, for example, the 20-day VWAP at 30 June 2023 is $1.71 (an 80% increase in the 20-day VWAP), then 80% of this performance measure would be deemed to have been met.

5. Relative TSR - (Maximum weighting 17.5%)

A proportional LTI payment shall be made where the TSR exceeds the median TSR, between 1 July 2020 and 30 June 2023, of the peer group* (refer below).
« 0% allocation if TSR below 50th percentile
« Pro-rata allocation if TSR between 50th and 75th percentile (as detailed below)
« 100% allocation if TSR above 75th percentile

If the TSR is between the 50th and 75th percentile, then for each percentile increment above 50, a multiple of 4 times that increment would have been met. For example: If the Chalice TSR is at the 55th percentile, 20% of this performance measure would be deemed to have been met.

*The peer group includes the following ASX listed resource companies: Panoramic Resources Limited, Flinders Mines Limited, Liontown Resources Limited, New Century Resources Limited, Emerald Resources NL, Rand Mining Limited, Atrum Coal Limited, Greenland Minerals Limited, Stavely Minerals Limited, Lion One Metals Limited, Magnetic Resources NL and Oklo Resources Limited.

Board Discretion

Where required, the Board may, acting reasonably and in good faith, use its discretion to vary the LTI maximum weightings. For example, where a sale of an asset occurs prior to completion of a PFS (i.e. milestone 2 is unable to be met), the Board may allocate the attributable weighting to other milestones.

33% allocation if two breaches
0% allocation if more than two breaches
*Two fatalities would be considered two breaches

2. Pre-feasibility study completion (Maximum weighting 25%)

Release on the ASX a mining pre-feasibility study (PFS) on an asset (including Gonneville) which shows the potential to generate an internal rate of return (IRR) of >20% using consensus commodity prices and Board approved assumptions.

3. Project milestone achievements (Maximum weighting 25%)

Generate significant value, on an existing or new asset (either operated or non-operated), through achievement of the below milestones:
a) Define a new JORC Mineral Resource Estimate (for a new discovery outside of Gonneville) which shows the potential to be economic (generate an IRR >20% based on internal financial modelling using consensus commodity prices and Board approved assumptions).
b) Increase an existing JORC Mineral Resource Estimate by a factor of 2x, subject to a minimum increase of 0.5Moz AuEq.
c) Sell a material asset (as part of an asset sale or corporate transaction) where:
- (i) the total deal value (including royalties retained) exceeds a threshold determined by the Board using a published mining feasibility study outcome OR consensus commodity prices and Board approved assumptions OR as determined by an Independent Expert); AND
- (ii) the deal generates a profit after-tax of at least 50% reflecting costs of acquisition and all project-todate expenditure incurred (whether expensed or capitalised).

Achieving NONE of the above conditions – 0% Achieving ONE of the above conditions – 12.5% Achieving TWO of the above conditions – 25%

Long-term Incentives (LTIs) vested during FY2021 -2017/2018 Performance Rights

As presented in the 2020 Remuneration Report, in July 2020, the Board determined, following a recommendation from the Remuneration Committee that the 2017/2018 Performance Rights vested in full due to the achievement of the performance conditions measured over the three years ended 30 June 2020. Upon vesting, the performance rights were exercised into an equivalent number of fully paid ordinary shares in accordance with their terms.

The table below outlines the performance rights granted to KMP during the 2017/2018 financial year.

Annual Award KMP	Number of Rights	Measurement Date	Expiry date
Tim Goyder	1,217,989	30 June 2020	30 June 2021
2017/2018 Alex Dorsch Richard Hacker	339,076 764,921	30 June 2020 30 June 2020	30 June 2021 30 June 2021
Kevin Frost	815,607	30 June 2020	30 June 2021

Long-term Incentives (LTIs) yet to be tested -2019/2020 Performance Rights

The 2019/2020 Performance Rights granted in 2019 and have a three-year performance period, from 1 July 2019 to 30 June 2022. The performance conditions will be tested shortly after the end of the performance period. Performance Rights will only vest based on the extent of the satisfaction of the performance conditions outlined below. Following testing, Performance Rights that do not vest will be forfeited. Assessment of the performance conditions and achievement of the performance conditions will be determined by the Board having regard to any matters it considers relevant.

The following table outlines key business objectives and the weightings of the performance conditions:

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No. 2019/2020 Performance Conditions and Weightings

1. Strategic objectives (Max weighting 50%)

Undertake a significant acquisition or corporate transaction: acquire one or more assets or undertake a corporate transaction with potential to generate an internal rate of return (IRR) of at least 20% using consensus commodity prices and board approved cost assumptions.

AND/OR

Value generation through:

« making a significant new discovery which shows the potential to be economic based on consensus commodity prices and board approved cost assumptions;
« substantially increasing the Company’s resource base;
« conducting economic/feasibility studies which show the potential to generate an IRR of at least 20% using consensus commodity prices and board approved cost assumptions; or
« the sale of an asset(s) at a significant profit.

NB: The determination as to whether the above objectives have been met will be done by the Board of the Company in a timely manner, acting reasonably and in good faith.

2. Absolute TSR objectives (Max weighting 25%)

If the volume weighted average price of the Company’s Shares traded on ASX over the 30 trading days (30Day VWAP) up to and including 30 June 2022 is:
« below $0.18 per Share – 0%
« between $0.18 and $0.20 per Share - Pro rata weighting between 8.25% and 25%; and
« at or above $0.20 per Share – 25%

By way of example, if the 30-Day VWAP as at 30 June 2022 is $0.19 per Share, 16.625% of the Performance Rights would vest, calculated as follows: 8.25% + (($0.19 - $0.18)/($0.20-$0.18)*(25%-8.25%)) = 16.625%

In the event of a corporate action including a demerger, special dividend or reorganisation of capital (including a consolidation, sub-division, return of capital, or reduction of capital), the above thresholds are to be amended to account for that corporate action, provided that such amendment must not provide the Performance Rights holder with a benefit that holders of Shares do not receive.

3. Relative TSR objectives (Max weighting 25%)

Comparison of the Company’s total shareholder return (TSR) with that of an appropriate comparator group of companies as determined by the Remuneration Committee over the period from the grant of the Performance Rights, to 30 June 2022. The Performance Rights will vest depending on the Company’s percentile ranking within the comparator group on the relevant vesting date as follows:

« Below 50th percentile - 0%
« Between 50th and 75th percentile - Pro rata weighting between 8.25% and 25%
« At or above 75th percentile - 25%

The comparators companies included the following ASX and TSX listed companies: Probe Metals Inc., Cartier Resources Inc, QMX Gold Corporation, GFG Resources Inc., Catalyst Metals Limited, Navarre Minerals Limited, Kalamazoo Resources Limited, Petratherm Limited, Buxton Resources Limited, Encounter Resources Limited, Prodigy Gold Limited, S2 Resources Limited, and Mirasol Resources Ltd.

Executive KMP LTIs Awarded for FY2022 – 2021/2022 Performance Rights

In September 2021, the following performance rights were granted to KMP as per the table below:

achievement of the performance conditions will be determined by the Board having regard to any matters it considers relevant.

The following table outlines key business objectives and the weightings of the performance conditions:

No. 2021/2022 Performance Conditions and Weightings

1. Sustainability (Max. weighting 20%)

Achieve inclusion into the S&P/ASX 200 ESG Index by 30 June 2024.

2. Generative Exploration, Project Definition and Strategic (Max. weighting 30%) Generate significant value, on an existing or new asset (either operated or non-operated), through the achievement of several strategic objectives that exceed stretch targets, pre-determined by the Board by resolution on 16 August 2021, including:

  - « Define a new, material JORC Mineral Resources (excluding Gonneville) which shows the potential to be economic;

  - « Increase materially an existing JORC Mineral Resource;

  - « Define JORC Mineral Reserves or a material increase in JORC Mineral Reserves; and

  - « Disposal of a material asset (as part of an asset sale, joint venture or corporate transaction).

3. Absolute TSR measure (Max. weighting 25%)

A proportional LTI payment shall be made which is directly proportional to the Total Shareholder Return ( TSR ) from 1 July 2021 to 30 June 2024. The proportion paid is calculated as:
- « If 3-yr TSR <10% p.a (equivalent to <33.1% increase in share price) – 0%;
- « If 3-yr TSR between 10-20% p.a (equivalent to 33.1-72.8% increase in share price) - weighting pro-rata between 5-25%;
- « If 3-yr TSR >20% p.a (equivalent to >72.8% increase in share price) – weighting 25%.

4. Relative TSR compared to peer group. (Max. weighting 25%)

A proportional LTI payment shall be made where the TSR exceeds the median TSR of the peer group, between 1 July 2021 and 30 June 2024. The proportion paid is calculated as:

« If TSR <50th percentile – 0%;
« If TSR between 50th and 75th percentile - weighting pro-rata between 5-25%;
« If TSR >75th percentile – weighting 25%.

As an illustrative example: If the TSR is at the 65th percentile, 17% of the performance measure would be deemed to have been met – calculated as (((65%-50%)/(75%-50%))x(25%-5%))+5%.

The comparators companies include the following ASX listed companies: Pilbara Minerals Limited, Zimplats Holding Limited, Orocobre Limited, Galaxy Resources Limited, Brockman Mining Limited, De Grey Mining Limited, Perseus Mining Limited, Piedmont Lithium Limited, Oceanagold Corporation, Ramelius Resources Limited, Sandfire Resources NL, Gold Road Resources Limited, Mount Gibson Iron Limited.

Board Discretion

Where required, the Board may, acting reasonably and in good faith, use its discretion to vary the LTI maximum weightings. For example, where a sale of an asset occurs prior to estimating resources or reserves (i.e. a milestone is unable to be met), the Board may allocate the attributable weighting to other milestones.

Annual Award	KMP	Number of Rights	Measurement Date	Expiry date
	Alex Dorsch(1)	65,531	30 June 2024	30 June 2026
2021/2022	Richard Hacker Kevin Frost	34,404 34,404	30 June 2024 30 June 2024	30 June 2026 30 June 2026
	Bruce Kendall	34,404	30 June 2024	30 June 2026
	Soolim Carney	50,895	30 June 2024	30 June 2026

(1) The performance rights to be issued to Mr Dorsch are subject to shareholder approval at the Company’s 2021 AGM.

The 2021/2022 Performance Rights have a three-year performance period, from 1 July 2021 to 30 June 2024. The performance conditions will be tested shortly after the end of the performance period. Performance Rights will only vest based on the extent of the satisfaction of the performance conditions outlined below. Following testing, and Performance Rights that do not vest will be forfeited. Assessment of the performance conditions and

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9.5 Key Management Personnel remuneration for FY2021

Key Management Personnel	Key Management Personnel	Short-term Benefits Salary & Fees $ Non- monetary Benefits(2) $	Short-term Benefits Salary & Fees $ Non- monetary Benefits(2) $	Short-term Benefits Salary & Fees $ Non- monetary Benefits(2) $	Cash Bonus(3) $		Post- employment Benefits Superan- nuation $		Long- term Benefits Leave(4) $		Share- based Payments Long-term Incentives (5) $		Total $		Performance Related %
Executive Directors A C Dorsch Executives R K Hacker K M Frost B Kendall S Carney(1)	2021 2020 2021 2020 2021 2020 2021 2020 2021 2020	335,696 298,997 284,202 284,893 291,724 271,987 280,570 195,418 74,439 -	15,658 4,308 27,079 6,899 21,820 4,308 27,810 3,225 10,853 -		125,438 - 65,003 - 64,813 - 63,750 - - -		21,694 21,003 21,694 21,003 21,694 21,003 21,694 15,752 6,542 -		- - (18) - - - - - - -		345,087 172,589 138,991 37,196 149,632 43,850 109,283 11,880 - -		843,573 496,897 536,951 349,991 549,683 341,148 503,107 226,275 91,834 -		41 21 26 11 27 13 22 5 - -
Total	2021 2020	1,266,631 1,051,295	103,220 18,740		319,004 -		93,318 78,761		(18) -		742,993 265,515		2,525,148 1,414,311

(1) Ms Carney was appointed General Manager - Environment and Community on 15 March 2021.

(2) Short-term, non-monetary benefits include the cost to the company of providing, car parking, income protection, movement in annual leave entitlements.

(3) Cash bonuses represents the 2020/2021 STI payable to KMP and a “one off”, discretionary, cash bonus to Mr Dorsch of $50,000 (inclusive of superannuation).

(4) Long-term benefits, relates to movements in long service leave during the year.

(5) The amount disclosed in the table above relates to the non-cash value ascribed to share options and performance rights under Australian Accounting Standards using the Black Scholes and Monte Carlo valuation methodologies and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of the fair value of the options and performance rights allocated to this reporting period. This includes negative amounts where a sharebased payment expense is reversed due to a non-market based performance condition not being met.

9.6 Equity instruments

9.6.1 Options granted as compensation

During the financial year, options over ordinary shares granted as compensation under the ESIP following shareholder approval at the Company’s 2020 AGM are as follows:

			Fair value	Fair value	Exercise	Exercise
	No. of		per option at		price	per		Number of
	options		grant	date	option			options
	granted	Grant date	$		$		Expiry date	vested
Directors
T R B Goyder M S Ball	250,000 150,000	25 November 2020 25 November 2020		2.72 2.72		2.20 2.20	30 June 2023 30 June 2023	250,000 150,000
G J Dixon	150,000	25 November 2020		2.72		2.20	30 June 2023		-
S P Quin	150,000	25 November 2020		2.72		2.20	30 June 2023	150,000
S M McIntosh(1)	150,000	-		4.81		6.72	19 February2024		-

(1) Options to be issued to Mr McIntosh are subject to shareholder approval at the Company’s 2021AGM.

The value of the options is estimated at the date of grant using a Black-Scholes option-pricing model. Refer to Note 18 of the financial statements for model inputs for the options granted during the year.

9.6.2 Performance rights granted as compensation

During the reporting period the following performance rights were granted as compensation to KMP and details of performance rights that vested during the reporting period are as follows:

	Fair value of	Weighted
Number of	performance	average
performance	rights at	fair value		Number of
rights	grant date	per right		performance
granted Grant date	$	$	Expiry date	rights vested
Directors T R B Goyder - -	-	-	-	1,217,989
A C Dorsch 280,081 25 November 2020	1,042,581	3.722	30 June 2024	339,076
Executives R K Hacker 160,893 2 September 2020	226,926	1.408	30 June 2024	764,921
K M Frost 160,422 2 September 2020	225,926	1.408	30 June 2024	815,607
B M Kendall 157,792 2 September 2020	222,222	1.408	30 June 2024	-

The value of performance rights granted in the year is the fair value of performance rights calculated at grant date using the Monte Carlo simulation model (market based conditions) and the Black Scholes option valuation methodology (non-market based conditions) that takes into account the term of performance rights, the share price at grant date and expected volatility of the underlying performance right, the expected dividend yield, the risk free rate for the term of the performance right and the correlations and volatilities of the peer companies. The total value of the performance rights granted is included in the table above. This amount is allocated to remuneration over the vesting period. Refer to Note 18 of the financial statements for model inputs for the performance rights granted during the year.

The above performance rights were issued at no cost and expire on the earlier of their expiry date or termination

of the KMP’s employment.

Details of the vesting profile of performance rights granted as remuneration to each KMP of the Group are outlined below.

Number of			%
Performance		% vested in	forfeited/lapsed
Rights Grant date Directors T R B Goyder 1,217,989 29 November	2017	year 100	in year -	Measurement Date 30 June 2020
871,751 28 November	2018	-	-	30 June 2021
735,294 28 November	2019	-	-	30 June 2022
A C Dorsch 339,076 9 November	2017	100	-	30 June 2020
1,045,931 31 July	2018	-	-	30 June 2021
1,074,402 28 November	2019	-	-	30 June 2022
280,081 25 November	2020	-	-	30 June 2023
Executives R K Hacker 764,921 28 July	2017	100	-	30 June 2020
762,514 31 July	2018	-	-	30 June 2021
700,606 28 November	2019	-	-	30 June 2022
160,893 2 September	2020	-	-	30 June 2023
K M Frost 815,607 28 July	2017	100	-	30 June 2020
847,738 31 July	2018	-	-	30 June 2021
827,593 28 November	2019	-	-	30 June 2022
160,422 2 September	2020	-	-	30 June 2023
B Kendall 363,221 28 November	2019	-	-	30 June 2022
157,792 2 September	2020	-	-	30 June 2023
S Carney -	-	-	-	-

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9.6.3 Equity holdings of key management personnel

Option holdings and performance rights of key management personnel

The movement during the reporting period in the number of options and performance rights over ordinary shares in the Group held, directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:

Equity Type		Held at 1 July 2020	Granted as compensation	Exercised/ Forfeited	Held at 30 June 2021	Vested during the year	Vested and exercisable at 30 June 2021
Directors T Goyder Performance Rights Options A Dorsch Performance Rights Options S P Quin Options G J Dixon Options M S Ball Options S M McIntosh - Executives R K Hacker Performance Rights K M Frost Performance Rights B M Kendall Performance Rights S Carney	-	2,825,034 - 2,459,409 5,000,000 350,000 - 500,000 - 2,228,041 2,490,938 363,221 -	- 250,000 280,081 - 150,000 150,000 150,000 - 160,893 827,593 363,221 -	(1,217,989) - (339,076) (4,000,000) (350,000) - (500,000) - (764,921) (815,607) - -	1,607,045 250,000 2,400,414 1,000,000 150,000 150,000 150,000 - 1,624,013 1,835,753 521,013 -	1,217,989 - 339,076 - 150,000 - 150,000 - 764,921 815,607 - -	- 250,000 - 1,000,000 150,000 - 150,000 - - - - -

9.8 Executive contracts

Remuneration and other terms of employment for Executive KMP are formalised in employment contracts. Details of these contracts are provided below.

		R Hacker	K Frost	B Kendall	S Carney
	A Dorsch	Chief	General	General	General
	Managing	Financial	Manager –	Manager –	Manager
	Director	Officer	Exploration	Corporate	Environment
Resignation notice	3 months	3 months	3 months	3 months	3 months
Termination notice for cause	None	None	None	None	None
Termination notice without	3 months	3 months	3 months	3 months	3 months
cause (severance pay) Diminution of responsibility (severancepay)	6 Months	6 Months	N/A	N/A	N/A

All employments agreements are for an unlimited duration. All Executive KMP are entitled to receive pay in lieu of notice and any accrued but untaken annual and long-service leave on cessation of employment.

End of Remuneration Report

Shareholdings of key management personnel

The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:

			Received on exercise of	Received on exercise of
	Held at		Options / Performance				Held at
	1 July 2020		rights		Other Changes1		30 June 2021
Directors
T R B Goyder	35,975,209			1,217,989	5,526		37,198,724
A Dorsch		-		4,339,076	2,763		4,341,839
S P Quin	176,321			350,000	(375,470)		150,851
M B Ball	30,000			500,000	(247,237)		282,763
G J Dixon		-		-		-	-
S M McIntosh		-		-		-	-
Executives
R K Hacker	100,000			764,921	(398,158)		466,763
K M Frost		-		815,607		-	815,607
B M Kendall		-		-		-	-
S Carney		-		-		-	-

(1) Other changes represent shares that were purchased or sold during the year by KMP.

9.7 Other transactions with key management personnel and their related parties

There were no other key management personnel transactions within the Group during the year ended 30 June 2021 .

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10. DIVIDENDS

No dividends were declared or paid during the year and the directors recommend that no dividend be paid.

11. LIKELY DEVELOPMENTS

There are no likely developments that will impact on the Company other than as disclosed elsewhere in this report.

12. SIGNIFICANT EVENTS AFTER BALANCE DATE

On 12 July 2021, the Company announced an intention to demerge its Pyramid Hill and other gold projects, subject to finalising the transaction structure and to obtaining all necessary shareholder and regulatory approvals.

In July 2021, the Group sold the remaining balance of its holding in O3 Mining Inc. for total proceeds of $4.6 million.

On 3 August 2021, 5,930,787 2018/2019 Performance Rights that were issued to KMP and employees in 2018 vested in full due to the achievement of the performance conditions measured over the three years ended 30 June 2021. Upon vesting, 5,930,787 Performance Rights were exercised into an equivalent number of fully paid ordinary shares.

On 23 September 2021, the Company issued 296,160 – 2021/2022 Performance Rights to senior executives and employees of the Company under the terms of the Employee Securities Incentive Plan. In addition to the above issue, on 16 August 2021, it was resolved that Alex Dorsch, Managing Director and CEO, has been awarded 65,531 Performance Rights on the same terms and conditions. The issue of the Performance Rights to Mr Dorsch is conditional on the receipt of shareholder approval to be sought at the Company’s 2021 Annual General Meeting.

Other than disclosed above or elsewhere in this report, there have been no other material post balance date events which have impacted the Company.

13. SHARE PLACEMENTS AND ISSUES

During the financial year, the Company issued the following fully paid ordinary shares, excluding options and performance rights exercised before costs:

Date	No. of shares	Price per share ($)	$
8 December 2020	26,666,6667	3.75	100,000,000
15 December 2020	2,303,010	3.56	8,198,716
19 January 2021	3,999,952	3.75	14,999,820
31 May 2021 31 May2021	240,384 792,910	8.78 8.78	2,110,572 6,961,750

14. SHARE OPTIONS AND PERFORMANCE RIGHTS

Unissued shares under option

At the date of this report 1,550,000 (1,700,000 at reporting date) unissued ordinary shares of the Company are under option on the following terms and conditions:

Expiry date	Exercise price ($)	Number of options
30 June 2023	2.20	550,000
30 November 2021	0.21	1,000,000

Unless exercised, these options do not entitle the holder to participate in any share issue of the Company or any other body corporate.

In addition to the above, the Board has resolved, subject to shareholder approval at the Company’s 2021 AGM, to grant Mr McIntosh 150,000 share options, in accordance with the terms and conditions of the Company’s ESIP. The options have an exercise price of $6.72, expiry date of 19 February 2024 and vesting 19 February 2022.

Performance rights

At the date of this report 6,758,584 performance rights (12,393,211 at reporting date) have been issued on the following terms and conditions:

Series Exercise	price ($)	Number of rights	Test date	Expiry date
2019/2020	Nil	5,292,347	30 June 2022	30 June 2023
2020/2021	Nil	1,170,077	30 June 2023	30 June 2024
2021/2022	Nil	296,160	30 June 2024	30 June 2026

In addition to the above, the Board resolved, subject to shareholder approval at the Company’s 2021 AGM to grant Mr Dorsch 65,531 2021/2022 performance rights with a test date of 30 June 2024, and expiry of 30 June 2026.

Shares issued on exercise of options or performance rights

During the financial year the Company issued the following ordinary shares on the exercise of options:

Date Date options granted	Issue price of shares ($)	No. of shares issued
6 October 2020 27 November 2019	0.21	650,000
10 October 2020 11 June 2019	0.25	500,000
18 November 2020 27 November 2019	0.21	200,000
15 March 2021 23 March 2018	0.16	2,000,000
15 March 2021 23 March 2018	0.18	2,000,000

Subsequent to the end of the financial year, on 5 August 2021, the Company issued 150,000 fully paid ordinary

shares as a result of the exercise of options.

During the financial year the Company issued the following ordinary shares on the vesting and exercise of performance rights:

	Date Date performance rights granted	Issue price of shares ($)	No. of shares issued
	14 July 2020 28 July 2017	Nil	2,410,225
	14 July 2020 9 November 2017	Nil	339,076
	14 July 2020 29 November 2017	Nil	1,217,989
Subsequent to the end of the financial year, on 3 August 2021, the Company issued			5,930,787 fully paid ordinary
shares to KMP and employees following the vesting and exercise of the 2018/2019 in 2018.			performance rights granted

15. ENVIRONMENTAL LEGISLATION

The Group is subject to environmental legislation and obligations within the jurisdictions in which it operates

throughout Australia.

The Group has policies and procedures in place that are designed to ensure that, where operations are subject to any particular and significant environmental regulation under law of the Commonwealth or of a State or Territory, those obligations are identified, appropriately addressed and any breaches promptly notified.

There has been no material known breaches of the Group’s licence conditions or environmental regulations to which it is subject during the financial year.

16. PROCEEDINGS ON BEHALF OF THE COMPANY

No proceedings have been brought on behalf of the Company, nor have any applications been made in respect of the company, under section 237 of the Corporations Act 2001 .

17. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

The Company has agreed to indemnify each of its Directors and Officers, including the Company Secretary who have held office during the year, against all liabilities to another person (other than the Company or a

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related body corporate) that may arise from their position as directors and officers of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full amount of any such liabilities, including costs and expenses.

During the year the Group has paid insurance premiums in respect of directors and officers indemnity insurance contracts, for current and former directors and officers.

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The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

18. INDEMNIFICATION OF AUDITORS

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company against a liability incurred as an auditor.

19. NON-AUDIT SERVICES

The following non-audit services were provided by the Group’s auditors, HLB Mann Judd. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The nature and scope of the non-audit service provided means that auditor independence was not compromised.

HLB Mann Judd received or are due to receive the following amounts for the provision of non-audit related services. Refer to note 27 for further information.

ervices. Refer to note 27 for further information.
Taxation services Assurance related	$ 5,150 3,125
	8,275

20. AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration is set out on page 87 and forms part of this Directors’ Report for the year ended 30 June 2021.

21. ROUNDING OF AMOUNTS

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of Chalice Mining Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.

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M R Ohm Partner

Perth, Western Australia 23 September 2021

The amounts contained in this financial report have been rounded to the nearest thousand unless otherwise specified under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies.

This Report is made in accordance with a resolution of the Directors:

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Alex Dorsch Managing Director and Chief Executive Officer Dated at Perth the 23rd Day of September 2021

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For the Year Ended 30 June 2021

As at 30 June 2021

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	2021 2020
Note	$’000 $’000
Continuing operations Revenue 5(a) Net Finance Income 5(b) Net gain on sale of exploration and evaluation assets Foreign exchange gain Exploration and evaluation expenditure 7 Corporate and administration expenses 6(a) Share based payments 18 Fair value adjustment 13 Loss from deconsolidation of subsidiaries Loss before tax from continuing operations Income tax benefit 8 Loss for the year from continuing operations Discontinued operations Net gain for the year from discontinued operations Income tax expense 8 Profit for the year from discontinued operations 9 Loss for the year attributed to owners of the parent Other comprehensive income/(loss) Items that may be reclassified to profit or loss Foreign exchange gain on deconsolidation of subsidiaries Items that will not be reclassified to profit or loss Net gain on fair value of financial assets, net of tax 23(b) Exchanges differences on translation of foreign operations Other comprehensive income for the year Total comprehensive income for the year Total comprehensive income/(loss) for the year attributable to owners of the parent Basic and diluted loss per share from continuing operations 10 Basic and diluted earnings gain per share from discontinued operations 9 Basic and diluted loss per share from continuing and discontinued operations 10
	520 453 150 36 - 178 33 219 (37,324) (9,622) (6,774) (3,185) (2,956) (512) 102 - (8) (81)
	(46,257) (12,514)
	3,064 1,115
	(43,193) (11,399) - 8,741 - (1)
	- 8,740 (43,193) (2,659)
	8 1,022 6,635 3,303 47 (264)
	6,690 4,061
	(36,503) 1,402

	(36,503) 1,402
	(0.13) (0.04) - 0.03 (0.13) (0.01)

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	2021 2020
Note	$’000 $’000
Current assets	99,884 45,694 1,684 611 329 - 1,094 - 15,570 8,580
Cash and cash equivalents 11 Receivables 12 Biological assets 13 Income tax receivable 8 Financial assets 14 Total current assets Non-current assets Financial assets 14 Right-of-use assets 16 Receivables 12 Property, plant and equipment 15 Total non-current assets Total assets Current liabilities Trade and other payables 19 Provisions 20 Lease liabilities 16 Employee benefits 17 Total current liabilities Non-current liabilities Lease liabilities 16 Other liabilities Total non-current liabilities Total liabilities
	118,561 54,885
	300 278 252 14 - 15 43,551 296
	44,103 603
	162,664 55,488
	10,577 1,745 2,063 - 137 47 409 208
	13,186 2,000
	212 12 42 49
	254 61
	13,440 2,061
Net assets	149,224 53,427
Equity Issued capital 21 Accumulated losses 22 Reserves 23 Total equity	189,429 59,501 (49,181) (6,752) 8,976 678
	149,224 53,427

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

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

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	Issued capital $’000 Accumulated losses $’000 Share based payments reserve Note 23(a) $’000 Investment revaluation reserve Note 23(b) $’000 Foreign currency translation reserve Note 23 (c) $’000 Total $’000 59,501 (6,752) 1,630 (1,468) 516 53,427 - (43,193) - - - (43,193) - - - 6,635 - 6,635 - - - - 8 8 - - - - 47 47 - (43,193) - 6,635 55 (36,503) 129,344 - - - - 129,344 - - 2,956 - - 2,956 584 764 (847) (501) - - 189,429 (49,181) 3,739 4,666 571 149,224 Issued capital $’000 Accumulated losses $’000 Share based payments reserve Note 23(a) $’000 Investment revaluation reserve Note 23(b) $’000 Foreign currency translation reserve Note 23(c) $’000 Total $’000 29,807 (9,133) 1,461 (74) (242) 21,819 - (2,659) - - - (2,659) - - - 3,303 - 3,303 - - - - 1,022 1,022 - - - - (264) (264) - (2,659) - 3,303 758 1,402 29,694 - - - - 29,694 - - 512 - - 512 - 5,040 (343) (4,697) - - 59,501 (6,752) 1,630 (1,468) 516 53,427

Balance at 1 July 2020 Loss for the year Other comprehensive income for the period Net change in fair value of equity investments Exchange differences on deconsolidation of subsidiaries Exchange differences on translation of foreign operations Total comprehensive income/(loss) for the year Issue of share capital (net of costs) Share-based payments Transfers between equity items Balance at 30 June 2021



Balance at 1 July 2019 Loss for the year Other comprehensive income for the period Net change in fair value of equity investments Exchange differences on deconsolidation of subsidiaries Exchange differences on translation of foreign operations Total comprehensive income/(loss) for the year Issue of share capital (net of costs) Share-based payments Transfers between equity items Balance at 30 June 2020

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	2021 2020
Note	$’000 $’000
Cash flows from operating activities Cash receipts from operations Cash paid to suppliers and employees Payments for mineral exploration and evaluation Income tax received Government grants and incentives received Interest received Interest paid Net cash used in operating activities 11 Cash flows from investing activities Acquisition of property, plant and equipment Acquisition of biological assets Acquisition of freehold land and buildings Proceeds from sale of biological assets Proceeds from sale of fixed assets Proceeds from sale of financial assets Payment for acquisition of financial assets Proceeds from disposal of subsidiary Costs associated with disposal of subsidiary Net cash from/(used in) investing activities Cash flows from financing activities Payment of principal portion of lease liabilities Security deposits Proceeds from issue of shares 21(a) Share issue costs 21(a) Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at 30 June 11	81 542 (3,884) (3,260) (34,561) (7,789) 125 110 462 134 171 55 (24) (13)
	(37,630) (10,221)
	(689) (81) (574) - (20,753) - 264 - - 9 2,691 12,944 (1,202) (5,633) - 1,573 - (140)
	(20,263) 8,672
	(32) (197) (21) 38 115,983 30,221 (3,900) (1,615)
	112,030 28,447
	54,137 26,898 45,694 18,621 53 175
	99,884 45,694

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

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

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For the Year Ended 30 June 2021

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For the Year Ended 30 June 2021

SUMMARY OF SIGNIFICANT POLICIES

Note 1: Corporate information Note 2: Reporting entity Note 3: Basis of preparation

PERFORMANCE FOR THE YEAR

Note 4: Segment reporting Note 5: Revenue Note 6: Expenses Note 7: Exploration and evaluation expenditure Note 8: Income tax Note 9: Discontinued operations Note 10: Loss per share

ASSETS

Note 11: Cash and cash equivalents Note 12: Receivables Note 13: Biological assets Note 14: Financial assets Note 15: Property, plant and equipment Note 16: Leases

EMPLOYEE BENEFITS AND SHARE-BASED PAYMENTS

Note 17: Employee benefits Note 18: Share-based payments

LIABILITIES AND EQUITY

Note 19: Trade and other payables Note 20: Provisions Note 21: Issued capital Note 22: Accumulated losses Note 23: Reserves

Summary of Significant Policies

This Section of the financial report sets out the Group’s (being Chalice Mining Limited and its controlled entities) accounting policies that relate to the Consolidated Financial Statements as a whole. Where the accounting policy is specific to one Note, the policy is described in the Note to which it relates.

The Notes include information which is required to understand the Financial Statements and is material and relevant to the operations and the financial position and performance of the Group.

Information is considered relevant and material if:

« The amount is significant due to its size or nature
« The amount is important in understanding the results of the Group
« It helps to explain the impact of significant changes in the Group’s business
« It relates to an aspect of the Group’s operations that is important to its future performance.

1. CORPORATE INFORMATION

The consolidated financial report of Chalice Mining Limited for the year ended 30 June 2021 was authorised for issue in accordance with a resolution of Directors on 23rd September 2021.

Chalice Mining Limited is listed on the Australian Securities Exchange (“ASX”) (trading under the code CHN) and OTCQB Venture Market (“OTCQB”) (trading under the code CGMLF) and is domiciled in Australia at Level 2, 1292 Hay Street, West Perth, Western Australia. The nature of the operations and principal activities are disclosed in the Directors’ Report.

2. REPORTING ENTITY

The consolidated financial report comprises the financial statements of Chalice Mining Limited (“Company” or “Parent”) and its subsidiaries (“the Group”) for the year ended 30 June 2021. A list of the Group’s subsidiaries is provided at note 26.

3. BASIS OF PREPARATION

(a) Statement of compliance

The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report also complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

FINANCIAL INSTRUMENTS

Note 24: Financial instruments

GROUP COMPOSITION

Note 25: Parent entity Note 26: List of subsidiaries

OTHER INFORMATION

Note 27: Auditor’s remuneration Note 28: Related parties Note 29: Commitments and contingencies Note 30: Events subsequent to reporting date

ACCOUNTING POLICIES

Note 31: Changes in accounting policies Note 32: Adoption of new and revised accounting standards

(b) Basis of measurement

The financial report has been prepared on a historical cost basis, except for financial assets, and biological assets which have been measured at fair value. Cost is based on the fair values of the consideration given in exchange for assets. Chalice is domiciled in Australia and all amounts are presented in Australian dollars, unless otherwise indicated.

The consolidated financial statements provide comparative information in respect of the previous period. In addition, the Group presents an additional statement of financial position at the beginning of the earliest period presented when there is a retrospective application of an accounting policy, a retrospective restatement, or a reclassification of items in financial statements.

All amounts have been rounded to the nearest thousand, unless otherwise stated in accordance with ASIC Corporations (Rounding in Financial/ Directors’ Reports) Instrument 2016/191.

(c) Significant accounting judgements, estimates and assumptions

The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical

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Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by the Group.

Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The Group also discloses its exposure to risks and uncertainties in note 24. The key judgements, estimates and assumptions which are material to the financial report are found in note 15 and note 18.

(d) Foreign currency translation

The functional currency of the Company is Australian dollars and the functional currency of subsidiaries based in Canada is Canadian Dollars (CAD). The Group’s consolidated financial statements are presented in Australian Dollars (AUD), which is also the parent company’s functional currency. Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rates of exchange at the reporting date.

All exchange differences in the consolidated financial report are taken to profit or loss as incurred. Nonmonetary items that are measured in terms of historical cost in a foreign currency are translated at exchange rates as at the date of the initial transaction.

As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of Chalice Mining Limited at the rate of exchange ruling at the balance date and their statement of comprehensive income is translated at the average exchange rate for the year.

The exchange differences arising on the translation are taken directly to a separate component of recognised foreign currency translation reserve in equity.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

PERFORMANCE FOR THE YEAR

This section provides additional information about those line items in the Statement of Comprehensive Income that the directors consider most relevant in the context of the operations of the entity.

4. SEGMENT REPORTING

The Group has identified its operating segments based on internal reports that are reviewed and used by the Board of Directors in assessing performance and in determining the allocation of resources. The Group considers that it only operated in one reportable segment, being mineral exploration and evaluation. The segment information is as per the Group’s consolidated financial statements.

5. REVENUE

REVENUE
(a) Revenue Corporate and administration services Government grants and incentives Other	2021 2020
	$’000 $’000
	60 310 460 136 - 7
	520 453

Government Grants are recognised when there is reasonable certainty that the grant will be received, and all grant conditions are met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating.

(b) Net finance income Finance Income Interest income from financial assets Interest income from lease receivables Finance costs Interest on lease liabilities	2021 2020
	$’000 $’000
	175 46 3 3
	178 49
	(28) (13)
	(28) (13)
	150 36

(b) Net finance income

Accounting policy

The Group’s finance income and finance costs include interest income, interest expense and interest income and expenses on lease liabilities. The Group receives interest income from monies held in its bank accounts.

Interest revenue is recognised on an accruals basis based on the interest rate, deposited amount and time which lapses before the reporting period end date.

6. EXPENSES

EXPENSES
(a) Corporate and administration expenses Depreciation Business development costs Investor relations and marketing Regulatory and compliance Corporate personnel expenses (note 6(b)) Other (b) Corporate personnel expenses Wages and salaries Directors’ fees Associated personnel expenses Payroll tax expense(1) Superannuation contributions Increase in liability for annual leave Increase/(decrease) in liability for long service leave	2021 $’000 2020 $’000 118 263 - 699 287 202 710 455 5,264 1,444 395 122 6,774 3,185
	2021 2020
	$’000 $’000
	1,694 985 365 107 175 148 2,808 91 157 75 56 78 9 (40)
	5,264 1,444

(1) Payroll tax expenses increased significantly in 2021 due to the vesting in full of 5,930,787 performance rights in August 2021that were issued to key management personnel and employees in 2018 following determination by the Board that the performance conditions have been satisfied over the three-year measurement period ended 30 June 2021 and due to the increase in personnel numbers. Refer note 20 and the Remuneration Report for further details.

Government grants and incentives predominately includes amounts received under the Australian Federal Government’s JobKeeper Payment Scheme and Cashflow Boost Scheme, which provided temporary subsidies to eligible businesses.

Accounting policy

Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.

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Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

7. EXPLORATION AND EVALUATION EXPENDITURE

EXPLORATION AND EVALUATION EXPENDITURE
Julimar, Western Australia Pyramid Hill, Victoria Hawkstone, Western Australia Acquisition of exploration project – fair value adjustment Other generative projects	2021 2020
	$’000 $’000
	31,443 3,051 3,445 4,280 843 571 - 1,086 1,593 634
	37,324 9,622

Accounting policy

Costs incurred in the exploration and evaluation stages of specific areas of interest are expensed against profit or loss as incurred. All exploration expenditure, including acquisition costs, general permit activity, geological and geophysical costs, project generation and drilling costs, is expensed as incurred. Once the technical feasibility and commercial viability of extracting a mineral resource are demonstrable in respect of an area of interest, development expenditure is capitalised to the Statement of Financial Position.

8. INCOME TAX

The major components of income tax expense are as follows:

Current income tax: Over provision for income tax Research and Development tax credits Deferred tax: Temporary differences relating to financial assets Total income tax benefit reported in the statement of comprehensive income	2021 $’000 2020 $’000 125 109 1,094 - 1,219 109 1,872 1,005 3,064 1,114

The prima facie income tax expense on pre-tax accounting result on operations reconciles to the income tax expense in the financial statements as follows:

The prima facie income tax expense on pre-tax accounting result on expense in the financial statements as follows:	operations reconciles to the income tax
	2021 2020
$’000 $’000 Accounting loss from continuing operations (46,257) (12,514) Accounting profit from discontinued operations - 8,741 (46,257) (3,773) Income tax calculated at the Australian corporate rate of 26% (2020: 30%) (12,027) (1,132) Non-deductible expenses 563 864 Share based payments 662 154 Non-assessable income (39) (2,895) Deferred tax assets and liabilities not recognised 10,841 3,350 Income tax benefit on financial assets (1,872) (1,005) Effect of different tax rates of subsidiaries operating in other jurisdictions - (341) Previously unrecognised tax losses refunded (125) (109) Research and development tax credits (1,094) - Income tax benefit reported in the statement of comprehensive income 3,064 1,114 The tax rate used in the above reconciliation is the corporate rate of 26% (2020: 30%) payable by Australian corporate entities on taxable profits under Australian tax law. Current tax assets comprise: 2021 $’000 2020 $’000 Income tax receivable attributable to: Parent Entity 1,094 - 1,094 - The following deferred tax assets and liabilities have not been brought to account: Unrecognised deferred tax balances 2021 $’000 2020 $’000 Deferred tax assets comprise: Revenue losses available for offset against future taxable income 16,354 9,178 Lease liabilities 98 4 Other deferred tax assets 1,954 665 18,406 9,847 Deferred tax liabilities comprise: Right-of-use assets 65 4 Other deferred tax liabilities 3 445 68 449 Income tax benefit not recognised directly in equity during the year: 2021 $’000 2020 $'000 Share issue costs 1,070 392	$’000 $’000
	(46,257) (12,514) - 8,741
	2021 2020
	$’000 $’000
	16,354 9,178 98 4 1,954 665
	18,406 9,847
	65 4 3 445
	68 449

	2021 2020
	$’000 $'000
	1,070 392

Deferred tax liabilities have not been recognised in respect of these taxable temporary differences as the entity is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

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Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

Accounting Policy

The income tax expense or benefit for the period is the tax payable or receivable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the end of the reporting period in the country where the company’s subsidiaries operate and generate taxable income. Provisions are established where appropriate on the basis of amounts expected to be paid to the tax authorities.

Current tax liabilities for the current period and prior periods are measured at the amount expected to be recovered from or paid to taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the balance date.

Deferred income tax is provided on all temporary differences at reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Unrecognised deferred income tax assets at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Income taxes relating to items recognised directly in equity are recognised in equity and not profit or loss. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax Consolidation

Chalice and its 100% owned Australian resident subsidiaries have formed an income tax consolidated group under the tax consolidation regime. Current and deferred tax amounts are accounted for in each individual entity as if each entity continued to act as a taxpayer on its own.

Chalice recognises its own current and deferred tax amounts and those current tax liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has assumed from its controlled entities within the tax consolidated Group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts payable or receivable from or payable to other entities in the Group. Any difference between the amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) controlled entities in the tax consolidated Group.

9. DISCONTINUED OPERATIONS

(a) On 26 July 2019, the Group disposed of its wholly owned subsidiary Chalice Gold Mines (Quebec) Inc. (“CGMQ”) to O3 Mining Inc. (“O3 Mining”) in consideration for 3,092,784 common shares of O3 Mining and a partial 1% Net Smelter Return Royalty.

CGMQ was the registered holder of the Group’s East Cadillac and Kinebik Project in Quebec, Canada and as a consequence of the disposal of CGMQ, the Group discontinued all remaining exploration and business development activities in Canada during the prior year ended 30 June 2020 and was thus classified as a discontinued operation.

The results of the discontinued operations for the prior year are presented below.

(a) Financial performance and cash flow information Finance income Expenses Net loss on sale of plant and equipment Loss before tax from discontinued operations Income tax loss Loss for the year from discontinued operations Gain on sale of subsidiary after income tax (see (c) below) Profit from discontinued operations Exchange differences Other comprehensive loss from discontinued operations	2021 2020
	$’000 $’000
	- - - (385) - (18)
	- (403) - (1)
	- (404) - 9,145
	- 8,741 - 941
	- 9,682

The major classes of assets and liabilities of Chalice Gold Mines (Quebec) Inc. at the time of sale:

Assets Trade and other receivables Income tax receivable Total assets Liabilities Trade and other payables Total liabilities Net assets The net cash flows from discontinued operations are as follows: Operating cash flows Investing cash flows Financing cash flows Net cash inflows (b) Details of the sale of the subsidiary Consideration received: Cash Fair value of O3 Mining Inc. shares received Total disposal consideration Carrying amount of net assets sold Transactions costs associated with the disposal Gain on sale before income tax and reclassification of foreign currency translation reserve Reclassification of foreign currency translation reserve Gain on sale after income tax Earnings per share Basic earnings, profit/(loss) for the year from discontinued operations Diluted earnings profit/(loss) for the year from discontinued operations	2021 $’000 2020 $’000 - 624 - 968 - 1,592 - - - - - 1,592
	2021 2020
	$’000 $’000
	- (411) - 1,442 - -
	- 1,031

	2021 2020
	$’000 $’000
	- 1,581 - 10,138
	- 11,719
	- (1,591) - (42)
	- 10,086
	- (941)
	- 9,145

	2021 2020
	$’000 $’000
	- 0.03 - 0.03

Accounting policy

A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held for sale 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 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 and other comprehensive income.

10. LOSS PER SHARE

Basic and diluted loss per share

The calculation of basic loss per share for the year ended 30 June 2021 was based on the loss attributable to ordinary equity holders of the parent of $43.2 million (2020: loss of $2.7 million) and a weighted average number of ordinary shares outstanding during the year ended 30 June 2021 of 327,183,753 (2020: 277,061,780).

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Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

Loss attributable to ordinary shareholders
Loss attributable to ordinary equity holders of the parent from
continuing operations
Profit attributable to ordinary equity holders of the parent from
discontinued operations
Loss attributable to ordinary equity holders of the parent for basic
earnings
Loss attributable to ordinary equity holders of the parent adjusted for
the effect of dilution

2021
$’000
2020
$’000
(43,193)
(11,399)
-
8,740
(43,193)
(2,659)
(43,193)
(2,659)

Diluted loss per share has not been disclosed as the impact from options and performance rights is anti-dilutive.

Accounting policy

Basic loss per share is calculated by dividing the profit attributable to the 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 any bonus elements in ordinary shares issued during the financial year.

Diluted loss per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

ASSETS

Non-cash financing and investing activities

During the year ended 30 June 2021, the Company issued 3,336,304 shares in addition to cash consideration of $20.8 million to acquire private properties at the Julimar Project refer to note 15 and 21(a).

Accounting policy

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of six months or less. The carrying value of cash and cash equivalents is considered to approximate fair value.

12. RECEIVABLES

Current Trade receivables GST receivable Lease receivable Prepayments Non-Current Lease receivable	2021 2020
	$’000 $’000
	19 62 1,282 383 14 34 369 132
	1,684 611
	- 15
	- 15

Accounting Policy

Trade and Other Receivables

This section provides additional information about those individual line items in the Statement of Financial Position that the Directors consider most relevant in the context of the operations of the entity.

11. CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS
Bank balances and cash on hand Term deposits Reconciliation of cash flows from operating activities Loss for the year attributed to owners of the parent Adjustments for: Depreciation and amortisation Loss/(gain) on sale of fixed assets Income tax benefit Net gain on sale of exploration and evaluation assets Foreign exchange gain Fair value adjustment on acquisition of exploration projects Fair value adjustment on livestock Deconsolidation of subsidiaries Equity-settled share-based payment expenses Operating loss before changes in working capital and provisions Increase in trade and other receivables Increase in financial assets Increase in trade creditors and other liabilities Increase /(decrease) in provisions Net cash used in operating activities	2021 2020
	$’000 $’000
	20,862 30,601 79,022 15,093
	99,884 45,694

	2021 2020
	$’000 $’000
	(43,193) (2,659) 274 264 - 17 (2,938) (1,004) - (178) (33) (219) - 1,086 (102) - 8 (9,063) 2,956 512
	(43,028) (11,244)
	(1,003) (162) (1) (2) 4,146 1,193 2,256 (6)
	(37,630) (10,221)

Trade and other receivables are recognised at fair value which is usually the value of the invoice sent to the counterparty and subsequently at the amounts considered recoverable. Trade receivables are generally due for settlement within periods ranging from 30 to 60 days.

Goods and Services Taxes (GST)

Revenue, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated at the amount of GST included. The net amount of GST recoverable from, or payable, to the Australian Taxation Office (‘ATO’) is included as a current asset or current liability in the consolidated statement of financial position.

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

13. BIOLOGICAL ASSETS

Livestock Carrying amount at 1 July Acquisitions of livestock(1) Decreases due to sales Change in fair value	2021 $’000 2020 $’000 - - 573 - (346) - 102 - 329 -

(1) At 30 June 2021, livestock comprises of cattle and sheep which were acquired in December 2020, as part of the acquisition of three private properties at the Julimar Project.

Accounting Policy

Livestock is measured at fair value less costs to sell. At 30 June 2021, current market prices were used in determining the fair value of livestock on hand.

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Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

14. FINANCIAL ASSETS

Current Equity instruments designated at fair value through other comprehensive income: Listed equity investments(1)	2021 $’000 2020 $’000 15,570 8,580 15,570 8,580

(1) Listed equity investments represent investments in various companies listed on the ASX and TSX including 2,115,884 ordinary shares in O3 Mining (2020: 3,092,784 ordinary shares) and 6,007,192 ordinary shares in Caspin Resources Limited (“Caspin”) (2020: nil).

During the year ended 30 June 2021, the Company sold 976,900 ordinary shares in O3 Mining for total net proceeds of A$2.6 million and acquired a strategic 10% interest in Caspin for $1.2 million as part of an Initial Public Offering.

Refer to note 23 (b) for details of movements in equity instruments (including disposals) and note 24 for further information in relation to the fair value determination of financial assets.

Non-current Bank guarantee and security deposits	2021 2020
	$’000 $’000
	300 278
	300 278

Accounting Policy

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 the business model that such assets are held.

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.

(i) Financial assets at fair value through profit or loss:

Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.

(ii) Financial assets at fair value through other comprehensive income:

Financial assets at fair value through other comprehensive income (FVOCI) 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. Under FVOCI, subsequent movements in fair value are recognised in other comprehensive income and are never reclassified to profit or loss. Any gains or losses recognised in other comprehensive income are not recycled upon derecognition of the asset.

15. PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT
Cost At 1 July 2020 Additions Acquisition of freehold land and buildings(1) At 30 June 2021 Accumulated depreciation and impairment losses At 1 July 2020 Depreciation charge At 30 June 2021 Net book value at 30 June 2021	Plant, equipment Office furniture & computer Freehold land &
	& Vehicles equipment buildings Total
	$’000 $’000 $’000 $’000
	183 590 - 773 668 97 - 765 - - 42,654 42,654
	851 687 42,654 44,192
	86 391 - 477 85 58 21 164
	171 449 21 641
	680 238 42,633 43,551

(1) During the year ended 30 June 2021, the Group acquired eight private properties covering a combined area of 2,146 hectares (~21km[2] ) of private land at the southern end of the Julimar Project, covering all of the current known mineralisation at the Gonneville Intrusion. Total cash consideration (inclusive of stamp duty and settlement costs) for the eight properties was $23.7 million and 3,336,304 fully paid ordinary shares valued at $17.3 million at the date of settlement. One property had not settled as at 30 June 2021 and as the contract of sale was unconditional, the Group has recognised the acquisition as a payable. Refer to note 19.

The Group also acquired an additional private property for field accommodation purposes for a total of $1.7 million (inclusive of stamp duty and settlement costs).

Accounting estimate and judgement

During the year, the acquisition of several private properties included farming equipment and livestock. This has been accounted for as an asset acquisition rather than a business combination under AASB 3 Business Combinations as the Group has applied the “concentration test”. Under AASB 3, if an acquisition meets the concentration test, whereby substantially all of the fair value of the gross assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets, then an entity may elect to account for an acquisition as an asset acquisition rather than a business combination.

As substantially all of the fair value of the assets acquired was attributable to the land and buildings acquired rather than the value attributable to the livestock and farming equipment, the Group has determined that the acquisition meets the concentration test and as such is recognised as an asset acquisition rather than a business combination.

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Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

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----- Start of picture text -----

||||||
|---|---|---|---|---|
|Office|
|Plant,|furniture &|Freehold|
|equipment|computer|land &|
|& Vehicles|equipment|buildings|Total|
|$’000|$’000|$’000|$’000|
|Cost|
|At 1 July 2019|221|653|-|874|
|Additions|87|40|-|127|
|Disposals|(128)|(105)|-|(233)|
|Foreign exchange differences|3|2|-|5|
|At 30 June 2020|183|590|-|773|
|Accumulated depreciation and impairment losses|
|At 1 July 2019|148|398|-|546|
|Depreciation charge|22|67|-|89|
|Disposals|(85)|(75)|-|(160)|
|Foreign exchange differences|1|1|2|
|At 30 June 2020|86|391|-|477|
|Net book value at 30 June 2020|97|199|-|296|

----- End of picture text -----

Accounting Policy

Recognition and measurement

Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses, if any. It also includes the direct cost of bringing the asset to the location and condition necessary for first use. The assets are subsequently measured at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation

Depreciation is calculated on a diminishing value basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. The depreciation rates used in the current and comparative periods are as follows:

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----- Start of picture text -----

||||
|---|---|---|
|«|Buildings|2.5%|
|«|Plant, equipment and vehicles|5%-40%|
|«|Office furniture & computer equipment|6%-40%|

----- End of picture text -----

The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.

An item of plant and equipment and any significant part initially recognised is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised.

The carrying values of plant and equipment are reviewed for impairment at each balance date in line with the Group’s impairment policy.

16. LEASES

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----- Start of picture text -----

2021 2020
$’000 $’000
347 178
(95) (164)
252 14
----- End of picture text -----

Amounts recognised in statement of financial position Right-of-use assets Right-of-use assets Depreciation Net carrying amount

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||||
|---|---|---|
|2021|2020|
|$’000|$’000|
|Lease liabilities|
|Current|137|47|
|Non-current|212|12|
|Total liabilities|349|59|
|Amounts recognised in statement of comprehensive income|
|Deprecation charge of right-of-use assets|109|176|
|Net finance expenses|25|10|

----- End of picture text -----

This Note provides information for leases where the Group is lessee.

Accounting Policy

Right-of-use leased assets

A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net of any lease incentives received, any initial direct costs incurred, and an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.

Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the asset, whichever is the shorter. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.

The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.

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 Group’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.

EMPLOYEE BENEFITS AND SHARE-BASED PAYMENTS

This section of the Notes includes information that must be disclosed to comply with accounting standards and other pronouncements relating to the remuneration of employees and consultants of the Group, but that is not necessarily immediately related to individual line items in the Financial Statements.

17. EMPLOYEE BENEFITS

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||||
|---|---|---|
|2021|2020|
|$’000|$’000|
|Annual leave accrued|403|197|
|Provision for long service leave|6|11|
|409|208|

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Accounting Policy

Liabilities for employee benefits for wages, salaries, annual leave and personal leave expected to be settled within 12 months of the reporting date are recognised in employee benefits in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

The provision for long service leave represents the vested long service leave entitlements accrued.

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Annual Report 2021 105

Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

18. SHARE-BASED PAYMENTS

(a) Share based payment transactions

The expense recognised during the year is shown in the following table:

Share options granted – equity settled Performance rights granted – equity settled Reversal of expense previously recognised on performance rights that lapsed during the period Total expenses recognised as share-based payments	2021 2020
	$’000 $’000
	2,085 128 930 681 (59) (297)
	2,956 512

(c) Performance Rights

Performance rights issued during the year ended 30 June 2021, were issued under the Company’s ESIP. Under the ESIP, the Board may issue performance rights to eligible employees and directors. Each performance right represents a right to be issued an ordinary share at a future point in time, subject to the satisfaction of any vesting conditions. Performance rights are subject to lapsing if the vesting conditions are not met by the relevant measurement date or expiry date (if no other measurement date is specified) or if employment is terminated.

No exercise price is payable and eligibility to receive performance rights under the ESIP is at the Board’s discretion. The performance rights cannot be transferred and are not quoted on the Australian Securities Exchange (ASX). There are no voting rights attached to the performance rights. For details regarding the vesting conditions of the performance rights refer to pages 74 to 79 of the Remuneration Report.

A summary of performance rights on issue is as follows:

30 June 2021:

(b) Share Options

Share options are granted under the terms of the Company’s Employee Share Incentive Plan (ESIP). Under the terms of the ESIP, the Board may offer options for no consideration to full-time or part-time employees (including persons engaged under a consultancy agreement), executive and non-executive directors. In the case of the directors, the issue of options requires shareholder approval.

Each share option entitles the holder, on exercise, to one ordinary fully paid share in the Company. There is no issue price for the share options. The exercise price for the share options is determined by the Board. A share option may only be exercised after that share option has vested and any other conditions imposed by the Board on exercise satisfied. The Board may determine the vesting period, if any. Where options are granted with vesting conditions, unless the Board determines otherwise, unvested options are forfeited when the holder ceases to be employed by the Group.

Typically, share options are granted under service conditions. Non-market performance conditions are not considered in the grant date fair value measurement of the services received.

The number and weighted average exercise prices of share options on issue is as follows:

Outstanding at the beginning of the year Exercised during the year Lapsed during the year Granted during the year(1) Outstanding at the end of the year Vested/exercisable at the end of the year	Weighted average exercise Weighted average
	price Number exercise price Number
	$ of options $ of options
	2021 2021 2020 2020
	0.19 6,350,000 0.19 6,200,000 0.18 (5,350,000) 0.20 (850,000) - - 0.21 (1,000,000) 3.43 850,000 0.21 2,000,000
	1.32 1,850,000 0.19 6,350,000
	1.09 1,550,000 0.19 6,350,000

(1)Share options granted during the year includes 150,000 options to be issued to Mr McIntosh subject to shareholder approval.

The share options outstanding as of 30 June 2021 have a weighted average contractual life remaining of 2.28 years (2020: 1.3 years).

The fair value of the share options is estimated at the date of grant (including the share options to be issued subject to shareholder approval) using a Black-Scholes option-pricing model. The following table gives the assumptions made in determining the fair value of the share options granted during the year.

Weighted average share price at grant date Weighted exercise price Expected volatility (expressed as weighted average volatility) Option life (expressed as weighted average life) Expected dividends Risk-free interest rate (expressed as weighted average) Weighted average valuation per share option	2021 2020 $4.42 $0.165 $3.43 $0.21 110% 65% 2.60 2.5 - - 0.13% 0.65% $2.29 $0.053

	Opening Closing Share price at date of
Grant date	balance Granted Vested Lapsed/Forfeited balance issue ($)
27 July 2017 9 November 2017 29 November 2017 31 July 2018 28 November 2018 28 November 2019 2 September 2020 25 November 2020 26 November 2020 25 February 2021 30 June 2020:	2,825,590 - (2,410,225) (415,365) - 0.16 339,076 - (339,076) - - 0.205 1,217,989 - (1,217,989) - - 0.18 5,059,036 - - - 5,059,036 0.155 871,751 - - - 871,751 0.155 5,292,347 - - - 5,292,347 0.165 - 820,482 - - 820,482 1.475 - 280,081 - - 280,081 3.78 - 7,500 - - 7,500 3.86 - 62,014 - - 62,014 4.57
	15,605,789 1,170,077 (3,967,290) (415,365) 12,393,211

	Opening Closing Share price at date of
Grant date	balance Granted Vested Lapsed/Forfeited balance issue ($)
15 July 2016 22 November 2016 27 July 2017 9 November 2017 29 November 2017 31 July 2018 28 November 2018 28 November 2019	2,271,452 - - (2,271,452) - 0.19 1,200,738 - - (1,200,738) - 0.16 2,825,590 - - - 2,825,590 0.16 507,316 - - (168,240) 339,076 0.205 1,217,989 - - - 1,217,989 0.18 5,430,053 - - (371,017) 5,059,036 0.155 871,751 - - - 871,751 0.155 - 5,292,347 - - 5,292,347 0.165
	14,324,889 5,292,347 - (4,011,447) 15,605,789

The following table provides the assumptions made in determining the fair value of the performance rights granted.

Weighted average share price at grant date Exercise price Weighted average expected volatility Weighted average performance period (years) Weighted average Vesting period (years) Expected dividends Weighted average Risk-free interest rate Weighted average fair value per right	2021 2020
	$2.206 $0.165 Nil Nil 110% 65% 2.74 2.59 2.74 2.59 - - 0.22% 0.65% $2.142 $0.143

The weighted average fair value of the performance rights outstanding at 30 June 2021 was $0.326 per performance right (2020: $0.139).

106 Annual Report 2021

Annual Report 2021 107

Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

Accounting Policy

The fair value of performance rights and share options granted by the Company 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 performance rights and share options granted including any market conditions (e.g. the company’s share price) and excluding the impact of any service and non-market performance vesting conditions (e.g. strategic objectives and service conditions).

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 performance rights or share options 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 profit or loss, with a corresponding adjustment to equity.

The value of share options at grant date is calculated using a Black Scholes option valuation model. The value of performance rights at grant date is the fair value of performance rights calculated is calculated using a Monte Carlo simulation model (market-based conditions) and the Black Scholes option valuation model (non-market based conditions).

In circumstances where performance rights or share options are subject to a service condition and require shareholder approval which is yet to be obtained at reporting date, the Group estimates the services when received. In this situation, the Group estimates the fair value of the equity instruments by estimating the fair value at the end of the reporting period being 30 June 2021. Once the date of grant has been established, the Group shall revise the earlier estimate so that the amounts recognised for services received are ultimately based on the grant date fair value.

Significant accounting judgements, estimates and assumptions

The Group measures the cost of equity-settled share-based payments of options at fair value at the grant date using a Black-Scholes Option model and performance rights are measured using a Monte Carlo simulation model for market-based conditions and the Black Scholes option valuation methodology for non-market-based conditions, taking into account the terms and conditions upon which the instruments were granted.

The expected life of the share-based payments is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome.

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 profit or loss and equity.

At each reporting period non-market vesting conditions in relation to performance rights are assessed in order to determine the probability of the likelihood that the non-market vesting conditions are met.

LIABILITIES AND EQUITY

19. TRADE AND OTHER PAYABLES

TRADE AND OTHER PAYABLES
Trade payables Other payables Property acquisition payable (refer note 15) Accrued expenses	2021 2020
	$’000 $’000
	36 32 185 104 4,685 - 5,671 1,609
	10,577 1,745

Accounting Policy

Trade and other payables are stated at amortised cost. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

20. PROVISIONS

PROVISIONS
Provision for payroll tax	2021 2020
	$’000 $’000
	2,063 -
	2,063 -

A provision has been recognised for payroll tax payable in relation to 5,930,787 performance rights that were issued to key management personnel and employees in 2018 that vested in full following determination by the Board in August 2021 that the performance conditions had been satisfied over the three-year measurement period ended 30 June 2021.

Accounting Policy

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

21. ISSUED CAPITAL

There were 346,857,393 shares on issue at 30 June 2021 (2020: 303,537,180).

(a) Movements in ordinary shares on issue Balance at beginning of financial year Shares issued on vesting of performance rights Shares issued to acquire private properties – refer to note 15. Shares issued to acquire subsidiary Options exercised - directors Options exercised - other Share placement(1) Share purchase plan(2) Share issue costs Balance at end of financial year	2021 2020
	No. $’000 No. $’000

	303,537,180 59,501 266,568,134 29,807
	3,967,290 584 - - 3,336,304 17,271 - - - - 7,500,000 1,088 4,850,000 859 150,000 31 500,000 125 700,000 140 26,666,667 100,000 28,619,046 30,050 3,999,952 15,000 - - - (3,911) - (1,615)
	346,857,393 189,429 303,537,180 59,501

(1) On 8 December 2020, the Company completed a Share Placement to institutional and sophisticated investors raising $100 million (before issue costs) at an issue price of $3.75.

(2) On 15 January 2021, the Company completed a Share Purchase Plan raising $15 million (before issue costs) at an issue price of $3.75.

Issuance of Ordinary Shares

Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, the ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds on liquidation.

(b) Share options On issue at 1 July Options exercised during the year Options lapsed during the year Options issued during the year On issue at 30 June Subject to shareholder approval (refer note 18) Total	2021 2020
	No. No.
	6,350,000 6,200,000 (5,350,000) (850,000) - (1,000,000) 700,000 2,000,000
	1,700,000 6,350,000 150,000 -
	1,850,000 6,350,000

108 Annual Report 2021

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Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

The details of options on issue as at 30 June 2021 are as follows:

Number		Expiry Date	Exercise Price $
1,000,000	30	November 2021	0.21
700,000		30 June 2023	2.20

Options subject to shareholder approval at 30 June 2021 are to be issued with an exercise price of $6.72 and an expiry date of 19 February 2024.

(c) Performance rights On issue at 1 July Performance rights issued Performance rights vested Performance rights lapsed On issue at 30 June	2021 2020
	No. No.
	15,605,789 14,324,889 1,170,077 5,292,347 (3,967,290) - (415,365) (4,011,447)
	12,393,211 15,605,789

At 30 June 2021 the Company had 12,393,211 performance rights on issue under the following terms and conditions:

Number Terms	Expiry Date	Exercise Price $
5,930,787 The number of performance rights that will vest will be solely dependent on the Company meeting the outlined strategy objectives, absolute Total Shareholder Return (“TSR”) objectives and by comparing the Company’s TSR with that of a comparator group, as at the measurement date of 30 June 2021, as outlined in the Remuneration Report. 5,292,347 The number of performance rights that will vest will be solely dependent on the Company meeting the outlined strategy objectives, absolute Total Shareholder Return (“TSR”) objectives and by comparing the Company’s TSR with that of a comparator group, as at the measurement date of 30 June 2022, as outlined in the Remuneration Report. 1,170,077 The number of performance rights that will vest will be solely dependent on the Company meeting the outlined strategy objectives, ESG & Health & Safety objectives, absolute Total Shareholder Return (“TSR”) objectives and by comparing the Company’s TSR with that of a comparator group, as at the measurement date of 30 June 2023, as outlined in the Remuneration Report.	30 June 2022 30 June 2023 30 June 2024	Nil Nil Nil

22. ACCUMULATED LOSSES

Movements in retained earnings/(accumulated losses) attributable to owners of the parent: Balance at beginning of financial year Loss for the year attributable to owners of the parent Net gain/(loss) on disposal of financial assets transferred between equity items (see note 23(b)) Transfers between equity items (see note 23) Balance at end of financial year	2021 2020
	$’000 $’000
	(6,752) (9,133) (43,193) (2,659) (524) 4,697 1,288 343
	(49,181) (6,752)

23. RESERVES

(a) Share based payment reserve Balance at beginning of financial year Equity settled share-based payments expense (refer to note 18(a)) Vesting of performance rights Transfers to accumulated losses (refer to note 22) Balance at end of financial year	2021 2020
	$’000 $’000
	1,630 1,461 2,956 512 (584) - (263) (343)
	3,739 1,630

The share-based payments reserve is used to recognise the value of equity settled share-based payment transactions provided to employees, including key management personnel, as part of their remuneration. Refer to note 18 for further details.

(b) Investment revaluation reserve Balance at beginning of financial year Realised gains/(losses) on sale of financial assets(1) Fair value movement on revaluation of financial assets(2) Tax effect on investment revaluations and disposals Net gain/(loss) on disposal of financial assets transferred between equity items (see note 22) Transfers to accumulated losses (see note 22) Balance at end of financial year	2021 2020
	$’000 $’000
	(1,468) (74) (487) 6,243 8,969 (1,907) (1,847) (1,033)
	5,167 3,229 524 (4,697) (1,025) -
	4,666 (1,468)

(1) Realised losses on sale of financial assets for the year ended 30 June 2021, primarily includes the net loss on sale (before tax) of the Company’s equity investment in O3 Mining Inc. Refer note 14.

(2) Unrealised fair value movements on financial assets for the year ended 30 June 2021, primarily relates to the Company's equity investment in Caspin Resources Limited. Refer note 14.

(c) Foreign currency translation reserve

The foreign currency reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used to record the effect of exchange variances resulting from net investments in foreign operations. Total foreign currency translation reserve balance at 30 June 2021 was $0.5 million (30 June 2020: $0.5 million).

All movements in the above reserves are as stated in the consolidated statement of changes in equity.

FINANCIAL INSTRUMENTS

This section of the Notes discusses the Group’s exposure to various risks and shows how these could affect the Group’s financial position and performance.

24. FINANCIAL INSTRUMENTS

(a) Capital risk management

The capital structure of the Group consists of equity attributable to equity holders, comprising issued capital, reserves and accumulated losses as disclosed in notes 21-22.

The Board reviews the capital structure on a regular basis and considers the cost of capital and the risks associated with each class of capital. The Group will balance its overall capital structure through new share issues as well as the issue of debt, if the need arises.

(b) Market risk exposures

Market risk is the risk that changes in market prices such as foreign exchange rates, equity prices and interest rates will have on the Group’s income or value of its holdings of financial instruments.

(i) Foreign exchange rate risk

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. The Group does not hedge this exposure. The cash at bank held by the Company currently comprises Australian dollar (“AUD”) and Canadian dollar (“CAD”) funds. The Group manages its foreign exchange risk by constantly reviewing its exposure and ensuring that there are appropriate cash balances in

110 Annual Report 2021

Annual Report 2021 111

Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

order to meet its likely future commitments in each currency. At 30 June 2021, Chalice had approximately CAD$2.9 million (A$3.1 million) cash on hand in CAD denominated bank accounts.

The following tables summarises the impact of increases/decreases in the relevant foreign exchange rates on the Group’s post-tax result for the year and on the components of equity. The sensitivity analysis uses a variance of 10% movement in the CAD against AUD.

10% movement in the CAD against AUD.
Impact on gain/(loss) AUD/CAD +10% AUD/CAD -10% Impact on equity AUD/CAD +10% AUD/CAD -10%	2021 2020
	$’000 $’000
	(279) 307 (37) 60 (279) 307 (37) 60

In addition to the above foreign exchange exposure on the Group’s cash balance, the Group is also exposed to movements in CAD against AUD due to its shareholding in O3 Mining Inc.

The following table summarises the impact of increases/decreases in the relevant foreign exchange rates on the Group’s post-tax result for the year and on the components of equity. The sensitivity analysis uses a variance of 10% movement in the CAD against AUD.

10% movement in the CAD against AUD.
Impact on gain/(loss) AUD/CAD +10% AUD/CAD -10% Impact on equity AUD/CAD +10% AUD/CAD -10%	2021 2020
	$’000 $’000
	(475) 522 (763) 839 (475) 522 (763) 839

(ii) Equity prices

The Group has exposure to equity prices through its holdings in various listed entities. The following table outlines the impact of increases/decreases in the value of the Company’s investment holding on the components of equity. The sensitivity analysis uses a variance of 10% movement upwards and down on the year end closing share prices.

equity. The sensitivity analysis uses a variance of 10% share prices.	movement upwards and down on the year end closing
Impact on equity Share price +10% Share price -10%	2021 2020
	$’000 $’000
	1,557 (1,415) 858 (780)

(iii) Interest rate risk

At reporting date, the Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s short-term cash deposits. The Group is not exposed to cash flow volatility from interest rate changes on borrowings, as it does not have any short or long term borrowings.

Chalice constantly analyses its exposures to interest rates, with consideration given to potential renewal of existing positions and the period to which deposits may be fixed. The Group considers preservation of capital as the primary objective as opposed to maximising interest rate yields by investing in higher risk investments.

At reporting date, the following financial assets were exposed to fluctuations in interest rates:

Cash and cash equivalents	2021 2020
	$’000 $’000
	99,884 45,694

The following sensitivity analysis is based on the interest rate risk exposures in existence at reporting date. The sensitivity is based on a change of 20 basis points in interest rates at reporting date.

In the year ended 30 June 2021 if interest rates had moved by 20 basis points, with all other variables held constant, the post-tax result for the Group would have been affected as follows:

Impact on gain/(loss) 20 bp increase 20 bp decrease Impact on equity 20 bp increase 20 bp decrease	2021 2020
	$’000 $’000
	158 (158) 88 (88) 158 (158) 88 (88)

(c) Credit risk exposure

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount, net of any allowance for doubtful debts, as disclosed in the notes to the financial statements.

It is not the Company’s policy to securitise its trade and other receivables, however, receivable balances are monitored on an ongoing basis. In addition, the Company currently diversifies its cash holdings across three of the main Australian financial institutions.

(d) Liquidity risk exposure

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board of Directors actively monitors the Group’s ability to pay its debts as and when they fall due by regularly reviewing the current and forecast cash position based on the expected future activities.

The Group has non-derivative financial liabilities and lease liabilities which include trade and other payables of $10.6 million (2020: $1.7 million) all of which are due within 60 days.

In light of the Group’s current financial assets and minimal committed expenditure, the Group could continue to operate as a going concern for a considerable period of time, subject to any changes to the Group structure or undertaking a material transaction.

(e) Fair value of financial instruments

The Directors consider the carrying value of the financial assets and financial liabilities are recognised in the consolidated financial statements approximate their fair values. In particular, equity investments designated at fair value through other comprehensive income are measured at fair value using quoted market prices at the reporting date (Level 1 fair value measurement).

Non-listed equity investments are measured at fair value using unobservable inputs (Level 3 fair value measurement).

The directors have assessed that the fair value of cash and short-term deposits, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Accounting Policy

The Group measures financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

In the principal market for the asset or liability; or

«

« In the absence of a principal market, the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximise the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

« Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

112 Annual Report 2021

Annual Report 2021 113

Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

« Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
« Level 3 - Valuation technique for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

GROUP COMPOSITION

This section of the Notes includes information that must be disclosed to comply with accounting standards and other pronouncements relating to the structure of the Group, but that is not immediately related to individual line items in the Financial Statements.

25. PARENT ENTITY

Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Non-current liabilities Total liabilities Net assets Equity Issued capital Accumulated losses Reserves Total equity Financial performance Loss for the year Total comprehensive loss Commitments and contingencies (i) Contingencies	2021 2020
	$’000 $’000
	110,224 46,136 6,546 6,961
	116,770 53,097
	3,421 582 254 49
	3,675 631
	113,095 52,466
	189,429 59,501 (109,561) (31,965) 33,227 24,930
	113,095 52,466

	2021 2020
	$’000 $’000
	(77,829) (10,551)
	(77,829) (10,551)

Other than as disclosed in note 29 the parent entity has no contingent assets or liabilities.

26. LIST OF SUBSIDIARIES

Significant investments in subsidiaries

The consolidated financial statements include the financial statements of Chalice Mining Limited and its subsidiaries listed in the following table:

Country of	% Equity Interest

Name Incorporation	2021 2020
Parent entity Chalice Mining Limited Australia Subsidiaries Chalice Operations Pty Ltd Australia Western Rift Pty Ltd_(i) Australia Falcon Gold Resources Pty Ltd(1) Australia CGM (Lithium) Pty Ltd Australia CGM (WA) Pty Ltd Australia North West Nickel Pty Ltd(ii) Australia (i) _Subsidiaries of Western Rift Pty Ltd Chalice Gold Mines (Ontario) Inc_.(iii)_ Canada	100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 - 100
(ii) Subsidiaries of North West Nickel Pty Ltd
Nebula Resources Pty Ltd Australia (iii) Subsidiaries of Chalice Gold Mines (Ontario) Inc. Chalice Gold Mines(Exploration)Inc.(2) Canada

(1) Falcon Gold Resources Pty Ltd was formerly named CGM Minerals Pty Ltd.

(2) Chalice Gold Mines (Exploration) Inc was voluntarily deregistered August 2020.

Accounting Policy

The consolidated financial statements comprise the financial statements of Chalice Mining Limited (“Company” or “Parent”) and its subsidiaries as at 30 June each year (the “Group”). Interests in associates are equity accounted and are not part of the consolidated Group.

Subsidiaries are all those entities controlled by the Group. The Group controls an entity when it 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 over the entity.

Special purpose entities are those entities over which the Group has no ownership interest but in effect the substance of the relationship is such that the Group controls the entity so as to obtain the majority of benefits from its operation.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

Subsidiaries and special purpose entities are fully consolidated from the date on which control is transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Group.

Investments in subsidiaries held by Chalice Mining Limited are accounted for at cost in the financial statements of the parent entity less any impairment charges.

(ii) Capital commitments

Other than disclosed in note 29, the parent entity has no capital commitments.

Accounting Policy

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

Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent entity’s financial statements. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

114 Annual Report 2021

Annual Report 2021 115

Notes to the Consolidated Financial Statements For the Year Ended 30 June 2021

OTHER INFORMATION

This section of the Notes includes other information that must be disclosed to comply with accounting standards and other pronouncements, but that is not immediately related to individual line items in the Financial Statements.

27. AUDITOR’S REMUNERATION

AUDITOR’S REMUNERATION
Audit services HLB Mann Judd: Audit and review of financial reports Other services	2021 2020
	$’000 $’000
	36 52 8 5
	44 57

28. RELATED PARTIES

Key management personnel Executive Directors A C Dorsch (Managing Director and Chief Executive Officer)

Non-executive Directors

T R B Goyder (Chairman) (transitioned from Executive Chairman 1 September 2020) S P Quin M S Ball G J Dixon – appointed 21 August 2020 S M McIntosh – appointed 20 February 2021

Executives

R K Hacker (Chief Financial Officer) K M Frost (General Manager – Exploration)

B M Kendall (General Manager – Development)

S Carney (General Manager – Environment and Community) appointed 15 March 2021

The KMP compensation is as follows:

Short-term benefits Post-employment benefits Long-term benefits Termination benefits Share-based payments	2021 2020
	$’000 $’000
	2,100 1,519 118 102 (8) - - 62 2,912 411
	5,130 2,094

Individual director’s and executive’s compensation disclosures

The Group has transferred the detailed remuneration disclosures to the Directors’ Report in accordance with Corporations Amendment Regulations 2006 (No. 4). These remuneration disclosures are provided in the Remuneration Report at page 63 and 83 of the Directors’ Report and are designated as audited.

Loans to key management personnel and their related parties

No loans were made to KMP or their related parties.

Other key management personnel transactions with the Group

There were no other key management personnel transactions within the Group during the year ended 30 June 2021.

29. COMMITMENTS AND CONTINGENCIES

Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements as specified by various governments in order to maintain exploration tenements in good standing. Therefore, amounts stated are based on the minimum commitments known within the next year. The Group may in certain situations apply for exemptions under relevant mining legislation or enter into joint venture arrangements which significantly reduce working capital commitments. These obligations are not provided for in the financial report and are payable:

Within 1 year Within 2-5 years Later than 5 years	2021 2020
	$’000 $’000
	5,187 3,086 - - - -
	5,187 3,086

Contingent asset and Contingent Liabilities

There are no contingent assets or contingent liabilities at 30 June 2021 (30 June 2020: nil).

30. EVENTS SUBSEQUENT TO REPORTING DATE

In July 2021, the Group sold the remaining balance of its holding in O3 Mining Inc. for total proceeds of $4.6 million.

On 23 September 2021, the Company issued 296,160 – 2021/2022 Performance Rights to senior executives and employees of the Company under the terms of the Employee Securities Incentive Plan. In addition to the above issue, on 16 August 2021, it was resolved that Alex Dorsch, Managing Director and Chief Executive Officer has been awarded 65,531 Performance Rights on the same terms and conditions. The issue of the Performance Rights to Mr Dorsch is conditional on the receipt of shareholder approval to be sought at the Company’s 2021 Annual General Meeting.

Other than disclosed above or elsewhere in this report, there have been no other material post balance date events which have impacted the Company.

31. CHANGES IN ACCOUNTING POLICIES

In the year ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to the Group and effective for the current annual reporting period.

Apart from the adoption of the new “concentration test” under AASB 3 Business Combinations (refer to note 15), the impact on the financial performance and position of the Company from the adoption of the new or amended Accounting Standards and Interpretations is not material. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

32. ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been early adopted by the Group for the year ended 30 June 2021.

The Directors have also reviewed all Standards and Interpretations in issue not yet adopted for the period ended 30 June 2021. As a result of this review the Directors have determined that there is no material impact of the standards and Interpretations on issue and not yet adopted by the Company.

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For the Year Ended 30 June 2021

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In the opinion of the directors of Chalice Mining Limited (the ‘Company’):
a. the financial statements, notes and the additional disclosures in the directors’ report designated as audited, of the Group are in accordance with the Corporations Act 2001 including:
- (i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year ended on that date; and
- (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 .
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
c. The statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.

This declaration is signed in accordance with a resolution of the Directors of Chalice Mining Limited.

Dated at Perth the 23[rd] day of September 2021.

On behalf of the Board:

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INDEPENDENT AUDITOR’S REPORT

To the members of Chalice Mining Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Chalice Mining Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

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

Basis for opinion

Alex Dorsch Managing Director and Chief Executive Officer

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

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

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter

How our audit addressed the key audit matter

Accounting for Freehold Land and Buildings Refer to Note 15

During the year the Group acquired $42.7 million of freehold land and buildings in the Julimar Project area.

Our procedures included but were not limited to the following:

Reviewing the material terms and conditions of the transactions by

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Independent Auditor’s Report

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Key Audit Matter

How our audit addressed the key audit matter

Accounting for Freehold Land and Buildings

Refer to Note 15

reference to the underlying sales agreements;

We consider these acquisitions to be a key audit matter as they are material to the users’ understanding of the financial statements as a whole and it required significant auditor attention and communication with those charged with governance.

Ensuring management had correctly applied the requirements of accounting standards to the transactions and, in particular, the application of the concentration test under AASB 3;
- Assessing whether the consideration had been determined correctly with respect to equity instruments issued as consideration; and
- Testing of title held over freehold land.

Accounting for share-based payments

Refer to Note 18

Our procedures included but were not limited to the following:

The Group has various share-based payment arrangements in place comprising options and performance rights issued with various performance conditions and in varying tranches. The Group recorded a share-based payment expense of $2.96 million for the year ended 30 June 2021.

Reviewing the valuation of sharebased payments entered into during the accounting period;
Assessing the experience, qualifications and expertise of external valuers used;

We consider this to be a key audit matter due to the complexity of the varying share-based payment arrangements and the judgement involved in relation to the satisfaction of vesting conditions and allocation across vesting periods.

Considering whether the determination of the current period vesting expense had been correctly determined;
Assessing whether management’s determination of the likelihood of vesting was reasonable; and
- Ensuring disclosures within the financial statements and remuneration report were appropriate.

Information other than the financial report and auditor’s report thereon

The directors are responsible for the other information. The other information comprises the information included in the Group’s Annual Financial Report for the year ended 30 June 2021 but does not include the financial report and our auditor’s report thereon.

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

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

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Responsibilities of the directors for the financial report

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

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

Auditor’s responsibilities for the audit of the financial report

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

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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

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Independent Auditor’s Report

For the Year Ended 30 June 2021

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From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Remuneration Report

Additional information required by the Australian Securities Exchange Limited (“ASX”) Listing Rules and not disclosed elsewhere in this report is set out below. The information below was applicable as at 15 September 2021.

Substantial shareholders

The names of the substantial shareholders and the number of shares in which they have a relevant interest are:

	Number of ordinary	Percentage of capital held
Shareholder	shares held	%

Timothy Rupert Barr Goyder	38,070,475	10.79

Opinion on the Remuneration Report

Issued Capital

We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2021.

In our opinion, the Remuneration Report of Chalice Mining 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

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HLB Mann Judd M R Ohm Chartered Accountants Partner

Perth, Western Australia 23 September 2021

Share capital comprised 352,938,180 fully paid ordinary shares of the Company and the Company had 9,542 holders of ordinary fully paid shares.

Other Unlisted Securities on Issue

Class of Security	No. Securities	No. Holders
Options, exercise price $0.21, expiry 30 November 2021	1,000,000	1
Options exercise price $2.20, expiry 30 June 2023	550,000	3
Performance Rights (measurement date 30 June 2022)	5,292,347	13
Performance Rights (measurement date 30 June 2023)	1,170,077	17
Performance Rights (measurement date 30 June 2024)	296,160	22

Distribution of equity security holders:

Range	Ordinary Shares Unlisted Share Options Performance Rights
	No. No. No.
	Holders % Held Holders % Held Holders % Held
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total	3,862 0.47 - - - - 2,834 2.11 - - 2 0.12 1,066 2.29 - - 3 0.29 1,534 12.72 - - 11 6.67 246 82.41 4 100 12 92.92
	9,542 100 4 100 28 100

The number of shareholders holding less than a marketable parcel is 236 (based on a share price of $7.38).

Voting Rights

All fully paid ordinary shares carry one vote per share. There are no voting rights attached to options or performance rights until exercised.

Restricted securities

There are no restricted ordinary shares on issue.

On-market Buyback

There is no on-market buy-back currently being undertaken.

Mineral Resource Statement

At 30 June 2021 and at the date of this report, the Company has no Mineral Resources reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012) and Canadian National Instrument 43-101.

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ASX Additional Information For the Year Ended 30 June 2021

Directors’ Report For the Year Ended 30 June 2021

Twenty Largest Ordinary Fully Paid Shareholders

	Number of	Percentage of
Name	shares	issued capital
HSBC Custody Nominees (Australia) Limited	65,509,056	18.56
Mr Timothy R B Goyder	38,070,475	10.79
J P Morgan Nominees Australia Pty Limited	36,526,888	10.35
Citicorp Nominees Pty Limited	34,850,964	9.87
National Nominees Limited	8,384,066	2.38
BNP Paribas Nominees Pty Ltd ACF Clearstream	6,182,803	1.75
BNP Paribas Nominees Pty Ltd	5,542,497	1.57
AEGP Super Pty Ltd	5,000,000	1.42
Lunar Co Pty Ltd	4,887,770	1.38
UBS Nominees Pty Ltd	3,771,050	1.07
BNP Paribas Noms Pty Ltd Six Sis Ltd	3,350,699	0.95
BNP Paribas Noms Pty Ltd	3,022,681	0.86
Bremerton Pty Ltd	2,303,010	0.65
BNP Paribas Noms Pty Ltd	2,077,196	0.59
Mr Michael Leslie Cohen	1,610,000	0.46
Howard-Smith Investments Pty Ltd	1,457,017	0.41
Lambhill Pty Ltd	1,380,678	0.39
Warbont Nominees Pty Ltd	1,371,369	0.39
Warbont Nominees Pty Ltd	1,349,132	0.38
Mr PhilipScott Button + Ms Philippa Anne Nicol	1,318,261	0.37
Top Twenty Shareholders	227,965,612	64.59
Total Remaining Shareholders	124,972,568	35.41
Total	352,938,180

Share Registry Information

For information on your shareholding or related administrative matters please contact the Company’s share registry Computershare Investor Services Pty Ltd at:

Computershare Investor Services Pty Limited GPO Box 2975 Melbourne VIC 3001 AUSTRALIA

Telephone Australia: 1300 653 212 Telephone International: (+61 3) 9415 4000

Website: https://www.computershare.com/au

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ASX: CHN OTCQB: CGMLF

chalicemining.com

126 Annual Report 2021

AI assistant

CHALICE MINING LIMITED — Annual Report 2021

64649_rns_2021-09-22_511e373f-5378-4726-a59f-9bc047aa504f.pdf

Directors

Auditors

Home Exchange

OTCQB Exchange

Company Secretary

Share Registry

Principal Place of Business & Registered Office

ASX Listing

OTCQB Listing

~650% Total Shareholder Return

Zero reportable environmental incidents

Zero lost time injuries

~$0.5M local procurement spend

Managing Director and CEO’s Letter

Deliver a sustainability strategy

Make another major ‘green

Preserve our generative

Operating and Financial Review

Key Project

Royalties

Key Investments

Overview

Exploration and Evaluation

Mineralogy and lithogeochemical analysis (Gonneville)

Resource definition drilling (Gonneville)

Metallurgical testwork (Gonneville)

Property acquisitions

Regional exploration and access

Forward Plan

Resource definition drilling (Gonneville)

Studies (Gonneville)

Regional exploration and access

Geotechnical, metallurgical, hydro-geological and infrastructure drilling (Gonneville)

Metallurgical testwork (Gonneville)

Overview

Exploration

Forward Plan

Barrabarra Nickel-Copper-PGE Project, WA (100%)

Hawkstone Nickel-Copper-Cobalt Project, WA (100%)

Viking Gold Project, WA (70-100%)

Strategic Investments

Caspin Resources Limited (ASX: CPN)

Financial Performance

Financial Position

Statement of Cash Flows

Designated Foreign Issuer Status

Sustainability Report

A Message from the Chair of Risk and Sustainability Committee

Garret Dixon

Our Vision and Sustainability Pillars

Risk Management

Healthy and Safe Workplace

COVID-19 Pandemic

Safety Performance

FY2021

Occupational Health and Hygiene

Sustainability Pillar FY2021 Achievement FY2022 Performance Target

Create Value for Stakeholders

Community Engagement

Cultural Heritage

Strong Environmental Stewardship

Our core environmental management procedures include:

Non Ground Disturbing Exploration Activities

Assessments data standards.

Manage Climate Change Risk

Palladium

Nickel

Platinum

Copper

GHG emissions per activity [tCO2-e]

Directors’ Report

Other current directorships of listed companies:

Former directorships of listed companies in the last three years:

Other current directorships of listed companies:

Stephen P Quin

PGeo, FGAC, FSEG, MIOM3 Independent Non-executive Director

Garret J Dixon

CHALICE MINING LIMITED Annual Report 2021