ECLIPSE METALS LIMITED. — Interim / Quarterly Report 2023

Mar 13, 2023

Eclipse Metals Limited

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Eclipse Metals Limited

ABN 85 142 366 541 and its controlled entities

Report for the half-year ended 31 December 2022

Eclipse Metals Limited

Corporate directory

Board of Directors

Mr. Carl Popal Executive Chairman Mr. Rodney Dale Non-Executive Director Mr. Ibrar Idrees Non-Executive Director Dr Oliver Kreuzer Non-Executive Director

Company Secretary

Matthew Foy

Registered Office and Principal Place of Business

Level 3, 1060 Hay Street West Perth, Western Australia 6005 Tel: +61 8 9480 0420 Fax: +61 8 9321 0320 Email: info@eclipsemetals.com.au

Postal Address

PO Box 1395 West Perth, Western Australia 6872

Website

Website: www.eclipsemetals.com.au

Auditors

Stantons Level 2, 40 Kings Park Road West Perth, Western Australia 6005

Share Registry

Automic Group Level 5, 191 St Georges Terrace Perth, Western Australia 6000

Securities Exchange

Australian Securities Exchange Limited Level 40, Central Park 152-158 St Georges Terrace Perth, Western Australia 6000

ASX Code

Shares: EPM

Eclipse Metals Limited

Half year report for the half-year ended 31 December 2022

Contents

Directors’ report………………………………………………………………………………………	3
Auditor’s independence declaration.............................................................................	16
Directors’ declaration……………………………………………………………………………………	17
Consolidated statement of profit or loss and other comprehensive income………………	18
Consolidated statement of financial position……………………………………………………	19
Consolidated statement of changes in equity………………………………….…………………………	20
Consolidated statement of cash flows…………………………………………………………………	21
Condensed notes to the consolidated financial statements…………………………………………...	22
Independent auditor’s review report…………………………………………………………………	29

Eclipse Metals Limited

Directors’ report

The directors of Eclipse Metals Limited (“the Company”) submit herewith the operations and financial report of Eclipse Metals Limited and its controlled entities (“the Group”) for the half-year ended 31 December 2022. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

Mr. Carl Popal Mr. Rodney Dale Mr. Ibrar Idrees Dr. Oliver Kreuzer

Operating Results

The loss before income tax for the Group for the half-year ended 31 December 2022 amounted to $767,318 compared to a loss before income tax of $608,430 for the half-year ended 31 December 2021.

REVIEW OF OPERATIONS

Eclipse Metals Ltd ( Eclipse or the Company ) is an Australian exploration company focused on exploring south-western Greenland, Northern Territory and Queensland for multi commodity mineralisation. Eclipse Metals Ltd has an impressive portfolio of assets prospective for cryolite, fluorite, siderite, quartz, REE, gold, platinum group metals, manganese, palladium, vanadium and uranium mineralisation.

IVITTUUT PROJECT – GREENLAND

Eclipse acquired mineral exploration licence MEL2007-45 in Greenland in January 2021. The project area hosts the historic Ivigtût cryolite mine and undeveloped mineral resources. Over 120 years, between 1865 and 1985, the Ivigtût mine produced 3.8 million tonnes of high-grade cryolite for use in the aluminum industry, from the world's largest known minable resource of naturally occurring cryolite ( Figures 1 & 2 ).

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Figure 1: Ivigtût Project Location Map

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Figure 2: Ivigtût Project Tenement Map – MEL 2007- 45 - located on the coast of Arsuk Fjord in southwestern Greenland

Ivigtût is located in southwestern Greenland and has a power station and fuel supplies to service this station and local road infrastructure to support mineral exploration. About 5.5km to the northeast of Ivigtûut, the settlement of Kangilinnguit provides a heliport and an active wharf with infrastructure.

The Grønnedal carbonatite complex is less than 10km from Ivigtût and only 5km from the port of Kangilinnguit. This complex ranks amongst the larger alkaline intrusions of the Gardar Igneous Province in Greenland and is recognised by GEUS as one of the prime REE targets in the country, along with Kvanefjeld and Kringlerne (also referred to as Tanbreez) (Paulick et al., 2015).

Assay results from grab samples collected earlier this year show the various styles of REE mineralisation at Grønnedal and Ivigtût ranging from light to heavy REE. Their respective geological host environments are testament to a complex intrusive history with multiple episodes of REE enrichment (refer ASX release 24 March 2022). Previous tenement holders concentrated on exploring and mining the Ivigtût cryolite deposit. Eclipse is the first company to test the REE and multi-element potential at both Grønnedal and Ivigtût.

Commencement of maiden drilling program

During the period Eclipse commenced a maiden program of drilling and trenching on its Ivigtût and Grønnedal projects. The percussion drilling program was designed to follow-up REE targets and obtain samples from the mine wall rocks.

In addition to drilling, the Company undertook a surface sampling program in areas of interest defined by remote sensing surveys and in proximity of the historical mine precinct. Findings from geophysical inversion modelling and satellite imagery analysis have provided Eclipse with many targets for field checking and sampling to be conducted where possible during the current exploration program (refer ASX release 13 June 2022 for further details). Surface samples from the Grønnedal prospect, collected during a previous site visit, have been sent to St Andrews University for technical analysis.

Investigations around the Ivigtût mine-site included sampling of remnant waste dumps to assess cryolite, fluorite and base metal content and outcrop areas to assess REE and lithium prospectivity. Executive Chairman, Carl Popal, has joined the Greenlandic drilling contractor and geologist on site to oversee and report on the program as it progresses.

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Eclipse Metals Limited

Commencement of the drilling program follows the Minerals Licenses and Safety Authority in Greenland granting Eclipse approval for field activities for the 2022 field season.

Commencement of environmental and social studies for Ivigtût mining licence application

During the period Eclipse announced it had engaged a leading international consultancy group based in Europe to commence environmental and social studies for the multi-commodity Ivigtût project.

The consultancy has expertise across engineering, environmental science, and architecture and provides services including studies and concept design, design development and finalisation, planning/permissions, construction management, PMC services and asset management.

The group will work with Eclipse to assist in preparing environmental and social impact assessments (EIA and SIA) required for Eclipse’s application for an exploitation (mining) licence at Ivigtût from Greenland’s Mineral Licenses and Safety Authority (MLSA). This work will include data collection, mapping and public consultation for environmental and social studies.

Eclipse is committed to developing a strong ESG framework for the Greenland projects to include minimal environmental impact, developing and preserving local Ivigtût history, assistance to restore the Ivigtût Mining Museum and use of renewable power where possible.

GRØNNEDAL CARBONATITE

On the Grønnedal carbonatite complex, Eclipse completed 31 drill holes over a ~3.0km by ~1.5km area to vertical depths of between 3m and 22m (Figure 3). A grid pattern was utilised where surface features permitted, with ground conditions varying from very broken to solid rock. Trenches were excavated in areas where drilling was not practicable.

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Figure 3: MEL 2007-45 Location Map and Exploration Drill Targets

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Eclipse Metals Limited

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• Figure 4: Grønnedal target area. Drill collars are marked with red dots while the two REE mineralisation styles are marked with green points. Assays are expected to be available toward the end of Q1-2023

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Figure 5: Grønnedal trenching and sampling area marked in yellow

Drill sample testing using a portable XRF analyzer (pXRF)

The pXRF analyses of composite samples recorded in Greenland before shipment have returned encouraging praseodymium (Pr) and neodymium (Nd) ratios. The results indicate that the Grønnedal carbonatite complex could be significant on a global basis with respect to its Pr and Nd content, which are amongst the commercially most valuable rare earth elements (REE).

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Eclipse Metals Limited

At the Greenland sample preparation facility, pXRF readings, taken on five 1.5m composite samples from drillhole L3-9, returned an intersection average of 7.5m @ 0.8% La2O3+Ce2O3+Pr2O3+Nd2O3 (4REO), with praseodymium (Pr)/lanthanum (La) and neodymium (Nd)/cerium (Ce) ratios of about 1.2:1, as well as 0.49% Zn+Pb+Ni ( Table 1 ).

DH L3-9 (azimuth/dip: 140/-70)	DH L3-9 (azimuth/dip: 140/-70)	DH L3-9 (azimuth/dip: 140/-70)
Sample id	From (m)	To (m)	Interval (m)	4REO (%)*	Zn+Pb+Ni (%)	Fe	Ca	Si	Mag**
27990	1.0	2.5	1.5	0.83%	0.15%	38.8%	3.1%	6.9%	2.6
27991	2.5	4.0	1.5	0.85%	0.56%	49.1%	1.5%	0.9%	2.0
27992	4.0	5.5	1.5	0.69%	0.27%	50.0%	2.2%	0.5%	2.0
27993	5.5	7.0	1.5	0.87%	0.64%	46.3%	5.6%	0.7%	2.1
27994	7.0	8.5	1.5	0.66%	0.82%	48.9%	2.8%	0.8%	2.2
Total Intersection			7.5	0.8% rounded	0.49%	46.6%	3.0%	2.0%	2.2

Table 1: p-XRF testing of drill hole L3-9 indicates an intersection average with 0.8% (rounded) 4REO* (La2O3+Ce2O3+Pr2O3+Nd2O3) and 0.49% Zn+Pb+Ni. The intersection is non-magnetic but with abundant Fe and low Si, indicating the dominant carbonate iron facies (siderite). ** Mag is magnetic susceptibility as 10[-3] SI

Eclipse cautions that the pXRF tests are not definitive in nature with all samples yet to be analysed at an Australian laboratory for REE and base metals as well as other major and trace elements.

Bearing in mind the preliminary nature of these pXRF results, Eclipse believes these results indicate a significant enrichment of the commercially more valuable REE Pr and Nd in drillhole L3-9 relative to the lower value La and Ce, an observation that is consistent with published academic studies as well as previous laboratory results summarised below.

Previous laboratory and pXRF assay results from Grønnedal rock chip samples:

• On 17[th] November 2021, the Company reported pXRF results indicating potentially significant rare ‐ earth element content. Subsequent laboratory results from samples tested by pXRF confirmed significant 4REE (La+Ce+Pr+Nd) (reported on 9 March 2022).

• On 22[nd ] November 2021, Eclipse reported laboratory assays from historical Grønnedal drill core sample IVT 214, which yielded 2.1% TREO, including 0.12% Pr2O3 and 0.46% Zn.

• On 9[th] March 2022, the Company reported highly anomalous heavy REE laboratory assay results for six rock chip samples (G21010, G21011, G21014, G21016, G21017 and G21019), demonstrating that the Grønnedal carbonatite complex is – at least in part – enriched in Pr and Nd.

• On 24[th] March 2022, Eclipse reported the final laboratory assay results for the above samples with G21016 having returned 4.66% TREO, 0.13% Gd2O3 and 3.3% BaO, and sample G21011, collected from an aplite cutting the Grønnedal complex, having returned 0.93% Nb2O5, 0.07% Rb2O and 1.77% ZrO2.

Discussion of preliminary results

Overall, the previous Grønnedal rock chip samples and pXRF data from drill hole DH L3-9 demonstrate unusual patterns for Pr/La and Nd/Ce ratios compared to other REE-mineralised carbonatite complexes such as Mountain Pass (California) and Mt Weld (Western Australia).

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Eclipse Metals Limited

The lower La and Ce contents as measured by pXRF, if confirmed by laboratory assay results across the Grønnedal complex or a significant part thereof, would indicate that REE mineralisation at Grønnedal contains a higher proportion of the commercially more valuable magnetic REE Pr and Nd. The latter are often termed the ‘magnet feed’ REE which are critical elements for high-performance magnets used by and in high demand from the automotive sector and for wind turbines.

More specifically, the pXRF readings and laboratory assay results collected thus far show a relatively large proportion of Pr and Nd, comprising up to 55% of the measured 4REE.

This can be compared with other rare earth deposits:

i) Grønnedal Pr+Nd: 55% of the measured 4REE (La+Ce+Pr+Nd) ii) Mountain Pass Pr+Nd: 17% of the measured 4REE (La+Ce+Pr+Nd) iii) Mount Weld CLD Pr+Nd: 25% of the measured 4REE (La+Ce+Pr+Nd)

* Reference: Technology Metals Research, TMR (2015)

Such a difference in composition for the project could have a positive implication on the so-called “basket price”. The basket price is described as the sum of the proportions of the individual REOs in the product multiplied by the price of the individual REOs.

IVIGTÛT

Mineralised Waste Dump Sampling

Eclipse bulk sampled five mineralised waste dumps (ROM size) from the Ivigtût historical cryolite mine to assess the mineral and chemical content. These dumps contain a substantial volume of mineralised material that may be suitable for processing to recover saleable products. Previous laboratory assessments have indicated the polymetallic nature of mineralisation in the pit from which the large volume of mineralised waste was produced, as shown in earlier laboratory results.

• The Company’s previous surface sample I21012 provided encouraging results of 165g/t Ag, 0.15% Cu, 3.83% Pb and 0.37% Zn (ASX Announcement dated 24 March 2022).

• Laboratory assessment of a historical drill core sample IVT 21 - 11(1) returned 9.86% Zn (ASX Announcement dated 22 November 2021).

In addition to drilling, the Company undertook a surface sampling program in areas of interest defined by remote sensing surveys and in proximity of the historical mine precinct. Findings from geophysical inversion modelling and satellite imagery analysis have provided Eclipse with many targets for field checking and sampling to be conducted where possible during the current and future exploration programs (refer ASX release 13 June 2022 for further details). Surface samples from the Grønnedal prospect, collected during a previous site visit, have already been sent to St Andrews University for technical analysis.

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Eclipse Metals Limited

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Figure 6: Ivigtût target area. Drill collars are marked with red dots. Bulk sample trenches are marked with purple lines. Assays are expected to be available toward the end of Q1 2023

Earlier laboratory results for samples from the mineralised waste dumps returned relatively low TREO values, ranging from 2.26 to 161.44ppm, however the ratio of high-demand heavy to light REE is considered to be very encouraging. Chemical and petrological assessment of the bulk samples in Australia will provide the Company with data to estimate commercial potential in the waste dumps.

Eclipse is considering a Ground Penetrating Radar (GPR) survey for the Ivigtût precinct to assist with an assessment of the potential volume of mineralised waste material. By calculating the size of the open pit and access tunnels and subtracting the cryolite concentrate that has been exported, it can be estimated that up to 5Mt of ROM waste was deposited in the dumps as well as for landfill purposes during a century of mining. There has been no comprehensive commercial assessment for other critical metals.

Pursuant to the Greenlandic Mineral Resources Act no. 7 of 7 December 2009 on mineral resources and activities of significance for these (the Mineral Resources Act), and later amendments, mineral resources companies must prepare a SIA and EIA in connection with developing mineral projects. The European consultancy has been appointed to conduct this work and a first draft scoping document covering the SIA and EIA are prepared for preliminary review and action in due course.

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Eclipse Metals Limited

Eclipse Executive Chairman Carl Popal said work to be completed by a consultancy would be vital in progressing the Company’s development of Ivigtût project and preparing a ‘white paper’ required for obtaining a mining licence from MLSA.

The estimated timeframe for the completion and submission of these reports is usually two to three years. Eclipse expects that this timeframe will be reduced with the benefit of existing documents and reports held by the Company, which will contribute to form part of the scoping phase for the Social Impact Assessment undertaken by Eclipse.

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Figure 7: Map of Exploration Drill Targets

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Eclipse Metals Limited

NGALIA BASIN URANIUM PROJECT – NORTHERN TERRITORY

The Ngalia Basin is centred approximately 300km west-northwest from Alice Springs and is considered highly prospective for sandstone and paleochannel style uranium / vanadium mineralisation.

Eclipse holds two granted exploration licences and six exploration licence applications in the Ngalia Basin (Figure 8), with a combined area of approximately 7,550km[2] situated within this extensive uranium mineralized region. To the north roll-front uranium mineralisation at Bigrlyi occurs in Devonian aged sandstones of the Ngalia Basin[1] with Inferred and Indicated Resources of 9,570 tons of U3O8 at 1,283 ppm and 8,930 tons of V2O3 averaging 1197 ppm at 500 ppm U3O8 cut-off. Other deposits within the Ngalia Basin include Cappers[2] with an Inferred Resource of 3,200t of U3O8, averaging 145 ppm U at 100 ppm cut-off and Napperby[3] with an Inferred Resource of 3,643 tons of U3O8 at 382 ppm U3O8 and 2,251 tons of V2O3 grading 236 ppm at 200 ppm U3O8 cut-off.

The Company is in discussion with the Central Land Council for an access agreement to permit limited exploration drilling on its granted tenements.

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Figure 8: Ngalia Basin Location Map

1 Refer Energy Metals Ltd (ASX:EME) announcement 28 June 2011

2 Refer Energy Metals Ltd (ASX:EME) announcement 16 April 2010

3 Refer Core Exploration Ltd (ASX:CXO) announced 12 October 2018

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Eclipse Metals Limited

LIVERPOOL URANIUM PROJECT – NORTHERN TERRITORY

The Devil’s Elbow uranium-gold-palladium prospect in the Northern Territory is covered by EL27584, granted at the end of FY20. Adjacent to this exploration licence to the east, extensions of the Ranger Fault and related structures are covered by four exploration licence applications. Combined area of the tenements covering this prospective area is approximately 1,464km[2] .

Eclipse’s exploration program is aimed to focus on the area around the Devil’s Elbow, Terrace and Ferricrete uranium prospects, concentrating on high priority areas defined by historical geochemical and radiometric anomalies centrally within EL27584 and relatively unexplored ground south of the Ranger Fault.

The Devil’s Elbow prospect has strong similarities with the Jabiluka uranium and gold mine discovered in 1971, followingup a low order anomaly from a ground radiometric survey. Jabiluka is located 20km north of the Ranger uranium mine, about 75km west of Devil’s Elbow. At Jabiluka, uranium and gold mineralisation occurs in an altered member of the Cahill Formation, proximal to reverse faulting structures with similarities to the Devil’s Elbow prospect.

Eclipse has commenced the ethnographic survey of ELAs 31065 and 31770 within the Liverpool group of tenements located in the Alligator Rivers Uranium province in the Northern territory with the assistance of Northern Land Council (NLC). The survey assesses Aboriginal sacred sites as part of further negotiations with the traditional landowners as we progress toward granting these tenements. The surveys were completed in late Q2 of the financial year. Based on the outcome of the surveys, the company is discussing with NLC to conclude on any of the sacred sites that would need to be noted in the Aboriginal Land Rights Agreement (ALRA) with the terms due to be agreed on with NLC and negotiated with the traditional landowners during the 2023 calendar year.

CORPORATE

Completion of $2M placement

In August 2022, Eclipse Metals announced it had received firm commitments from sophisticated investors to raise $2 million before costs via a placement ( Placement ) of 100 million shares at an issue price of $0.02 per share ( Placement Shares ).

Subscribers to the Placement were offered one (1) free attaching option exercisable at $0.05 expiring 17 September 2024 ( Placement Options ) for every one subscribed Placement Share. The Company will seek quotation of the Placement Options, being a total of 100 million options.

Allotment of the Placement Shares occurred in September 2022. Eclipse is using funds raised from the Placement for drilling campaigns in Greenland.

The Placement was managed by Ignite Equity Pty Ltd ( Ignite ). Ignite is a boutique corporate advisory firm specialising in funding and acting as corner investor for small-cap ASX listed Companies.

A total of 100,000,000 Placement Shares were issued pursuant to the Company’s existing Listing Rule 7.1A placement capacity. In addition, the 100 million attaching listed options and 7.5 million listed Broker Options were issued pursuant to Listing Rule 7.1.

Shares issued in lieu of services

During the period, the Company issued 3,130,435 to its suppliers in lieu of marketing services.

Quotation of Options

As indicated at the time of Placement, the Company proceeded to seek approval for the quotation of the Placement Options. The process necessitated application to ASX for a waiver from ASX Listing Rule 6.23.4 which requires

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Eclipse Metals Limited

shareholder approval to change a term of an issued option. ASX granted the waiver on 16 September 2022. All other terms of the options as set out in the Prospectus remain unchanged.

A total of 298,476,469 options exercisable at $0.05 expiring 17 September 2024 have been quoted under the ASX ticker code “EPMOA”.

European Exchange Listing

Subsequent to the period end, Eclipse commenced trading on both the Frankfurt Stock Exchange and Germany’s Tradegate Exchange under the ticker 9EU.

Dual listing on European exchanges supports Eclipse’s strategy of broadening its overseas investor base to engage with European investors and stakeholders as well as facilitating an opportunity for low transaction cost access for retail investors from European and Scandinavian countries.

Eclipse has appointed Frankfurt-based DGWA, the German Institute for Asset and Equity Allocation and Valuation (Deutsche Gesellschaft für Wertpapieranalyse GmbH) as its investor relations and corporate advisor in Europe.

The Australian Securities Exchange (ASX) will continue to be Eclipse’s primary exchange.

Subsequent Events

On 13 January 2023, 3,802,945 shares were issued in lieu of drilling services provided. On 16 January 2023, 100,000,000 fully paid ordinary shares were released from escrow.

There has not been any matter or circumstances that have arisen since the end of the reporting date and to the date of this report that significantly affects or may significantly affect the results of the operations of the Group.

Competent Persons Statement

The information in this report / ASX release that relates to Exploration Results and Exploration Targets includes information was compiled and reviewed by Mr. Rodney Dale, Non-Executive Director of Eclipse Metals Ltd. Mr. Dale holds a Fellowship Diploma in Geology from RMIT, is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) and has sufficient experience relevant to the styles of mineralisation under consideration and to the activity being reported to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Dale consents to the inclusion in this report / ASX release of the matters based on information in the form and context in which it appears. Additionally, Mr Dale confirms that the entity is not aware of any new information or data that materially affects the information contained in the ASX releases referred to in this report.

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Eclipse Metals Limited

Tenement Schedule as at 31 December 2022

Tenement Schedule as at 31 December 2022	Tenement Schedule as at 31 December 2022	Tenement Schedule as at 31 December 2022	Tenement Schedule as at 31 December 2022	Tenement Schedule as at 31 December 2022	Tenement Schedule as at 31 December 2022	Tenement Schedule as at 31 December 2022
		Greenland Projects
Tenement	Project Name	Commodity	Status		Holder	%
MEL2007-45	Ivigtût Project	Cryolite & REE	Granted	Eclipse	Metals Ltd Greenland	100
		Australian Projects
Tenement	Project	Commodity	Status	State	Holder	%
EL 24808	Cusack's Bore	U	Granted	NT	Eclipse Metals Ltd	100
EL 32080	North Ngalia	U	Granted	NT	Eclipse Metals Ltd	100
EPM 17672	Mary Valley	Mn	Granted	Qld	Walla Mines Pty Ltd	100
EPM 17938	Amamoor	Mn	Granted	Qld	Walla Mines Pty Ltd	100
EL 27584	Devil’s Elbow	U, Au, Pd	Granted	NT	North Minerals Pty Ltd	100
EL31065	Liverpool Project	U	Application	NT	Eclipse Metals Ltd	100
EL31770	Liverpool Project	U	Application	NT	Eclipse Metals Ltd	100
EL31771	Liverpool Project	U	Application	NT	Eclipse Metals Ltd	100
EL31772	Liverpool Project	U	Application	NT	Eclipse Metals Ltd	100
EL31499	Ngalia Basin	U	Application	NT	Eclipse Metals Ltd	100
EL31500	Ngalia Basin	U	Application	NT	Eclipse Metals Ltd	100
EL31502	Ngalia Basin	U	Application	NT	Eclipse Metals Ltd	100
EL32077	Ngalia Basin	U	Application	NT	Eclipse Metals Ltd	100
EL32078	Ngalia Basin	U	Application	NT	Eclipse Metals Ltd	100
EL32079	Ngalia Basin	U	Application	NT	Eclipse Metals Ltd	100
ELA 24623	Eclipse	Cu, U	Application	NT	Eclipse Metals Ltd	100
ELA 26487	Yuendi	Cu, U	Application	NT	Whitvista Pty Ltd	100
ELA 31501	Ngalia 3	U	Application	NT	Eclipse Metals Ltd	100

Key to abbreviations: Au = gold, Mn = manganese, Pd = palladium, REE = rare earth elements, U = uranium.

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Auditor’s Independence Declaration

The auditor’s independence declaration as required under s.307C of the Corporations Act 2001 is included on page 16 and forms part of the directors’ report for the half- year ended 31 December 2022.

Signed in accordance with a resolution of directors made pursuant to s.306(3) of the corporations Act 2001.

On behalf of the directors

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Mr Carl Popal Executive Chairman 14 March 2023 Perth, Western Australia

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PO Box 1908 West Perth WA 6872 Australia

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Level 2, 40 Kings Park Road West Perth WA 6005 Australia

Tel: +61 8 9481 3188 Fax: +61 8 9321 1204

ABN: 84 144 581 519 www.stantons.com.au

14 March 2023

Board of Directors Eclipse Metals Limited Level 3, 1060 Hay Street WEST PERTH WA 6005

Dear Sirs

RE: ECLIPSE METALS LIMITED

In accordance with section 307C of the Corporations Act 2001 , I am pleased to provide the following declaration of independence to the directors of Eclipse Metals Limited.

As Audit Director for the review of the financial statements of Eclipse Metals Limited for the half-year ended 31 December 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (ii) any applicable code of professional conduct in relation to the review.

Yours faithfully

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD

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Martin Michalik Director

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Liability limited by a scheme approved under Professional Standards Legislation

Stantons Is a member of the Russell Bedford International network of firms

Eclipse Metals Limited

Directors’ declaration

The directors declare that:

• (a) in the directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable; and

• (b) in the directors’ opinion, the attached condensed consolidated financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standard AASB 134 ‘Interim Financial Reporting’ and giving a true and fair view of the financial position as at 31 December 2022 and performance of the Group for the half year ended on that date.

Signed in accordance with a resolution of the directors made pursuant to s.303(5) of the Corporations Act 2001.

On behalf of the directors

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Mr. Carl Popal Executive Chairman 14 March 2023 Perth, Western Australia

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Eclipse Metals Limited

Consolidated statement of profit or loss and other comprehensive income for the half-year ended 31 December 2022

Note Continuing operations Revenue and other income 2 Employee benefits expenses and director fees Consultancy expenses Professional services expenses Listing expenses Travel expenses Administration expenses Finance expenses Depreciation of Right-of-Use Asset Foreign exchange loss Exploration expenses Loss before income tax Income tax expense Loss for the period Other comprehensive income, net of income tax Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income for the period, net of income tax Total comprehensive loss for the period Loss attributable to: Owners of Eclipse Metals Limited Non-controlling interests Total comprehensive loss attributable to: Owners of Eclipse Metals Limited Non-controlling interests Loss per share: Basic and diluted (cents per share)	Consolidated
	Half-year ended
	31 Dec 2022 $ 31 Dec 2021 $
	5,299 11,077 (261,258) (239,126) (49,733) (58,562) (74,990) (83,884) (50,725) (25,651) (48,333) (24,140) (164,793) (172,578) (608) (852) (9,313) (9,228) (1,566) (5,486) (111,298) -
	(767,318) (608,430) - -
	(767,318) (608,430)
	- - - -
	- -
	(767,318) (608,430)
	(762,783) (608,395) (4,535) (35)
	(767,318) (608,430)
	(762,783) (608,395) (4,535) (35)
	(767,318) (608,430)
	(0.04) (0.04)

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the condensed notes to the consolidated financial statements.

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Consolidated statement of financial position as at 31 December 2022

Note Current assets Cash and cash equivalents Trade and other receivables Rent deposit Right-of-use asset Prepayments Total current assets Non-current assets Exploration and evaluation expenditure 3 Total non-current assets Total assets Current liabilities Trade and other payables Accruals Lease liability Total current liabilities Total liabilities Net assets Equity Issued capital 4 Reserves 5 Accumulated losses Owners of Eclipse Metals Limited Non-controlling interests Total equity	Consolidated
	31 Dec 2022 $ 30 Jun 2022 $
	1,298,851 659,753 92,051 46,028 4,782 - 9,313 16,550 64,637 -
	1,469,634 722,331
	13,378,133 9,197,172
	13,378,133 9,197,172
	14,847,767 9,919,503
	13,896 48,383 20,000 - 7,860 16,550
	41,756 64,933
	41,756 64,933
	14,806,011 9,854,570
	35,297,755 33,399,288 5,744,009 1,923,717 (26,206,504) (25,443,721)
	14,835,260 9,879,284 (29,249) (24,714)
	14,806,011 9,854,570

The consolidated statement of financial position is to be read in conjunction with the condensed notes to the consolidated financial statements.

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Eclipse Metals Limited

Consolidated statement of cash flows for the half-year ended 31 December 2022

Note Cash flows from operating activities Payments to suppliers and employees Income from sales of tenement data Deposit from sales of tenement Finance costs Interest received Net cash (used in) operating activities Cash flows from investing activities Payments for exploration and evaluation expenditure Payment for acquisition of Ivittuut Net cash (used in) investing activities Cash flows from financing activities Proceeds from rights issue Cash received in advance for exercise of options Share issue costs Repayment of lease liability Net cash provided by financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	Consolidated
	Half-year ended
	31 Dec 2022 $ 31 Dec 2021 $
	(757,184) (627,461) - 6,000 - 5,000 - (852) 5,299 77
	(751,885) (617,236)
	(501,594) (12,491) - (100,000)
	(501,594) (112,491)
	2,000,000 382,793 - 22,577 (98,733) (16,927) (8,690) (9,371)
	1,892,577 379,072
	639,098 (350,655) 659,753 1,808,695
	1,298,851 1,458,040

The consolidated statement of cash flows is to be read in conjunction with the condensed notes to the consolidated financial statements.

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Eclipse Metals Limited

Condensed notes to the consolidated financial statements for the half-year ended 31 December 2022

1. Significant accounting policies

Statement of compliance

The half-year financial report is a general-purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 ‘Interim Financial Reporting’. The half-year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with annual financial statements of the Group for the half year ended 31 December 2022 together with any public announcements made during the following half-year.

The half-year financial report was authorized for issue by the directors on 14 March 2023.

a. Basis of preparation

These general purpose interim financial statements for the half-year reporting period ended 31 December 2022 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standard AASB 134: Interim Financial Reporting. Compliance with AASB 134 ensures compliance with IAS 34 ’Interim Financial Reporting”’. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.

This interim financial statement is intended to provide users with an update on the latest annual financial statements of Eclipse Metals Limited and its controlled entities (referred to as the "Consolidated Group" or "Group"). As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group.

b. Going Concern

The financial report has been prepared on a going concern basis that contemplates the continuity of normal business activities and the realisation and extinguishment of liabilities in the ordinary courses of business. For the half year ended 31 December 2022 the Group incurred a loss of $767,318 (31 December 2021: loss $608,430). Based upon the Group’s existing cash resources of $1,298,851 (30 June 2022: $659,753) and the ability to modify expenditure outlays if required, and to source additional funds, the Directors consider there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable, and therefore the going concern basis of preparation is considered to be appropriate for the Group’s 31 December 2022 half year financial report. In the event that the Group is not able to continue as a going concern, it may be required to realise assets and extinguish liabilities other than in the normal course of business and perhaps at amounts different to those stated in its financial report.

c. Accounting Policies

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements.

The Group has adopted all the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period. Any new or amended Accounting Standards or interpretations that are not yet mandatory have not been early adopted.

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Eclipse Metals Limited

2. Revenue and other income

Income received through sales of data on old tenements Deposit received in regards to sales of NT tenements Interest income Exploration and evaluation expenditure Balance at the beginning of the period/year Additions Acquisition cost - Ivittuut1 Balance at the end of the period/year	31 Dec 2022 31 Dec 2021 $ $ - 6,000 - 5,000 5,299 77 5,299 11,077 31 Dec 2022 30 Jun 2022 $ $ 9,197,172 9,173,139 501,594 24,033 3,679,367 - 13,378,133 9,197,172

3. Exploration and evaluation expenditure

1Acquisition of Ivittuut

On 18 November 2022, Eclipse has issued to the vendors the following unlisted options as additional consideration (Phase 3 consideration options) pursuant to the agreement between Eclipse and the Ivittut vendors. The Phase 3 Consideration options were subject to shareholders approval and was approved on 9 November 2022. The fair value of these options which amounted to $3,679,367 have been capitalised as acquisition cost of Ivittut.

• 180,000,000 options exercisable at $0.015 expiring 18/11/2025

• 160,000,000 options exercisable at $0.05 expiring 18/11/2027

These options were valued using the Black-Scholes valuation model. Details of the options issued are disclosed in the Note 5(d) to the consolidated financial statements.

Exploration and evaluation expenditure

There is uncertainty as to the recoverability of the deferred exploration and evaluation expenditure assets of Eclipse Metals Limited at their stated values. The recoverability of the deferred exploration and evaluation expenditure assets is dependent upon the successful development and commercial exploitation, or alternatively, sale of the respective areas.

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Eclipse Metals Limited

4. Issued Capital

Issued Capital
Fully paid ordinary shares (a)	31 Dec 2022 30 Jun 2022 $ $
	35,297,755 33,399,288
	35,297,755 33,399,288

(a) Fully paid ordinary shares Balance at the beginning of period/year Shares issued through placement (@$0.02) during the period Shares issued in lieu of services (@ $0.023) Options exercised Performance shares vested Share issue costs Balance at the end of the period	31 Dec 2022 30 Jun 2022 No. $ No. $
	1,921,126,413 33,399,288 1,913,956,865 33,304,398 100,000,000 2,000,000 - - 3,130,435 72,200 - - - - 419,548 20,977 - - 6,750,000 94,638 - (173,733)1 - (20,725)
	2,024,256,848 35,297,755 1,921,126,413 33,399,288

1. Included in the share issue costs is the value of listed options issued to the lead manager of $75,000.

5. Reserves

Share-based payment reserves (1) Other reserves	31 Dec 2022 30 Jun 2022 $ $
	5,732,177 1,911,885 11,832 11,832
	5,744,009 1,923,717

• (1) During the half year ended 31 December 2022, the movement in the share-based payment reserves were as follows:

(a) Issue of options to brokers

On 19 September 2022, the Company issued 7,500,000 listed options to the lead manager based on the amount raised during the placement. The Company valued the listed options during the half year for an amount of $75,000.

(b) Performance rights

During the year ended 30 June 2021, 32 million performance rights were issued to directors and consultants. Tranche 2 of the Performance Rights (6,750,000 Performance shares) were fully vested in the financial year ended 30 June 2022. During the half year ended 31 December 2022, performance rights for a value of $65,925 have vested.

(c) Free attaching options

On 5 September 2022, the Company issued 100,000,000 free attaching options to subscribers of the placement which raised $2 million before costs. These options were valued at NIL.

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Eclipse Metals Limited

5. Reserves (Continued)

The terms and conditions of Performance Rights affecting remuneration in the current or future reporting years are as follows:

follows:
Dec 2022	Grant Date(I)	No of Performance Rights	Expiry date	Exercise price	Value at grant date1	Number vested	Vested (%)	Value vested for the period ended Dec 2022	Max value yet to vest
Tranche 1(ii)(a)	26/05/21	8,625,000	04/06/24	NIL	0.02	-	-	$28,825	$108,914
Tranche 3(ii)(b)	26/05/21	4,625,000	04/06/24	NIL	0.0123	-	-	$9,486	$35,721
Tranche 4(ii)(c)	26/05/21	4,625,000	04/06/24	NIL	0.0114	-	-	$8,811	$33,177
Tranche 1(ii)(a)	31/05/21	2,000,000	04/06/24	NIL	0.02	-	-	$6,682	$25,537
Tranche 3(ii)(b)	31/05/21	1,000,000	04/06/24	NIL	0.0121	-	-	$2,000	$7,769
Tranche 4(ii)(c)	31/05/21	1,000,000	04/06/24	NIL	0.0112	-	-	$1,870	$7,140
Tranche 1(ii)(a)	01/06/21	1,125,000	04/06/24	NIL	0.02	-	-	$3,760	$14,383
Tranche 3(ii)(b)	01/06/21	1,125,000	04/06/24	NIL	0.0124	-	-	$2,330	$8,911
Tranche 4(ii)(c)	01/06/21	1,125,000	04/06/24	NIL	0.0115	-	-	$2,161	$8,268
		25,250,000			-	-	-	$65,925	$249,820

(i) The value at grant date has been calculated in accordance with AASB 2 Share based payments.

(ii) The Performance Rights vest and become exercisable by the holder upon the Company:

(a)Announcing a minimum JORC code of compliant resource in any one of the following minerals:

(i) 2.8 mt @ 95% SiO2;

(ii) 150 kt @ 18% FI; (iii) 0.5 mt @ 16% Cy; (iv) 0.5 mt @ 25% Fe; (v) 50 kt @ 1.1 Zn.

(b) Achieving a 30-day volume weighted average share price (VWAP) of $0.08 or more.

(c) Achieving a 30-day volume weighted average share price (VWAP) of $0.10 or more.

(d) Issue of options to Ivittut vendors

On 18 November 2022, the Company issued 180,000,000 options exercisable at $0.015 on or before 3 years from the date of issue and 160,000,0000 options exercisable at $0.05 on or before 5 years from the date of issue as part of Ivittut acquisition. These options vested immediately. The fair value of these options which amounted to $3,679,367 have been capitalised as acquisition cost of Ivittut.

Date Granted	Number Granted	Expiry Date	Expected Volatility	Risk free Interest Rate	Exercise Price	Share Price at Grant Date	Fair Value of Options
			%	%		$	$
18 Nov 2022	180,000,000	18 Nov 2025	89.82	0.03	$0.015	0.019	0.01167
18 Nov 2022	160,000,000	18 Nov 2027	89.82	0.03	$0.05	0.019	0.00986

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Eclipse Metals Limited

6. Contingent assets and contingent liabilities

There are no contingent assets or contingent liabilities at the end of the reporting period.

7. Commitments

a. Leasing commitments

At the half-year ended 31 December 2022, the Group had a lease agreement with Bullion Ventures Pty Ltd. The lease is on an ongoing basis and the Company may give one months’ notice to terminate the lease otherwise the Company can also re negotiate the rent agreement.

The Group has a 12 months lease agreement for its Greenland office. The lease expires on the 30[th] May 2023 with an option to renew.

b. Exploration commitments

Exploration commitments for the next one (1) year totalled $692,500. These commitments may vary depending on whether the Group relinquishes any tenements or enters into formal arrangements.

8. Key management personnel

Remuneration arrangements of key management personnel are disclosed in the annual financial report. Arrangements with related parties continue to be in place. For details of these arrangements, please refer to the 30 June 2022 annual financial report.

Key management personnel continue to receive compensation in the form of short-term employee benefits, postemployment benefits and share-based payments.

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Eclipse Metals Limited

9. Segment information

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources. The Group has two reportable segments during the period ended 31 December 2022.

Half-Year ended 31 December 2022 Interest Income Other Income Others Total segment income Employee benefits expenses and director fees Consultancy expenses Professional services expenses Listing expenses Travel expenses Administration expenses Finance expenses Depreciation of Right-of-Use Asset Foreign exchange loss Exploration expenses Loss for the period At 31 December 2022 Current assets Rights-of-use asset Exploration expenditure Current liabilities Net Assets	Australia Greenland Consolidated $ $ $ 5,251 - 5,251 48 - 48 - - -
	5,299 - 5,299 (261,258) - (261,258) (37,572) (12,161) (49,733) (74,990) - (74,990) (50,725) - (50,725) (46,197) (2,136) (48,333) (157,013) (7,780) (164,793) (360) (248) (608) - (9,313) (9,313) - (1,566) (1,566) (70,709) (40,589) (111,298)
	(693,525) (73,793) (767,318)
	1,455,539 4,782 1,460,321 - 9,313 9,313 2,656,620 10,721,513 13,378,133 (33,896) (7,860) (41,756)
	4,078,263 10,727,748 14,806,011

10. Subsidiaries

Subsidiaries
		Percentage	owned (%) *
Entity	Incorporation	31 Dec 2022	30 Jun 2022
		Ownership	Ownership
North Minerals Pty Ltd	Australia	100.00	100.00
Central Energy Pty Ltd	Australia	100.00	100.00
Whitvista Pty Ltd	Australia	100.00	100.00
U308 Agencies Australia Pty Ltd	Australia	100.00	100.00
Walla Mines Pty Ltd (i)	Australia	87.17	87.17
Contour Resources Pty Ltd	Australia	99.48	99.48
Eclipse Greenland	Greenland	100	100

• Percentage of voting power is in proportion to ownership.

(i) Direct and indirect percentage owned.

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Eclipse Metals Limited

11. Subsequent events

On 13 January 2023, 3,802,945 shares were issued in lieu of drilling services provided. On 16 January 2023, 100,000,000 fully paid ordinary shares were released from escrow.

There has not been any matter or circumstances that have arisen since the end of the reporting date and to the date of this report that significantly affects or may significantly affect the results of the operations of the Group.

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PO Box 1908 West Perth WA 6872 Australia

Level 2, 40 Kings Park Road West Perth WA 6005 Australia

Tel: +61 8 9481 3188 Fax: +61 8 9321 1204

ABN: 84 144 581 519 www.stantons.com.au

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF ECLIPSE METALS LIMITED

Report on the Half-Year Financial Report

Conclusion

We have reviewed the half-year financial report of Eclipse Metals Limited (the “Company”) and its controlled entities (the “Group”), which comprises the consolidated statement of financial position as at 31 December 2022, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, condensed notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the accompanying half-year financial report of Eclipse Metals Limited does not comply with the Corporations Act 2001 including:

• (a) giving a true and fair view of the Group’s financial position as at 31 December 2022 and of the performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity . Our responsibilities are further described in the Auditor’s Responsibilities for the Review 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 (including Independence Standards) (the Code) that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 has been given to the directors of the Company on 14 March 2023.

Material Uncertainty Relating to Going Concern

As referred to in Note 1(b) to the consolidated financial statements, the consolidated financial statements have been prepared on a going concern basis. For the half-year ended 31 December 2022, the Group incurred a loss after income tax of $767,318, had net cash outflows from its operating activities of $751,885, and had cash and cash equivalents of $1,298,851 at 31 December 2022.

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Liability limited by a scheme approved under Professional Standards Legislation

Stantons Is a member of the Russell Bedford International network of firms

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The ability of the Group to continue as a going concern and meet its planned exploration, administration and other commitments is dependent upon the Group raising further working capital and/or successfully exploiting its mineral assets. In the event that the Group is not successful in raising further equity or in exploiting its mineral assets, the Group may not be able to meet its liabilities as and when they fall due and the realisable value of the Group’s current and non-current assets may be significantly less than book values.

Our opinion is not modified in respect of this matter.

Responsibility of the Directors for the Financial Report

The directors of Eclipse Metals Limited are responsible for the preparation of the half-year 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 half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility for the Review of the Financial Report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2022 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD (An Authorised Audit Company)

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Martin Michalik Director

West Perth, Western Australia 14 March 2023