29 October 2021

2021 Annual Report

Hammer Metals Limited (ASX:HMX) ("Hammer" or "the Company") is pleased to attach its Annual Report for the year ended 30 June 2021.

For further information, please contact: Daniel Thomas Managing Director T +61 8 6369 1195 E [email protected]

This announcement was authorised for issue by Mark Pitts, Company Secretary, Hammer Metals Limited.

ABN 87 095 092 158

BOARD OF DIRECTORS

Russell Davis Non-Executive Chairman

Daniel Thomas Managing Director

Zbigniew Lubieniecki Non-Executive Director

David Church Non-Executive Director

COMPANY SECRETARY Mark Pitts

PRINCIPAL AND REGISTERED OFFICE

Unit 1, 28-30 Mayfair Street, West Perth, WA 6005

Telephone: +61 8 6369 1195 Email: [email protected] Website: www.hammermetals.com.au

POSTAL ADDRESS

Unit 1, 28-30 Mayfair Street, West Perth, WA 6005

AUDITORS

KPMG

235 St Georges Terrace Perth WA 6000 Australia Telephone: +61 8 9263 7171 Facsimile: +61 8 9263 7129

SHARE REGISTRY

Advanced Share Registry Ltd 110 Stirling Highway Nedlands WA 6009 Australia Telephone: +61 8 9389 8033 Facsimile: +61 8 9262 3723

STOCK EXCHANGE

ASX Limited Level 40, Central Park, 152-158 St Georges Terrace Perth WA 6000

ASX CODE HMX

CORPORATE GOVERNANCE

The Company's corporate governance statement can be found at the following URL: www.hammermetals.com.au/company-profile/corporate-governance/

Chairman's Letter	4
Corporate Strategy	6
Operational Highlights	7
Corporate Activity	8
Operations Summary	9
Competent Persons Statement	37
Annual Mineral Resource Statement	38
Tenement Interests	45
Directors Report	49
Auditor's Independence Declaration	66
Consolidated Statement Of Financial Position	67
Consolidated Statement Of Profit Or Loss And Other Comprehensive Income	68
Consolidated Statement Of Changes In Equity	69
Consolidated Statement Of Cash Flows	70
Notes To The Consolidated Financial Statements	72
Director's Declaration	102
Independent Auditor's Report	103
ASX Additional Information	108

Chairman's Letter

It is my pleasure to present Hammer Metals Annual Report for the 2021 financial year, providing details of our continued progress against our business strategy.

Dear Fellow Shareholders,

Your Board's objective is to bring wealth to our stakeholders by making a significant exploration discovery. Hammer's directors and senior management are firmly aligned with our shareholders in the desire to successfully achieve this objective.

The Company is focused on exploring its highly prospective tenement positions in two of the world's great mineral provinces - the Eastern Goldfields of Western Australia for gold and the Northwest Mineral Province in Queensland for copper and gold.

Our work in Northwest Queensland saw exploration success in late 2020 at the Trafalgar copper-gold project which formed part of the JOGMEC JV. Following this discovery and the interest shown by other Japanese mining groups, JOGMEC undertook a process whereby in August this year Sumitomo Metal Mining Oceana Pty Ltd (Sumitomo Metal Mining) stepped into JOGMEC's shoes in the JV. Sumitomo Metal Mining's international operations span several world class operating copper mines and it is of significant credit to the Hammer team and to the quality of the project that the company has attracted a joint venture partner with the stature of Sumitomo Metal Mining. We look forward to working productively with Sumitomo Metal Mining into the future.

Exploration activity on the JV was unavoidably reduced during this changeover period however work has now ramped-up, with extensive geochemical, geophysical and drilling programs presently underway. Exploration on the 100%-owned tenements has also progressed well with significant copper-gold results returned from maiden drilling programs at Neptune and Lakeview along with several new copper and gold prospects identified through our regional mapping and sampling.

New target generation is an ongoing process at Hammer, and reviews of Hammer's extensive exploration datasets both inhouse and by consultants NewExco and PGN has produced a range of exciting targets to add to the project pipeline.

With one of the best ground positions in this productive mineral region and the targets Hammer has in front of it, we are confident of adding to Hammer's existing copper resource inventory at Kalman, Overlander, Elaine and Jubilee.

Over in WA at our Bronzewing South project, RC and Aircore drilling programs have continued to return encouraging results. An exciting deep RC drilling program designed to test the conceptual down-plunge position of the 3Moz Bronzewing deposit is also anticipated to commence in October this year.

Hammer has secured additional prospective tenure in the Yandal Belt to augment our holdings and as tenement applications are progressively being granted the scope of our exploration activities continues to expand. Hammer remains keen to grow the gold side of the business and to acquire additional tenure when opportunities arise.

There is good reason to look forward to the year ahead with anticipation. Hammer ended the year in a strong financial position with the ability to undertake effective work on several large-scale exploration targets at both Mount Isa and Bronzewing South. The key projects and work planned are discussed in more detail in the pages ahead.

Lastly, I would like to thank our supportive shareholders, our joint venture partners at Mount Isa (Sumitomo Metal Mining Oceania and Glencore) as well as our small but effective team led by Dan Thomas for their outstanding efforts during another "pandemic" year.

Sincerely

Russell Davis Chairman

Corporate Strategy

Position the company for discovery, through innovative and focused exploration for large copper-gold and gold deposits in two of the world's great metal provinces.
Grow the Company's defined JORC resources to progress to a viable mining development scenario in Mount Isa.
Work to consolidate and improve the quality of the Company's tenement positions.
Operate safely and effectively.
Deliver positive financial returns to shareholders.

Operational Highlights

Discovery of the Trafalgar copper and gold deposit as part of our Joint Venture with JOGMEC (now Sumitomo Metal Mining). The Trafalgar discovery is part of a 4km trend of copper and gold soil and magnetic anomalies with mineralisation in drilling accompanied by magnetite.
Reinvigoration of Hammer's 100% owned exploration project areas in the Mount Isa region with the successful test of mineralised copper and gold systems at Neptune and Lakeview.
Completed the first diamond drilling program at Bronzewing South with several high priority targets defined along the prospective corridor immediately south of the 3Moz Bronzewing mine.
Welcomed Sumitomo Metal Mining to the Mount Isa East Joint Venture following their purchase of JOGMEC's interest in the Joint Venture.
Defined multiple new targets within Hammer's 100% controlled tenure in the Mount Isa region.
Hammer continued to acquire additional new properties through tenement applications within both the Yandal and Mount Isa project areas.

Corporate Activity

The Company's corporate activities are focussed on enhancing the capacity of our exploration team to make discoveries through adequate funding, as well as securing tenements or projects that improve the quality and potential of the Company's exploration portfolio.

During the year, the Company further enhanced its standing in both the Yandal and Mount Isa regions. In Mount Isa, the company continued to grow its portfolio with the addition of several prospective tenements in close proximity to the Company's existing tenure. In addition to the growth in tenure, the success of the Mount Isa East JV resulted in JOGMEC selling their interest to Sumitomo Metal Mining.

In the Yandal belt the Company acquired the Harrier tenements to the Southeast of the Bronzewing Gold mine. The tenements are lightly explored with a mineralised trend passing through the Harrier and Bower prospects associated with a north-northeast trending structure with historical prospecting in this area encountering zones of gold nuggets. The tenement is located on the eastern limb of the Bronzewing Anticline within 3km of the former Bronzewing Gold Mine. The company was also successful in securing several new tenement applications over prospective areas in the region.

Subsequent to the year end, the Company has successfully divested its non-core early-stage Iron Ore project in Western Australia for a consideration of \$325,000 and a future NSR royalty of 0.5% on all Iron Ore sales.

During the period, the Company completed its first diamond drilling program at Bronzewing South with the assistance of a \$150,000 Exploration Incentive Scheme (EIS) grant from the Western Australian state government testing a compelling gravity, geochemical and structural target. The Company also successfully applied for and received additional EIS funding of \$52,000 towards a 9km air core drilling program at our North Orelia project.

As reported in ASX releases on 23 and 29 April 2021 and 26 May 2021, the company completed a raising of \$5 million at a price of 9.5c per share to existing, sophisticated and institutional investors, with a Share Purchase Plan raising an additional \$1 million from existing shareholders. The company is well funded for aggressive and extensive exploration programs in the Mount Isa and Yandal regions for the year ahead.

The HMXOD listed options expired on 30 September 2020, with 187,820,778 of the quoted options being exercised. This represented over 98% of the total number of quoted options on issue. The exercise of these options at 3 cents each raised over \$5.6 million for the Company.

Management actively interacts with the investment and exploration community. The Company's website (www.hammermetals.com. au) provides additional project and corporate information and access to previous announcements.

Mount Isa Project (Queensland)

The Company is an active mineral explorer in the Mount Isa region, focused on discovering large copper-gold deposits of the Ernest Henry style and has a range of prospective targets at various stages of testing.

Through its wholly owned subsidiaries, the Company holds a strategic tenement position covering over 2,100km2 with 100% interests in the Kalman (Cu-Au-Mo-Re) deposit, the Overlander North and Overlander South (Cu-Co) deposits, the Elaine-Dorothy (Cu-Au) deposit and a 51% interest in the Jubilee (Cu-Au) deposit. The ground position is focused on major regional-scale structural zones and extends for over 100km from Mary Kathleen in the north to the Tick Hill area in the south. The Company's discovery of the Trafalgar copper-gold deposit as part of the Mount Isa East Joint Venture was the highlight of the year with a reinvigoration of our exciting and advanced base metals prospects in Mount Isa. The Trafalgar trend is highly prospective with numerous mineralised targets appearing along a prospective trend that runs for 14km from the south of Trafalgar through to the Elaine (100% HMX) and the Jubilee (51% HMX) copper-gold deposits.

The significant mineralisation recently intercepted at Neptune and Lakeview on Hammer's 100% owned tenure demonstrates the potential along this trend to contribute additional resources to Hammer's portfolio.

Significant market interest in the Trafalgar copper-gold discovery resulted in our JV partner, JOGMEC, receiving unsolicited offers for their position in the Joint Venture. This culminated in JOGMEC selling their interest in the Mount Isa East Joint Venture to global base metal producer and developer Sumitomo Metal Mining.

In addition to exploration activities at the Mount Isa East JV, the Company continued to advance its own prospects within the Mount Isa region. Copper and gold prospects located within a 25km radius of Kalman were prioritised for further evaluation, with 6 targets areas advancing to drill testing during the year – Lakeview, Kalman West, Overlander, Kings/Charlotte, Neptune and Serendipity.

With defined copper-gold resources at Kalman, Overlander, Elaine and Jubilee and significant mineralisation being discovered at Trafalgar, Lakeview and Neptune, Hammer is focussing on the expansion of its mineral inventory with a view to advancing the company to become a future base metal miner.

Exploration also continued on Hammer's gold prospects in Mount Isa with the advancement of exploration efforts in the Tick Hill region. Several areas have been identified for further geochemical, geophysical and field mapping activities with drilling targets to be generated during the coming year.

Mount Isa Project Locations

Copper-Gold Exploration - Kalman and Surrounds

▲ Kalman Deposit

The Kalman Deposit contains 360kt of Copper Equivalent Metal.

The Indicated and Inferred Mineral Resource at Kalman stands at 20Mt at 0.61% Cu, 0.14% Mo, 0.34g/t Au and 3.7g/t Re (1.8% CuEq) (refer ASX announcement 27 September 2016). The deposit remains open down plunge and with a molybdenum grade of 0.14%, Kalman is one of the highest-grade molybdenum resources in the world.

Kalman is Hammer's most advanced prospect with significant mineral inventory. It is near Hammer's other JORC compliant resources at Elaine, Jubilee (51% HMX) and Overlander as well as the Company's lead exploration projects at Trafalgar, Lakeview and Neptune. All are located within 30km of the main highway between Mount Isa and Cloncurry.

Hammer continues to advance its exploration efforts through this region with the aim of defining an appropriate resource that will enable a future development of the Kalman project.

Kalman Deposit Block Model (CuEq) (See ASX announcement 27 September 2016)

Copper-Gold Exploration - Kalman and Surrounds

▲ Kalman West

Kalman West is located approximately 1km west of the Kalman Deposit.

The prospect contains a multi-element soil anomaly partially coincident with a zone of graphitic sediments and a correlating VTEM anomaly.

The zone has been previously drilled by Hammer with noted zones of lead, zinc and gold anomalism. The anomaly also aligns with the Magneto-Telluric anomaly that was identified during Hammer's 2020 Queensland government CEI funded survey. Recent prospecting in the area delineated a thin quartz vein with visible gold. A 44,800g/t Au analysis of this vein indicates the area has the potential to host a high-grade gold deposit. The sample also contained more than 96 ounces of Ag which is the upper detection limit for the method utilised.

In a further test of this anomalous zone, Hammer added two holes (for 188m) to the drilling program. This drilling was completed in addition to the initial planned program which completed a 299m hole drilled targeting a deeper Magneto-telluric ("MT") and Versatile Time Domain Electromagnetic ("VTEM") response.

Example of visible gold samples obtained from a vein at Kalman West. Lab Analysis of a sample from this vein reported 4.48% Au and in excess of 96oz per tonne Ag. Photograph width is 6cm (See ASX announcement 26 July 2021)

Plan of the Kalman West Prospect (see ASX announcement 14 October 2021)

Northern Minerals Hub –Lakeview, Neptune, Jubilee (51%), Elaine, Blackrock and Sunset

▲ Lakeview

The Lakeview prospect is marked by historical workings along an approximate 350m strike length.

Production records indicate that the former prospect was worked in the 1960's and early 1970's with 1,213 tons of ore extracted at a 16% Cu grade. The lode forms a distinctive sigmoidal shape with shafts being present on the long limbs of the prospective structure.

The initial four-hole (300m) program was successful in delineating mineralisation and a second nine-hole (1080m) program was completed to further investigate mineralisation at depth (refer to ASX announcement dated 22 June 2021 and 14 October 2021).

Lakeview eastern shaft which records indicate is approximately 28m deep

The aim of this follow-up drilling was to determine whether a Cu-Au resource could be defined at Lakeview to add to Hammer's existing mineral resource inventory. At the time of this report, assays from 3 of the 9-hole follow-up program have been received. Significant intercepts from Lakeview includes:

10m at 1.97% Cu and 0.42g/t Au from 23m in HMLVRC003 including; o 2m at 4.58% Cu and 0.95g/t Au from 26m; and
8m at 1.97% Cu and 0.24g/t Au from 42m in HMLVRC001 including; o 5m at 2.9% Cu and 0.32g/t Au from 43m in;
17m at 1.05% Cu and 0.39g/t Au from 29m in HMLVRC004 including; o 8m at 1.82% Cu and 0.76g/t Au from 38m.
18m at 1.7% Cu and 0.49g/t Au from 61m in HMLVRC005, including; o 5m at 4.17% Cu and 1.04g/t Au from 61m;

Further attractive exploration targets continue to evolve in close proximity to the Lakeview target with a number of prospective surface features mapped, accompanied by high grade copper and gold rock chips. These targets will form part of Hammer's upcoming Reverse Circulation drilling program.

View of Hammer's Mount Isa Northern Hub Copper Resources and Prospects

Trafalgar Trend extending into Hammer's 100% owned project areas showing the location of Pearl, Lakeside, Smoko Gossan and Lakeview prospects approximately 7km to the north of Trafalgar (See ASX announcement 9 March 2021)

Lakeview Plan view showing the location of the initial and follow-up drilling program

(See ASX announcement 14 October 2021)

Long section looking north through the Lakeview Prospect (See ASX announcement 14 October 2021)

Comparison of quartz-sulphide mineralisation from Lake View surface dumps (left) with sieved chips from HMLVRC001, interval 44-45m assayed at 4.65% Cu and 0.52g/t Au (right) (See ASX announcement 22 June 2021)

Operations Summary

Northern Minerals Hub –Lakeview, Neptune, Jubilee (51%), Elaine, Blackrock and Sunset

▲ Lady Rose (Neptune)

The Lady Rose prospect is located within the Neptune project area and is approximately 2km to the west of Trafalgar in an area of complex magnetic anomalism with multiple copper prospects.

Mineralisation is associated with magnetite alteration and shows strong similarities to mineralisation at Trafalgar, Black Rock and the Jubilee Cu-Au resource. This style of mineralisation and alteration is typical of IOCG systems in the Mt Isa region.

Hammer completed three drill holes at the prospect for a total of 728m with the aim of extending known mineralisation to the north, whilst also looking to test under previous workings at the Lady Rose Extended and Jola Rose prospects. These two prospects are characterised by small scale shafts and workings and have not been previously drilled.

Significant intercepts from drilling include (see ASX announcement 26 July 2021):

100m at 0.48% Cu and 0.18g/t Au from 173m (HMLRRC002) including o 3m at 2.23% Cu and 0.2g/t Au from 185m o 3m at 3.09% Cu and 1.4g/t Au from 198m; and o 5m at 2.21% Cu and 0.37g/t Au from 234m
66m at 0.32% Cu and 0.07g/t Au from 33m (HMLRRC003) including o 2m at 1.92% Cu and 0.42g/t Au from 33m

Down hole electromagnetic surveys ("DHEM") were completed on holes HMLRRC002 and HMLRRC003 with the data from this survey currently being processed by Hammer's geophysical consultants. This prospect along with others defined through mapping, prospecting, geochemical and geophysical review shape as exciting targets for Hammer in the 2022 Financial Year.

Cross section through HMLRRC002 (See ASX announcement 26 July 2021)

Drilling at Lady Rose Extended

Copper-Gold Exploration - Malbon Area – Kings-Charlotte (100% HMX)

The Kings and Charlotte region is characterised by zones of outcropping copper, cobalt and gold mineralisation with numerous anomalous soil geochemical responses.

The majority of this project area has a thin layer of cover masking potential mineral systems. Drilling during the year tested outcropping features which consist of two main structural directions.

Hammer drilled six holes for 660 meters. Holes 1, 5 and 6 tested the Charlotte structure and holes 2, 3 and 4 tested the Kings structure. All holes intersected anomalous responses and significantly the prospects have a strong gold response relative to copper.

Elevated cobalt was also intersected at Charlotte. Significant results included (see ASX announcement 26 July 2021):

3m at 3.89% Cu and 0.56g/t Au from 18m in HMAKRC004 including o 1m at 10.1% Cu and 1.52g/t Au;
1m at 2.13g/t Au from 9m in HMAKRC003; and
10m at 0.58% Cu and 0.12% Co from 19m and 1m at 1.59% Cu from 36m in HMAKRC005.

Hammer's tenements at Malbon contain multiple repeats of this structural regime, in places displaying strong geochemical anomalism. Hammer intends to further delineate and rank these zones through use of surface prospecting and potentially geophysical methods such as Sub-audio Magnetics ("SAM") during the coming year.

Rig on site at HMAKRC001

Southern Hub - Gold Focussed Exploration

▲ Tick Hill Region

Hammer's first detailed work program in the Tick Hill region was designed to provide an initial assessment of the gold potential of Hammer's tenements.

Approximately 1000 soil samples from seven zones were collected and analysed via a partial digest method. (See ASX release 23 September 2020)

Highlights from Hammer's partial leach gold results include;

A program high, gold value of 13ppb is located on eastern side in the main Zone 4.
Continuous and broad Au anomalies are located within the Zone 2 and Zone 6 with both anomalies trending more than 1km long.

The maximum Au value 5.5ppb was recorded in Zone 6 and 6.0ppb Au in Zone 2. It is believed that Zone 2 could have similar overall lithological and magnetic signature to position of Tick Hill, on the eastern side of quartz-feldspar intrusive.

In comparison, the Tick Hill deposit was discovered by a joint MIM and Carpentaria Exploration Company Pty. Ltd. team in October 1989. Follow up work on a bulk cyanide leach ("BCL") sampling anomaly of 6.9 ppb gold in a stream draining the Tick Hill deposit culminated in the drilling of early discovery holes.

Several gold anomalous zones were identified by the sampling. Field reviews of the area of interest have commenced and will continue with the aim of delineating drill ready targets for the coming year.

Tick Hill soil sampling area

Other Commodities

As previously reported the significant potential of Hammer's tenement holding for several critical minerals including cobalt, iron ore, potash, graphite, manganese and rare earth elements.

Hammer continues to assess the geological merits of these prospects and remains open to considering partners to explore these highly attractive prospects within Hammer's large tenement holding.

Mount Isa East Joint Venture (Sumitomo Metal Mining earning 60% Interest)

The Joint Venture area covers sections of the Even Steven, Mount Philp, Dronfield West and Malbon target areas covering approximately 290km2 of Hammer's 2,100km2 Mount Isa Project.

The areas are considered highly prospective for the discovery of Iron Oxide Copper Gold deposits ("IOCG").

The Joint Venture was highly successful during its second year in operation with the discovery of the Trafalgar copper and gold deposit. Following this discovery JOGMEC elected to sell their rights and obligations in the Joint Venture to Sumitomo Metal Mining Oceania (SMMO), a subsidiary of Sumitomo Metal Mining. SMMO now holds the right to earn a 60% interest in the Joint Venture. The future expenditure by SMMO combined with the historical expenditure by JOGMEC will need to exceed \$6,000,000 by 31 March 2024 to earn the 60% interest in the project. During this period, Hammer will continue to manage and operate the exploration program.

Even Steven Area

The Even-Steven area comprises three advanced copper/gold Targets encompassing the Trafalgar, Pearl and Even-Steven prospects. Two of these three prospects were drilled during the period culminating in the discovery of the copper and gold deposit at Trafalgar.

Aerial view of the Trafalgar prospect looking south.

▲ Trafalgar

Trafalgar is a north-northeast trending copper-gold prospect located on the regional scale Fountain Range Fault.

Small scale historical mining occurred at the prospect until the Mining Lease was abandoned in early 2017. The Trafalgar Mine had been held under a Mining Lease by a non-related party since the late 1970's and as a result, the two Joint Venture holes drilled in December 2020 were the first known exploration drill holes conducted on the property.

The two holes were drilled on lines approximately 140m apart as an initial test of the width and tenor of the prospect. Both holes intersected copper mineralisation with a significant gold credit. Significant intersections included (refer ASX announcement 20 January 2021):

55m at 1.12% Cu and 0.30g/t Au from 119m including 16m at 1.77% Cu and 0.49g/t Au from 149m in HMTRRC001 with maximum individual grades of 1.96g/t Au and 3.2% Cu; and
60m at 1.04% Cu and 0.25g/t Au from 64m including 6m at 2.38% Cu and 1.45g/t Au from 91m in HMTRRC002 with maximum individual of 3.22g/t Au and 7.58% Cu.

Additional drilling was completed at Trafalgar in February and June with an additional 7 holes completed for 1256m. The aim of the additional drilling program at Trafalgar was to test along strike and below previous intersections in addition to testing for mineralised zones in the hanging wall. Significant intersections from these two programs were (refer ASX announcement 24 September 2021):

15m at 1.15% Cu and 0.35g/t Au from 92m in HMTRRC003
15m at 0.63% Cu and 0.15g/t Au from 29m in HMTRRC004
16m at 0.88% Cu and 0.34g/t Au from 192m in HMTRRC006, including:
o 9m @ 1.28% Cu and 0.5g/t Au from 195m;
19m at 0.70% Cu and 0.17g/t Au from 117m in HMTRRC007, including

The Trafalgar deposit remains open to the north and at depth with new zones of mineralisation being discovered to the west of the deposit. Evidence of a fault offset to the south of the deposit was identified and further testing of this zone was not possible with the finite budget and drilling program agreed during the JOGMEC sales process. The southern extension will be considered as a potential target zone in the upcoming drilling program.

Example of sulphide mineralisation encountered in drilling at Trafalgar (HMTRRC001, 151-152m (refer ASX announcement 20 January 2021)

Even Steven Area

▲ Trafalgar Trend

The Trafalgar mineralised trend is defined by extensive copper-gold soil anomalism and a strong magnetic ridge with multiple historic workings over a strike length of over 3km.

The trend has had very little systematic exploration completed. The scale of the mineralised system and the nature of the alteration and mineralisation present provides encouragement for locating new copper-gold zones along the trend. Apart from Trafalgar, this trend is not tested by drilling.

Recent field mapping has identified new outcropping zones of copper mineralisation within the trend.

Alteration, the presence of magnetite and elevated light rare earth elements (with individual maximum grades of 0.20% Ce and 0.16% La in HMTRC006, refer ASX announcement 24 September 2021) are all indicative of an IOCG system.

Geological mapping indicates the presence of a red rockmagnetite alteration zone which spans the central mineralised trend and extends along strike.

At a broader scale the Trafalgar trend is marked by attenuated magnetic and conductive highs which highlight the target zone for immediate exploration and future drill testing.

Ivanhoe Copper Outcrop (left) and Lady Northcote Copper Oxide Outcrop (right)

Old shaft at Victory, to the south of Trafalgar (left) and massive sulphides from these workings (right) (See ASX announcement 9 February 2021)

Operations Summary

Mt Philp Area

▲ Shadow, Toby and Charlie

Drilling was also conducted at the Shadow (2 holes), Alpha, Juliett, Bravo and Charlie prospects.

At Shadow, two holes for 399m were drilled approximately 180m north of HMSHDD001. The aim of the holes was to test the northern extent of the Shadow prospect in the area with the highest magnetic response. The drilling encountered low levels of Cu and Au anomalism (refer ASX announcement 20 January 2021). The Shadow prospect occurs at the northern end of a 4.7km long anomalous trend marked by elevated Cu, Au and magnetic responses. The Joint Venture continues to assess the potential to drill targets further south along this trend.

A strong coherent gold anomaly to the north of the Shadow trend was identified through the soil geochemical surveys completed by the Joint Venture. A follow up soil sampling program has been initiated over this area with the intention of defining a drill ready gold target to the north of the Shadow prospect.

Three holes were drilled for 792m at the Alpha, Bravo and Juliett prospects. At the Bravo prospect HMTBRC002 tested a subvertical EM plate defined in mid-2020. This hole intersected graphite rich carbonaceous metasediment which is likely the source of the conductive response. HMTBRC001 and HMTBRC003 were designed to test anomalous soil responses at the Juliett and Alpha prospects. HMTBRC003 intersected (refer ASX announcement 20 January 2021):

■ 5m at 0.18% Cu and 0.11g/t Au from 106m and 1m @ 0.21% Cu and 0.14g/t Au from 131m

At Charlie, the Joint Venture drilled one hole (HMCHRC001) to test beneath a Cu-Zn-Ag gossanous zone. The hole intersected a weakly mineralised zone of sulphide mineralisation from 51m with mineralisation of 1m at 0.3% Cu, 48.7g/t Ag and 0.3% Zn over 1m recorded.

Location of Mt Isa East Joint Venture prospects drilled in late 2020 and early 2021.

Shadow trend and Fountain Range soil sampling program extents (refer ASX announcement 9 December 2020)

Malbon and Dronfield Area

Soil sampling was conducted over the Mount Isa East JV Dronfield and Malbon project areas.

The aim of the sampling program was to investigate magnetic and gravity anomalies. The assays for these programs consisted of a mix of 4 acid digest and partial leach soil sampling. The broad spaced programs have defined zones of anomalism which will now be examined in further detail with closer spaced soil surveys during the FY22 year.

Dronfield and Malbon soil sampling program (See ASX announcement 26 July 2021)

Trafalgar Trend extending into Hammer's 100% owned project areas showing the location of Pearl, Lakeside and Smoko Gossan Prospects approximately 7km to the north of Trafalgar

Yandal Gold Projects (WA)

Hammer holds a 100% interest in approximately 290sqkm of tenements, located within the Yandal greenstone belt in Western Australia.

The Company acquired these projects in 2019 and has been busy exploring and expanding its footprint in a prime gold exploration region, located, close to existing infrastructure. The Company remains keen to increase its exploration footprint in this prospective region.

There are three main target areas:

1. The Bronzewing mineralised corridor extending for 5km to the south of the 2.3 Moz Bronzewing Mine. This area is considered highly prospective due to the area's disrupted exploration history and extensive blanketing by barren transported cover. Previous drilling highlighted several anomalous zones within the Bronzewing corridor which have received limited follow-up with deeper RC and diamond drilling. The previous drilling only tested for north-south lode orientations which did not consider the inherent structural complexity and variable orientation of the Bronzewing lodes.
1. The Orelia trend shear zones extending for 15km along strike to the north of the Lotus pit and adjacent 1Moz Orelia gold deposit. RAB interface and Aircore drilling to an average depth of <30m along the trend outlined numerous bottomof-hole gold anomalies (0.1-1g/t Au) some of which have not been tested by deeper RC or diamond drilling.
1. The Kens Bore quartz vein target is located 11km southeast of Bronzewing. Several strongly anomalous gold results in rock chips coinciding with a 3km long gold-in-soil anomaly at a granite – basalt contact marked by quartz veining.

During the year the Company completed a detailed reverse circulation program (3,442m) targeting prospective gold anomalies at North Orelia and Bronzewing South whilst also drill testing a prospective electromagnetic anomaly at Ken's Bore. Hammer also completed ~1,202m of diamond drilling in two holes targeting gravity low features approximately 5km south of the Bronzewing gold mine. An extensive 9,700m aircore program of 309 holes at several North Orelia geochemical targets was also completed during the period.

Bronzewing South Gold Project

▲ Bronzewing South

The diamond drilling program at Bronzewing South, part funded by the Western Australian Government Exploration Incentive Scheme grant, was undertaken to test two gravity low targets considered to represent potential alteration zones associated with gold mineralisation south of the Bronzewing gold mine.

Results from BWSDD001 include 14m @ 0.14g/t Au from 202m. This drillhole tested the edge of the interpreted gravity anomaly and still encountered a significant zone of quartz and carbonate veining with low levels of gold mineralisation. BWSDD003 tested a similar gravity low approximately 500m to the south of BWSDD003.

As with BWSDD001 vein intensity was strongest in gravity lows, however downhole gold anomalism was limited. Despite this the intersection of the quartz and carbonate veining supports Hammer's targeting rationale and offers encouragement for other target areas within the Bronzewing south tenement.

BWSDD001 212.2-216.7m. The core shows the vein styles and alteration accompanying mineralisation at Bronzewing South. This zone is accompanied by fine grained disseminated pyrite. (see ASX announcement 15 January 2021)

A single RC hole targeted an intersection zone between northeast trending faults and the eastern shear. The hole encountered a broad low-grade mineralised envelope of 96m at 0.39g/t Au from 48m (see ASX announcement 15 January 2021). Peak gold grades are associated with quartz veined pyritic mafic units with an elevated magnetic response. Intercepts of interest were:

■ 17m at 1.56g/t Au from 120m in drill hole BWSRC0037, including; 1m at 19.69g/t Au from 123m

The identification of these zones along with an improved understanding of the structure and stratigraphy plunging to the south of the Bronzewing deposit is assisting in defining potentially shallower targets closer to the tenement boundary.

Of most interest, is the corridor that sits in an analogous position to the Bronzewing Gold mine. This corridor is defined by the Bapinmarra dolerite unit to the west and an eastern share zone. It is interpreted that within this corridor the mineralised trend is plunging at 10 to 20 degrees to the south.

This target volume is traversed by several northeast trending faults which are considered contributory to the location of mineralisation at Bronzewing. Hammer has defined several targets at the intersection of these key features which will be progressively tested by a potential combination of reverse circulation and diamond drilling.

A detailed gravity survey conducted at a 50m spacing was undertaken to extend the coverage of a previously completed survey across the immediate southern strike extension of the Bronzewing Deposit. (Refer to ASX announcement dated 13 October 2020). The survey has assisted in refining the structural framework and exploration model for the Bronzewing South prospect, outlining five target zones directly south of the original Bronzewing gold pits. These targets remain untested at depth yet sit in a favourable structural corridor with several attractive geophysical attributes.

Two of the five targets were partially tested by a 2020 diamond drilling program (refer to ASX announcement dated 15 January 2021). This initial testing confirmed the location of prospective stratigraphy within the Hammer Metals project area and the presence of altered and mineralised material co-incident with a gravity low

Hammer intends to target the third of these five targets located only 300m south of the Bronzewing deposit in an upcoming reverse circulation drilling program. Drill planning is complete and program organisation is underway for a late October mobilisation.

Long section looking west through the Bronzewing South area showing the five targets identified in the detailed gravity survey. Hammer plans to test the most northern anomaly in the upcoming drilling program. (See ASX announcement 9 December 2020)

Bronzewing South area showing Hammer targets (See ASX announcement 25 August 2021)

Bronzewing South Gold Project

▲ North Orelia

These tenements are situated to the North of the McClure group of deposits which include the Orelia and Lotus gold deposits.

The North Orelia tenements comprise of tenements E36/869, 870, 916 and 1006. In addition to our first RC program at North Orelia, Hammer tested several targets with extensive air core programs. During the year, the Company completed its first reverse circulation program at two target areas along with further air core drilling.

Hammer also completed a ~9,700m aircore program in May to test several new prospects with previously untested soil geochemical targets on the northern Orelia trend. This work was partly funded by a Western Australia Government Exploration Initiative Scheme grant.

▲ North Orelia - Target 1

The RC drilling program at Target 1 aimed to further test key structural positions below the depth of weathering along a 2km mineralisation trend that was identified through Hammer's previous air core drilling programs.

The reverse circulation program consisted of 2,111m of drilling (20 holes). Significant intercepts included (see ASX announcement 15 January 2021):

8m at 4.2g/t Au from 20m in BWSRC0025 including: 1m at 27.1g/t Au from 26m;
5m at 3.5g/t Au from 25m in BWSRC0026 including:1m at 16.6g/t from 25m;
4m at 6.3g/t Au from 77m in BWSRC0028;
7m at 1.2g/t Au from 85m in BWSRC0031 including1m at 3.5g/t Au from 88m;
14m @ 1.87g/t Au from 67m in BWSRC018 including4m @ 6.31g/t Au from 77m; and
7m @ 1.17g/t Au from 85m including1m @ 3.50g/t Au.

▲ North Orelia - Target 4

Target 4 is located 1km along strike to the north of Northern Star's (ASX:NST) 1Moz Orelia Resource.

Orelia and the former Lotus and Cockburn deposits are located within a fault bounded corridor and associated with regional structures such as the Lotus Fault. Hammer Metals has been progressively testing this corridor to identify specific stratigraphic units and discern major fault zones.

Two RC holes for 330m were drilled to gather further geological knowledge and test the prospective stratigraphy at Target 4. This drilling confirmed the position of a semi-massive sulphide unit which is also present on the western edge of the Orelia deposits and is a stratigraphic marker for the prospective mineralised zone at Target 4. Gold mineralisation was identified in one of the holes drilled at this target with an intercept of 3m at 0.3g/t Au from 51m in BWSRC0035. The semi-massive sulphide was also anomalous for zinc. The information gathered from drilling at Target 4 highlights the corridor in which Hammer will focus future drilling programs.

Example of sulphide mineralisation encountered in drilling at Trafalgar (HMTRRC001, 151-152m (see ASX announcement 20 January 2021)

North Orelia Target 1 Plan (see ASX announcement 15 January 2021)

Bronzewing South Gold Project

▲ North Orelia -Target 2

The northern portion of Target 2 was tested by air core drilling with 47 holes for 745m. This drilling targeted the southern margin of a fractionated granite. The best result from this target was 4m at 0.19g/t Au from 8m in BWSAC0794 which was overlain by a plus 5ppb Au-in-soil anomaly.

▲ North Orelia - Target 3

Drilling at Target 3 extended the strike length of known mineralisation up to 3.2km.

The 76 holes of air core drilling (2418m) targeted a shear zone with significant intercepts of (see ASX announcement 25 August 2021):

4m at 0.52g/t Au from 32m in BWSAC0638A;
8m at 0.21g/t Au from 40m in BWSAC0641; and
4m at 0.55g/t Au from 24m in BWSAC0653.

The zone is located on the eastern margin of the Orelia mineralisation trend and is associated with elevated Arsenic, Antimony and Tellurium.

▲ North Orelia - Eastern Granite

Drilling at three holes at Target 3 finished in anomalous zones of gold mineralisation – including (see ASX announcement 25 August 2021);

■ 0.15g/Au from 8m in BWSAC0736, 0.11g/t Au from 14m in BWSA0800, and 0.12g/t Au from 45m BWSAC0640

This target is located partly within a granite bordering the eastern margin of the Orelia trend where soil geochemical sampling had defined a1.1km by 300m gold anomaly.

No previously drilling had been conducted over this target. Hammer Metals tested the area with 126 air core holes (3101m).

Significant geochemical intercepts of 8m at 0.12g/t Au from 20m in BWSAC0621 and 4m at 0.15g/t Au from 12m in BWSAC0622 (see ASX announcement 25 August 2021) were associated with a north-northwest trending shear zone on the margin of the granite. Both holes terminated in anomalous mineralisation. Shear zones within granites are attractive targets within the Yandal Belt and, in some cases host economic mineralisation such as Northern Star's Ramone Deposit.

North Orelia Trend Targets three and four showing significant Hammer Drilling Intercepts (Background image Magnetics) (see ASX announcement 25 August 2021)

Bronzewing South Gold Project

▲ Ken's Bore

Two reverse circulation holes for 480m were drilled to test an EM anomaly.

These holes encountered massive and semi massive sulphide with true widths of up to 50m.

Intersected gold results include:

11m @ 0.11g/t Au from 123m in BWSRC040; and
2m @ 0.12g/t Au from 175m in BWSRC041

Significantly, the broad intervals of massive sulphide occur at the contact of an ultramafic unit that extends through the Ken's Bore tenement.

Several nickel sulphide prospects occur in association with similar ultramafic units in the district and the presence of other untested EM anomalies along this unit upgrades the nickel potential within this tenement. Hammer is examining these untested anomalies in further detail(see ASX announcement dated 15 January 2021).

▲ North Orelia - Eastern Granite

This target is located partly within a granite bordering the eastern margin of the Orelia trend where soil geochemical sampling had defined a 1.1km by 300m gold anomaly.

No previously drilling had been conducted over this target. Hammer Metals tested the area with 126 air core holes (3101m).

Ken's Bore RC Drill chips with broad massive sulphide zone

Kens Bore composite section showing both BWSRC040 and BWSRC041 (See ASX announcement 15 January 2021)

View looking north showing the proximity of the Bronzewing Deposit to E36/854

Pilbara Iron Ore (WA)

Subsequent to the year end, the Company divested its early stage Iron Ore project in Western Australia for a consideration of \$325,000 and a future NSR royalty of 0.5% on all Iron Ore sales.

Competent Persons Statement

▲ Exploration Results

The information in this report as it relates to exploration results and geology was compiled by Mr. Mark Whittle, who is a fellow of the AusIMM and an employee of Hammer Metals Limited.

Mr. Mark Whittle, who is also a share and option holder in the Company, has sufficient experience which is relevant to the styles of mineralisation and deposit types under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Reserves. Mr. Whittle consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

▲ Mineral Resource Estimates

Where the company refers to Mineral Resource Estimates for the following prospects:

the Kalman deposit (ASX 27 September 2016); and
the Jubilee deposit (ASX 20 December 2018)

it confirms that it is not aware of any new information or data that materially affects the information included in those announcements and all material assumptions and technical parameters underpinning the resource estimates continue to apply and have not materially changed.

Annual Mineral Resource Statement

As of 30 June 2021

The Company's Mineral Resource Statement has been compiled in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2012 and 2004 Editions) and Chapter 5 of the ASX Listing Rules and ASX Guidance Note 31. The Company has no Ore Reserve estimates.

The Company governs its activities in accordance with industry best-practice. The reported estimates for Overlander and Kalman were generated by reputable, independent consulting firms. The resource reports and supporting data were subjected to internal analysis and peer-review before release.

In 2016, Hammer Metals Limited commissioned Haren Consulting Pty Ltd to update the Kalman Resource based on new drilling and geological interpretation. The resource was issued on the 27th of September 2016.

In November 2018, H&S Consultants Pty Ltd was commissioned to undertake a resource estimate on the Jubilee Cu-Au Deposit. The resource was issued on 12 December 2018.

The estimate is based on good quality RC and Diamond drilling data. The estimate was based on a 42 reverse circulation holes for 5475m and 3 diamond holes for 261m. Of these holes 26 were drilled by Hammer Metals Ltd and the remaining 19 drilled by the previous operator. Drilling extends to a maximum depth of 325m below surface. The drill hole spacing is approximately 50m along strike.

There has been no material change to the Jubilee Resource estimate since its initial release to the ASX dated 20 December 2018.

The company has not reported the Mineral Resource Estimate over the West Pilbara Iron Ore Deposit, as this immaterial, non-core asset was divested subsequent to the end of the year.

In relation to the Kalman, Overlander, Elaine, Mt Philp, and Jubilee Resources, there have been no material changes to the Resource Estimates during the reporting period.

Resource Project	Mineral Resource Competent Person	Organization	ASX Reporting Date
Jubilee	Mr. L. Burlet	H&S Consultants Pty Ltd	December 12th, 2018
Kalman	Ms. E. Haren	Haren Consulting	September 27th 2016
Overlander	Ms. E. Haren	Haren Consulting	August 26th 2015
West Pilbara	Mr. C. Allen	CSA Global Pty Ltd	July 26th 2010
Mt. Philp	Mr. T. Leahey	Cerro Resource NL	September 28th 2012

▲ Jubilee Deposit JORC 2012 Mineral Resource Estimate (12 December, 2018)

(Reported at 0.5% Cu cut-off)

Classification	Weathering Domain	Tonnes	Cu %	Au (Cut) g/t	Cu Tonnes	Au (Cut) Ounces
Inferred	Mod-Slightly Weathered	0.07	1.51	0.55	1,000	1,200
Inferred	Fresh	1.34	1.41	0.63	19,000	27,100
Total		1.41	1.41	0.62	20,000	28,300

■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence

■ Note: (2) Totals may differ due to rounding

The 51%-owned Jubilee Deposit is situated 50 kilometres west of Mount Isa in North West Queensland.

In November 2018, H&S Consultants Pty ltd was commissioned to undertake a resource estimate on the Jubilee Cu-Au Deposit. The resource was issued on 12 December 2018.

There has been no material change to the Jubilee Resource estimate since its initial release to the ASX dated 20 December 2018.

Refer to the ASX release dated 20 December, 2018. The company is not aware of any new information or data that materially affects the information in the HMX ASX announcement. All material assumptions and technical parameters underpinning the mineral resource estimate continue to apply and have not materially changed.

▲ Kalman Deposit JORC 2012 Mineral Resource Estimate (27 September, 2016)

Classification	Mining Method	CuEq Cut-off	Tonnes Kt	CuEq %	Cu %	Mo %	Au ppm	Ag ppm	Re ppm
Indicated	Open Pit	0.75%	7,100	1.5	0.48	0.12	0.27	1.4	2.9
Inferred	Open Pit	0.75%	6,200	1.6	0.44	0.15	0.24	1.5	3.9
Inferred	Underground	1.4%	7,000	2.4	0.89	0.16	0.50	2.9	4.5
Total			20,000	1.8	0.61	0.14	0.34	1.9	3.7

■ Note: (1) The copper equivalent equation is: CuEq= Cu+(0.864268*Au)+(0.011063*Ag)+(4.741128*Mo)+(0.064516*Re)

■ Note: (2) Copper Equivalent Price assumptions are: Cu: US\$4,650/t; Au: US\$1,250/oz; Ag: US\$16/oz; Mo: US\$10/lb; and Re: US\$3,000/kg.

The Kalman Molybdenum-Rhenium-Copper-Gold-Silver (Mo-Re-Cu-Au-Ag) deposit is situated 60 kilometres southeast of Mt Isa within the Mt Isa Inlier, and forms part of the company's Kalman Project.

Drilling extends to a maximum down hole depth of 998.3 metres and the mineralisation was modelled from surface to a depth of approximately 800 metres below surface. The estimate is based on good quality RC and diamond core drilling data. The drill hole spacing is approximately 100 metres along strike with some 50 metre-spaced infill drilling.

In September 2016, Haren Consulting was contracted by Hammer Metals Limited to complete an update of the Mineral Resource estimate for the deposit. The estimate was reported to comply with the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' by the Joint Ore Reserves Committee (JORC).

The Kalman Mineral Resource has been reported at two cut-off grades to reflect both open pit and underground mining scenarios. The Kalman Mineral Resource estimate comprises a combined 20 million tonnes at 1.8% copper equivalent (CuEq) at 0.61% copper, 0.34 g/t gold, 0.14% molybdenum and 3.7 g/t rhenium in the Indicated and Inferred categories at revised cut-off grades. (Refer to the ASX release dated 27 September 2016).

The Kalman Mineral Resource Estimate disclosed as part of the 2015 review was last updated in March 2014 in accordance with the JORC Code (2012 Edition). The Resource estimate comprised a combined 30 million tonnes at 1.3% copper equivalent (CuEq) at 0.54% Cu, 0.28% Au, 0.08% Mo and 2.2 g/t Re in the Inferred category. (Refer to the ASX Release dated 19 March 2014 for full details of the Resource Estimate.)

▲ Kalman Deposit Mineral Resource Estimate (2015)

(Reported at 0.3% CuEq cut-off above 100m RL and 1.0% CuEq cut-off below 100m RL)

Classification	Mining Method	Tonnes kt	CuEq %	Cu %	Au ppm	Ag ppm	Mo %	Re ppm
Inferred	Open Pit	22,000	1.1	0.42	0.22	1.1	0.07	1.9
Inferred	Underground	8,300	1.9	0.87	0.42	2.0	0.11	2.9
Total		30,000	1.3	0.54	0.28	1.3	0.08	2.2

Note: (1) Numbers rounded to two significant figures
Note: (2) Totals may differ due to rounding
Note: (3) (CuEq = Cu + 0.594464Au + 0.010051Ag + 4.953866Mo + 0.074375Re)

The reasons for the update were:

8 holes (K131-K132 and K134-139) drilled by Hammer in 2014 were incorporated into the resource model. The drill holes intersected multiple, relatively shallow high-grade molybdenum and copper intersections which were considered to have the potential to enhance the existing mineral resource model.
The deposit was re-interpreted to improve mineralisation constraints.

The 2016 resource update differed from the 2014 update in that the resulting total resource tonnage was reduced from 30,000kt to 20,000kt and average metal grades increased, primarily due to the use of more elevated cut-off grades.

▲ Overlander North And South Deposits JORC 2012 Mineral Resource Estimates (26 August, 2015)

(Reported at 0.7% Cu cut-off)

OVERLANDER NORTH MINERAL RESOURCE

Classification	Tonnes	Cu %	Co ppm	Cu Tonnes	Co Tonnes
Indicated	253,000	1.4	254	3,414	64
Inferred	870,000	1.3	456	11,350	396
Total	1,123,000	1.3	410	14,764	461

■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence

■ Note: (2) Totals may differ due to rounding

OVERLANDER SOUTH MINERAL RESOURCE

Classification	Tonnes	Cu %	Co ppm	Cu Tonnes	Co Tonnes
Indicated	-	-	-	-	-
Inferred	649,000	1.0	500	6,352	327
Total	649,000	1.0	500	6,352	327

■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence

■ Note: (2) Totals may differ due to rounding

OVERLANDER NORTH AND SOUTH COMBINED MINERAL RESOURCE

Classification	Tonnes	Cu %	Co ppm	Cu Tonnes	Co Tonnes
Indicated	253,000	1.4	254	3,414	64
Inferred	1,518,000	1.2	476	17,700	723
Total	1,772,000	1.2	445	21,112	788

■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence

■ Note: (2) Totals may differ due to rounding

The 100%-owned Overlander Project is situated 60 kilometres to the southeast of the mining centre of Mount Isa in North West Queensland and 6 kilometres to the west of Hammer's Kalman copper-gold-molybdenum-rhenium deposit. It is a high-priority target area for both shear-hosted copper and IOCG copper mineralisation. The Overlander North and South Copper Deposits are situated approximately one kilometre apart within a common shear zone.

Drilling in the Overlander North deposit extends to a vertical depth of approximately 430m and the mineralisation was modelled from surface to a depth of approximately 420 metres below surface. Drilling in the Overlander South deposit extends to a vertical depth of approximately 215 metres and the mineralisation was modelled from surface to a depth of approximately 180m below surface. The resource estimates are based on good quality RC and diamond drilling data. Drill hole spacing is predominantly on a 40 metre by 20 metre spacing with additional drill holes between sections targeted at the higher-grade cores of the deposits.

Following additional drilling in 2014 and 2015, the Mineral Resource Estimates for the Overlander North and South shear-hosted copper Deposits were revised by Haren Consulting Pty Ltd and reported in accordance with the guidelines of the JORC Code (2012 Edition). They contain combined resources of 1,772,000 tonnes at 1.2% copper in the indicated and inferred categories (Refer to the ASX release dated 26 August 2015). There has been no material change to the Overlander resource base during the financial year.

CuEq cut-off %	Mt	CuEq %	Cu %	Au g/t
0.10	64.34	0.34	0.31	0.05
0.20	32.77	0.54	0.49	0.08
0.25	26.10	0.62	0.56	0.09
0.30	22.81	0.67	0.60	0.10
0.40	17.81	0.76	0.68	0.12
0.50	15.05	0.82	0.73	0.13
0.60	12.47	0.88	0.77	0.15
0.70	9.31	0.95	0.82	0.19
0.80	6.46	1.04	0.87	0.25

▲ Elaine Mineral Resource

The 100%-owned Elaine Cu-Au deposit is situated on granted exploration licence 14022, approximately 50km east of Mount Isa in North West Queensland.

A resource estimate was first completed and reported to ASX by previous owners (Chinalco Yunnan Copper Resources Limited, now AUKing Limited) on 18th October 2012. The resource was conducted by Mine Development Associates. The company is not aware of any new information or data that materially affects the information in the AKN ASX announcement. All material assumptions and technical parameters underpinning the mineral resource estimate continue to apply and have not materially changed.

A review of the Resource Estimate was completed for the purpose of compiling this statement and the principles and methodology of the resource estimation procedure and the resource classification procedure are considered to comply.

The Elaine Project Mineral Resource Estimate is based on approximately 30 holes to a depth of 450 metres below surface.

The current resource totals 9.3 million tonnes (Mt) grading 0.82% Cu and 0.19g/t Au and is classified as being all in the Inferred category. The resource is tabulated below at a variety of CuEq % cut-offs.

ELAINE INFERRED MINERAL RESOURCE ESTIMATE METAL EQUIVALENT INFORMATION

The Copper Equivalent (CuEq) equation has been calculated to reflect current and forecast pricing. CuEq grades were calculated using estimated block grades for Cu and Au. Metal prices used were:

Cu: US\$5,400/t;
Au: US\$1,300/oz;

The copper equivalent equation is: CuEq % = Cu % + (Au ppm * 0.70216).

Cut-offs of 0.7% have been applied for reporting Mineral Resources.

▲ Mt. Philp Deposit JORC 2004 Mineral Resource Estimate (12 March, 2012)

Classification	Tonnes	Fe %	P %	SiO2 %	Al2O3 %	TiO2 %	LOI %
Indicated	19,110,000	41	0.02	38	1.3	0.38	0.29
Inferred	11,400,000	34	0.02	48	2.0	0.46	0.31
Total	30,510,000	39	0.02	42	1.6	0.41	0.30

■ Note: (1) Numbers rounded to two significant figures to reflect appropriate levels of confidence

■ Note: (2) Totals may differ due to rounding

The Mount Philp Iron Ore deposit is located in north-western Queensland, 1,500 kilometres northwest of Brisbane. The Mineral Resource Estimate is based on 48 diamond and reverse circulation (RC) drillholes completed in 2011 for a total of 3,801 metres. Drilling comprises fans located on a nominal 100 metre pattern along the strike length of the ironstone. The Mineral Resource was estimated and reported in-house by Cerro Resource NL.

The current resource totals 19.1 million tonnes grading 41.4% iron and 37.9% silica in the Indicated category and 11.4 million tonnes grading 33.8% iron and 47.4% silica in the Inferred category. This resource is open at depth.

A resource estimate was first completed and reported to ASX by previous owners on 28th September 2012 and there has been no material change to the resource base during the financial year. A review of the resource estimate was completed for the purpose of compiling this statement and the principles and methodology of the resource estimation procedure and the resource classification procedure have been reconciled with the CIM Resource Reserve definitions and found to comply.

▲ Governance And Internal Controls – Resource Calculations

The Company ensures good governance in relation to resource estimation through the use of third-party resource consultants and internal review in accordance with industry best practice. All reported resource estimates were generated by reputable, independent consulting firms. The resource reports and supporting data were subjected to internal analysis and peer review before release. The Company is not aware of any additional information, other than that reported, which would have a material effect on the estimates as reported.

Due to the nature, stage and size of the Company's existing operations, the Board believes there would be no efficiencies gained by establishing a separate mineral reserves and resources committee responsible for reviewing and monitoring the Company's processes for calculating mineral reserves and resources estimates and for ensuring that the appropriate controls are applied to such calculations.

The Company will report any future mineral reserves and resources estimates in accordance with the 2012 JORC Code.

Competent Persons Statement

The information in this Annual Mineral Resources Statement is based on, and fairly represents information and supporting documentation reviewed by Mr Mark Whittle, a Competent Person who is a fellow of the AusIMM and an employee of Hammer Metals Limited. Mr Whittle, who is a share and option holder of the company, has sufficient experience which is relevant to the styles of mineralisation and deposit types under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2004 JORC Code) and the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 JORC Code). Mr Whittle consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Tenement Interests

▲ Tenement Interests At End Of September 2020

Mt Isa (Queensland)

MT. DOCKERELL MINING PTY LTD

Lease	Lease Name	Lease Status	Interest
EPM 11919	Cameron River	Granted	100%
EPM 13870	Pelican	Granted	100%
EPM 18084	Dronfield	Granted	100%
EPM 25165	Cameron River 4	Granted	100%
EPM 26474	Enterprise	Granted	100%
EPM 26511	Sling Shot	Granted	100%
EPM 26628	Argylla	Granted	100%
EPM 26694	Mt Philp	Granted	100%
EPM 26775	Pilgrim North	Granted	100%
EPM 26776	Pilgrim Central	Granted	100%
EPM 26777	Pilgrim South	Granted	100%
EPM 26902	Marriage	Granted	100%
EPM 26904	Jady Jenny	Granted	100%
EPM 27018	Dingo Creek	Granted	100%
EPM27469	Mount Moran	Granted	100%
EPM27470	China Wall	Granted	100%
EPM27806	Roos	Granted	100%
EPM27815	Lady Vampire	Granted	100%

MULGA MINERALS PTY LTD

Lease	Lease Name	Lease Status	Interest
EPM 12205	Cloncurry	Granted	100%
EPM 14019	South Mary K	Granted	100%
EPM 14022	North Mary K	Granted	100%
EPM 14467	Mt Frosty	Granted	51%
EPM 25145	Green Creek	Granted	100%
EPM 25866	Malbon	Granted	100%
EPM 25867	Mt Jasper	Granted	100%
EPM 26126	Cathay	Granted	100%
EPM 26127	Resolve	Granted	100%
EPM 26130	El Questro	Granted	100%
EPM 26512	Black Angel	Granted	100%
EPM 27355	Pioneer	Granted	100%

Lease	Lease Name	Lease Status	Interest

E08/1997 Cheela Plains Granted 100%

Yilgarn (Western Australia)

CARNEGIE EXPLORATION PTY LTD

Lease	Lease Name	Lease Status	Interest
E36/854		Granted	100%
E36/855		Granted	100%
E36/868	Kens Bore	Granted	100%
E36/869		Granted	100%
E36/870		Granted	100%
E36/882		Granted	100%
E36/916		Granted	100%
E36/996		Application	100%
E36/1006		Application	100%
E53/1989		Granted	100%
E53/1996		Granted	100%
E53/2030		Granted	100%
E53/2085		Granted	100%

Lease	Lease Status	Interest
E53/2112	Granted	100%
E53/2113	Granted	100%
E53/2114	Granted	100%
E53/2115	Granted	100%
E53/2116	Granted	100%
E53/2127	Granted	100%
E53/2128	Granted	100%
P36/1857	Granted	100%
P36/1858	Granted	100%
P53/1682	Granted	100%
P53/1683	Granted	100%
P53/1684	Granted	100%
P53/1685	Granted	100%
P53/1686	Granted	100%
P53/1687	Granted	100%
P53/1688	Granted	100%
P53/1689	Granted	100%
P53/1690	Granted	100%
P53/1691	Granted	100%
P53/1692	Granted	100%
P53/1693	Granted	100%
P53/1694	Granted	100%
P53/1695	Granted	100%
P53/1696	Granted	100%
P53/1697	Granted	100%

Directors Report

The Directors present their report together with the financial report of Hammer Metals Limited ("the Company" or "Hammer") and of the Group, comprising the Company and its subsidiaries, for the year ended 30 June 2021 and the auditor's report thereon.

▲ 1. Directors

The names and details of the Company's directors in office during the financial year or since the end of the financial year are set out below.

RUSSELL DAVIS Non-Executive Chairman

BSc (Honours) MBA MAusIMM, MAICD

Russell Davis is a Geologist with over 30 years' experience in the mineral resources business. He has worked on the exploration and development of a range of commodities for a number of international and Australian companies, holding senior technical and corporate positions including Chief Mine Geologist, Exploration Manager and Managing Director. Mr Davis was a founding Director of Gold Road Resources Limited and also Syndicated Metals Limited where he was Managing Director from December 2007 to March 2012. Mr Davis has been a Director of Hammer Metals (Australia) Pty Ltd since its inception in 2012.

DANIEL THOMAS Managing Director

BSc (Applied Chemistry), MBA

Daniel Thomas has over 20 years' experience in operations, corporate development, project management and project finance having completed undergraduate studies in Chemistry and Geology as well as attaining an BMA from the Melbourne Business School.

During his career, Mr Thomas has worked across Australia, North America, Asia and Africa, in a wide range of commodities, including base and precious metals. Mr Thomas' most recent role before joining the Company was as Business Development Manager at Sandfire Resources (ASX:SFR), where he was instrumental in utilising cash-flows generated by the DeGrussa Copper-Gold Mine to grow the Company both organically through exploration and through business development initiatives, including several acquisitions, investments and joint ventures. Prior to his time at Sandfire Resources Limited, Mr Thomas held roles with Wesfarmers, PTT Asia Pacific Mining and Mitsui E&P Australia.

ZBIGNIEW LUBIENIECKI

Non-Executive Director

BSc (Applied Geology), MAIG

Zbigniew ("Ziggy") Lubieniecki holds a Bachelor of Science (Applied Geology) and is an experienced exploration geologist with more than 30 years' experience in exploration, mining, management, property acquisition and company listings. Mr Lubieniecki has held senior positions including Chief Mine Geologist for Plutonic Resources Limited and exploration Manager for Australian Platinum Mines and was most recently an Executive Director of Gold Road Resources Limited. Mr Lubieniecki has had a successful exploration career including the discovery of the 6.2-millionounce Gruyere gold deposit.

DAVID CHURCH Non-Executive Director (appointed 1 July 2020)

LLB, BEc

David Church is currently the nonexecutive Chairman of Caprice Resources Limited and a consultant to the Hong-Kong Stock Exchange-listed Regent Pacific Group Limited, performing the functions of General Counsel and Head of Mergers and Acquisitions. Mr Church is a qualified solicitor and has practiced in Australia with Clayton Utz, and in the UK and Hong Kong with Linklaters.

▲ 2. Directorships Of Other Listed Companies

Directorships of other ASX listed companies held by Directors in the 3 years immediately before the end of the financial year are as follows:

Name	Company	Period of Directorship
Russell Davis	None	-
Daniel Thomas	None	-
Zbigniew Lubieniecki	None	-
David Church	Caprice Resources Limited	October 2019 - current

▲ 3. Company Secretary

MARK PITTS – COMPANY SECRETARY

B.Bus, FCA, GAICD

Mr Pitts is a Chartered Accountant with over 25 years' experience in statutory reporting and business administration. He has been directly involved with, and consulted to, a number of public companies holding senior financial management positions. Mr Pitts is a Partner in the corporate advisory firm Endeavour Corporate providing secretarial support, corporate and compliance advice to a number of ASX listed public companies.

▲ 4. Directors' Meetings

The number of Directors' meetings held, and the number of meetings attended by each of the Directors of the Company during their term in office in the financial year is as follows:

Director	Meetings held while in office	Meetings attended
Mr R Davis	4	4
Mr D Thomas	4	4
Mr Z Lubieniecki	4	3
Mr D Church	4	3

The Company does not have any committees. Matters usually considered by an audit, remuneration or nomination committee were dealt with by the whole Board during regular Board meetings.

▲ 5. Principal Activity

The principal activity of the Group during the course of the financial year was mineral exploration in Australia.

▲ 6. Operating And Financial Review

The Group incurred an after-tax loss for the year of \$611,525 (2020: \$1,978,610).

CORPORATE:

The following issues of ordinary shares were completed during the year:

Between 1 July and 30 September 2020, the Company received valid exercise notices of 167,105,021 of its HMXOD listed options, which were exercisable at \$0.03 on or before 30 September 2020. Through the exercise of these options, the company raised \$5,013,151.
On 8 December 2020, 875,206 ordinary shares were issued to Directors of the Company in lieu of fees totalling \$23,500. These shares were approved by shareholders at the Company's 2020 Annual General Meeting. Furthermore, on this date, 1,500,000 performance rights were exercised and converted into fully-paid ordinary shares.
On 3 February 2021, 1,000,000 unquoted options exercisable at \$0.032 on or before 30 November 2022 were exercised.
On 30 April 2021, the Company completed a placement of 45,789,473 ordinary shares at \$0.095 per share, raising \$4,350,000 before costs.
On 3 February 2021, and additional 250,000 unquoted options exercisable at \$0.032 on or before 30 November 2022 were exercised.
On 26 May 2021, the Company completed its Share Purchase Plan, issuing 10,526,254 shares at \$0.095 per share to raise \$999,994 before costs.

A total of 4,500,000 unquoted options exercisable at \$0.05 were issued to Directors of the Company on 8 December 2020, after being approved by the shareholders of the Company at the 2020 Annual General Meeting.

The following options expired during the period:

2,676,078 unquoted options exercisable at \$0.07 expired, unexercised, on 1 September 2020.
3,724,428 HMXOD quoted options exercisable at \$0.03 expired, unexercised, on 1 October 2020

Since the end of the financial year, no options have been granted or expired and no options have been exercised.

The following performance rights were exercised during the year:

750,000 performance rights, vesting on 21 October 2020.
750,000 performance rights, vesting on 21 October 2020, subject to achieving a minimum share price of \$0.031 for a period of 30 days.

No performance rights were issued or expired during, or since the end of the financial year.

EXPLORATION ACTIVITIES:

Hammer Metals Limited is exploring in two great minerals provinces, focused on the discovery of gold and copper deposits. Following a successful drilling program with the discovery of the Trafalgar copper and gold deposit within the Mount Isa East JV with the Japan Oil, Gas and National Metals Corporation ("JOGMEC"), the company has embarked on an aggressive exploration program across its Mount Isa holdings. Hammer continues to advance its gold exploration activities in the Yandal province testing a number of targets near the former Bronzewing and Orelia gold mines

QUEENSLAND - MOUNT ISA REGION PROJECTS

Hammer is exploring its Mount Isa project for large iron oxide copper-gold (IOCG) deposits of the Ernest Henry style (approximately 220 million tonnes at 1.1% Cu and 0.5g/t Au). The Group holds approximately 2,100 km2 of tenure in the Mt. Isa region. A systematic IOCG targeting exercise within the Mount Isa region is ongoing through the Mt Isa East JV and 100% funded activities.

Mt. Isa project – wholly-owned projects

Hammer's activities in Mount Isa were reinvigorated on the back of the success within the Mt Isa East JV. Early work during the year focused on the gold potential in proximity to the historic Tick Hill mine with a number of promising prospects identified. Work continues to develop these targets whilst recent activities focused on prospective Copper and Gold targets in close proximity to Hammer's Kalman deposit and the prospective trend running from Trafalgar through to the Jubilee deposit (of which the Company has a 51% interest). In total, 6 separate areas were drill tested; Lakeview, Neptune, Kings/Alice (Malbon), Kalman West, Overlander and Serendipity. Key results include (See ASX Announcement 22 June and 26 July 2021):

100m at 0.48% Cu and 0.2g/t Au from 173m in HMLRRC002 at Neptune (Lady Rose); and
10m at 1.97% Cu and 0.24g/t Au from 23m in HMLVRC003 at Lakeview

Further programs focusing in on the copper and gold mineralisation at Neptune are likely in the new financial year along with other prospects which are being advanced through geochemical and geophysical surveys. A drilling program is likely in the last quarter of the 2021 calendar year.

Mt Isa East Joint Venture

The Mt Isa East Joint Venture (the "JV") with JOGMEC was executed in late 2019 and field activities continued throughout the financial year. The JV agreement allows JOGMEC to earn a 60% interest in approximately 290sq. km of tenure by expending \$6 million in five years. The JV encountered success with the exploration program at Trafalgar with the initial two holes intersecting (See ASX Announcement 20 January 2021):

55m at 1.12% and 0.3g/t Au from 119m in HMTRRC001; and
60m at 1.04% Cu and 0.25g/t Au from 64m in HMTRC002

Further drilling at Trafalgar was completed in June with results yet to be reported.

With the drilling success at Trafalgar, JOGMEC received unsolicited approaches regarding their interests in the JV. Following a formal sale process, JOGMEC has elected to sell their interest in the JV to Sumitomo Metal Mining Oceania. The transfer of the JV remains outstanding at the time of this report. Exploration activities within the JV remain ongoing whilst the ownership of the JV interests are formally transferred.

WESTERN AUSTRALIA - BRONZEWING SOUTH PROJECT

Hammer's tenements cover prospective structural trends in the core of the Yandal Greenstone Belt. This region has reported greater than 24Moz of current and historical gold production from deposits such as Bronzewing, Jundee, Mt McClure, Darlot and Thunderbox.

Hammer continues to acquire tenure, progressively applying for areas as they become available and acquiring low-cost tenements from others in the region (See ASX announcement 1 March 2021). The company now holds approximately 300km2 of tenure in the Yandal gold province.

North Orelia

Hammer's tenements cover prospective trends along strike from the former Lotus and Cockburn Deposits (of the Mt McClure group) and the current 1.1Moz Orelia gold resource owned by Northern Star Resources (ASX:NST). Hammer completed an extensive air core and reverse circulation drilling program during the year.

Hammer was able to complete 309 air-core holes for 9,700m during the period (Refer to ASX release dated 25 August 2021). A total of 2,111m of drilling in 20 holes was completed at Target 1 at North Orelia, focusing on a 2km stretch of gold anomalism identified in previous Hammer air core drilling. At Target 4, two reverse circulation holes were drilled for 330m targeting prospective stratigraphy to the North of the Orelia gold deposit.

Bronzewing South

During the reporting period, Hammer tested two geological targets, approximately 4km to the south of the former Bronzewing Gold mine. Development of innovative targeting concepts resulted in Hammer being awarded a \$150,000 Western Australian Government Exploration Incentive Grant to partly fund diamond drill testing of gravity anomalies. In addition to the three diamond drill holes (1326m), Hammer also completed a single reverse circulation hole (178m) (See ASX announcement 9 November 2020 and 1 March 2021) and a detailed gravity survey across select portions of the tenement.

Ken's Bore

Two reverse circulation holes for 480m were drilled to test an Electromagnetic anomaly. These holes encountered massive and semi massive sulphide with true widths of up to 50m (See ASX announcement 15 January 2021).

IMPACT OF COVID-19 PANDEMIC

During the previous financial year, Hammer reacted promptly to the COVID-19 pandemic and conducted a full review of its activities and expenditures during March 2020. It focused on delaying fieldwork to safeguard the safety of employees, whilst reducing overheads where possible to conserve working capital against the growing uncertainty and volatility. These measures have been gradually unwound over the course of the current financial year, and the levels of operations have returned to normal.

During the current financial year, Hammer has been impacted by COVID-19 related border closures, however the Board has instituted a number of measures to ensure that delays and disruptions from these closures are minimal.

All personnel and contractors of the Company are instructed in operating during the pandemic in a safe manner, which includes the use of masks, social distancing, and regular health checks as appropriate.

The Directors recognise the continuing uncertainty surrounding the pandemic and its impact upon the Group's operations, and believes the measures undertaken by the Group are proportionate.

▲ 7. Dividends

No dividends were paid or declared by the Company during the financial year.

▲ 8. Events Subsequent To Balance Date

Subsequent to year end the following events have occurred:

On 15 July 2021, the Company issued 6,842,104 shares to Directors of the Company, which related to the Director's participation in the placement completed in April 2021. These shares were issued at \$0.095 per share, raising \$650,000 before costs.
On 19 August 2021, the Company announced that Japan Oil, Gas and Metals National Corporation ("JOGMEC") and Sumitomo Metal Mining Oceania Pty. Ltd. ("SMMO") had signed an agreement whereby JOGMEC would transfer its position within the Mt Isa East JV to SMMO. The original terms of the agreement between the Company and JOGMEC remain unchanged, with the JV partner required to spend \$6 million over 5 years to earn a 60% interest in the project.

Other than the above, there has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.

▲ 9. Likely Developments

The Company will continue planning and executing exploration and development work on its existing projects in Australia as well as projects under review in Australia to complement and expand on existing tenement holdings.

▲ 10. Directors' Interests

The relevant interest of each Director in the shares and options of the Company as notified by the Directors to the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

Director	Ordinary shares	Unlisted options	Performance Rights
Mr R Davis	39,679,289	3,500,000	-
Mr D Thomas	2,241,407	7,000,000	6,500,000
Mr Z Lubieniecki	62,664,283	4,500,000	-
Mr D Church	1,052,631	1,000,000	-

The above table includes indirect shareholdings held by related parties to the directors.

▲ 11. Environmental Regulations

In the course of its normal mining and exploration activities Hammer adheres to environmental regulations imposed on it by the various regulatory authorities, particularly those regulations relating to ground disturbance and the protection of rare and endangered flora and fauna.

Hammer has complied with all material environmental requirements up to the date of this report. The Board believes that Hammer has adequate systems in place for the management of its environmental requirements and is not aware of any breach of these environmental requirements as they apply to it.

▲ 12. Remuneration Report – Audited

12.1 PRINCIPLES OF COMPENSATION

Remuneration levels for key management personnel and other staff of Hammer are competitively set to attract and retain appropriately qualified and experienced personnel and therefore includes a combination of cash paid and the issuance of options and rights.

Key management personnel comprise the directors of the Company and senior executives for Hammer. Staff remuneration is reviewed annually.

Consequences of performance on shareholder wealth

In establishing performance measures and benchmarks to ensure incentive plans are appropriately structured to align corporate behaviour with the long-term creation of shareholder wealth, the Board has regard for the stage of development of the Company's business, share price, operational and business development achievements (including results of exploration activities) that are of future benefit to the Company. In considering Hammer's performance and benefits for shareholder wealth, the Board have regarded the following indices in respect to the current and previous four financial years:

	2021	2020	2019	2018	2017
Loss per share (cents)	(0.08)	(0.40)	(0.29)	(0.26)	(0.28)
Net loss (\$)	(611,525)	(1,978,610)	(852,517)	(673,062)	(539,578)
Share price at 30 June	\$0.092	\$0.043	\$0.023	\$0.025	\$0.036

Service contracts

Daniel Thomas – Managing Director

The Company has entered into an Executive Service agreement with Mr Thomas on 21 October 2019. An Executive service fee of \$220,000 (plus superannuation at 9.5%) per annum is payable with an indefinite term. Either Party can terminate the agreement subject to a three-month notice period. Mr Thomas is not entitled to any termination payments other than for services rendered at time of termination.

Mark Pitts – Company Secretary

Mr Pitts is a Partner in the corporate advisory firm Endeavour Corporate providing secretarial support and corporate and compliance advice, pursuant to a contract between Endeavour Corporate and the Company. The contract with Endeavour Corporate has no fixed term with the option of termination by either party with two months' written notice. Mr Pitts is not entitled to any termination payments other than for services rendered at time of termination.

Non-executive directors

All non-executive Directors receive a fixed annual Directors' fee of \$40,000 (plus superannuation benefits as required under the applicable legislation). The Chair receives a fixed annual fee of \$60,000 (plus superannuation benefits as required under the applicable legislation).

The maximum aggregate amount of non-executive Directors' fees payable by the Company as approved by the shareholders at the 2011 annual general meeting is \$300,000 per annum.

Share trading policy

In December 2010, Hammer introduced a share trading policy which sets out the circumstances in which directors, executives, employees and other designated persons may deal with securities held by them in the Company. This includes any shares or any other securities issued by the Company such as options. The policy includes restriction on key management personnel and other employees from entering into arrangements that limit their exposure to losses that would result from share price decreases. Entering into such arrangements has been prohibited by law since 1 July 2011.

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▲

Details of the nature and amount of each major element of the remuneration of each director of the Company and other key management personnel of the Group are:

Year Ended 30 June 2021		Short Term		Long Term			remuneration Proportion of	Value of options and rights as
Directors	Salary & fees \$	Consulting fees \$	leave accruals1 \$ Movement in	Superannuation benefits \$	Options and Rights \$	Total \$	performance related %	remuneration % proportion of
Mr D Thomas Executive	220,000	-	8,723	20,900	81,0452	330,668	14.6%	24.5%
Non-executive Mr R Davis	60,000	-	-	5,463	47,000	112,463	-	41.8%
Mr Z Lubieniecki	40,000	40,708	-	3,800	35,250	119,758	-	29.4%
Mr D Church	40,000	-	-	3,800	23,500	67,300	-	34.9%
Total - Directors	360,000	40,708	8,723	33,963	186,795	630,189	7.67%	29.6%
Other Key Management Personnel Executives
(Company Secretary) Mr M Pitts	58,500	-	-	-	-	58,500	-	-
management personnel Total – all key	418,500	40,708	8,723	33,963	186,795	688,689	7.02%	27.1%

1 – Represents the accounting value of the movement in accrued leave liabilities, and not amounts paid to the member of Key Management Personnel.

2 – Represents the vesting expense of options and rights issued during a previous period.

12.2 Directors' and senior executives' remuneration continued

▲

Year Ended 30 June 2020		Short Term		Long Term			remuneration Proportion of	Value of options and rights as
Directors	Salary & fees \$	Consulting fees \$	leave accruals1 \$ Movement in	Superannuation benefits \$	Options and Rights \$	Total \$	performance related %	remuneration % proportion of
Mr D Thomas Executive	153,841	-	7,240	13,570	78,007	252,658	20.6%	31.8%
Non-executive Mr R Davis2	87,500	-	-	-	-	87,500	-	-
Mr Z Lubieniecki	40,000	58,875	-	-	-	98,875	-	-
Mr N El Sayed	30,000	-	-	2,731	-	32,731	-	-
Total - Directors	311,341	58,875	-	16,301	78,007	471,764	10.9%	16.8%
Other Key Management Personnel Executives
(Company Secretary) Mr M Pitts	42,000	-	-	-	13,000	55,000	-	23.6%
management personnel Total – all key	353,341	58,875	-	16,301	91,007	526,764	9.8%	17.5%

1 – Represents the accounting value of the movement in accrued leave liabilities, and not amounts paid to the member of Key Management Personnel. 2 – Subsequent to the appointment of Mr Thomas on 21 October 2019, Mr Davis amended his role from an Executive Chair to a Non-Executive Chair.

▲ 12.3 Value of options to executives

The value of options will only be realised if and when the market price of the Company shares, as quoted on the Australian Securities Exchange, rises above the Exercise Price of the options. Further details of the options are contained below.

▲ 12.4 Options and rights over equity instruments granted as compensation

4,500,000 options were granted to the Non-Executive Directors during the year. The terms of these options and rights are noted in the table below.

▲ 12.5 Analysis of options and rights over equity instruments granted as compensation

GRANTED DURING THE CURRENT FINANCIAL YEAR

The table below details the vesting profile of the options granted as remuneration to each key management person during the year.

Key Management Personnel	Number of options granted	Date granted	% Vested	% Forfeited / Lapsed	Financial year in which grant vested / will vest
Russell Davis	2,000,000	30 November 2020	100%	-	-
Zbigniew Lubieniecki	1,500,000	30 November 2020	100%	-	-
David Church	1,000,000	30 November 2020	100%	-	-

The fair value of the options issued during the year to Key Management Personnel was determined by reference to the Black-Scholes option pricing model. The key inputs and valuations are summarised as follows:

	Directors
Underlying security spot price on grant date	\$0.037
Exercise price	\$0.05
Grant date	30 November 2020
Expiration date	30 November 2024
Vesting date	Immediate
Life (years)	4
Volatility	100%
Risk free rate	0.20%
Dividend Yield	-
Number of options	4,500,000
Valuation per option	\$0.0235
Remaining life (years)	3.4
Total value	\$105,750
Value recognised to date	\$105,750
Value still to be recognised	-

GRANTED DURING PREVIOUS FINANCIAL YEARS

The following options were granted as remuneration to key management personnel during the prior year.

Key Management Personnel	Number of options granted	Date granted	% Vested	% Forfeited / Lapsed	Financial year in which grant vested / will vest
Mr D Thomas – Tranche 1	3,000,000	14 November 2019	100%	0%	30 June 2021
Mr D Thomas – Tranche 2	4,000,000	14 November 2019	0%	0%	30 June 2022
Mr M Pitts	500,000	23 June 2020	100%	0%	30 June 2020

The fair value of the options issued during the prior year to Key Management Personnel was determined by reference to the Black-Scholes option pricing model. The key inputs and valuations are summarised as follows:

	Mr D Thomas – Tranche A	Mr D Thomas – Tranche B	Mr M Pitts
Underlying security spot price on grant date	\$0.021	\$0.021	\$0.04
Exercise price	\$0.05	\$0.06	\$0.05
Grant date	14 November 2019	14 November 2019	23 June 2020
Expiration date	21 October 2023	21 October 2023	30 June 2024
Vesting date	21 October 2020	21 October 2021	Immediate
Life (years)	4	4	4
Volatility	100%	100%	100%
Risk free rate	0.795%	0.795%	0.340%
Dividend Yield	-	-	-
Number of options	3,000,000	4,000,000	500,000
Valuation per option	\$0.0111	\$0.0105	\$0.0260
Remaining life (years)	2.3	2.3	2.0
Total value	\$33,360	\$42,080	\$13,000
Value recognised to date	\$33,360	\$33,354	\$13,000
Value still to be recognised	-	\$6,726	-

The above options issued to Mr Thomas include a service condition for the individual to remain employed until the vesting date. There are no further vesting conditions attached to the options issued to Mr Pitts.

The following performance rights, which all expire on 13 December 2023, were issued to the Company's Managing Director during the prior year:

750,000 performance rights, vesting on 21 October 2020;
750,000 performance rights, vesting on 21 October 2020, subject to achieving a minimum share price of \$0.031 for a period of 30 days at any point during the vesting period;
750,000 performance rights, vesting on 21 October 2021;
750,000 performance rights, vesting on 21 October 2021, subject to achieving a minimum share price of \$0.036 for a period of 30 days at any point during the vesting period; and
5,000,000 performance rights, vesting upon the satisfactory completion of a transaction in accordance with the terms outlined in the Company's Notice of Annual General Meeting dated 8 October 2019.

For Tranches 1 and 3, these rights vest on the vesting date (being the service period) with no additional vesting conditions.

During the financial year, the first two tranches above were exercised. No further rights were issued during the year and, as at the end of the financial year, 6,500,000 rights were outstanding, none of which had vested.

The number of rights under each tranche on issue during the current and previous financial years are as follows:

	30 June 2021 No.	30 June 2020 No.
Managing Director Performance Rights – Tranche 1	-	750,000
Managing Director Performance Rights – Tranche 2	-	750,000
Managing Director Performance Rights – Tranche 3	750,000	750,000
Managing Director Performance Rights – Tranche 4	750,000	750,000
Managing Director Performance Rights – Tranche 5	5,000,000	5,000,000
	6,500,000	8,000,000

The fair value of the performance rights issued during the prior year to Key Management Personnel was determined by reference to the underlying security on the date of issue, adjusted as necessary for any market-based performance conditions. The key inputs and valuations are summarised as follows:

	Mr D Thomas – Tranche 1	Mr D Thomas – Tranche 2	Mr D Thomas – Tranche 3	Mr D Thomas – Tranche 4	Mr D Thomas – Tranche 5
Underlying security spot price on grant date	\$0.021	\$0.021	\$0.021	\$0.021	\$0.021
Grant date	14 Nov 2019	14 Nov 2019	14 Nov 2019	14 Nov 2019	14 Nov 2019
Expiration date	13 Dec 2023	13 Dec 2023	13 Dec 2023	13 Dec 2023	13 Dec 2023
Vesting date	21 Oct 2020	21 Oct 2020	21 Oct 2021	21 Oct 2021	Note 3
Life (years)	4.1	4.1	4.1	4.1	4.1
Discount applied (Note 1)	-	39%	-	26%	-
Number of rights	750,000	750,000	750,000	750,000	5,000,000
Value per right	\$0.021	\$0.0129	\$0.021	\$0.0156	\$0.021
Remaining life (years) (Note 2)	N/A	N/A	2.5	2.5	2.5
Total value	\$15,750	\$9,642	\$15,750	\$11,729	\$105,000
Value recognised to date	\$15,750	\$9,642	\$13,233	\$9,854	\$41,859
Value still to be recognised	-	-	\$2,517	\$1,875	\$63,141

Note 1 – this discount represents the expected likelihood that the share-price hurdle condition would be met and was determined by an independent valuation.

Note 2 – the remaining life represents the time, in years, left until the expiry of the right. The rights may vest before this date, as noted for tranches 1 and 2.

Note 3 – Tranche 5 contains a performance-based vesting condition. For measurement and recognition purposes, it has been estimated that these rights would vest over their entire life.

▲ 12.6 Option holdings

The movement during the reporting period in the number of options over ordinary shares in Hammer Metals Limited held, directly, indirectly or beneficially, by each key management person, including their personally-related entities, is as follows:

Key Management Personnel	Held at beginning of period/on appointment	Granted	Purchased	Exercised	Lapsed or Expired	Held at end of period / on resignation	Vested and exercisable at end of period
Mr R Davis	6,500,000	2,000,000	-	(5,000,000)	-	3,500,000	3,500,000
Mr D Thomas	7,000,000	-	-	-	-	7,000,000	3,000,000
Mr Z Lubieniecki	3,000,000	1,500,000	-	-	-	4,500,000	4,500,000
Mr D Church	-	1,000,000	-	-	-	1,000,000	1,000,000
Mr M Pitts	1,582,287	-	-	(582,287)	-	1,000,000	1,000,000

▲ 12.7 Equity holdings and transactions

During the year, 875,206 shares were issued to key management personnel in lieu of fees for the prior year (2020: nil). The movement during the reporting period in the number of ordinary shares in Hammer Metals Limited held directly, indirectly or beneficially, by each key management person, including their personally related entities, is as follows:

	Held at beginning of period/on appointment	Purchases		Granted in lieu of fees	Exercise of Options and Performance Rights	Held at end of period/on resignation
Mr R Davis	33,600,000	252,631	-	300,432	5,000,000	39,152,973
Mr D Thomas	282,711	84,210	-	374,486	1,500,000	2,241,407
Mr Z Lubieniecki	57,200,837	-	-	200,288	-	57,401,125
Mr D Church	-	-	-	-	-	-
Mr M Pitts	842,294	-	-	-	582,287	1,424,581

▲ 12.8 Performance right holdings

The movement during the reporting period in the number of performance rights over ordinary shares in Hammer Metals Limited held, directly, indirectly or beneficially, by each key management person, including their personally-related entities, is as follows:

	Held at beginning of period/on appointment	Granted	Exercised	Other movements	Held at end of period / on resignation	Vested and exercisable at end of period
Mr R Davis	-	-	-	-	-	-
Mr D Thomas	8,000,000	-	1,500,000	-	6,500,000	-
Mr Z Lubieniecki	-	-	-	-	-	-
Mr D Church	-	-	-	-	-	-
Mr M Pitts	-	-	-	-	-	-

12.9 Key management personnel transactions

The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial year exclusive of GST:

			Transaction value year ended	Balance outstanding as at
Key management Personnel	Transaction	30 June 2021 \$	30 June 2020 \$	30 June 2021 \$	30 June 2020 \$
Zbigniew Lubieniecki	Consulting Services	40,708	58,875	-	9,075
Mark Pitts	Accounting services	41,520	41,140	3,670	1,280

The Company paid fees to Endeavour Corporate, a company associated with Mark Pitts, for accounting and financial reporting services provided to the company. The Company also paid fees to Zbigniew Lubieniecki, as consulting fees for geological services provided.

END OF REMUNERATION REPORT

▲ 13. Share Options

Unissued shares under option

At the date of this report unissued ordinary shares of the Company under option are:

	Expiry Date	Exercise price	Number of options
Director/Executive/Employee Options	30 November 2021	\$0.032	8,750,000
Corporate Advisor Options – Tranche 1	13 December 2022	\$0.035	1,000,000
Managing Director Options – Tranche 1	21 October 2023	\$0.05	3,000,000
Managing Director Options – Tranche 2	21 October 2023	\$0.06	4,000,000
Corporate Advisor Options – Tranche 2	30 June 2023	\$0.035	3,000,000
Employee and Consultant Options	30 June 2024	\$0.05	2,600,000
Director Options	30 November 2024	\$0.05	4,500,000

These options do not entitle the holder to participate in any share issue of the Company or any other body corporate.

Shares issued on exercise of options

The Company has issued 167,105,021 ordinary shares as a result of the exercise of HMXOD quoted options (exercisable at 3 cents on or before 21 September 2020) and 1,250,000 as the result of the exercise of unquoted options exercisable at 3.2 cents on or before 30 November 2021 during this year (2020: 19,525,757).

Subsequent to year end, on 15 July 2021, the Company issued 6,842,104 shares to Directors of the Company, which related to the Director's participation in the placement completed in April 2021. These shares were issued at \$0.095 per share, raising \$650,000 before costs.

▲ 14. Performance Rights

Unissued shares under performance rights

At the date of this report unissued ordinary shares of the Company under performance rights are:

	Expiry Date	Number of rights
Managing Director Rights – Tranche 3	13 December 2023	750,000
Managing Director Rights – Tranche 4	13 December 2023	750,000
Managing Director Rights – Tranche 5	13 December 2023	5,000,000

The terms of these rights are summarised in section 12.5 above.

▲ 15. Corporate Governance

In recognising the need for the highest standards of corporate behaviours and accountability, the Directors support and have adhered to the principles of sound corporate governance. The Board recognises the recommendations of the ASX Corporate Governance Council and considers the Company is in compliance with those guidelines which are of importance to the operations of the Company. Where a recommendation has not been followed, that fact has been disclosed together with the reasons for the departure.

The Company's Corporate Governance Statement and disclosures available on the Company's website at www.hammermetals.com.au.

▲ 16. Indemnification Of Officers And Auditors

The Company has entered into Director and Officer Protection Deeds (Deed) with each Director and the Company Secretary (officers). Under the Deed, the Company indemnifies the officers to the maximum extent permitted by law and the Constitution against legal proceedings, damage, loss, liability, cost, charge, expense, outgoing or payment (including legal expenses on a solicitor/client basis) suffered, paid or incurred by the officers in connection with the officers being an officer of the Company, the employment of the officer with the Company or a breach by the Company of its obligations under the Deed.

Also pursuant to the Deed, the Company must insure the officers against liability and provide access to all board papers relevant to defending any claim brought against the officers in their capacity as officers of the Company.

The Company has paid insurance premiums during the year in respect of liability for any past, present or future Directors, secretary, officers and employees of the Company or related body corporate. The insurance policy does not contain details of the premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under the insurance policy.

The Company has not provided any insurance or indemnification for the Auditor of the Company.

▲ 17. Non-Audit Services

During the year, KPMG, the Company's auditor provided taxation compliance services in addition to their statutory duties. Refer to Note 7 to the financial statements for more information.

▲ 18. Lead Auditor's Independence Declaration Under Section 307c Of The Corporations Act 2001

The lead auditor's independence declaration is set out on page 66 and forms part of the Directors' report for the financial year ended 30 June 2021.

▲ 19. Significant Changes In State Of Affairs

In the opinion of Directors, other than that disclosed elsewhere in this report, there were no other significant changes in the state of affairs of the Group that occurred during the financial year under review.

This report is made with a resolution of the Directors:

R Davis Chairman Perth

29 September 2021

Directors Report

Auditor's Independence Declaration

Auditor's Independence Declaration To the Directors of Hammer Metals Limited

Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001 ii. no contraventions of any applicable code of professional conduct in relation to the audit.

To the Directors of Hammer Metals Limited KPMG R Gambitta

I declare that, to the best of my knowledge and belief, in relation to the audit of Hammer Metals Limited for the financial year ended 30 June 2021 there have been: Perth

i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and 29 September 2020
ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPM_INI_01

KPMG Glenn Brooks Partner Perth 29 September 2021

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Consolidated Statement Of Financial Position

▲ As At 30 June 2021

	Note	30 June 2020	30 June 2019
Current Assets
Cash and cash equivalents	10	9,706,093	2,678,535
Trade and other receivables	11	140,842	154,728
Total current assets		9,846,935	2,833,263

Non-current assets
Other financial assets	12	484,299	271,097
Right-of-use assets	14	303,302	71,570
Exploration and evaluation expenditure	15	17,429,445	14,110,772
Total non-current assets		18,217,046	14,453,439
Total assets		28,063,981	17,286,702

Current liabilities
Trade and other payables	16	1,171,283	363,896
Lease liabilities	17	63,997	17,208
Total current liabilities		1,235,280	381,104

Non-current liabilities
Lease liabilities	17	232,595	56,302
Total non-current liabilities		232,595	56,302
Total liabilities		1,467,875	437,406

Net assets		26,596,106	16,849,296

Equity
Share capital	18	62,277,335	51,429,354
Reserves	19	1,291,101	1,794,923
Accumulated losses		(36,972,330)	(36,374,981)

Total equity		26,596,106	16,849,296

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

Consolidated Statement Of Profit Or Loss And Other Comprehensive Income

Consolidated Statement Of Profit Or Loss And Other Comprehensive income

▲ For The Year Ended 30 June 2021

	Note	30 June 2020	30 June 2019
Other income	4	308,019	99,092
Marketing expenses		(114,839)	(78,954)
Administrative expenses		(765,502)	(732,957)
Share based payments	5	(186,795)	(233,707)
Occupancy expenses		(45,878)	(45,756)
Depreciation and amortisation	5	(26,906)	-
Fair value adjustment on financial assets		213,202	(987,661)
Other expenses		(1,915)	-

Loss from operating activities		(620,614)	(1,979,943)

Finance income		14,006	2,299
Finance expenses		(4,917)	(966)
Net finance income / (expense)	6	9,089	1,333

Loss before income tax		(611,525)	(1,978,610)
Income tax benefit	8	-	-
Net loss for the year from continuing operations		(611,525)	(1,978,610)

Other comprehensive income		-	-

Other comprehensive loss for the year, net of income tax		-	-

Total Comprehensive loss for the year		(611,525)	(1,978,610)

Loss per share:
Basic and diluted loss per share (cents per share)	9(a)	(0.08)	(0.40)

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

Consolidated Statement Of Changes In Equity

For The Year Ended 30 June 2020

▲

		Share based	Option issue	Accumulated
	Share capital	payment reserve	reserve	losses	Total
Balance at 1 July 2019	46,628,496	910,991	747,854	(34,396,371)	13,890,970

Loss for the year	-	-	-	(1,978,610)	(1,978,610)
Other comprehensive income / loss	-	-	-	-	-
Total comprehensive loss for the period	-	-	-	(1,978,610)	(1,978,610)
Shares issued for cash	4,391,969	-	-	-	4,391,969
Exercise of options	683,401	-	(97,629)	-	585,772
Share based payments	-	233,707	-	-	233,707
Share issue costs	(274,512)	-	-	-	(274,512)
Balance at 30 June 2020	51,429,354	1,144,698	650,225	(36,374,981)	(16,849,296)

Balance at 1 July 2020	51,429,354	1,144,698	650,225	(36,374,981)	(16,849,296)
Loss for the year	-	-	-	(611,525)	(611,525)
Other comprehensive income / loss	-	-	-	-	-
Total comprehensive loss for the period	-	-	-	(611,525)	(611,525)
Exercise of options	5,704,199	(15,000)	(636,049)	-	5,053,150
Shares issued for cash	5,349,994	-	-	-	5,349,994
Shares issued to acquire tenements	50,000	-	-	-	50,000
Shares issued in lieu of fees	23,500	-	-	-	23,500
Conversion of performance rights	25,392	(25,392)	-	-	-
Lapse of listed options	-	-	(14,176)	14,176	-
Share based payments	-	186,795	-	-	186,795
Share issue costs	(305,104)	-	-	-	(305,104)
Balance at 30 June 2021	62,227,335	1,291,101	-	(36,972,330)	(26,596,106)

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

Consolidated Statement Of Cash Flows

▲ For The Year Ended 30 June 2021

	Note	30 June 2020	30 June 2019
Cash flows from operating activities
Interest received		14,006	2,299
Receipts from other parties to joint operations		100,000	-
Rental income received		-	9,185
COVID-related government assistance received		38,500	-
Fuel rebate received		4,667	2,035
Payments to suppliers and employees		(776,845)	(812,617)
Net cash used in operating activities	24	(619,672)	(799,098)

Cash flows from investing activities
Payments for exploration expenditure		(3,868,940)	(2,369,818)
Management fees received from farm-in and joint arrangement partners		197,170	75,798
Receipt of research and development grant		384,209	214,939
Government exploration grants received		377,224	-
Purchase of plant and equipment		(5,946)	-
Net cash used in investing activities		(2,916,283)	(2,079,081)

Cash flows from financing activities
Proceeds from issue of share capital		5,349,994	4,391,969
Share funds received in advance		500,000	-
Proceeds from issue of options		5,053,150	585,772
Transaction costs from issue of shares and options		(305,104)	(274,512)
Lease payments made		(34,527)	(7,171)
Net cash from financing activities		10,563,513	4,696,058

Net increase / (decrease) in cash and cash equivalents		7,027,558	1,817,879
Cash and cash equivalents at beginning of year		2,678,535	860,656
Cash and cash equivalents at end of year	10	9,706,093	2,678,535

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

Notes To The Consolidated Financial Statements

▲ 1.Reporting Entity

Hammer Metals Limited (the "Company") is a company domiciled in Australia. The Company's registered office is Unit 1, 28-30 Mayfair Street, West Perth, Western Australia. The consolidated financial statements of the Company for the financial year ended 30 June 2021 comprises the Company and its subsidiaries (together referred to as the "Group").

The Group is a for profit entity and is primarily involved in the exploration and extraction of mineral resources.

▲ 2.Basis Of Preparation

(A) STATEMENT OF COMPLIANCE

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements also comply with International Financial Reporting Standards (IFRS's) adopted by the International Accounting Standards Board (IASB).

The consolidated financial report was authorised for issue by the Directors on 29 September 2021.

(B) BASIS OF MEASUREMENT

The financial report is prepared on the historical cost basis except for share based payments and other financial assets which are measured at their fair value.

(C) FUNCTIONAL AND PRESENTATION CURRENCY

The financial report is presented in Australian dollars which is the functional and presentation currency of the Company and its subsidiaries.

(D) USE OF ESTIMATES AND JUDGEMENTS

Set out below is information about:

critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements; and
assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year.

Critical judgements

i. Going concern

A key assumption underlying the preparation of the financial statements is that the Group will continue as a going concern. An entity is a going concern when it is considered to be able to pay its debts as and when they are due, and to continue in operation without any intention or necessity to liquidate or otherwise wind up its operations. A significant amount of judgement has been required in assessing whether the Group is a going concern, as set out in note 2(f).

Estimates and assumptions

ii. Ore Reserves and Mineral Resources

Economically recoverable reserves represent the estimated quantity of product in an area of interest that can be expected to be profitably extracted, processed and sold under current and foreseeable economic conditions. The Group determines and reports ore reserves and mineral resources under the standards incorporated in the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves, 2012 edition (the JORC Code). The determination of ore reserves or mineral resources includes estimates and assumptions about a range of geological, technical and economic factors, including: quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates. Changes in ore reserves and mineral resources impact the assessment of recoverability of exploration and evaluation assets, provisions for site restoration and the recognition of deferred tax assets, including tax losses.

iii. Exploration and evaluation assets

Determining the recoverability of exploration and evaluation expenditure capitalised in accordance with the Group's accounting policy (refer note 3(n)), requires estimates and assumptions as to future events and circumstances, in particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved. Critical to this assessment is estimates and assumptions as to ore reserves (refer note 2(d)(ii)), the timing of expected cash flows, exchange rates, commodity prices and future capital requirements. Changes in these estimates and assumptions as new information about the presence or recoverability of an ore reserve becomes available, may impact the assessment of the recoverable amount of exploration and evaluation assets. If, after having capitalised the expenditure under accounting policy 3(n), a judgement is made that recovery of the expenditure is unlikely, an impairment loss is recorded in the statement of profit and loss and other comprehensive income in accordance with accounting policy 3(f). The carrying amounts of exploration and evaluation assets are set out in note 15.

(E) ADOPTION OF NEW AND REVISED STANDARDS

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

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

(F) GOING CONCERN

The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

For the year ended 30 June 2021, the Group has incurred a consolidated loss before tax of \$611,525 and net cash outflows from operating and investing activities of \$3,570,482. As at 30 June 2021, the Group had \$9,706,093 in cash and cash equivalents and net current assets of \$8,611,655.

Subsequent to year end, the Company has received \$650,000 (before costs) from the issue of shares at \$0.095 per share.

On the above basis, the Directors are of the view that the going concern basis of preparation is appropriate.

▲ 3. Statement Of Significant Accounting Policies

The Group has consistently applied the accounting policies set out in note 3 to all periods presented in these consolidated financial statements.

(A) BASIS OF CONSOLIDATION

i. Subsidiaries

Subsidiaries are 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. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

ii. Investments in associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 percent and 50 percent of the voting power of another entity.

Investments in associates are accounted for using the equity method and are recognised initially at cost. The cost of the investments includes transaction costs.

The consolidated financial statements include the Group's share of the profit or loss and other comprehensive income of equity accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.

When the Group's share of losses exceeds its interest in an equity accounted investee, the carrying amount of the investment, including any long-term interest that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

iii. Joint arrangements

The Group classifies its interests in joint arrangements as either joint operations or joint ventures depending on the Group's rights to the assets and obligation for the liabilities of the arrangements. When making this assessment, the Group considers the structure of the arrangements, the legal form of any separate vehicles, the contractual terms of the arrangements and other facts and circumstances.

iv. Transactions eliminated on consolidation

Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.

v. Business combinations

Business combinations are accounted for by applying the acquisition method.

For every business combination, the Group identifies the acquirer, which is the combining entity that obtains control of the other combining entities or businesses. 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. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another.

vi. Contingent liabilities

A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably.

vii. Non-controlling interest

The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree.

(B) FOREIGN CURRENCY

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of profit and loss and other comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.

The assets and liabilities of foreign operations, including fair value adjustments arising on consolidation, are translated to Australian dollars at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated to Australian dollars at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity.

(C) PLANT AND EQUIPMENT

Items of plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses (see accounting policy 3(f)). Depreciation is charged to the statement of profit and loss and other comprehensive income on a straight-line basis over their estimated useful lives. The estimated useful lives in the current and comparative periods are as follows:

Office equipment 3 to 4 years
Plant and equipment 3 to 5 years

The residual value, if significant, is reassessed annually.

(D) FINANCIAL INSTRUMENTS

Recognition and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and initial measurement of financial assets

Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).

For the purpose of subsequent measurement, financial assets, are classified into the following categories:

amortised cost
fair value through profit or loss (FVTPL)
equity instruments at fair value through other comprehensive income (FVOCI)
debt instruments at fair value through other comprehensive income (FVOCI).

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.

The classification is determined by both:

the entity's business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.

Subsequent measurement of financial assets

Financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVTPL):

they are held within a business model whose objective is to hold the financial assets to collect its contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, these are measured at amortised cost using the effective interest method.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets that are held within a different business model other than 'hold to collect' or 'hold to collect and sell' are categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL.

The category also contains an equity investment. The Group accounts for the investment at FVTPL and did not make the irrevocable election to account for the investment in unlisted and listed equity securities at fair value through other comprehensive income (FVOCI). The fair value was determined in line with the requirements of AASB 9, which does not allow for measurement at cost. Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.

Equity instruments at fair value through other comprehensive income (Equity FVOCI)

Investments in equity instruments that are not held for trading are eligible for an irrevocable election at inception to be measured at FVOCI.

Under Equity FVOCI, subsequent movements in fair value are recognised in other comprehensive income and are never reclassified to profit or loss.

Dividend from these investments continue to be recorded as other income within the profit or loss.

Any gains or losses recognised in other comprehensive income (OCI) are not recycled upon derecognition of the asset.

Debt instruments at fair value through other comprehensive income (Debt FVOCI)

Financial assets with contractual cash flows representing solely payments of principal and interest and held within a business model of collecting the contractual cash flows and selling the assets are accounted for at debt FVOCI.

The Group accounts for financial assets at FVOCI if the assets meet the following conditions:

they are held under a business model whose objective it is to "hold to collect" the associated cash flows and sell financial assts; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset

Trade and other receivables and contract assets

The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix.

The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due.

Classification and measurement of financial liabilities

The Group's financial liabilities include borrowings, trade and other payables and derivative financial instruments.

Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss.

Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments).

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance costs or finance income.

(E) CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(F) IMPAIRMENT

The Group assesses at each balance date whether a financial asset or group of financial assets is impaired.

Financial assets at amortised cost

The group assesses on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group always recognises the lifetime expected credit loss for trade receivables carried at amortised cost.

The expected credit losses on these financial assets are estimated based on the Group's historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as forecast conditions at the reporting date.

For all other receivables measured at amortised cost, the Group recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. If the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to expected credit losses within the next 12 months.

The Group considers an event of default has occurred when a financial asset is more than 90 days past due or external sources indicate that the debtor is unlikely to pay its creditors, including the Group. A financial asset is credit impaired when there is evidence that the counterparty is in significant financial difficulty or a breach of contract, such as a default or past due event has occurred. The Group writes off a financial asset when there is information indicating the counterparty is in severe financial difficulty and there is no realistic prospect of recovery.

Non-financial assets

The carrying amounts of the Company's non-financial assets, other than deferred tax assets (see accounting policy 3(k)) are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset's recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(G) SHARE CAPITAL

Ordinary shares

Transaction costs of an equity transaction are accounted for as a deduction from equity, net of any related income tax benefit.

(H) INTEREST BEARING BORROWINGS

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of profit and loss and other comprehensive income over the period of the borrowings on an effective interest basis.

(I) EMPLOYEE BENEFITS

Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense in the statement of profit and loss and other comprehensive income as incurred.

Share based payment transactions

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcome.

Wages, salaries, annual leave, sick leave and non-monetary benefits

Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations resulting from employees' services provided to reporting date, calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay as at reporting date including related on-costs, such as, workers compensation insurance and payroll tax.

(J) FINANCE INCOME AND EXPENSES

Net finance income

Net finance income comprises interest payable on borrowings calculated using the effective interest method, interest receivable on funds invested and realised foreign exchange gains and losses. Interest income is recognised in the statement of profit and loss and other comprehensive income as it accrues, using the effective interest method.

Income tax on the statement of profit and loss and other comprehensive income for the periods presented comprises current and deferred tax. Income tax is recognised in the statement of profit and loss and other comprehensive income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

The Company and its Australian resident wholly owned subsidiaries adopted the tax consolidation legislation with effect from 1 July 2014 and are therefore taxed as a single entity from that date. Hammer Metals Ltd is the head entity within the tax-consolidated group. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries are assumed by the head entity in the tax-consolidated group.

(L) PROVISIONS

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the liability.

A provision for site restoration in respect of contaminated and disturbed land, and the related expense, is recognised when the land is contaminated or disturbed. Such activities include dismantling infrastructure, removal and treatment of waste material, and land rehabilitation, including restoring, topsoiling and revegetation of the disturbed area.

(M) SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of the Company.

(N) EXPLORATION AND EVALUATION EXPENDITURE

Exploration for and evaluation of mineral resources is the search for mineral resources after the Group has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resources. Accordingly, exploration and evaluation expenditures are those expenditures incurred by the Group in connection with the exploration for and evaluation of minerals resources before the technical feasibility and commercial viability of extracting mineral resources are demonstrable.

Accounting for exploration and evaluation expenditure is assessed separately for each area of interest. An area of interest is an individual geological area which is considered to constitute a favourable environment for the presence of a mineral deposit or has been proved to contain such a deposit.

Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred.

For each area of interest, the expenditure is recognised as an exploration and evaluation asset where the following conditions are satisfied

a) The rights to tenure of the area of interest are current; and
b) At least one of the following conditions is also met:
i. The expenditure is expected to be recouped through successful development and commercial exploitation of an area of interest, or alternatively by its sale; and
ii. Exploration and evaluation activities in the area of interest have not, at reporting date, reached a stage which permits a reasonable assessment of the existence or otherwise 'economically recoverable reserves' and active and significant operations in, or in relation to, the area of interest are continuing. Economically recoverable reserves are the estimated quantity of product in an area of interest that can be expected to be profitably extracted, processed and sold under current and foreseeable conditions.

Exploration and evaluation assets include

Acquisition of rights to explore;
Topographical, geological, geochemical and geophysical studies;
Exploratory drilling, trenching, and sampling and
Activities in relation to evaluating the technical feasibility and commercial viability of extracting the mineral resource.

General and administrative costs are allocated to, and included in, the cost of exploration and evaluation assets only to the extent that those costs can be related directly to the operational activities in the area of interest to which the exploration and evaluation assets relate. In all other instances, these costs are expensed as incurred.

Exploration and evaluation assets are transferred to Development Assets once technical feasibility and commercial viability of an area of interest is demonstrable. Exploration and evaluation assets are assessed for impairment, and any impairment loss is recognised prior to being reclassified.

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

Impairment testing of exploration and evaluation assets

Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist:

The term of exploration licence in the specific area of interest has expired during the reporting period or will expire in the near future, and is not expected to be renewed;
Substantive expenditure on further exploitation for and evaluation of mineral resources in the specific area are not budgeted or planned;
Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the decision was made to discontinue such activities in the specified are; or
Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development of by sale.

Where a potential impairment is indicated, an assessment is performed for each cash generating unit which is no larger than the area of interest. The Group performs impairment testing in accordance with accounting policy 3(f).

Farm-in arrangements (in the exploration and evaluation phase)

For exploration and evaluation asset acquisitions (farm-in arrangements) in which the Group has made arrangements to fund a portion of the selling partner's (farmor's) exploration and/or future development expenditures (carried interests), these expenditures are reflected in the financial statements as and when the exploration work progresses.

Farm-out arrangements (in the exploration and evaluation phase)

The Group does not record any expenditure made by the farmee on its account. It also does not recognise any gain or loss on its exploration and evaluation farm-out arrangements but redesignates any costs previously capitalised in relation to the whole interest as relating to the partial interest retained.

Monies received pursuant to farm-in agreements are treated as a liability (advanced cash call) on receipt and until such time as the relevant expenditure is incurred

(O) GOVERNMENT GRANTS

Government grants are recognised when there is reasonable assurance that (a) the Group will comply with the conditions attaching to them; and (b) the grants will be received; they are then recognised in profit or loss as other income or as a deduction against the carrying value of an underlying asset.

The Group recognises the refundable research and development tax incentive (received under the tax legislation passed in 2011) as a government grant. This incentive is refundable to the Group regardless of whether the Group is in a tax payable position and is presented by deducting the grant from the carrying amount of the related exploration asset.

(P) RIGHT-OF-USE 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, except where included in the cost of inventories, 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. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. 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.

(Q) 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.

	30 June 2021	30 June 2020
4. OTHER INCOME	\$	\$
Management fee from farm-in partners	141,780	75,798
Rental income	-	9,185
COVID-related government assistance	38,500	-
Fees received from preparation of exploration information	100,000	-
Other income	27,739	14,109
	308,019	99,092

	30 June 2021	30 June 2020
5. RESULT FROM OPERATING ACTIVITIES	\$	\$
Net loss for the year before tax has been arrived at after the charging the following expenses:
Depreciation of property, plant and equipment	5,946	-
Amortisation of right-of-use assets	20,960	-
	26,906	-
Salary and wages	239,315	139,888
Superannuation expense	17,982	12,665
Share based payments	186,795	233,707
Total employee costs	444,092	386,260

	30 June 2021	30 June 2020
6. FINANCE INCOME AND FINANCE COSTS	\$	\$
Recognised in loss for the year:
Interest income	14,006	2,299
Finance costs	(4,917)	(966)
Net finance income	9,089	1,333

	30 June 2021	30 June 2020
7. AUDITORS' REMUNERATION	\$	\$
Auditors of the Company - KPMG
Audit services:
Audit and review of financial reports	37,000	32,500
Non-audit services:
Taxation compliance services	-	34,048
	37,000	66,548

8. INCOME TAX	30 June 2021 \$	30 June 2020 \$
(a) Income tax benefit
Current tax	-	-
Deferred tax	-	-
Total income tax benefit	-	-

Numerical reconciliation of income tax benefit to pre-tax accounting loss:
Loss before income tax	(611,525)	(1,978,610)
Income tax benefit using the Company's domestic tax rate of 27.5% (2020: 27.5%)	(168,169)	(544,118)
Adjusted for:
Non-deductible expenses / (Non-Assessable Income)	(820)	(880)
Under/over from prior year	-	-
Temporary differences and tax losses not recognised	168,989	544,998
Income tax benefit	-	-

(b) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Temporary timing differences related to:
Property, plant and equipment	539	174
Investments	212,976	271,607
Accrued expenses and provisions	73,772	53,757
Capital raising costs	131,500	99,424
Income tax losses	7,566,723	7,483,908
	7,985,510	7,908,870

(c) Recognised deferred tax assets & liabilities
Temporary timing differences related to:
Exploration and evaluation expenditure	(4,793,097)	(3,880,462)
Income tax losses	4,793,097	3,880,462
	-	-

The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits from.

(d) Movement of temporary differences recognised during the year ended 30 June 2021:

	Balance 1 July 2020	Profit or Loss	Other comprehensive income	Equity	Balance 30 June 2021
Exploration and evaluation expenditure	(3,880,462)	(912,635)	-	-	(4,793,097)
Carried-forward tax losses	3,880,462	912,635	-	-	4,793,097
	-	-	-	-	-

(e) Movement of temporary differences recognised during the year ended 30 June 2020:

			Other
	Balance 1 July 2019	Profit or Loss	comprehensive income	Equity	Balance 30 June 2020
Exploration and evaluation expenditure	(3,287,520)	(768,355)	-	-	(3,880,462)
Carried-forward tax losses	3,287,520	768,355	-	-	3,880,462
	-	-	-	-	-

9. LOSS PER SHARE	30 June 2021 \$	30 June 2020 \$
(a) Basic and dilutive loss per share calculated using the weighted average number of fully paid ordinary shares on issue at the reporting date.	(0.08) cents	(0.40) cents
Options disclosed in Note 16(b) are potential ordinary shares which are considered anti-dilutive, therefore diluted earnings per share are the same as basic earnings per share.
(b) Weighted average number of shares used in calculation of basic and dilutive earnings per share	721,519,795	490,120,306
10. CASH AND CASH EQUIVALENTS	30 June 2021 \$	30 June 2020 \$
Cash at bank and on hand	9,706,093	2,678,535

The Group's exposure to interest rate risk and sensitivity analysis for financial assets and financial liabilities are disclosed in Note 26.

11. TRADE AND OTHER RECEIVABLES	30 June 2021 \$	30 June 2020 \$
Current
GST receivable	23,733	5,704
Security deposit	25,150	38,858
Exploration grant receivable	-	99,000
Other receivables	91,959	11,166
	140,842	154,728

Trade and other receivables are non-interest bearing.

12. OTHER FINANCIAL ASSETS	30 June 2021 \$	30 June 2020 \$
Non - Current
Investments in other entities
Listed shares in TSXV and ASX-listed companies - at fair value	484,299	271,097

The Group's exposure to equity price risk and sensitivity analysis in disclosed in Note 26. Listed shares recognised as non-current assets have been recognised at fair value through profit or loss ("FVTPL").

13. PLANT AND EQUIPMENT	30 June 2021 \$	30 June 2020 \$
Office equipment and fittings at cost	258,852	252,906
Accumulated depreciation	(258,852)	(252,906)
Net book value	-	-

14. RIGHT-OF-USE ASSETS	30 June 2021 \$	30 June 2020 \$
Plant and equipment – right of use	324,262	71,570
Less: accumulated depreciation	(20,960)	-
Total right-of-use assets	303,202	71,570

Movements in right-of-use assets for the period:
Opening balance at the beginning of the period	71,570	-
Additions for the period	252,592	71,570
Depreciation	(20,960)	-
Disposals	-	-
Closing balance at the end of the period	303,202	71,570

15. EXPLORATION AND EVALUATION EXPENDITURE	30 June 2021 \$	30 June 2020 \$
Balance at 1 July	14,110,772	11,954,619
Exploration and evaluation expenditure incurred	4,030,106	2,461,092
Tenements acquired	50,000	-
Exploration grants received	(377,224)	(90,000)
Research and development grant received	(384,209)	(214,939)
Balance at 30 June	17,429,445	14,110,772

The ultimate recovery of costs carried forward for exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas of interest at an amount greater than or equal to carrying value. Refer note 3 (n).

Expenses capitalised to Exploration and Evaluation Expenditure assets for the year include direct exploration costs (drilling, rock chip programs and surveys including magnetic and SAM), laboratory costs (assaying, analysis and review), geological and geochemical consultants as well as allocated administration costs (including salary and wages) where those costs can be directly attributed to the exploration or evaluation activities upon a given area of interest.

16. TRADE AND OTHER PAYABLES	30 June 2021 \$	30 June 2020 \$
Trade payables and accruals	623,965	346,048
Employee Leave Accruals	47,318	17,848
Share issue funds received in advance – Note 1	500,000	-
	1,171,283	363,896

All trade and other payables are non-interest bearing and payable on normal commercial terms.

The Group's exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 26.

Note 1 – relates to funds received for the subscription of shares in the Company by a director, which was subject to shareholder approval. Approval was obtained after balance date and therefore these funds were subsequently reallocated to issued capital.

17. LEASE LIABILITIES	30 June 2021 \$	30 June 2020 \$
Current lease liabilities	63,997	17,208
Non-current lease liabilities	232,595	56,302
	296,592	73,510

18. ISSUED CAPITAL	30 June 2021 No.	30 June 2020 No.	30 June 2021 \$	30 June 2020 \$
(a) Share capital
Ordinary shares
On issue at 1 July	578,356,565	351,213,748	51,429,354	46,628,496
Shares issued for cash at \$0.02 per share	-	87,803,437	-	1,756,069
Shares issued for cash at \$0.022 per share	-	119,813,623	-	2,635,900
Exercise of HMXOD listed options	167,105,021	19,525,757	5,649,199	683,401
Shares issued to acquire tenements	1,250,000	-	50,000	-
Shares issued for cash at \$0.095 per share	56,315,727	-	5,349,994	-
Shares issued in lieu of fees	875,206	-	23,500	-
Conversion of performance rights	1,500,000	-	25,392	-
Exercise of unlisted options	1,250,000	-	55,000	-
Share issue costs	-	-	(305,104)	(274,512)
On issue at 30 June – fully paid	806,652,519	578,356,565	62,277,335	51,429,354

Terms and conditions

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. The company does not have authorised capital or par value in respect of its issued shares.

In the event of winding up of the Company, ordinary shareholders rank after all other shareholders and creditors and are fully entitled to any proceeds of liquidation.

Dividends

No dividends were paid or declared for the year (2020: NIL).

18. ISSUED CAPITAL Continued	30 June 2021 No.	30 June 2020 No.
(b) Options outstanding over ordinary shares
Listed options (Option issue reserve)
Listed HMXOD options exercisable at \$0.03 on or before 30 Sep 2020	-	170,829,449

Unlisted options (Share-based payment reserve)
Unlisted options exercisable at \$0.032 on or before 30 Nov 2022	8,750,000	10,000,000
Unlisted options exercisable at \$0.05 expiring 21 Oct 2023	3,000,000	3,000,000
Unlisted options exercisable at \$0.06 expiring 21 Oct 2023	4,000,000	4,000,000
Unlisted options exercisable at \$0.035 expiring 13 Dec 2022	1,000,000	1,000,000
Unlisted options exercisable at \$0.035 expiring 30 Jun 2023	3,000,000	3,000,000
Unlisted options exercisable at \$0.05 expiring 30 Jun 2024	2,600,000	2,600,000
Unlisted options exercisable at \$0.05 expiring 30 Nov 2024	4,500,000	-
	26,850,000	197,105,527

No listed options were issued during the year (2020: Nil).

4,500,000 unlisted options were granted to directors, executives and employees during the year (2020: 9,600,000).

1,250,000 unlisted options were exercised during the year (2020: Nil).

No unlisted options were granted to consultants during the year (2020: 4,000,000)

167,105,021 Listed options were exercised during the year (2020: 19,525,757), and 3,724,428 lapsed (2020: Nil).

2,676,078 fully vested unlisted options expired unexercised during the period (2020: 14,300,000).

Options carry no voting rights until converted to fully paid ordinary shares. All unlisted options were granted for no cash consideration.

	30 June 2021 No.	30 June 2020 No.
(c) Performance rights
Performance rights (Share-based payment reserve
Managing Director Performance Rights – Tranche 1	-	750,000
Managing Director Performance Rights – Tranche 2	-	750,000
Managing Director Performance Rights – Tranche 3	750,000	750,000
Managing Director Performance Rights – Tranche 4	750,000	750,000
Managing Director Performance Rights – Tranche 5	5,000,000	5,000,000
	6,500,000	8,000,000

The following performance rights were granted during the period (refer note 21):

		Number of		Vesting
	18. ISSUED CAPITAL Continued	options	Vesting Date	Condition	Expiry Date
	Managing Director Performance Rights
-	Tranche 1	750,000	21/10/2020	-	13/12/2023
-	Tranche 2	750,000	21/10/2020	Note 1	13/12/2023
-	Tranche 3	750,000	21/10/2021	-	13/12/2023
-	Tranche 4	750,000	21/10/2021	Note 2	13/12/2023
-	Tranche 5	5,000,000	Note 3	Note 3	13/12/2023

All performance rights require the managing director to remain employed until vesting date. For Tranches 1 and 3, these rights vest on the vesting date (being the service period) with no additional vesting condition. Tranches 2, 4 and 5 contain additional performance condition as follows:

Tranche 2 performance rights include a vesting condition of maintaining a minimum share price of \$0.031 for a period of 30 Days at any point during the vesting period.
Tranche 4 performance rights include a vesting condition of maintaining a minimum share price of \$0.036 for a period of 30 Days at any point during the vesting period.
Tranche 5 performance rights include a vesting condition of the satisfactory completion of a transaction in accordance with the terms outlined in the Company's Notice of AGM dated 8 October 2019.

19. RESERVES	30 June 2021 \$	30 June 2020 \$
Share-based payment reserve (1)
Balance at beginning of period	1,144,698	910,991
Options issued to Directors and executives	105,750	35,967
Options issued to Employees and contractors	-	155,700
Performance rights issued to Managing Director	-	42,040
Options exercised during the period	(15,000)	-
Performance rights exercised during the period	(25,392)	-
Further vesting expense of options and rights issued in previous periods	81,045	-
	1,291,101	1,144,698
Option issue reserve (2)
Balance at beginning of period	650,225	747,854
Options exercised during the period	(636,049)	(97,629)
Lapse of unexercised options	(14,176)	-
	-	650,225
	1,291,101	1,794,923

(1) The share-based payment reserve is used to record the fair value of options and rights issued to Directors and employees and consultants under various share-based payment schemes and options issued for the acquisition of assets.
(2) The option issue reserve is used to record the value of listed options issued under an entitlement issue during a previous financial year, less the costs of that issue. All listed options either were exercised or lapsed during the period, therefore the balance of the reserve is now nil.

20. COMMITMENTS

a) Exploration Expenditure Commitments

In order to maintain current rights of tenure to exploration tenements the Company is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various State Governments within Australia. These obligations may be reset when application for a mining lease is made and at other times.

The Group has a minimum expenditure commitment on tenure under its control.

The Company can apply for exemption from compliance with the minimum exploration expenditure requirements.

These obligations are not provided for in the financial report and are payable:

	Consolidated		Company
	30 June 2021 \$	30 June 2020 \$	30 June 2021 \$	30 June 2020 \$
Annual minimum exploration expenditure	2,325,718	1,590,410	-	-

21. SHARE BASED PAYMENTS

Incentive Option Plan

The Hammer Metals Incentive Option Plan was approved by shareholders on 14 November 2019. The key features of this plan are:

(a) The plan will be available to directors, employees and other permitted persons of the Company and its subsidiaries.
(b) Options are granted for no consideration.
(c) The options are issued at an exercise price as determined by the Board from time to time.
(d) The number of shares the subject of options issued under this plan and other similar plans will not exceed 5% of the Company's issued capital from time to time.
(e) If a holder ceases to be an eligible participant of the plan during the exercise period of a vested option, the holder may exercise the options within 30 days of ceasing to be an eligible participant and thereafter the options will lapse.
(f) The options issued under this plan shall not be quoted on ASX.
(g) The options' terms are at the discretion of the Directors.

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

21. SHARE BASED PAYMENTS Continued

		30 June 2021		30 June 2020
	No of unlisted options	Weighted average exercise price	No of unlisted options	Weighted average exercise price
Outstanding at 1 July	26,276,078	\$0.044	26,276,078	\$0.051
Granted during the period	4,500,000	\$0.050	-	-
Exercised during the period	(1,250,000)	\$0.032	(13,600,000)	\$0.061
Expired / lapsed during the period	(2,676,078)	\$0.070	(14,300,000)	\$0.044
Outstanding at 30 June	26,850,000	\$0.045	26,276,078	\$0.044
Exercisable at 30 June	22,850,000		8,000,000

The options outstanding at year end have exercise prices ranging from \$0.032 to \$0.07

and a weighted average remaining contractual life of 2.652 years.

The following options were granted during the prior year.

	Number of options granted	Date granted	% Vested	% Forfeited / Lapsed	Financial year in which grant vested / will vest
Key Management Personnel
Russell Davis	2,000,000	30 November 2020	100%	-	-
Zbigniew Lubieniecki	1,500,000	30 November 2020	100%	-	-
David Church	1,000,000	30 November 2020	100%	-	-

	Directors
Underlying security spot price on grant date	\$0.037
Exercise price	\$0.05
Grant date	30 November 2020
Expiration date	30 November 2024
Vesting date	Immediate
Life (years)	4
Volatility	100%
Risk free rate	0.20%
Dividend Yield	-
Number of options	4,500,000
Valuation per option	\$0.0235
Remaining life (years)	3.4

21. SHARE BASED PAYMENTS Continued

Granted during previous financial years

The following options were granted during the prior year:

Key Management Personnel	Number of options granted	Date granted	% Vested	% Forfeited / Lapsed	Financial year in which grant vested / will vest
Mr D Thomas – Tranche A	3,000,000	14 November 2019	100%	0%	30 June 2021
Mr D Thomas – Tranche B	4,000,000	14 November 2019	0%	0%	30 June 2022
Employees and contractors	2,600,000	23 June 2020	100%	0%	30 June 2020
Corporate advisors – Tranche A	1,000,000	14 November 2019	100%	0%	30 June 2020
Corporate advisors – Tranche B	3,000,000	23 June 2020	100%	0%	30 June 2020

	Mr D Thomas – Tranche A	Mr D Thomas – Tranche B	Mr M Pitts	Corp. Advisors – Tranche A	Corp. Advisors – Tranche B
Underlying security spot price on grant date	\$0.021	\$0.021	\$0.04	\$0.021	\$0.04
Exercise price	\$0.05	\$0.06	\$0.05	\$0.035	\$0.035
Grant date	14 Nov 2019	14 Nov 2019	23 Jun 2020	14 Nov 2019	23 Jun 2020
Expiration date	21 Oct 2023	21 Oct 2023	30 Jun 2024	13 Dec 2022	30 Jun 2023
Vesting date	21 Oct 2020	21 Oct 2021	Immediate	Immediate	Immediate
Life (years)	4	4	4	3	3
Volatility	100%	100%	100%	100%	100%
Risk free rate	0.795%	0.795%	0.340%	0.795%	0.340%
Dividend Yield	-	-	-	-	-
Number of options	3,000,000	4,000,000	500,000	1,000,000	3,000,000
Valuation per option	\$0.0111	\$0.0105	\$0.0260	\$0.0110	\$0.0257
Remaining life (years)	2.3	2.3	3.0	1.5	2.0
Total value	\$33,360	\$42,080	\$13,000	\$11,000	\$77,100
Value recognised to date	\$33,360	\$33,354	\$13,000	\$11,000	\$77,100
Value still to be recognised	-	\$6,726	-	-	-

The number of performance rights on issue is as follows:

21. SHARE BASED PAYMENTS Continued	30 June 2021 No.	30 June 2020 No.
Outstanding at 1 July	8,000,000	-
Granted during the period	-	8,000,000
Exercised during the period	(1,500,000)	-
Expired / lapsed during the period	-	-
Outstanding at 30 June	6,500,000	8,000,000
Vested and exercisable at 30 June	-	-

	Mr D Thomas – Tranche 1	Mr D Thomas – Tranche 2	Mr D Thomas – Tranche 3	Mr D Thomas – Tranche 4	Mr D Thomas – Tranche 5
Underlying security spot price on grant date	\$0.021	\$0.021	\$0.021	\$0.021	\$0.021
Grant date	14 Nov 2019	14 Nov 2019	14 Nov 2019	14 Nov 2019	14 Nov 2019
Expiration date	13 Dec 2023	13 Dec 2023	13 Dec 2023	13 Dec 2023	13 Dec 2023
Vesting date	21 Oct 2020	21 Oct 2020	21 Oct 2021	21 Oct 2021	Note 3
Life (years)	4.1	4.1	4.1	4.1	4.1
Discount applied (Note 1)	-	39%	-	26%	-
Number of rights	750,000	750,000	750,000	750,000	5,000,000
Value per right	\$0.021	\$0.0129	\$0.021	\$0.0156	\$0.021
Remaining life (years) (Note 2)	N/A	N/A	2.5	2.5	2.5
Total value	\$15,750	\$9,642	\$15,750	\$11,729	\$105,000
Value recognised to date	\$15,750	\$9,642	\$13,233	\$9,854	\$41,859
Value still to be recognised	-	-	\$2,517	\$1,875	\$63,141

Note 1 – this discount represents the expected likelihood that the share-price hurdle condition would be met and was determined by an independent valuation.

Note 2 – the remaining life represents the time, in years, left until the expiry of the right. The rights may vest before this date, as noted for tranches 1 and 2.

Note 3 – Tranche 5 contains a performance-based vesting condition. For measurement and recognition purposes, it has been estimated that these rights would vest over their entire life.

Notes To The Consolidated Financial Statements

22. RELATED PARTIES

Key Management Personnel Compensation:

The following were key management personnel of the Group at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period:

Executive Directors

Mr D Thomas

Non-executive Directors

Mr R Davis

Mr Z Lubieniecki

Mr D Church (appointed 1 July 2020)

Executives

Mr M Pitts (Company Secretary)

	30 June 2021 \$	30 June 2020 \$
The key management personnel compensation comprised:
Short-term employee benefits	489,208	412,216
Post-employment benefits	37,050	16,301
Share-based payments	186,794	91,007
	713,052	519,524

Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors and executives. Remuneration packages include a mix of fixed remuneration and equity-based remuneration.

Information regarding individual Directors and executive's compensation and some equity instruments disclosures as permitted by Corporations Regulations 2M.3.03 and 2M.6.04 is provided in the remuneration report section of the Directors' report.

Certain key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. Some of these entities (as detailed below) transacted with the Group during the reporting period.

The aggregate value of transactions and outstanding balances relating to this entity were as follows:

		Transaction value year ended		Balance outstanding as at
	Transaction	30 June 2021 \$	30 June 2020 \$	30 June 2021 \$	30 June 2020 \$
Mr Z Lubieniecki	Consulting Fees	40,708	58,875	-	9,075
Mr M Pitts	Accounting services	41,520	41,140	3,670	1,280

23. INTEREST IN OTHER ENTITIES

Name	Country of Incorporation	Percentage held 2021	Percentage held 2020
Parent and ultimate controlling entity
Hammer Metals Limited
Subsidiaries
Hammer Metals Australia Pty Ltd	Australia	100%	100%
Mt. Dockerell Mining Pty Ltd	Australia	100%	100%
Mulga Minerals Pty Ltd	Australia	100%	100%
Carnegie Exploration Pty Ltd	Australia	100%	100%
Hammer Bulk Commodities Pty Ltd (i)	Australia	100%	100%
Midas Metals Asia Pty Ltd (i)	Australia	85%	85%

(i) These subsidiaries are dormant and have not traded during the year.

The investments held in controlled entities are included in the financial statements of the parent at cost.

Element Minerals Australia Pty Ltd was disposed of on 28 June 2019. Refer Note 28 for details. Carnegie Exploration Pty Ltd was acquired on 21 May 2019. Refer Note 22 for details.

Joint arrangements

The Group has the following farm-in / farm-out arrangements:

Dronfield

The Group has a farm-in agreement in relation to a tenement held in the Mt. Isa region. The Group has earned an 80% interest in the project. The Group's interest in the above arrangement includes capitalised exploration phase expenditure totalling \$659,627 at 30 June 2021 and is included in exploration and evaluation assets (note 15).

Mt Frosty – Mt Isa Mines (Glencore)

During a previous financial year the Group (through its wholly owned subsidiary Mulga Minerals Pty Ltd ('Mulga')) completed the acquisition of a 51% interest in the Mt. Frosty prospect and agreed terms for a new joint venture agreement with Mount Isa Mines Limited ('MIM') (a 100% owned subsidiary of Glenore PLC).

Each party to the joint arrangement contributes exploration expenditure according to their participating interest (Hammer – 51% and MIM – 49%).

Dilution provisions apply if a party elects not to contribute to a programme. If a party's participating interest falls below 10% their interest will convert to a 3% Net Profits Royalty.

Mulga acts as the initial manager of the joint arrangement. The Group's interest in the above arrangement includes capitalised exploration phase expenditure totalling \$594,717 at 30 June 2021 and is included in exploration and evaluation assets (note 15).

Mt Isa East JV – JOGMEC/SMMO

The Agreement with Japan Oil, Gas and Metals National Corporation ("JOGMEC") was signed in November 2019 and covers sections of the Even Steven, Mount Philp, Dronfield West and Malbon targets for a total area of approximately 290km2 of the 2,200km2 Mount Isa Project. The arrangement is referred to as the Mount Isa East Joint Venture, however in accordance with the Australian Accounting Standards is a joint arrangement by nature. During the Farm-in period, JOGMEC can achieve a 60% interest in the project areas by expending \$6,000,000 by 31 March 2024. The Farm-in Period is staged as follows, noting that JOGMEC earns its interest after the completion of the Fifth and final Farm-in Period:

The First Farm-in Period is a minimum expenditure of \$1,000,000 by 31 March 2020 before JOGMEC can withdraw from the agreement;
The Second Farm-in Period is an aggregate expenditure of \$2,000,000 by 31 March 2021;
The Third Farm-in Period is an aggregate expenditure of \$3,000,000 by 31 March 2022;
The Fourth Farm-in Period is an aggregate expenditure of \$4,500,000 by 31 March 2023; and
The Fifth and final Farm-in Period is an aggregate expenditure of \$6,000,000 by 31 March 2024.

Upon completion of the Fifth Farm-in Period, each company can elect to contribute its pro-rata share of future funding. If either party does not contribute and is diluted to an ownership of less than 10% of the Mt Isa East JV, the Group's equitable interest will convert to a 2% Net Smelter Return Royalty. At any time, the Net Smelter Royalty Return Rate can be reduced to 1% via the payment of A\$2,000,000. The areas of interest are all 100% held by the Company's subsidiaries Mt Dockerell Mining Pty Ltd and Mulga Minerals Pty Ltd. Subsequent to the end of the financial year, JOGMEC and Sumitomo Metal Mining Oceania Pty. Ltd. ("SMMO") signed an agreement whereby JOGMEC would transfer its position within the Mt Isa East JV to SMMO. The terms of the agreement remain unchanged. Refer Note 28.

24. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES	30 June 2021 \$	30 June 2020 \$
Loss for the year	(611,525)	(1,978,610)
Adjustments for:
Depreciation and amortisation	26,906	-
Share based payments	186,795	233,707
Fair value adjustment on financial assets	(213,202)	987,661
Gain on disposal of subsidiary	-	(58,424)
Interest expense	4,917	71
Management fee from farm-in partners	(141,780)	(75,798)
Shares issued in lieu of fees	23,500	-
Movements attributable to operating activities:
Decrease / (increase) in trade and other receivables	(41,504)	(13,743)
Increase / (decrease) in trade and other payables	146,221	106,038
Net cash used in operating activities	(619,672)	(799,098)

25. SEGMENT INFORMATION

The Group has three reportable segments, being mineral exploration in Queensland and Western Australia, and corporate activities.

The Group's operating segments have been determined with reference to the monthly management accounts, program budgets and cash flow forecasts used by the chief operating decision maker to make decisions regarding the Group's operations and allocation of working capital.

Segment information

The following tables represent revenue and profit information and certain asset and liability information regarding geographical segments for the year ended 30 June 2021.

	Queensland	Western Australia	Corporate
25. SEGMENT INFORMATION (Continued)	Exploration \$	Exploration \$	Overheads \$
30 June 2021
Segment income	-	-	308,019
Segment loss before income tax expense	(17,782)	(273)	(611,525)

Segment assets	12,914,534	4,514,911	10,634,536
Segment liabilities	(139,607)	(22,842)	(1,305,426)

30 June 2020
Segment income	-	-	99,092
Segment loss before income tax expense	(337)	(8,261)	(1,946,671)

Segment assets	11,947,179	406,267	4,933,256
Segment liabilities	(18,448)	(101,983)	(316,975)

26. FINANCIAL INSTRUMENTS DISCLOSURES

Overview

The Group has exposure to the following risks from their use of financial instruments:

Credit risk

Liquidity risk

Market risk

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

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

Credit risk

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 and arises principally from the Group's receivables from customers and investment securities.

Trade and other receivables

As the Company operates in the mining exploration sector it does not have significant trade receivables and is therefore not exposed to credit risk in relation to trade receivables. The Group receives advanced cash calls from its farm-in / joint arrangement partner which are classified as liabilities. The cash call amounts are reduced as and when expenditure in terms of the farm-in/ joint arrangement agreement is incurred.

Presently, the Group undertakes exploration and evaluation activities in Australia. At the balance sheet date there were no significant concentrations of credit risk.

Exposure to credit risk

The carrying amount of the Group's financial assets represents the maximum credit exposure. The Group's maximum exposure to credit risk at the reporting date was:

	Carrying amount
	Note	30 June 2021 \$	30 June 2020 \$
Cash and cash equivalents	10	9,706,093	2,678,535
Trade and other receivables	11	140,842	154,728

Impairment losses

None of the Group's trade and other receivables are past due and impaired (2020: Nil).

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due (refer Note 2(f)). The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows. Typically, the Group ensures it has sufficient cash on demand to meet expected operational expenses for a period of 90 days, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

The expected settlement of the Group's financial liabilities is as follows.

Consolidated	Carrying Amount	Contractual Cash-Flows	< 6 months	6-12 months	1-2 years	2-5 years
30 June 2021	1,171,283	1,171,283	1,171,283	-	-	-
Trade and Other Payables	296,592	320,305	36,201	36,201	72,401	175,502
Lease liabilities	1,467,875	1,491,588	1,207,484	36,201	72,401	175,502

30 June 2021	363,896	363,896	363,896	-	-	-
Trade and Other Payables	73,510	78,886	8,606	8,606	17,212	44,462
Lease liabilities	437,406	442,782	372,502	8,606	17,212	44,462

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Group has no exposure to currency risk on investments and transactions that are denominated in a currency other than the respective functional currencies of Group entities. The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated future receipts or payments that are denominated in a foreign currency.

Interest rate risk

The Group is not exposed to interest rate risk on borrowings as it has no borrowings subject to variable interest. The Group is exposed to interest rate risk on its cash balances.

Profile

At the reporting date the interest rate profile of the Company's and the Group's interest-bearing financial instruments was:

	Carrying amount
	30 June 2021 \$	30 June 2020 \$
Fixed rate instruments
Cash and cash equivalents	22,256	21,992
Weighted average interest rates	0.25%	1.20%

Variable rate instruments
Cash and cash equivalents	9,683,837	2,656,543
Weighted average interest rates	0.01%	0.41%

Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss or equity (2020: Nil)

Cash flow sensitivity analysis for variable rate instruments

A sensitivity of 50 basis points has been used and considered reasonable given current interest rates. A 0.5% movement in interest rates at the reporting date would have increased equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis for 2020 was performed on the same basis.

Consolidated	Loss		Equity
	50bp increase	50bp decrease	50bp increase	50bp decrease
30 June 2021
Variable rate instruments	\$48,419	(\$48,419)	\$48,419	(\$48,419)
30 June 2020
Variable rate instruments	\$13,283	(\$13,283)	\$13,283	(\$13,283)

Carrying amounts versus fair values

The fair values of financial assets and liabilities materially equates to the carrying amounts shown in the statement of financial position.

	30 June 2021 \$	30 June 2020 \$
Financial assets carried at fair value through profit or loss
Equity securities – listed on TSXV at quoted prices	484,299	271,097
Financial assets carried at amortised costs
Cash and cash equivalents	9,706,093	2,678,535
Trade and other receivables	140,842	154,728
Financial liabilities carried at amortised costs
Trade and other payables	(1,171,283)	(363,896)
Lease liabilities	(296,592)	(73,510)

Other Market Price Risk

Other Equity price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or all factors affecting all instruments traded in the market. Investments are managed on an individual basis and material buy and sell decisions are approved by the Board of Directors. The primary goal of the Group's investment strategy is to maximise investment returns.

Fair value sensitivity analysis for equity securities (listed investments)

A sensitivity of 10% has been used and considered reasonable given current market rates. A 10% movement in market prices at the reporting date would have increased equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis for 2020 was performed on the same basis.

Consolidated Loss		Equity
	10% increase	10% decrease	10% increase	10% decrease
30 June 2021
Equity securities – listed on TSXV	\$48,430	(\$48,430)	\$48,430	(\$48,430)
30 June 2020
Equity securities – listed on TSXV	\$27,110	(\$27,110)	\$27,110	(\$27,110)

Commodity Price Risk

The Group operates primarily in the exploration and evaluation phase and accordingly the Group's financial assets and liabilities are subject to minimal commodity price risk at this stage.

Capital Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or sell assets to reduce debt. The Group's focus has been to raise sufficient funds through equity to fund exploration and evaluation activities.

There were no changes in the Group's approach to capital management during the year. Risk management policies and procedures are established with regular monitoring and reporting.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

27. PARENT ENTITY DISCLOSURES	Company
Financial Position	30 June 2021 \$	30 June 2020 \$
Assets
Current assets	21,241,534	10,822,666
Non-current assets	6,729,891	6,341,410
Total assets	27,971,425	17,164,076

Liabilities
Current liabilities	1,200,479	258,478
Non-current liabilities	174,840	56,302
Total liabilities	1,375,319	314,780

Net assets	26,596,106	16,849,296

Equity
Issued capital	62,277,335	51,429,354
Accumulated losses	(36,972,330)	(36,374,981)
Reserves	1,291,101	1,794,923
Total equity	26,596,106	16,849,296

Financial Performance
Loss for the year	(597,349)	(1,978,610)
Other comprehensive income	-	-
Total comprehensive income	(597,349)	(1,978,610)

There were no contingent liabilities of the parent entity at 30 June 2021 (2020: None), nor where there any commitments of the parent entity (2020: None).

28. EVENTS SUBSEQUENT TO BALANCE DATE

Subsequent to year end the following events have occurred:

On 15 July 2021, the Company issued 6,842,104 shares to Directors of the Company, which related to the Director's participation in the placement completed in April 2021. These shares were issued at \$0.095 per share, raising \$650,000 before costs.
On 19 August 2021, the Company announced that Japan Oil, Gas and Metals National Corporation ("JOGMEC") and Sumitomo Metal Mining Oceania Pty. Ltd. ("SMMO") had signed an agreement whereby JOGMEC would transfer its position within the Mt Isa East JV to SMMO. The original terms of the agreement between the Company and JOGMEC remain unchanged, with the JV partner required to spend \$6 million over 5 years to earn a 60% interest in the project.

Directors' Declaration

In the opinion of the Directors of Hammer Metals Limited ("the Company"):
(a) the consolidated financial statements and notes and the remuneration report in the Directors' report, 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 financial year ended on that date; and
ii. complying with Australian Accounting Standards 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.
1. The Directors have been given the declarations by the managing director and company secretary for the financial year ended 30 June 2020 pursuant to Section 295A of the Corporation Act 2001.
1. The Directors draw attention to Note 2(a) to the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of the Directors:

R Davis Executive Chairman Perth Dated 29 September 2021

102 HAMMER METALS LIMITED / Annual Report 2021

To the shareholders of Hammer Metals Limited Independent Auditor's Report Independent Auditor's Report

Report on the audit of the Financial Report To the shareholders of Hammer Metals Limited

To the shareholders of Hammer Metals Limited

Opinion Report on the audit of the Financial Report

Hammer Metals Limited (the Company). Opinion

In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: We have audited the Financial Report of Hammer Metals Limited (the Company). Opinion

We have audited the Financial Report of

• giving a true and fair view of the Group's financial position as at 30 June 2020 and of its financial performance for the year ended In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: We have audited the Financial Report of Hammer Metals Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the

on that date; and • complying with Australian Accounting Standards and the Corporations Regulations 2001. • 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 ended on that date; and Corporations Act 2001, including: • giving a true and fair view of the Group's financial position as at 30 June 2021 and of
complying with Australian Accounting Standards and the Corporations Regulations 2001. on that date; and • complying with Australian Accounting

a scheme approved under Professional Standards Legislation

30 June 2020 The Financial Report comprises:

The Financial Report comprises:

• Consolidated statement of profit or loss and other comprehensive income, Consolidated statement • Consolidated statement of financial position as at 30 June 2021. The Financial Report comprises:

• Consolidated statement of financial position as at

of changes in equity, and Consolidated statement of cash flows for the year then ended • Notes including a summary of significant accounting policies • Directors' Declaration. • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended. • Consolidated statement of financial position as at 30 June 2021. • Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and
The Group consists of the Company and the entities it controlled at the year-end or from time to time • Notes including a summary of significant accounting policies. Consolidated statement of cash flows for the year then ended.
during the financial year. • Directors' Declaration. • Notes including a summary of significant accounting policies.

The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. • Directors' Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Basis for opinion

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 conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit

We are independent of the Group in accordance with 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 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 conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters We are independent of the Group in accordance with 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 Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. 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 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

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. Key Audit Matters accordance with the Code.

This matter was 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 this matter. 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. Key Audit Matters

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by

Liability limited by a scheme approved under Professional Standards Legislation.

Exploration and evaluation expenditure capitalised (\$17,429,445)

Refer to Note 15 'Exploration and Evaluation expenditure' to the Financial Report Exploration and evaluation expenditure capitalised (\$17,429,445)

Refer to Note 15 'Exploration and Evaluation expenditure' to the Financial Report The key audit matter	How the matter was addressed in our audit
The key audit matter Exploration and evaluation expenditure capitalised (E&E) is a key audit matter due to:	How the matter was addressed in our audit Our procedures included: • Evaluating the Group's accounting policy to
Exploration and evaluation expenditure • The significance of the activity to the Group's capitalised (E&E) is a key audit matter due to: business and] the balance (being 62% of	Our procedures included: recognise E&E using the criteria in the • Evaluating the Group's accounting policy to accounting standard. recognise E&E using the criteria in the
• The significance of the activity to the Group's total assets); and business and] the balance (being 62% of • The greater level of audit effort to evaluate total assets); and the Group's application of the requirements • The greater level of audit effort to evaluate of the industry specific accounting standard the Group's application of the requirements AASB 6 Exploration for and Evaluation of of the industry specific accounting standard Mineral Resources, in particular the	• Assessing the Group's determination of its accounting standard. areas of interest for consistency with the • Assessing the Group's determination of its definition in the accounting standard. This areas of interest for consistency with the involved evaluating the Group's planned definition in the accounting standard. This exploration programmes as well as involved evaluating the Group's planned announcements made to the ASX.
AASB 6 Exploration for and Evaluation of conditions allowing capitalisation of relevant Mineral Resources, in particular the expenditure and presence of impairment conditions allowing capitalisation of relevant indicators. The presence of impairment expenditure and presence of impairment indicators would necessitate a detailed indicators. The presence of impairment analysis by the Group of the value of E&E, indicators would necessitate a detailed therefore given the criticality of this to the analysis by the Group of the value of E&E, scope and depth of our work, we involved therefore given the criticality of this to the senior team members to challenge the scope and depth of our work, we involved Group's determination that no such	exploration programmes as well as • Assessing the Group's current rights to announcements made to the ASX. tenure for each area of interest by checking • Assessing the Group's current rights to the ownership of the relevant license to tenure for each area of interest by checking government registries and evaluating the ownership of the relevant license to agreements in place with other parties. We government registries and evaluating also tested for compliance with conditions, agreements in place with other parties. We such as minimum expenditure requirements, also tested for compliance with conditions, on a sample of licenses. such as minimum expenditure requirements,
senior team members to challenge the indicators existed. Group's determination that no such In assessing the conditions allowing capitalisation indicators existed. of relevant expenditure, we focused on:	• Testing the Group's additions to E&E for the on a sample of licenses. year by evaluating a statistical sample of • Testing the Group's additions to E&E for the recorded expenditure for consistency to year by evaluating a statistical sample of underlying records, the capitalisation
In assessing the conditions allowing capitalisation • The determination of the areas of interest of relevant expenditure, we focused on: (areas). • The determination of the areas of interest	recorded expenditure for consistency to requirements of the Group's accounting underlying records, the capitalisation policy and the requirements of the requirements of the Group's accounting accounting standard.
• Documentation available regarding rights to (areas). tenure, via licensing, and compliance with • Documentation available regarding rights to relevant conditions, to maintain current rights tenure, via licensing, and compliance with to an area of interest and the Group's relevant conditions, to maintain current rights intention and capacity (including the ability to to an area of interest and the Group's fund) to continue the relevant E&E activities. intention and capacity (including the ability to • The Group's determination of whether the fund) to continue the relevant E&E activities. E&E are expected to be recouped through • The Group's determination of whether the successful development and exploitation of E&E are expected to be recouped through the area of interest, or alternatively, by its	policy and the requirements of the • Evaluating Group documents, such as accounting standard. minutes of Board meetings, for consistency • Evaluating Group documents, such as with their stated intentions regarding minutes of Board meetings, for consistency continuing activities in certain areas of with their stated intentions regarding interest and the expectation of recoupment continuing activities in certain areas of of E&E. We corroborated this through interest and the expectation of recoupment interviews with key operational and finance of E&E. We corroborated this through personnel and announcements made by the interviews with key operational and finance Group to the ASX.
successful development and exploitation of sale. the area of interest, or alternatively, by its In assessing the presence of impairment sale. indicators, we focused on those that may draw In assessing the presence of impairment into question the commercial continuation of indicators, we focused on those that may draw E&E activities for areas of interest where into question the commercial continuation of significant capitalised E&E exists. In addition to E&E activities for areas of interest where the assessments above, we paid particular significant capitalised E&E exists. In addition to attention to results from latest exploration the assessments above, we paid particular activities regarding the existence or otherwise of attention to results from latest exploration	personnel and announcements made by the • Evaluating project and corporate budgets Group to the ASX. identifying areas with existing funding and • Evaluating project and corporate budgets those requiring alternate funding sources to identifying areas with existing funding and assess the Group's capacity to continue E&E those requiring alternate funding sources to activities and for consistency with the assess the Group's capacity to continue E&E expectation of recoupment of E&E. We activities and for consistency with the compared the allocation of funding for expectation of recoupment of E&E. We consistency to areas with E&E, for evidence compared the allocation of funding for of the ability to fund continued activities. consistency to areas with E&E, for evidence
potentially commercially viable quantity of activities regarding the existence or otherwise of reserves and resources. potentially commercially viable quantity of reserves and resources.	• Comparing the results from the latest of the ability to fund continued activities. exploration activities regarding the potential • Comparing the results from the latest existence of reserves and resources for exploration activities regarding the potential consistency to the treatment of E&E and the existence of reserves and resources for requirements of the accounting standard.

consistency to the treatment of E&E and the

Other Information

Other Information is financial and non-financial information in Hammer Metals Limited's annual reporting which is provided in addition to the Financial Report and the Auditor's Report. The Directors are responsible for the Other Information. Other Information Other Information is financial and non-financial information in Hammer Metals Limited's annual reporting which is provided in addition to the Financial Report and the Auditor's Report. The Directors

The Other Information we obtained prior to the date of this Auditor's Report was the Directors' Report and the Remuneration Report. The Chairman's Letter, Corporate Strategy, Operational Highlights, Corporate Activity, Operations Summary, Competent Person's Statement Annual Mineral Resource Statement, Tenements Interests and ASX Additional Information are expected to be made available to us after the date of the Auditor's Report. are responsible for the Other Information. The Other Information we obtained prior to the date of this Auditor's Report was the Directors' Report and the Remuneration Report. The Chairman's Letter, Corporate Strategy, Operational Highlights, Corporate Activity, Operations Summary, Competent Person's Statement Annual Mineral Resource Statement, Tenements Interests and ASX Additional Information are expected to be made

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. available to us after the date of the Auditor's Report. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we 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. of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with

We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor's Report we have nothing to report. misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained

Responsibilities of the Directors for the Financial Report prior to the date of this Auditor's Report we have nothing to report.

The Directors are responsible for: Responsibilities of the Directors for the Financial Report

preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. The Directors are responsible for:
implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001. • implementing necessary internal control to enable the preparation of a Financial Report that
assessing the Group and Company's ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so. gives a true and fair view and is free from material misstatement, whether due to fraud or error. • assessing the Group and Company's ability to continue as a going concern and whether theuse of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting

unless they either intend to liquidate the Group and Company or to cease operations, or have

Auditor's responsibilities for the audit of the Financial Report no realistic alternative but to do so.

Our objective is: Auditor's responsibilities for the audit of the Financial Report

to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and Our objective is:
to issue an Auditor's Report that includes our opinion. • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and

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. • 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

Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the

A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the

Auditor's Report. Auditing and Assurance Standards Board website at:

Report on the Remuneration Report

Opinion

In our opinion, the Remuneration Report of Hammer Metals Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001.

Directors' 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 responsibilities

We have audited the Remuneration Report included in section 12 of the Directors' report for the year ended 30 June 2021.

Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

KPMG Glenn Brooks Partner Perth 29 September 2021

ASX ADDITIONAL INFORMATION

Additional information required by the Australian Stock Exchange Listing Rules and not disclosed elsewhere in this report is set out below.

Information regarding share and option holdings is current as at 19 October 2021.

(A) ORDINARY SHAREHOLDERS

Twenty largest holders of ordinary shares	Number of Shares	% held
Central Mutual (Investments) Pty Ltd	80,822,184	9.94
Mr Zbigniew Waldemar Lubieniecki	62,664,283	7.7
Zenith Pacific Limited	50,000,000	6.15
Davis Family Capital Pty Ltd	39,378,947	4.84
BNP Paribas Nominees Pty Ltd	36,863,743	4.53
BNP Paribas Nominees Pty Ltd Six Sis Ltd	27,906,578	3.43
Lundie Investments Pty Ltd	25,916,704	3.19
HSBC Custody Nominees (Australia) Limited	21,126,035	2.6
Samlisa Nominees Pty Ltd	20,000,000	2.46
BNP Paribas Nominees Pty Ltd ACF Clearstream	9,950,224	1.22
B + C Watson Holdings Pty Ltd	9,099,999	1.12
Darrell James Holdings Pty Ltd	7,000,000	0.86
Sacchetta Group Holdings Pty Ltd	6,669,414	0.82
Mr Shane Ronald Britten	6,352,095	0.78
Mr Ernst Kohler	4,714,273	0.58
Mr Bryce Roy Symons	4,400,000	0.54
AXSIM Funds Management Pty Ltd <mamas superannuationFund A/C>	4,000,000	0.49
Mr Peter William Karlson + Mr Peter James Cargin <paps superFund A/C>	3,850,000	0.47
Mrs Natasha Kay Clarke	3,700,000	0.45
Mr Robert Spooner	3,300,000	0.41
	427,714,479	52.58

Significant Shareholders are:

Shareholder	Number of Shares	% held
Mr Paul Clarke	108,888,888	13.39
Mr Zbigniew Waldemar Lubieniecki	62,664,283	7.70
Zenith Pacific Limited	50,000,000	6.15

Each fully paid ordinary share entitles the holder to one vote at general meetings of shareholders and is entitled to dividends when declared.

The total number of shares on issue is 813,494,623.

The number of shareholders holding less than a marketable parcel is 450.

There is no current on market buy back.

The Company has no ordinary shares which are subject to voluntary escrow.

Distribution of ordinary shareholders:

Category of shareholding	Number of shareholders	Number of shares	%
1 – 1,000	154	29,637	0.00%
1,001 – 5,000	124	455,059	0.06%
5,001 – 10,000	340	2,636,651	0.32%
10,001 – 100,000	1,197	50,959,648	6.26%
100,001 and over	702	759,413,628	93.35%
Total	2,517	813,494,623	100%

(B) UNQUOTED SECURITIES

The Company has the following unquoted securities on issue.

Category of security	Number	Number of holders
Unlisted options exercisable at \$0.032 on or before 30 November 2022	8,750,000	10
Unlisted options exercisable at \$0.05 on or before 21 October 2023	3,000,000	1
Unlisted options exercisable at \$0.06 on or before 21 October 2023	4,000,000	1
Unlisted options exercisable at \$0.035 on or before 13 December 2022	1,000,000	1
Unlisted options exercisable at \$0.05 on or before 30 June 2024	2,600,000	5
Unlisted options exercisable at \$0.035 on or before 30 June 2023	3,000,000	1
Unlisted options exercisable at \$0.05 on or before 30 November 2024	4,500,000	3
Performance rights expiring 13 December 2023, vesting on 21 October 2021	750,000	1
Performance rights expiring 13 December 2023, vesting on 21 October 2021 and upon the achievement of a share price hurdle of \$0.036 for a period of 30 days	750,000	1
Performance rights expiring 13 December 2023, vesting on the satisfaction of a suitable transaction	5,000,000	1
Performance rights expiring 13 December 2023, vesting on the satisfaction of a suitable transaction	5,000,000	1

AI assistant

HAMMER METALS LIMITED — Annual Report 2021

65065_rns_2021-10-28_a7917e66-6a38-4d1d-b070-ed4ae2feda48.pdf

2021 Annual Report

BOARD OF DIRECTORS

PRINCIPAL AND REGISTERED OFFICE

POSTAL ADDRESS

AUDITORS

KPMG

SHARE REGISTRY

STOCK EXCHANGE

ASX CODE HMX

CORPORATE GOVERNANCE

Contents

Chairman's Letter

It is my pleasure to present Hammer Metals Annual Report for the 2021 financial year, providing details of our continued progress against our business strategy.

Dear Fellow Shareholders,

Corporate Strategy

Operational Highlights

Corporate Activity

Mount Isa Project (Queensland)

Mount Isa Project Locations

Copper-Gold Exploration - Kalman and Surrounds

▲ Kalman Deposit

The Kalman Deposit contains 360kt of Copper Equivalent Metal.

Copper-Gold Exploration - Kalman and Surrounds

▲ Kalman West

Kalman West is located approximately 1km west of the Kalman Deposit.

Northern Minerals Hub –Lakeview, Neptune, Jubilee (51%), Elaine, Blackrock and Sunset

▲ Lakeview

The Lakeview prospect is marked by historical workings along an approximate 350m strike length.

Lakeview Plan view showing the location of the initial and follow-up drilling program

Operations Summary

Northern Minerals Hub –Lakeview, Neptune, Jubilee (51%), Elaine, Blackrock and Sunset

▲ Lady Rose (Neptune)

Copper-Gold Exploration - Malbon Area – Kings-Charlotte (100% HMX)

Southern Hub - Gold Focussed Exploration

▲ Tick Hill Region

Other Commodities

Mount Isa East Joint Venture (Sumitomo Metal Mining earning 60% Interest)

Even Steven Area

▲ Trafalgar

Trafalgar is a north-northeast trending copper-gold prospect located on the regional scale Fountain Range Fault.

Even Steven Area

▲ Trafalgar Trend

Operations Summary

Mt Philp Area

▲ Shadow, Toby and Charlie

Drilling was also conducted at the Shadow (2 holes), Alpha, Juliett, Bravo and Charlie prospects.

Malbon and Dronfield Area

Soil sampling was conducted over the Mount Isa East JV Dronfield and Malbon project areas.

Yandal Gold Projects (WA)

Hammer holds a 100% interest in approximately 290sqkm of tenements, located within the Yandal greenstone belt in Western Australia.

There are three main target areas:

Bronzewing South Gold Project

▲ Bronzewing South

Bronzewing South Gold Project

▲ North Orelia

These tenements are situated to the North of the McClure group of deposits which include the Orelia and Lotus gold deposits.

▲ North Orelia - Target 1

▲ North Orelia - Target 4

Target 4 is located 1km along strike to the north of Northern Star's (ASX:NST) 1Moz Orelia Resource.

North Orelia Target 1 Plan (see ASX announcement 15 January 2021)

Bronzewing South Gold Project

▲ North Orelia -Target 2

▲ North Orelia - Target 3

Drilling at Target 3 extended the strike length of known mineralisation up to 3.2km.

▲ North Orelia - Eastern Granite

This target is located partly within a granite bordering the eastern margin of the Orelia trend where soil geochemical sampling had defined a1.1km by 300m gold anomaly.

Bronzewing South Gold Project

▲ Ken's Bore

Two reverse circulation holes for 480m were drilled to test an EM anomaly.

▲ North Orelia - Eastern Granite

Pilbara Iron Ore (WA)

Competent Persons Statement

▲ Exploration Results

▲ Mineral Resource Estimates

Annual Mineral Resource Statement

As of 30 June 2021

▲ Jubilee Deposit JORC 2012 Mineral Resource Estimate (12 December, 2018)

HAMMER METALS LIMITED Annual Report 2021