HASTINGS TECHNOLOGY METALS LTD — Annual Report 2021

Sep 29, 2021

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Annual Report 2021 ASX | HAS | Australia’s Next Rare Earth Producer

CORPORATE INFORMATION

ABN 43 122 911 399

Board of Directors and Senior Management Directors

Mr Charles Lew (Chairman) Mr Guy Robertson Mr Jean Claude Steinmetz Mr Neil Hackett Mr Malcolm Randall Mr Bruce McFadzean

Senior Management

Mr Andrew Reid (Chief Operating Officer) Mr Matthew Allen (Chief Financial Officer) Joint Company Secretaries Mr Guy Robertson Mr Neil Hackett

Registered office

Level 8, Westralia Plaza 167 St Georges Terrace Perth WA 6000 Telephone: +61 (8) 6117 6118

Principal place of business

Level 8, Westralia Plaza 167 St Georges Terrace Perth WA 6000 Australia

Share register

Automic Group Lvl 2/267 St Georges Terrace Perth WA 6000 Telephone: +61 1300 288 664

Bankers

HSBC – Perth WA 6000 Australia National Australia Bank – Perth WA Australia Westpac – Sydney NSW 2000 Australia

Auditors

PricewaterhouseCoopers 125 St Georges Terrace PERTH WA 6000

Website

www.hastingstechmetals.com

Securities Exchange

Australian Securities Exchange ASX Code: HAS

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Table of Contents

le of tents	le of tents
Letter from the Chairman Company Profle Evolution – Yangibana project – Milestones and Upcoming Events The Way Forward 2021 – 2023 Global Context – Market analysis Review of Operations Annual Ore Reserves and Mineral Resources Statement Directors’ Report Executive Team Corporate Governance Statement Auditor’s Independence Declaration Consolidated Statement of Proft or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Additional Shareholder Information											page 02 page 06 page 08 page 10 page 12 page 16 page 24 page 32 page 34 page 48 page 49 page 50 page 51 page 52 page 53 page 54 page 80 page 82 page 87
			– Milestones and Upcoming Events
	and Mineral				Resources			Statement
								Other Comprehensive Income

Annual Report 2021 | 1

Dear Shareholders,

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Acknowledgement of Country: We wish to acknowledge the Traditional Owners of this land upon which we operate and pay our respect to the Elders’ past, present and future for they hold the memories, the traditions, the culture, and the hopes of Aboriginal Australia.

It is my pleasure to present to you our Annual Report for the year ended 30 June 2021.

Letter from the Chairman Charles Lew– Executive Chairman

I am satisfied with the milestones we have achieved in the last 12 months despite border closures, COVID-19 lockdowns and uncertainties in many aspects of our business.

With the impact of COVID-19 being felt throughout 2020 and continuing into 2021, our ambition to become Australia’s next rare earth producer has continued as planned. I am satisfied with the milestones we have achieved in the last 12 months despite border closures, COVID-19 lockdowns and uncertainties in many aspects of our business. Regardless, we soldiered on and achieved some major milestones in the last 12 months.

The global shift towards clean energy sources and electric mobility continues to pick up momentum. As foreshadowed in previous reports, the demand for magnet rare earths, primarily neodymium (“Nd”) and praseodymium (“Pr”), has continued to grow strongly and is forecasted to increase at a compound annual growth rate of about 10% a year for this decade. Market research analysts are predicting NdPr oxides consumption to increase 5 times from US$3 billion this year to US$15 billion by 2030. This is due to strong demand for Electric Vehicles (“EV”) aided by favourable Government purchase incentives, stricter regulations on car exhaust emissions and an environmentally conscious consumer. Worldwide EV sales to June this year grew 140% year-on-year.

Constrained by an under-supply of NdPr oxide from 2022 onwards, Adamas Intelligence forecasts that global shortages of NdFeB (neodymium magnets) alloy and powder will amount to 48,000 tonnes annually by 2030, roughly the amount needed for some 25 to 30 million EV traction motors. This supply shortage presents Hastings with a unique opportunity as we maintain our momentum of mine development and aim to start production by 2024.

Climate related disasters such as floods, storms, droughts and heat waves have been on the rise worldwide. At the same time an increasing

concentration of greenhouse gases • COP26 (the 26th Conference of in the atmosphere causes average Parties, a UN convention on climate temperatures to rise and rainfall change) scheduled to occur in becoming more variable and extreme. November this year will focus on Multiple scientific research have accelerating action towards the goals linked a connection between the of the Paris Agreement (signed by increasing number of natural 196 countries on 12 December 2015) disasters and man-made emissions of and the UN Framework Convention on greenhouse gases in the atmosphere. Climate Change. The implication is that climate Hastings has continued to pursue its mitigation and adaptation should form objective to increase the Yangibana part of government and corporate actions for disaster risk reduction. Rare Earths Project’s (the “Yangibana

Hastings has continued to pursue its objective to increase the Yangibana Rare Earths Project’s (the “Yangibana Project”) mineable reserves and minelife. In July 2021, after completing a drill programme totalling approximately 25,000 metres, the Company announced an increase in Total Ore Reserve of 37% to 16.7 million tonnes and an 18% increase in NdPr tonnes to 158,400 tonnes. This extended the Yangibana Project’s mine-life to at least 15 years, thereby enhancing its bankability. An 8km long mineralised corridor from Bald Hill in the north through Simon’s Find to Frasers in the south was mapped out. Significant potential remains for future expansion of our resource in multiple directions within the total tenement area of 650sqkm.

At Hastings, we acknowledge the detrimental effects of climate change to society and are committed to do our part in reducing greenhouse gas emissions. Along with this Annual Report we are pleased to publish our maiden Sustainability Report which marks the genesis of our sustainability road map as we progress from construction into production. It sets out our recognition of the role we play in society and the environment in which we live and work. It delineates our contribution towards the climate change agenda via our mixed rare earths carbonate product and the way in which we will operate.

In addition, the drilling data obtained further confirmed the uniqueness of the Yangibana Project’s ore body. At Simon’s Find an NdPr ratio of up to 57% of Total Rare Earth Oxide (“TREO”) provided a result unrivalled for any known rare earth’s deposit worldwide. In aggregate, the Yangibana Project’s average life of mine NdPr content of 37% (to TREO) is double the industry average and accordingly our basket price is double the industry average. This allows for a lower capital intensity and is projected to have the highest operating margin amongst its peers.

Some of the key global initiatives underway that reinforce the changes seen in 2021 and beyond are:

• US government 100-day Reviews under the Biden Administration identified the need to increase the resilience of strategic and critical material supply chains that both expands sustainable production and processing capacity and works with allies and partners to ensure secure global supply;

• European Raw Materials Alliance (ERMA), launched in September 2020 is developing an action plan to build a viable permanent magnet industry in Europe to ensure that the European Union has a range of critical minerals needed for its green transition and has given high priority to building a non-China mine to magnets supply chain; and

The Company flagged a decoupling of the Hydrometallurgical Plant in July 2020 to the coast. The location was confirmed in September this year when we received DevelopmentWA’s board approval to enter into an option for a

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Annual Report 2021 | 3

tonnes per annum of MREC (equivalent to 33% of annual production) from its rare earth mine and processing facilities. Over the 10-year period, total MREC purchase volume committed by TK amounts to 70,000 tonnes. Together with the Skyrock Rare Earth New Materials Co. Ltd (based in Baotou, China) contract signed in November 2018, Hastings has now contracted approximately 77% of its production for the first 5 years. Having signed the Master Agreement with Schaeffler in June 2020, the Company has ongoing discussions on a long-term multi-year contract to supply Schaeffler with a significant tonnage of our MREC. Schaeffler, one of the leading global Tier 1 automotive components supplier, intends to establish a non-China reliant mine to magnet supply chain with downstream processing situated in Europe.

land lease within the Ashburton North Strategic Industrial Area (“ANSIA”) for a 30 year period. The site is located just outside of Onslow (in the coastal plains of the Pilbara region about 1,400km north of Perth) eliminates the requirement for a 114km lateral gas pipeline to the Yangibana Project as originally planned. It has access to piped natural gas, plentiful water supply and grid power. Hastings has received strong support from the Onslow community and will create local jobs and generate long term economic benefits.

Fundamental to securing the required project debt financing is the finalisation of binding offtake agreements for our high NdPr content of mixed rare earth carbonate (“MREC”). In April 2021, the Company executed a 10 year binding offtake contract with thyssenkrupp Materials Trading GmbH (“TK”), a wellestablished and internationally recognised German raw materials trading business with offices in 16 countries and core capabilities in materials trading that embrace complex logistic services for raw and finished materials along with supply chain knowledge and dependability. thyssenkrupp Materials Services, the holding company of TK, is the biggest mill-independent materials distributor and service provider in the western world with more than 480 locations in nearly 40 countries.

Debt negotiations with NAIF (North Australia Infrastructure Facility), Finnvera Oyj (Finland’s Export Credit Agency), KfW IPEX Bank (German State bank) and other commercial lenders continued during the year. Significant effort in conjunction with KPMG, our mandated debt advisor, went into completing the demanding due diligence exercise. We expect the debt financing to be finalised before the end of this calendar year. The Australian government’s “Critical Minerals Strategy” and “National Manufacturing Priority Roadmap” are important initiatives which have assisted the Company in moving the project forward.

The binding contract with TK requires Priority Roadmap” are important Hastings to supply 9,000 tonnes per initiatives which have assisted the annum of MREC (equivalent to 60% Company in moving the project forward. of the Yangibana Project’s annual production) for the first five years; As part of the debt financing process, and for the subsequent five years, 5,000 a revised cost fix exercise for the

Yangibana Project’s capital expenditure (“CAPEX”) is underway as this is necessary since the last exercise was conducted in mid-2019. With the recent sharp rise in commodity prices across the board, we have, in common with others in the mining industry, seen a significant increase in steel prices, labour rates, fuel and other ancillary mining equipment and services. These costs increase will inevitably have a pass-through effect on our CAPEX. We expect to complete this CAPEX review in 4Q 2021.

Earlier this year, with the strong capital market sentiments and our attractive project economics, the Company raised $100.7 million in February through the issue of approximately 301 million new ordinary shares at $0.19 per share. Canaccord Genuity acted as Lead Manager and Ord-Minnett acted as CoManager. With the strong EV thematics and rising NdPr price, the capital raise exercise generated significant interest from Australian institutions and was over-subscribed. L1 Capital, a Melbourne based global investment manager with a successful track record in natural resources and battery minerals ended up being a substantial shareholder with 7.5% equity interest in the Company.

In August last year, we raised $14.6 million through the issue of approximately 117 million new ordinary shares at 12.5 cents per share. Both raisings were well supported by long term existing shareholders from Singapore, Malaysia, UK and Australia.

• As our Yangibana Project matures, we strengthened our management team. We welcomed three senior executives during the year. Mr Bruce McFadzean who joined the Board on 1 January 2021, has more than 40 years’ experience in the global mineral resources industry. He has led the financing, development and operation of several mining projects around the world. He now chair’s the Company’s Technical and Risk Committee. Mr Matthew Allen, who joined the Company as the Chief Financial Officer on 1 February 2021, has over 25 years’ experience as a finance professional in the resources sector and he has further enhanced the team’s capability in project and corporate finance, enterprise resource planning and strategy management. Mr Nick Bennett, who has 25 years project construction management experience, joined in March as the Project Manager responsible for executing the mine and plant construction at our Yangibana site.

In addition to the above we have welcomed many other key employees to Hastings during the year who, together with those who have been with us for many years, have worked diligently in our mission of getting Yangibana into production and beyond.

The Company operates a Performance Rights Plan for its staff. This scheme which has defined milestones ensures that all qualifying employees are aligned

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dedication and continued focus to become Australia’s next rare earth producer. In addition, to all our shareholders, Traditional Owners and stakeholders, we appreciate your ongoing support to help us achieve our ambition.

with shareholders as we progress towards construction and production in the coming years.

During the coming financial year, you can expect to see Hastings take further steps forward on the Yangibana Project, including:

Last but not least, I like to thank the West Australian Premier, Mark McGowan who has commended our Yangibana Project and acknowledged our commitment of bringing the mine into production in alignment with the West Australian Government’s Future Battery Industry strategy.

• Project construction:

• Undertake infrastructure site works ahead of plant construction and mine development;

• Place orders for key equipment long lead items; and

• Commence construction of plant and mine development.

We look forward to the next stage of our journey which started back in 2014 with renewed energy and confidence. As we advance the Yangibana Project into the construction phase, Hastings is well timed to bring its high-grade magnets rare earth product to an emerging e-mobility market during this decade.

• Project finance:

• Secure binding credit approved commitments for project debt finance from key lenders and progress project finance documentation and execution; and

• Review and optimise the capital structure in view of expected CAPEX increase.

Our motto: One dream, one team.

Yours sincerely,

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• Sustainability:

• Deliver our maiden sustainability report; and

• Progress towards a capital markets compliant sustainability rating.I would like to take this opportunity to thank our Hastings team and my fellow Directors for their hard work,

Charles Lew

Executive Chairman

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Earlier this year, with the strong capital market sentiments and our attractive project economics, the Company raised $100.7 million in February.

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Annual Report 2021 | 5
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Company Profile

WHO WE ARE?

WHAT WE DO?

WHERE?

WHEN?

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Investment Highlights

RIGHT MARKET

• Supportive communities with Voluntary Native Title Agreement in place

• Hastings’ directors are significant shareholders

• Hastings is on track to become Australia’s next rare earths producer

• Most of the equity funding for Yangibana’s development already secured

• Hastings will feed a growing global demand for NdPr

RIGHT TIMING

• Yangibana base case is fully permitted. Amendments to permits underway for improved layout

• Strong balance sheet – currently no debt

• Soaring global investment in EVs is causing NdPr supply shortage. NdPr price set to be stronger and for longer

  • Project finance debt arrangement in final stage

• Start-up is timed to capture global NdPr supply shortage

• Hastings’ Yangibana project will play important role in the global clean mobility and energy revolution

• Long-lead items in design and construction scheduled to start in 2H 2021

MAJOR EVENTS ANNOUNCED:

• ESG investment opportunity

• 10-year major offtake contract signed with Thyssenkrupp (Germany)

• Only new global NdPr producer ex-China forecast to enter production in 2023/2024

RIGHT PROJECT

• Successful $100m capital raise

• Yangibana hosts an outstanding rare earth Mineral Resource with exceptionally high proportion of NdPr

  • L1 Capital (Melbourne) takes a substantial shareholding 7.57%

• NdPr price forecast is for 10yrs of growth

• High beneficiation rates and industry leading recoveries deliver a high grade final Mixed Rare Earth Carbonate (MREC) product.

• Mineral resources tonnes increased 54%

• Yangibana’s development aligns with Federal and State government strategies committing to support Australia’s critical minerals sector

• Hastings admitted to the S&P/ASX All Ordinaries index

• Yangibana offers a 3.5yr capital payback and ~15-year mine life

RIGHT COMPANY

NEXT CATALYSTS:

• Clear focus to deliver shareholder value from developing Yangibana project

• Yangibana’s development will be done at industry low capital intensity

• New economic numbers - NPV and IRR of project

• MREC will be produced at competitive operating costs based on a welldeveloped proven process flowsheet.

• Commencement of construction at Yangibana 3Q 2021

• Well led by an experienced team of corporate and mining professionals

• Credit approval in 2021 by senior debt lenders, ie. NAIF, KFW and Finnvera

• Backed by world-class offtake partners in Germany including Thyssenkrupp and Schaeffler.

• Yangibana is in the Tier 1 mining jurisdiction of Western Australia

• The financial close is expected in 2022

• Low sovereign risk and competitive royalties/tax structure

• Yangibana MREC enjoys attractive pricing due to high NdPr content (up to 52%)

• Ready access to a skilled workforce

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Evolution Yangibana Project Milestones and Upcoming Events

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Apr 19
Euler Hermes
(UFK) in Principal
Eligibility
Nov 17 Feb 19 Oct 19
Native Title Successful 2nd EPCM Apr 20
agreement pilot plant test – contract Commonwealth Feb 21
signed Higher Yield signed Environmental Jul 20 $100 Million
with DRA Approved Placement
Finnvera In
Nov 18
Principal
Skyrock Jun 20
Nov 17 DFS Feb 18 Thyssenkrupp Baotou offtake Mar 19 NAIF to June 19 Schaeffler Master Supply Eligibility Apr 21 Major Offtake
completed Offtake MOU signed contract signed finance infrastructure Schaeffler Off-Take Agreement signed Contract with Thyssenkrupp
MoU
2017 2018 2019 2020 2021
Nov 19 May 21
JORC Resource and Nov 20 Measured
Reserves increased 52% NdPr: and Indicated
Jan 17 Nov 17 to 21.3MT and TREO at Mineral
13.4 MT JORC 5.2 MT JORC May 18 Earthworks and Feb 19 JORC Reserves 12.2MT respectively Simon’s Find and 8km long Resource Tonnes up
Resource Oct 17 Reserves accommodation increased to Jun 20 mineralisation by 54%
20.7 MT camp construction 10.35MT Process Plant – Jun 21
JORC Aug 19 Works Permit granted Stand-out
Resource WA Minister of Simon’s Find
Environment – Metallurgical
Approval obtained Test Results
Amended
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Project Milestones
Reserve and
Resource Upgrades
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The Way Forward 2021 – 2023

Hastings Technology Metals Limited (ASX: HAS) is a Perth based rare earths company primed to become the world’s next producer of neodymium and praseodymium concentrate (NdPr).

NdPr are vital components used to manufacture permanent magnets used every day in advanced technology products ranging from electric vehicles to wind turbines, robotics, medical applications, digital devices, etc. Hastings’ flagship Yangibana project, in the Gascoyne region of Western Australia, contains one of the most highly valued NdPr deposits in the world with NdPr:TREO ratio of up to 52%. The site is permitted for long-life production and with offtake contracts signed and debt finance in advanced stage targeted for completion in 3Q2021. Construction is scheduled to start in mid-2021 ahead of first production in late 2023.

YANGIBANA ONSLOW PROJECT MILESTONES 2021 – 2023

Please note: this is an indicative, work-in-progress project development schedule, which depends on the outcome of the ongoing project financing discussions.

As soon as the project financing consortium is in place and all conditions for the financing are clarified the project schedule will be amended to accommodate the financing consortium requirements.

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Onslow Environmental Permitting
Commence Long Lead Equipment Supply
Commence Yangibana Construction
Early Stage Yangibana Civil Works Commence Commissioning
First Concentrate Production
Commence Site Works @ Onslow First MREC Production
Preparation and Finalisation of the Project Financing
Reserve Update Business Model Update
Q 1 Q 2 Q 3 Q4 Q 1 Q 2 Q 3 Q4 Q 1 Q 2
2021 2022 2023
(S2 -2023-S1 2024 : Customer Product Qualification)
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Global Context Market Analysis

The rare earth market is heading to new heights and is embarking on a journey where governments and market participants are reviewing their strategies. For them, it became clearer that rare earth and in particular Neodymium and Praseodymium oxide (NdPr) are part of the critical minerals group and need adequate attention due to the fact that NdPr is a key enabler for the global decarbonisation agenda.

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– fuelled by positive news about vaccines and due to strong market demand from consumer electronics (in particular from the automotive sector).

as the global CO2 reduction agenda is here to stay and with it the electrification of our society.

During the last 12 months, it has been understood that it is imperative to establish a sustainable, transparent and globally diversified NdPr supply chain. Ultimately, a NdPr is key raw material contributing in securing strategic long term economic growth and jobs.

This is supported by the fact that we are seeing more and more additional manufacturing capacity hitting the market, with the need to get supplied with the NdPr oxide/metal. At the same time Myanmar, as one of the rare earth producing countries, still must deal with its political and pandemic turmoils and therefore we are expecting that tight supply situation is continuing going forward combined with a continued increasing production capacity downstream.

Since the beginning of June, we were headed for a new decade high, which reached a new record level on the 4th of August of 630 RMB/kg or 97,02 USD/kg NdPr oxide EXW China.

NdPr pricing in 2021 continued on from 2020’s positive price trend. In the first quarter, the price continued to increase as China, Europe, Japan, and the US recovered from the initial impact of COVID quicker than anticipated. This positive effect and the increased consumption, resulted in drawing down the inventories of the oxide and metal suppliers and amplified the already tight supply situation.

Overall, the steady, continuous price recovery during the last 12 months indicates that the market demand-supply dynamics are being recalibrated. This reflects the new market situation and reality for NdPr and NdFeB with the usual volatility effects during such transitions.

For example, by 2023 China’s manufacturers will have 336,000t NdFeB capacity, heading for 400,000t in 2025 (source: giti/sg rare earth observer). This newly +100k installed industrial capacity for magnets alone will generate a pull effect for NdPr Oxide combined with the ongoing transformation of the car manufacturers supply chains and here in particular the motor components. VW is spearheading

The new reality is that this price rally we are experiencing in the rare earth sector right now is not based on speculation but for the first time in history underpinned by real substantiated, industrial demand. This is caused by an ongoing fundamental shift in the global manufacturing ecosystem, which will last for the coming decades

Starting at the end of March 2021 the price rally ceased and the price softened due to some traders taking profits in several regions in this world. New variants of the virus again raised concerns and caused a pandemicinduced drop in global consumption. This lasted for approximately two months before the market recovered

4th of August 2021 630 RMB/kg or 97,02 USD/kg

PrNd OXIDE Pr6O11 25%, Nd2O3 75% EXW CHINA USD/kg

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Flat exchange rate: 6.5 RMB/USD
Source: Asian Metals
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full torque at low speeds. Ultimately When we talk about potential resulting in a longer driving range due replacement threats, we have to to lesser energy/battery drainage than consider the above facts but also using other engine designs. should take into account the ecosystem of the automotive industry and the The NdFeB/NdPr motor is ultimately constraints of product approval cycles enabling OEMs to design a more costand platform cycles. This is the reason optimised, lightweight (up to 20% why we believe that the NdFeB motor smaller and lighter) vehicle and more technology remains the first choice for efficient powertrain solutions with a 15the coming decades.

this transformation as one of the established OEMs which 100% embrace the change in the automotive industry. They have announced that they will deploy across their ID/MEB platform a rare earth NdPr/NdFeB electric motor with a production capacity of 500,000 electric motors in Kassel, which will be joined by a Chinese plant in Tianjin. Together, those two will crank 1.4 million electric drives annually from 2023 onwards, which is equivalent to an incremental annual demand of 1,400t for VW vehicles alone.

The NdFeB/NdPr motor is ultimately enabling OEMs to design a more costoptimised, lightweight (up to 20% smaller and lighter) vehicle and more efficient powertrain solutions with a 1520% smaller battery at the same driving reach. This is important because a battery represents ~30% of a BEV vehicle manufacturing cost!

In our opinion, the price adjustment that we are experiencing right now is the beginning of a fundamental adjustment towards the new normal as the upstream sector of rare earth did not see any significant investments in new assets which could offer a relief on the supply side in the near future.

Therefore, in a world where raw materials the upstream sector of rare earth did including the battery become more not see any significant investments in expensive NdFeB motors are an enabler new assets which could offer a relief on for OEMs to maintain their profitability the supply side in the near future. especially in the high-volume/low profit margin vehicle segments like During the last 18 months, the rare earth the Golf category (also called A and market sentiment changed significantly, B segment) as it is a cost-efficient especially on the government side. design. This is the reason why NdFeB/ We observed a positive change in the NdPr electric traction motors have a perception of the importance of rare market share beyond 90% today, and earth as a critical raw material in Europe in our opinion, it will remain this way for with the ERMA/EIT initiative, and in the a considerable time. US with Biden’s Critical Minerals and

The permanent magnet NdFeB motor engine technology has the ability to produce a larger torque than competing technologies at the same values of current and voltage and more power by weight. They also suffer less electric and mechanical loss and benefit from simple rotor/stator configurations. They are smaller sizes (as much as one-third of most AC motor sizes, which makes installation and maintenance much easier), and they can maintain

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In our opinion, the price adjustment
that we are experiencing right now is the
beginning of a fundamental adjustment
towards the new normal as the upstream
sector of rare earth did not see any
significant investments.
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Materials 100-Day Supply Chain Review workstream. Here they are addressing the importance of decentralising the raw material supply chain for E-mobility. Additionally, governments in Canada and Australia also kicked off governmental workstreams to address how their countries could contribute to the decentralisation of the critical raw material supply chain globally.

Overall, the market sentiment has never been better for rare earth projects and we are bullish that this situation remains for the coming decades. Hastings wants fulfil our role as a reliable supply partner for downstream players worldwide with an ethical and sustainable transparent rare earth supply chain solution.

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GLOBAL PLUG-IN VEHICLE SALES

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Source: EV Volumes
‘000s
6 000
Plug-In Hybrids
5 000
Battery Electric Vehicles
4 000
3 000
2 000
1 000
0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 F
Growth +55% +69% +46% +59% +65% +9% +43% +98%
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Hastings has strengthened its management team, employing a Project Manager and Earths Works Manager both with in-excess of 30 years of experience constructing and commissioning mining projects around the world.

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Review Of Operations YANGIBANA RARE EARTHS PROJECT (The “Yangibana Project”)

OVERVIEW

• Camp relocation – A site has been selected and proposals sought for conceptual layouts for a location within 2.5km of the process plant;

The Yangibana Project’s Definitive Feasibility Study (“DFS”) was successfully completed in November 2017. In July 2020 Hastings announced that a substantial change had occurred to some of the supporting and enabling infrastructure due to the need to reduce capital costs because of COVID-19 and to better support the de-coupling of the hydrometallurgical plant from the beneficiation plant and its re-location to the coast at Onslow.

• Access road realignment – A revised alignment for the access road has been completed with considerable CAPEX savings in distance and reduction in the number of engineered creek crossings from 94 to 17; and

• Airstrip relocation – New proposed airstrip within the previous TSF footprint to brings it within 2.5km of the process plant and camp areas.

The majority of the processing facility has seen only minor change, however infrastructure items such as roads, airstrips and camps did result in changes of location due to the de-coupling. The estimated total capital cost was revised to $449 million, excluding contingency totalling $76 million, in July 2020 based on prices received in late 2019 and early 2020. A revised and updated capital cost is to be completed during the latter part of 2021.

At Onslow, the Ashburton North Strategic Industrial Area (ANSIA) has been selected as the location for the hydrometallurgical plant relocation and work has progressed towards identifying and securing a suitable site that provides access to the required services. Additionally, work continued on the hydrometallurgical plant’s associated engineered packages including:

Equipment will be procured from globally recognised Tier 1 mining equipment suppliers, with most of the processing plant being sole sourced from Metso-Outotec and other individual pieces of equipment coming from TAPC-Tialoc and FLSmidth, all of whom have a proven track record of delivering high quality equipment inclusive of performance guarantees with substantial local support.

Hastings has strengthened its management team, employing a Project Manager and Earths Works Manager both with in-excess of 30 years of experience constructing and commissioning mining projects around the world.

Engineering continues to progress on multiple work fronts in support of the process plant decoupling project. At the Yangibana Project, work has focused on site optimisation to deliver a more compact site layout (which has long-term benefits in operational efficiency). These efforts have included the following activities:

• Kiln and scrubber engineering – The detailed engineering for the scrubber package has been completed with the review process from the Hastings processing team underway;

The Yangibana Project’s mining operations will remain as conventional (i.e. drill, blast, load, and haul), utilising the services of an Australian contract miner with technical services and management provided by Hastings. The overall processing operation will consist of conventional beneficiation (i.e. crushing, grinding, and floatation) followed by an acid baked kiln and hydrometallurgy back-end process, producing a valuable MREC product.

• Site locations – Discussions continue with Government agencies DevelopmentWA and the Department of Jobs, Training, Science, and Innovation (JTSI) around several locations where conditional approval has been granted. Once discussions with third-party service providers

• Process plant relocation – The location has been moved 500m to the east to be closer to the Yangibana Project’s Eastern Belt mineral resources;

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At the Yangibana Project, work has focused on site optimisation to deliver a more compact site layout (which has long-term benefits in operational efficiency).

are finalised, site layouts will be developed;

commenced post 30 June 2021 • Permanent village construction to advance the project towards – Design and Installation of a construction prior to finalisation of key 300-person village, utilising previously service contracts for the construction procured and re-located buildings of the plant and development of the already onsite; and processing facilities at Yangibana and • Communications link – Dual band, Onslow where the hydrometallurgical 5 hop microwave link using new and plant will be located. Infrastructure works that are to commence at existing 60m towers from site to the north-west highway interconnection Yangibana include the following:

• Concentrate and tailings logistics – A logistics study was completed;

• Water – Discussions continue with the Water Corporation around access to a suitable water supply. Water is available as either a direct potable supply or from paleo aquifers.

  • Communications link – Dual band, 5 hop microwave link using new and existing 60m towers from site to the north-west highway interconnection to existing public network.

• Site clearing and roadworks – Initial works will focus on various site and access roadworks, topsoil clearing and storage, and ground preparation at the permanent village site;

• Gas – Australian Gas Infrastructure Group (AGIG) has been engaged to provide technical input into the required gas lateral connection; and

• Power – Proposals for a connection and supply costs are being developed with Horizon Power.

• Airstrip – Earthworks to construct a 2,000 metre unsealed airstrip near the village, capable of accommodating 50-seat aircraft;

Surface infrastructure development activities at the Yangibana Project

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GEOLOGY AND MINERAL RESOURCES

GEOLOGY

The near surface mineralisation has locally undergone alteration at to sub-vertical. The Fraser’s deposit throughout the Yangibana Project in shallow depths (to 25 metre depth) to has the most extreme range from 5o Western Australia’s Gascoyne region its hydrous equivalent rhabdophane in portions towards its north-eastern (Figure 1) is hosted by iron oxides and and to rare earths-bearing aluminiumend to 65o at its southwestern end. hydroxides termed ironstone, being phosphates such as florencite. Average true thickness varies from the alteration products of the primary 2.2 metres to 3.5 metres throughout the The deposits occur as narrow but strike hosts ferro-carbonatite and phoscorite Yangibana Project deposits although intrusive veins. The main rare earthsextensive veins that have a range of locally true thicknesses in excess of 20 dips from almost horizontal (10-20o) bearing mineral is monazite which metres occur (Figure 2).

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Figure 1 – Location of the deposits hosting mineral resources

MINERAL RESOURCES

Hastings completed an extensive drill Total Mineral Resources at the Mineral Resources for Yangibana program during the year ended 30 June Yangibana Project now stand at Northwest and additional Inferred 2021 comprising 341 holes for 23,739 27.42Mt @ 0.97% TREO. Mineral Resources from Gossan, metres of reverse circulation (RC) and Kane’s Gossan, Lion’s Ear and Hook 46 holes for 1,605 metres of diamond Measured and Indicated tonnes remain unchanged from 2019, stated for deposits drilled during the year drilling. Utilising this data, updated at a 0.20% NdPr cut-off. It is expected increased by 54% to 16.3Mt with a resource estimates were prepared for that re-stating these resources to a Bald Hill, Frasers, Auer, Yangibana, corresponding 32% increase in total 0.24% TREO cut-off will further increase and Simon’s Find and detailed in the rare earth oxides (TREO) to 137kt. the total Mineral Resources for the Company’s ASX announcement dated 5 Yangibana Project. The increase in Mineral Resources is May 2021 “Yangibana Project Updated a combination of drilling completed Measured and Indicated Resource All Yangibana Project deposits start during the year and application of a from surface, with no overburden Tonnes up 54%, TREO Oxides up 32%”. cut-off grade at 0.24% TREO following and contain large coherent domains The remaining resources have not evaluation of processing costs and comprising mostly high-value rare been updated since the October 2019 forward rare earth pricing assumptions, Minerals Resource announcement. earths dominated mineral assemblage.

The increase in Mineral Resources is a combination of drilling completed All Yangibana Project deposits start during the year and application of a from surface, with no overburden cut-off grade at 0.24% TREO following and contain large coherent domains evaluation of processing costs and comprising mostly high-value rare forward rare earth pricing assumptions, earths dominated mineral assemblage. which will be released in the upcoming Hastings intends to continue to Ore Reserve statement.

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progress additional drilling programs across all Yangibana Project deposits in due course. Hastings’ is currently focussed on updating Ore Reserves from the updated Mineral Resources targeting extensions to the Yangibana Project’s proposed mine life of high-grade NdPr concentrate production beyond the current defned 15 years.	Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
	Measured 4.9 1.01 0.38 49,442
	Indicated 16.24 0.95 0.33 154,750
	Sub-total 21.14 0.97 0.34 204,192
	Inferred 6.27 0.99 0.31 62,225
	TOTAL 27.42 0.97 0.33 266,417

The total resources as at 30 June 2021 are as shown in Table 1.

Table 1 – Yangibana Project – Total JORC Mineral Resources as at 30 June 2021. Includes JV tenement contributions

All table numbers may not add due to rounding.

The work completed on the unaltered deposits, except Yangibana North, was completed by Lynn Widenbar and Associates incorporating all information and data as per the previous Mineral Resource announcement from 28 November 2018. Yangibana North was re-estimated by D Princep, of Gill Lane Consulting, as per the announcement dated 31 October 2019.

applied to the estimates and changes to The Mineral Resources have been the reporting cut-off grade. The changes classified in the Measured, Indicated, in cut-off grade to 0.24% TREO followed and Inferred categories, in accordance mine planning studies. This value was with the 2012 Australasian Code initially based on a net smelter return for Reporting of Mineral Resources (NSR) calculation using all component and Ore Reserves (JORC) by the elements making up the TREO value, Competent Person. A range of criteria with additional work allowing this to was considered in determining the be simplified to a singular TREO value. classification including geological and The cut-off grade is based on Hastings’ grade continuity, data quality, drill hole view on the individual prices for the spacing, and modelling technique and various rare earth elements, individual kriging output parameters. processing recoveries and overall processing costs.

Differences between the Mineral Resource estimate released in May 2021 and the October 2019 estimates are resultant from additional drilling conducted by Hastings, adjustments to modelling and estimation methodologies, changes in bulk densities

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Figure 2 – Oblique view looking northeast of the Auer and the Frasers-Simons Find-Bald Hill resource models and completed drilling, coloured by REE%. These zones cover a strike of 10.5km. Significant additional potential exists to increase the resources where drilling is still widely spaced (red circles) as well as down dip.

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MINING ORE RESERVES

The Ore Reserve estimate is derived from the Measured and Indicated ore tonnes from the mineral resource estimates undertaken for the Bald Hill, Frasers, Simon’s Find, Auer, Yangibana and Yangibana North deposits. Only the Measured and Indicated Blocks from the mineral resources were converted to an ore reserve using Whittle 4D software which generated optimised pit shells defining economic envelopes based on various modifying factors, geotechnical domains, operational costs, and sales pricing. The optimised pit shells were used as the basis for detailed open pit designs and subsequent mine scheduling which aim to maximise net present values (“NPV”).

Total Proven and Probable Ore Reserves have increased to 16.7Mt at 0.95% Total Rare Earths Oxide (“TREO”) (Table 2) (see ASX announcement dated 27 July 2021 “Yangibana The increase in the Ore Reserves as uneconomic or inferred within Rare Earths Project Significant Ore is based on the re-estimated and the original geological wireframes Reserve tonnes increase of 37%, NdPr updated Mineral Resources for the reclassified in the updated wireframes tonnes up 18% to 58kt”) including Bald Hill, Fraser’s, Simon’s Find, Auer (as reported in the Company’s ASX 0.37% Nd2O3 and Pr6O11 (together, and Yangibana deposits plus the announcement dated 5 May 2021). The NdPr), a 37% increase in Ore Reserve previously announced and unchanged new Ore Reserve of 16.7Mt at 0.95% tonnes compared with the previous Yangibana North deposit. In addition to TREO extends the planned Yangibana Ore Reserve Estimate announced in the resource drilling conducted during Project’s mine life to 15 years. The 2019 (see ASX announcement, dated the year, drilling was undertaken to extension to mine life is underpinned by 4 November 2019 “18% Increase in provide samples for metallurgical test a maiden Ore Reserve for the Simon’s Ore Reserves, Mine Life Extended work and geological re-interpretation Find deposit along with increases in the 2 Years To 13 Years”). The major of the mineralisation delineating the Ore Reserves of the closest pits to the increase in Ore Reserve was built deposits. A significant increase in site of the proposed processing plant, on this year’s successful Exploration the Measured and Indicated Mineral being Bald Hill, Fraser’s Pits and Auer Program targeting five of ten key Resources was generated through Pits (Figure 2). The Bald Hill pit alone deposits at Yangibana, which the re-interpretation and re-estimation continues to represent around 40% of delivered a significant Mineral Resource process of the Mineral Resources based the total Ore Reserves and is forecast increase (see ASX announcement dated on the infill drilling completed during to supply feed to the processing plant 5 May 2021) the drilling campaign. This process saw for nine of the 15 years of mine life. mineralisation previously classified

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Deposit Mt %TREO % Nd2O3+Pr6O11 Nd2O3+Pr6O11 as
% of TREO
Bald Hill 6.75 0.86 0.34 39
Fraser’s 1.40 1.09 0.47 43
Simon’s Find 1.72 0.57 0.30 52
Auer 2.07 0.96 0.35 35
Yangibana 1.35 0.79 0.37 47
Yangibana North 3.42 1.31 0.34 26
TOTAL 16.70 0.95 0.35 38
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The deposits occur in a range of dips as shown in Table 3, with Fraser’s having the most extreme variation from 5[o] towards its north-eastern end to 65o at its south-western end. Average true thickness varies from 3.0 to 4.9 metres throughout the ore reserve deposits although locally true thicknesses in excess of 20 metres occur.

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Deposit Declination (degrees) Ave true thickness (metres)
Bald Hill 0 to 60 4.6
Fraser's 5 to 65 3.0
Auer 60 to 80 4.3
Auer North 65 to 85 3.2
Simon’s Find 25 to 55 3.4
Yangibana 30 to 65 3.3
Yangibana West 10 to 30 3.9
Yangibana North 5 to 20 4.9
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Table 3 – Basic dimensions of the Yangibana deposits hosting ore reserves

NATIVE TITLE AGREEMENT

In November 2017 Hasting’s signed a Native Title Agreement with the Thiin-Mah Warriyangka, Tharrkari and Jiwarli People (“TMWTJ People”) in respect of the Yangibana Project. To date, Hasting’s has met all obligations with respect to its Native Title Agreement.

BROCKMAN PROJECT

The Group continued the process of preparing documentation to support the application of a Mining Lease on the Brockman Project.

Terminology used in this report

TREO is the sum of the oxides of the heavy rare earth elements (HREO) and the light rare earth elements (LREO).

HREO is the sum of the oxides of the heavy rare earth elements europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb), lutetium (Lu), and yttrium (Y).

CREO is the sum of the oxides of neodymium (Nd), europium (Eu), terbium (Tb), dysprosium (Dy), and yttrium (Y) that were classified by the US Department of Energy in 2011 to be in critical short supply in the foreseeable future.

LREO is the sum of the oxides of the light rare earth elements lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), and samarium (Sm).

Andrew Reid

Chief Operating Officer

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30 September 2021

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Table 2 – Total JORC (2012) Ore Reserves by Deposit June 2021

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Annual Ore Reserves and Mineral Resources Statement

SUMMARY

This statement represents the Mineral Resources and Ore Reserves (MROR) for Hastings Technology Metals Limited as at 30 June 2021. This MROR statement has been compiled and reported in accordance with the guidelines of the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (2012 JORC Code).

The Brockman Mineral Resource estimate was first reported in September 2011 in accordance with the guidelines of the 2004 Edition of the JORC Code and was subsequently updated in January 2021 to comply with the 2012 JORC Code. The mineral resource estimate for the Southern Extension was first reported in the Group’s December 2015 Quarterly Report. The Group is not aware of any new information or data that materially affects the information included in the relevant market releases for this estimate. The Group confirms that all material assumptions and technical parameters underpinning the estimate in the relevant market releases continue to apply and have not materially changed. The Group confirms that the form and context in which the Competent Person’s findings are presented here have not been materially modified. Resources are shown for the main Brockman Project in Table 23.

Hastings holds a 100% interest as well as a 70% controlling interest through a joint venture arrangement (Table 18).

This statement is to be reviewed and updated annually in accordance with Section 15 of the 2012 JORC Code. The nominated annual review date for this MROR statement is 30 June.

MROR statement is 30 June. The quoted Yangibana Project’s Mineral Resource estimate was first reported in The Group’s Mineral Resources November 2017 in accordance with the increased at the Yangibana Project 2012 JORC Code. In November 2018, which were announced in May 2021 and October 2019, and again in May 2021, remained unchanged at the Brockman the Group announced major mineral Project (Halls Creek). The information in resource increases over the 2017 this statement has been extracted from the estimate. The Group is not aware of any relevant reports as indicated below in each new information or data that materially ore reserve or mineral resource table. affects the information included in the relevant market releases for The Group is not aware of any new these estimates. The Group confirms information or data that materially that all material assumptions and affects the information included technical parameters underpinning in the relevant market releases for the estimates in the relevant market this estimate. The Group confirms releases continue to apply and have that all material assumptions and not materially changed. The Group technical parameters underpinning confirms that the form and context in the estimate in the relevant market which the Competent Person’s findings releases continue to apply and have are presented here have not been not materially changed. The Group materially modified. Resources are confirms that the form and context shown for the total project (Table 6), in which the Competent Person’s and this total then splits into the 100% findings are presented here have not Hastings tenements (Table 7); and the been materially modified. Reserves joint venture ground in which Hastings are reported from tenements in which holds a 70% interest (Table 8).

YANGIBANA PROJECT’S MINERAL RESOURCES

Updated resource estimates were prepared for Bald Hill, Frasers, Auer,

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Yangibana, and Simon’s Find and detailed in the Company’s ASX announcement dated 5 May 2021 “Yangibana Project Updated Measured and Indicated Resource Tonnes up 54%, TREO Oxides up 32%”. The remaining resources have not been updated since the October 2019 Minerals Resource announcement.

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Deposit Comments Deposit Comments
Bald Hill Re-estimated Yangibana North Not re-estimated
Frasers Re-estimated Gossan Not re-estimated
Yangibana Re-estimated Lion’s Ear Not re-estimated
Auer Re-estimated Hook Not re-estimated
Simon’s Find Re-estimated Kane’s Gossan Not re-estimated
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Table 4 – Summary of Mineral Resources updated in May 2021

Table 5 – Summary of resources unaltered and unchanged in 2021

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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Measured 4.9 1.01 0.38 49,442
Indicated 16.24 0.95 0.33 154,750
Sub-total 21.14 0.97 0.34 204,192
Inferred 6.27 0.99 0.31 62,225
TOTAL 27.42 0.97 0.33 266,417
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Table 6 – Total Yangibana Project’s Mineral Resource by category.

• Numbers may not add up due to rounding. Includes JV tenement contributions.

• Reporting of Minerals Resources for Auer, Auer North, Bald Hill, Frasers, Simons Find and Yangibana is at a cut-off grade of 0.24% total rare earth oxides (TREO).

• Reporting of Mineral Resources for all other deposits is at 0.2% Nd2O3+Pr6O11 cut-off grade.

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Total Mineral Resource in Tenements 100% held by Hastings
Category Million Tonnes %TREO % Nd2O3+Pr6O11
Measured 4.53 0.98 0.39
Indicated 13.59 0.88 0.33
Inferred 3.84 0.80 0.28
TOTAL 21.96 0.88 0.33
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Table 7 – Yangibana Project’s resources within 100% Hastings tenements (see note for cut-off grade), 30 June 2021.

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Total Mineral Resource in Tenements 70% held by Hastings
Category Million Tonnes %TREO % Nd2O3+Pr6O11
Measured 0.38 1.42 0.36
Indicated 2.65 1.35 0.35
Inferred 2.43 1.34 0.36
TOTAL 5.46 1.35 0.36
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Table 8 – Yangibana Project’s resources within joint venture tenements (see note for cut-off grade), 30 June 2021.

Re-Estimated JORC (2012) Mineral Resources – by Deposit

The following tables represent those deposits which have been re-estimated during the year. Numbers may not add up due to rounding.

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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Measured 3.51 0.86 0.35 30,369
Indicated 3.78 0.83 0.32 31,172
Sub-total 7.29 0.84 0.33 61,541
Inferred 1.17 0.63 0.26 7,446
TOTAL 8.46 0.82 0.32 68,986
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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Measured - - - -
Indicated 1.98 0.71 0.34 14,034
Sub-total 1.98 0.71 0.34 14,034
Inferred 0.33 0.64 0.31 2,146
TOTAL 2.31 0.70 0.33 16,180
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Table 12 – Simon’s Find Mineral Resource, 100% Hastings

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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Measured - - - -
Indicated 1.79 0.58 0.30 10,437
Sub-total 1.79 0.58 0.30 10,437
Inferred 0.63 0.53 0.27 3,365
TOTAL 2.42 0.57 0.30 13,802
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Table 13 –Yangibana North re-estimated Mineral Resource, total

Comprising: Yangibana M09/165 (100% Hastings)

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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Measured 0.38 1.42 0.36 5,317
Indicated 2.49 1.40 0.36 34,785
Sub-total 2.87 1.40 0.36 40,101
Inferred 0.37 1.45 0.37 5,366
TOTAL 3.24 1.41 0.36 45,467
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Table 14 – Yangibana North re-estimated Mineral Resource, 100% Hastings

Table 9 – Bald Hill re-estimated Mineral Resource, 100% Hastings

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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Measured 0.73 1.36 0.58 9,899
Indicated 1.01 0.77 0.34 7,797
Sub-total 1.74 1.02 0.44 17,695
Inferred 0.25 0.9 0.36 2,255
TOTAL 1.99 1.00 0.43 19,950
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Table 10 – Frasers re-estimated Mineral Resource, 100% Hastings

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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Measured - - - -
Indicated 3.54 0.93 0.32 32,796
Sub-total 3.54 0.93 0.32 32,796
Inferred 1.10 0.76 0.24 8,297
TOTAL 4.64 0.89 0.30 41,093
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JORC (2012) Mineral Resources, not updated since November 2018– by Deposit

The following Tables represent those deposits which have not been updated or altered since the 28 November 2018 minerals resource announcement. Numbers may not add due to rounding errors.

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Category Million Tonnes %TREO % Nd2O3+Pr6O11 TREO Tonnes
Gossan 0.25 1.43 0.35 3,518
Lion's Ear 0.71 1.54 0.39 10,934
Hook 0.29 1.52 0.33 4,393
Kane's Gossan 0.57 1.04 0.29 5,970
TOTAL 1.82 1.39 0.34 24,814
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Table 15 – Mineral Resources not updated, 100% Hastings, all Mineral Resources are Inferred only

Updated resource estimates were prepared for Bald Hill, Frasers, Auer, Yangibana, and Simon’s Find and detailed in the Company’s ASX announcement dated 5 May 2021 “Yangibana Project Updated Measured and Indicated Resource Tonnes up 54%, TREO Oxides up 32%”. The remaining resources have not been updated since the October 2019 Minerals Resource announcement. There have been no resource adjustments made since the May 2021 announcement, available to view at www.hastingstechmetals.com .

Table 11 – Auer re-estimated Mineral Resource, 100% Hastings

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YANGIBANA PROJECT’S ORE RESERVES

The below quoted Yangibana Project’s Ore Reserve was first reported in July 2021 in accordance with the 2012 JORC Code (refer to ASX Release dated 27 July 2021 titled “Yangibana Rare Earths Project Significant Ore Reserve tonnes increase of 37%, NdPr tonnes up 18% to 58kt”), available to view at www.hastingstechmetals.com.

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Deposit Million Tonnes %TREO % Nd2O3+Pr6O11 % Nd2O3+Pr6O11
as % of TREO
Bald Hill 6.75 0.86 0.34 39
Fraser’s 1.40 1.09 0.47 43
Simon’s Find 1.72 0.57 0.30 52
Auer 2.07 0.96 0.35 35
Yangibana 1.35 0.79 0.37 47
Yangibana North 3.42 1.31 0.34 26
TOTAL 16.70 0.95 0.35 38
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Table 16 – Total Ore Reserves by deposit

Proved and Probable Ore Reserves within tenements held 100% by Hastings are shown in Table 17 and 18 respectively, with those within tenements in which Hastings holds a 70% interest being shown in Table 21.

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Deposit Million Tonnes %TREO % Nd2O3+Pr6O11 % Nd2O3+Pr6O11
as % of TREO
Bald Hill 3.45 0.86 0.35 40
Fraser’s 0.69 1.36 0.58 42
Simon’s Find - - - -
Auer - - - -
- - - -
Yangibana
Yangibana North 0.56 1.35 0.36 26
TOTAL 4.69 0.99 0.38 39
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Table 17 – Yangibana Project – Proved Ore Reserves by deposit, 30 June 2021

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Deposit Million Tonnes %TREO % Nd2O3+Pr6O11 % Nd2O3+Pr6O11
as % of TREO
Bald Hill 2.87 0.86 0.33 38
Fraser’s 0.71 0.83 0.36 43
Simon’s Find 1.72 0.57 0.30 52
Auer 2.07 0.96 0.35 35
Yangibana 1.35 0.79 0.37 47
Yangibana North 2.87 1.31 0.34 26
TOTAL 12.00 0.93 0.34 36
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Table 18 – Yangibana Project - Probable Ore Reserves by deposit, 30 June 2021

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Deposit Million Tonnes %TREO % Nd2O3+Pr6O11 % Nd2O3+Pr6O11
as % of TREO
Bald Hill 3.45 0.86 0.35 40
Fraser’s 0.69 1.36 0.58 42
Simon’s Find - - - -
Auer - - - -
- - - -
Yangibana
Yangibana North 0.29 1.31 0.36 27
TOTAL 4.43 0.97 0.39 39
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Table 19 – Yangibana Project - Proved Ore Reserves within tenements held 100% by Hastings, 30 June 2021

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Deposit Million Tonnes %TREO % Nd2O3+Pr6O11 % Nd2O3+Pr6O11
as % of TREO
Bald Hill 3.30 0.86 0.33 38
Fraser’s 0.71 0.83 0.36 43
Simon’s Find 1.72 0.57 0.30 52
Auer 2.07 0.96 0.34 35
Yangibana 1.25 0.81 0.38 47
Yangibana North 1.54 1.31 0.36 27
TOTAL 10.58 0.89 0.34 39
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Table 20 – Yangibana Project – Probable Ore Reserves within tenements held 100% by Hastings, 30 June 2021

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Deposit Million Tonnes %TREO % Nd2O3+Pr6O11 % Nd2O3+Pr6O11
as % of TREO
Bald Hill - - - -
Fraser’s - - - -
Simon’s Find - - - -
Auer - - - -
- - - -
Yangibana
Yangibana North 0.27 1.38 0.35 26
TOTAL 0.27 1.38 0.35 26
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Table 21 – Yangibana Project - Proved Ore Reserves within tenements held 70% by Hastings, 30 June 2021

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Deposit Million Tonnes %TREO % Nd2O3+Pr6O11 % Nd2O3+Pr6O11
as % of TREO
Bald Hill - - - -
Fraser’s - - - -
Simon’s Find - - - -
Auer - - - -
Yangibana 0.10 0.56 0.26 47
Yangibana North 1.33 1.27 0.33 26
TOTAL 1.43 1.22 0.32 27
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Table 22: Yangibana Project - Probable Ore Reserves within tenements held 70% by Hastings, 30 June 2021

28 | Hastings Technology Metals

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BROCKMAN PROJECT’S MINERAL RESOURCES

A new Mineral Resource estimate for the Brockman main deposit was prepared in January 2021 as previous Mineral Resources were prepared and first disclosed under JORC Code 2004. These estimates had not been updated since to comply with JORC Code 2012 on the basis that the information used to prepare these estimates had not materially changed since they were last reported (refer 8 September 2011 announcements “Significant upgrade in JORC Resources at Hastings Rare Metal – Heavy Rare Earth Deposit” and 29 January 2016’s announcement “December 2015 Quarterly Activities Report”).

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Inferred M tonnes TREO % HREO % NB2O5 % TA2O5 % Y2O3 % ZrO2 %
Total 41.6 0.20 0.17 0.35 0.02 0.11 0.86
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Table 23 – Updated JORC 2012 Brockman Project Mineral Resources. Lower cut-off grade is 700ppm Nb2O5

MATERIAL CHANGES AND COMPETENT PERSONS’ RESOURCE STATEMENT STATEMENT COMPARISON

David Princep of Gill Lane Consulting. Mineral Resources at Brockman were completed by Mr Simon Coxhell of CoxsRocks Pty Ltd, both of whom are Members of the Australasian Institute of Mining and Metallurgy (AusIMM). Both are consultants to Hastings Technology Metals Limited and have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 and 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Princep and Mr Coxhell consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.

The information that relates to the The Group reviews and reports its Ore Reserves at Bald Hill, Fraser’s, Mineral Resources at least annually and Yangibana, Auer and Auer North and provides an Annual Mineral Resource Yangibana West is based on information Statement. The date of reporting is 30 reviewed or work undertaken by Mr June each year, to coincide with the Stephen O’Grady, AusIMM, a Director Group’s end of financial year balance of Intermine Engineering Consultants. date. If there are any material changes Mr O’Grady has sufficient experience to its mineral resources over the course relevant to the style of mineralisation of the year, the Group is required to and type of deposit under consideration promptly report these changes. and to the preparation of mining studies to qualify as a Competent Person as GOVERNANCE defined by the JORC Code 2012. Mr O’Grady consents to the inclusion in ARRANGEMENTS AND this announcement of the matters INTERNAL CONTROLS based on his information in the form Hastings has ensured that the Ore and context in which it appears. The Reserves and Mineral Resources scientific and technical information quoted are subject to good governance that relates to process metallurgy is arrangements and internal controls. The based on information reviewed by Ms. Ore Reserves and Mineral Resources Narelle Marriott (Principal Engineer – reported have been generated by Beneficiation) and Mr Zhaobing (Robin) independent external consultants who Zhang (Process Engineering Manager) are experienced in best practices in of Hastings Technology Metals modelling and estimation methods. Limited. Both Ms Marriott and Mr The consultants have also undertaken Zhang are members of AusIMM. Each reviews of the quality and suitability has sufficient experience relevant to of the underlying information used the style of mineralisation and type of to generate the resource estimation. deposit under consideration and to the In addition, Hastings’ management activity being undertaken to qualify as carries out regular reviews of internal a Competent Person as defined by the processes and external contractors that 2012 JORC Code. Ms Marriott and Mr have been engaged by the Group. Zhang consent to the inclusion in this announcement of the matters based All Mineral Resources reported here on their information in the form and were compiled in accordance with context in which it appears.

The information that relates to Exploration Results is based on information compiled by Mr Andrew Reid. Mr Reid is an employee of the Group and is a Member of the Australian Institute of Mining and Metallurgy (FAusIMM). Mr Reid has sufficient experience relevant to the styles of mineralisation and types of deposits which are covered in this presentation and to the activity which they are 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 Ore Reserves’ (“JORC Code”). Mr Reid consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

All Mineral Resources reported here on their information in the form and were compiled in accordance with context in which it appears. the ‘Australasian Code for Reporting of Exploration Results, Mineral The information that relates to Mineral Resources and Ore Reserves’ Resources at the Yangibana Deposit is (JORC Code) 2012 Edition. based on information compiled by Mr

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TENEMENT SCHEDULE AS AT 30 JUNE 2021 (All tenements are in Western Australia)

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YANGIBANA RARE EARTHS PROJECT

	Gascoyne Metals Pty Limited (100% subsidiary)
	P09/489	100%
	E09/1703-1706	70%
	E09/2296	70%
	E09/2298	70%
	E09/2333	70%
	G09/11	70%
	G09/13	70%
	M09/159	70%
	M09/161	70%
	M09/163	70%

Gascoyne Metals Pty Limited (100% subsidiary)

	Gascoyne Metals Pty Limited (100% subsidiary)	Gascoyne Metals Pty Limited (100% subsidiary)	Gascoyne Metals Pty Limited (100% subsidiary)	Gascoyne Metals Pty Limited (100% subsidiary)
E09/1989 100% E09/2007 100% E09/2084 100% E09/2086 100% E09/2095 100% E09/2129 100% E09/2137 100% E09/2334 100% E09/2364 100% E09/2403-2404 100% G09/10 100% G09/14 100% G09/23-25 (Application) L09/66 100% L09/67 100% L09/68 100% L09/69 100% L09/70 100% L09/71 100% L09/72 100% L09/74 100% L09/75 100% L09/80 100% L09/81 100% L09/82 100% L09/83 100% L09/85 100% L09/86 100% L09/87 100% L09/89 100% L09/91 100% M09/157 100% M09/160 100% M09/164 100% M09/165 100% M09/177 (Application) M09/179 (Application) P09/489 100% E09/1703-1706 70% E09/2296 70% E09/2298 70% E09/2333 70% G09/11 70% G09/13 70% M09/159 70% M09/161 70% M09/163 70% Yangibana Pty Limited (100% subsidiary) E09/1700 100% E09/1943 100% E09/1944 100% E09/2018 100% G08/95 (Application) G08/96 (Application) G08/97 (Application) G09/17 100% G09/18 100% G09/20 100% G09/21 100% G09/22 100% G09/26 (Application) G09/27 (Application) G09/28 (Application) L09/93 100% L09/95 100% L09/96 (Application) L09/97 (Application) M09/158 100% M09/162 100% M09/176 (Application) M09/178 (Application) BROCKMAN RARE EARTHS PROJECT Brockman Project Holdings Pty Limited (100% subsidiary) E80/5248 (Application) M80/636 (Application) P80/1626-1635 100% OTHER PROJECT Ark Gold Pty Limited (100% subsidiary) E09/2385 100% E09/2399 100%	P09/489 E09/1703-1706 E09/2296 E09/2298 E09/2333 G09/11 G09/13 M09/159 M09/161 M09/163			100% 70% 70% 70% 70% 70% 70% 70% 70% 70%

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Annual Report 2021 | 31

Directors’ Report

Your directors submit the annual financial report of the consolidated entity consisting of Hastings Technology Metals Ltd (the “Company”) and the entities it controlled during the period (the “Group”) for the financial year ended 30 June 2021. Pursuant to the provisions of the Corporations Act, the Directors report as follows:

DIRECTORS

The names of Directors who held office during or since the end of the year and to the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Particulars

Name

Mr Charles Lew Mr Guy Robertson Mr Jean Claude Steinmetz Mr Neil Hackett Mr Malcolm Randall Mr Bruce McFadzean

Executive Chairman Executive Director Non-executive Director Non-executive Director Non-executive Director Non-executive Director (appointed 1 January 2021)

NAMES, QUALIFICATIONS, EXPERIENCE, AND SPECIAL RESPONSIBILITIES

Mr Charles Lew Executive Chairman

Qualifications: BA Hons Finance and Accounting, MSc Management Science

Mr Lew has more than 30 years of investment banking experience, including serving as Managing Director of ABN Amro’s investment banking business in Singapore from 1997 to 2000. He has been involved in a diverse range of investment banking activities, including IPOs, equity placements, corporate mergers and acquisitions, debt/equity restructuring, private equity investments and venture capital financing.

After leaving ABN Amro in year 2000, Mr Lew started his own investment management company, Equator Capital, which manages a hedge fund that is primarily involved in trading global managed futures, US equities and options. In addition, Equator Capital has been a private equity/pre-IPO investor in growth companies in Singapore, Malaysia, and China some of whom were subsequently listed on the Singapore Exchange.

Mr Lew served as an Independent Non-Executive Director of one of Malaysia’s prominent banking group, RHB Bank from March 2004 until his retirement from the group in May 2016. During this period, he was on the board of RHB Investment Bank (2004 to 2016), RHB Islamic Bank (2008 to 2016) and RHB Capital Berhad (2005 to 2007). He was an Independent Director on the board of Singapore Medical Group between 2007 and 2013. He is also Founder and Chairman of Muddy Murphy Holdings, an operator of traditional and concept pubs that was established in 1996.

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Mr Guy Robertson

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Executive Director and Joint Company Secretary

Qualifications: BCom (Hons) CA

Mr Robertson has significant experience as a director and company secretary of ASX listed and private companies in both Australia and Hong Kong.

Mr Robertson previously held senior roles in the Jardine Matheson group of companies over a period of sixteen years including Finance Director and Managing Director (NSW) for Jardine Lloyd Thompson Australia Insurance Brokers, Finance Director and Chief Operating Officer for Colliers International Property Services Asia Pacific and General Manager Finance of the Franklins Limited supermarket chain.

Mr Robertson is an Executive Director of Metal Bank Limited (ASX: MBK) and has held no other ASX directorships in the past three years.

Mr Neil Hackett

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Mr Jean Claude Steinmetz Non-Executive Director

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Non-Executive Director and Joint Company Secretary

Qualifications: BEcon UWA, GDAFI, GDFP, FFin, GAICD(Merit)

Qualifications: BSc in Chemical Engineering, MSc in Industrial Management

Mr Hackett is a professional Australian Securities Exchange director with over 25 years practical experience with ASX200 resources entities, diversified industrials, funds management, and ASIC. He is currently NonExecutive Chairman of Ardiden Ltd (ASX: ADV), Non-Executive Director of Intelicare Ltd (ASX: ICR), Non-Executive Director of Footwear Industries Pty Ltd (trading as Steel Blue Safety Boots), Council Member of John XXIII College, and Course Facilitator with the Australian Institute of Company Directors. Mr Hackett’s previous ASX resources experience includes Ampella Mining Ltd, African Chrome Fields Ltd, Calima Energy Ltd, Modun Resources Ltd and Sundance Resources Ltd.

Mr Steinmetz has been

involved in the specialty chemical industry for more than 25 years with a strong focus on the automotive industry leading breakthrough projects in body developments and major reductions programmes of carbon dioxide (CO2) in compliance with European and global legislation. Mr Steinmetz has also held management positions in RhodiaSolvay, GE and Du Pont. He currently serves as Chairman of the Auto Plastic and Innovative Materials Committee of SinoEU Chemical Manufacturers Association.

Mr Steinmetz’s was previously Chief Operating Officer for the ASX listed rare earth company Lynas Corporation where he had operational responsibility for the mining operations and concentration plant at Mount Weld in Western Australia and the Lynas Advanced Materials Plant in Malaysia. He also had oversight of the sales and marketing activities at Lynas and is fluent in English, Dutch, German and French.

He holds a Bachelor of Economics from University of Western Australia, Graduate Diploma in Applied Finance & Investment, Graduate Diploma in Financial Planning, is a Fellow of FINSIA, and a Graduate (Order of Merit) and Facilitator with the Australian Institute of Company Directors.

Mr Steinmetz has held no other ASX directorships in the past three years.

Over the past 3 years, Mr Hackett is a former ASX director of Calima Energy Ltd.

Mr Lew holds a BA (Hons) in Finance and Accounting from the University of East London and a MSc in Management Science from Imperial College, University of London.

Mr Lew has held no other ASX directorships in the past three years.

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NAMES, QUALIFICATIONS, EXPERIENCE, AND SPECIAL RESPONSIBILITIES CONTINUED

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Mr Malcolm Randall Non-Executive Director

Mr Bruce McFadzean Non-Executive Director

Qualifications: Chem, FAICD

Qualifications: Fellow of Australian Institute of Mining and Metallurgy (FAUSIMM), Graduate Diploma in Mining

Dip Applied

Mr Randall holds a Bachelor of Applied Chemistry degree and has more than 45 years of

Mr McFadzean, mining engineer, has more than 40 years’ experience in the global resources industry and was the Managing Director of Sheffield Resources Limited from Nov 2015 until July 2021. Mr McFadzean who has led the financing, development, and operation of several new mines around the world has experience in gold, copper, nickel, diamonds, iron ore and mineral sands.

experience in corporate, management and marketing in the resources sector, including more than 25 years with the Rio Tinto group of companies.

His experience has covered a diverse range of commodities including iron ore, base metals, uranium, mineral sands, and coal.

Mr Randall has held the position of chairman and director of several ASX listed companies. Current directorships include Ora Gold Limited (ASX: OAU), Magnetite Mines Limited (ASX: MGT), and Argosy Minerals Limited (ASX: AGY).

Mr McFadzean’s professional career includes 15 years with BHP Billiton and Rio Tinto in a variety of positions and four years as managing director of successful ASX gold miner Catalpa Resources Limited which merged into Evolution Mining Limited. Mr McFadzean has successfully completed several mergers, acquisitions and joint ventures.

Over the past 3 years, Mr Randall is a former ASX director of Iron Ore Holdings Limited, United Minerals Corporation NL, MZI Limited, and Kalium Lakes Limited.

Mr McFadzean has held the position of chairman and director of several ASX listed companies and is currently NonExecutive Chairman – Kimberley Mineral Sands (private) April 2021 to July 2021, and Non-Executive Chairman – Aquirian Limited (ASX: AQN) - April 2021 to present.

Over the past 3 years, Mr McFadzean is a former ASX director of Indiana Resources Limited and Sheffield Resources Limited

Executive Team

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Andrew Reid Chief Operating Officer

Mr Reid is an executive with over twenty-five years’ industry experience in surface and underground mining operations. Mr Reid holds qualifications in Geology, Mining Engineering and Mineral Economics and operational experience spanning the commodities of gold, uranium, iron ore and base metals. His areas of expertise include the commissioning and operation of complex metallurgical plants in remote regions.

Prior to joining Hastings, Mr Reid held Chief Operation Officer positions in Finders Resources and BCM International. Mr Reid is also a Fellow member of the AUSIMM, and has a proven track record of delivering at an operational level, maximising profit and improving business operations through optimising business systems and processes.

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Matthew Allen Chief Financial Officer

Mr Allen is a chartered accountant and finance professional with over 25 year’s experience in the operations and management of public companies in the resources sector. The majority of Mr Allen’s recent experience has been in the hydrocarbon sector and involved both the exploration for and development of projects in Australia, Asia, Africa and the USA.

Mr Allen was most recently the Managing Director and previously Chief Financial Officer of Otto Energy Ltd which was exploring and developing in the Gulf of Mexico in the United States. He was also involved in Otto’s successful Philippines operations and lead the sale of that business in 2014. Prior to joining Otto Energy, Mr Allen spent over 8 years

with Australia’s largest hydrocarbon business, Woodside Energy Ltd as a Finance Manager. During his time with Woodside, Mr Allen held key financial responsibilities in a number of business units with operations both within Australia and Africa.

Mr Allen is a Fellow of Chartered Accountants Australia and New Zealand (CAANZ), a Fellow of FinSIA and a Graduate Member of the Australian Institute of Company Directors (AICD).

Dr Lara Jefferson General Manager, Sustainability

Robin Zhang General Manager, Process Engineering

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Dr Lara Jefferson has nearly 30 years’ experience in a variety of environmental roles, including the preparation of environmental approvals, government and stakeholder consultation, development and implementation of Environmental and Social Management Systems (ISO 14001), compliance and sustainability reporting (Global Reporting Initiative standards).

Mr Zhang has more than 20 years’ experience in research and development, project engineering, plant commissioning and running

of operations in the rare earths industry. He has extensive experience in design and running a rare earths processing and separation plant.

Mr Zhang spent 8 years with Lynas Corporation serving as Senior Technical Services Manager and Senior Project Development Manager and had worked in all phases of the development of Lynas Advanced Materials Plant in Malaysia. Prior to this, he spent 11 years with Gansu Rare Earth Group – one of the largest rare earth companies in China where he served as the Deputy Director of its Technical Centre.

The focus of Lara’s doctorate was restoration ecology in a post-mining landscape. Lara has a Masters of Business Administration (MBA) degree and is a Graduate of the Australian Institute of Company Directors (GAICD). In 2012, Lara won the Encycle Award for her contribution to sustainability by the National Association of Women in Construction. Lara’s teams have won other environmental awards, including Western Australia’s prestigious Department of Mines and Petroleum Golden Gecko Award.

Nick Holthouse General Manager Engineering Operations Readiness

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Mr Holthouse is a qualified Mining Engineer with over thirty years’ industry experience in surface and underground mining operations. Mr Holthouse holds qualifications in Mining Engineering and Surveying and has operational experience in commodities such as gold, uranium, coal and base metals. His areas of expertise include the construction, commissioning and operation of mines and process plants in remote regions.

Prior to joining Hastings, Mr Holthouse spent 5 years in Indonesia with a corporate role in Merdeka Mining, operational and project construction roles with Finders Resources and a consulting role as Principal Mining Engineer and Manager of the mining department at CSA Global’s Perth office for 4 years.

Mr Holthouse is a Member of the AUSIMM and has a proven track record of delivering at a project construction and operational level and ongoing business optimisation.

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EXECUTIVE TEAM CONTINUED

Nick Bennett Project Manager

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Mr Bennett is an experienced Project Developer and Manager with a demonstrated history of achievements in the mining & metals industry. Mr Bennett has 30 years work experience in engineering environments, with 20+ years’ experience in executing studies and projects in Project Management roles in the chemical and mineral processing industry. Prior to joining KPMG, Mr Bennett was Project Manager at Ausenco in 2020 and Project Manager at MSP Engineering for more than 2 years.

Mr Bennett is skilled in Project development from concept through to commissioning, Project Management (Client, EPCM, EPC), Project Controls, Contract Management, Construction, Commissioning, Mineral Processing, Chemical Plants, Infrastructure, and Energy. Mr Bennett holds an Engineer’s Degree focused in Mechanical Engineering from the University of Western Australia.

INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY

The following relevant interests in shares and options of the Group or a related body corporate were held by the Directors as at the date of this report.

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Director Number of Fully Paid Number of Options Number of Performance
Ordinary Shares Rights
Mr Charles Lew 123,603,734 4,892,677 11,500,000
Mr Guy Robertson 451,472 - 1,500,000
Mr Jean Claude Steinmetz 3,720,890 100,000 1,500,000
Mr Neil Hackett - - 1,500,000
Mr Malcolm Randall 175,074 32,537 2,500,000
Mr Bruce McFadzean 263,157 - 2,500,000
----- End of picture text -----*

*Listed options exercisable at 25 cents per share expiring on 12 April 2022.

DIVIDENDS

Fund (“NAIF”), the German United Loan The comprehensive loss of the Guarantee Scheme with KfW IPEX-Bank consolidated entity for the financial (“KFW”), Finland’s Export Credit Agency period, after providing for income (“Finnvera Oyj”), and commercial tax amounted to $6,334,423 (2020: lenders, and signing a long-term off-take $4,230,338). contract with thyssenkrupp Materials The Group’s operating income decreased Trading GmbH.

No dividends have been paid or declared since the start of the financial year and the Directors do not recommend the payment of a dividend in respect of the financial year.

The Group’s operating income decreased to $175,915 (2020: $226,707) primarily due to a decrease in interest income given lower interest rates.

PRINCIPAL ACTIVITIES

For a review of operations, please refer to the section Review of Operations on pages 16 to 23.

The principal activities of the Group during the year were the exploration and evaluation of the Yangibana Rare Earths Project (“the Project”), advancing funding applications with the Northern Australia Infrastructure

Expenses increased to $6,509,067 (2020: $4,450,498) owing primarily to the $1,720,702 increase in share-based payment expenses.

OPERATING RESULTS FOR THE YEAR AND FINANCIAL REVIEW

Capitalised exploration increased to $64,704,236 (2020: $57,224,056) reflecting the costs associated with drilling on the Yangibana Rare Earths Project to increase probable reserves, and heritage and environmental approvals.

Plant and equipment increased to $46,446,450 (2020: $43,038,256) reflecting preliminary construction works on the Project’s site, and design and engineering costs. Net assets increased to $221,931,429 (2020: $109,943,000) reflecting capital raisings during the year of $121,923,528 (before costs) offset by the results for the year.

REVIEW OF FINANCIAL CONDITIONS

As at 30 June 2021 the consolidated entity had $110,067,095 in cash, of which $28,067,095 was in cash and cash equivalents and $82,000,000 in term deposits with maturities greater than 3 month terms. The funds are earmarked for construction, corporate costs, and working capital.

GOING CONCERN

In light of the $110,067,095 in funds held by the Group, and the Group’s forecasted cash outflows over the next 12 months, the Directors expect that the Group can continue its normal business activities, subject to any changes to the underlying assumptions on which those forecasts have been made. This includes the ability to extinguish liabilities as and when they fall due without the need for additional funding. The Directors therefore have determined it is appropriate for the financial statements to be prepared on a going concern basis.

The Group continues discussions with the support of its appointed debt adviser, KPMG, on project debt funding with a syndicate including KfW IPEXBank, Finland’s Export Credit Agency Finnerva Oyj, Northern Australian Infrastructure Facility, and a number of commercial banks. The project debt funding is expected to be finalised during the 2021/22 financial year and first drawdown in the second half of the 2021/2022 financial year. In

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addition, the currently issued HASO share options with an expiry date of 12 April 2022, if exercised by this date, would supplement the Company’s cash balance by a further $31.6 million.

For further information concerning going concern, refer to Note 1(d) to the financial statements.

consideration of water sources and groundwater dependent ecosystems, and water efficiency measures

ENVIRONMENTAL, SOCIAL, • Waste and tailings management AND GOVERNANCE (“ESG”) includes waste characterisation, waste management and long-term Hastings will be releasing its inaugural integrity of waste landforms sustainability report this year, which once completed, will be available on the • Biodiversity includes the assessment Group’s website: hastingstechmetals. of biodiversity values in areas where com/about-us/governance/ . It is we will operate the Group’s intention to build upon • Rehabilitation and closure this report year-on-year to meet the expectations of our stakeholders, include planning for closure prior build value for our shareholders that to construction extends beyond financial gain, aligns 2. People: We aim to create a workplace with international standards such that is respectful and inclusive. We as the Global Reporting Initiative attract and retain talent by developing (GRI) and Task Force on Climate and supporting our people, and Related Financial Disclosures putting in place measures to protect (TCFD), and contributes in part to their health, safety and wellbeing. the United Nations (UN) Sustainable Our performance was reported under Development Goals (SDGs).

• Biodiversity includes the assessment of biodiversity values in areas where we will operate

2. People: We aim to create a workplace that is respectful and inclusive. We attract and retain talent by developing and supporting our people, and putting in place measures to protect their health, safety and wellbeing. Our performance was reported under the following topics:

The value of our company is not only defined by our financial performance, but also by our environmental, social and governance performance. Our approach to operating in a sustainable manner is built around integrating four key pillars (i.e., environment, people, governance, community) into our business. In order to identify performance metrics in these four key pillars, a materiality analysis was conducted. The outputs from the materiality analysis have enabled us to identify and report on the following topics that are material to our business:

• Health, safety and wellbeing including Covid-19, mental health

• Attracting and retaining employees

3. Governance: We conduct our business with integrity, transparency and we honour our commitments. This is underpinned and guided by a structured set of policies and procedures, and strong leadership. Our performance was reported under the following topics:

• Ethics and Conduct, inclusive of human rights and tax transparency

• Risk management, inclusive of cyber-security

1. Environment : We seek to understand and manage our impact on the environment and be efficient in the way that we use resources. Key performance was reported under the following topics:

• Supply chain management

4. Community: We engage meaningfully with our stakeholders and look to make a positive contribution to the communities where we operate. Our performance was reported under the following topics:

• Climate change including our footprint and our contribution to supporting technologies that will enable a low carbon economy

• Cultural heritage

• Water stewardship includes

• Stakeholder engagement

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At Hastings, sustainability forms an integral part of the way we do business by recognising the long-term shared value it yields. Hastings believes good governance and social trust gives us a competitive advantage and contributes to enhanced performance by operating in a manner that will benefit others and leave a legacy that will benefit future generations. We can only achieve this by doing what is right for our people across all races, cultures and age groups, the environment, and our communities.

– Charles Lew, Executive Chairman

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This year Hastings has put in place a corporate governance framework that prioritises embedding ESG performance into our organisational culture, workplace practices, and business process. An ESG Committee led by our Executive Chairman was established to implement a sustainability strategy that underpins various initiatives and plans for our flagship Yangibana Rare Earths Project to deliver a mixed rare earths carbonate product to our global customers in 2024.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

0.95% TREO, extending the mine’s life to at least 15 years. TREO tonnes rose 15% to 158,400t, with NdPr increasing 18% to 58,300t;

During the coming financial year, the Group plans to focus on sourcing the balance of funding for the Project, initial site infrastructure works, and commencing plant construction of the Project.

The following summary of events were significant milestones in the state-ofaffairs of the Group during the year:

• Onslow selected as the site for the Yangibana Project’s hydrometallurgical plant;

• The Project’s capital cost estimate decreased by $68 million based on the decoupling and relocation of the hydrometallurgical plant to Onslow;

• Ore sorter testwork resulting in a 26% uplift in mine head grade;

The material business risks faced by the Group that are likely to impact the financial prospects of the Group, and how the Group manages these risks, are:

• The January 2021 appointment of Non-Executive Director Mr Bruce McFadzean and February 2021 appointment of Chief Financial Officer Mr Matthew Allen;

• Site works commencement at the Yangibana Project; and

• Western Australian State Government’s • Future capital needs – The Group currently does not generate cash from commendation for Yangibana Rare its operations and will require further Earths Project and approval for funding to develop the Yangibana Onslow hydrometallurgical plant site. Project in a period of rapidly Other than as outlined above, there were escalating construction prices, meet no matters or circumstances that have exploration obligations, and cover arisen since the end of the financial corporate costs. year that have significantly affected or may significantly affect the operations • Development risks – The Yangibana of the consolidated entity, the results Project has a substantial resource and will face development, construction, of those operations, or state-of-affairs of the consolidated entity in future and commissioning risk prior to financial years. going into production. The Group

• $121.5 million in equity raised from share placements and share purchase plans;

• The Company’s inclusion in the All Ordinaries Index on the Australian Securities Exchange (“ASX”);

• Development risks – The Yangibana Project has a substantial resource and will face development, construction, and commissioning risk prior to going into production. The Group employs technical specialists and engages external consultants where appropriate to address this risk.

• Signing of a major offtake contract with thyssenkrupp Materials Trading GmbH, agreeing to supply 9,000 tonnes per annum of Mixed Rare Earth Carbonate for the first 5 years and 5,000 tonnes per annum for the second 5 years; and

SHARES UNDER OPTION

At the date of this report there were 126,651,415 listed options on issue exercisable at 25 cents per share expiring on 12 April 2022.

• Commodity price risk – As a Group which is focused on the exploration and bringing into production of rare earth oxides, notably neodymium, praseodymium, dysprosium, and terbium, it is exposed to movements in the price of these commodities. The Group monitors historical and forecast price information from a range of sources to support its planning and decision making.

• Drilling campaigns confirmed increased grades and extensions to ore bodies, increasing the Project’s Measured and Indicated Mineral Resources, with the total Mineral Resource estimate increased to 27.42Mt at 0.97% total rare earth oxides.

The Group has 41,215,000 performance rights on issue to Directors and employees, of which 2,500,000 were issued during the year to newly appointed Non-Executive Director, Mr Bruce McFadzean, and 3,000,000 to Chief Financial Officer, Mr Matthew Allen. Additionally, 3,250,000 performance rights were issued subsequent to the financial year.

SIGNIFICANT EVENTS AFTER BALANCE SHEET DATE

Since 30 June 2021 the Group has announced:

• The Yangibana Project’s total Ore Reserve increased 37% to 16.7Mt at

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Annual Report 2021 | 39

ENVIRONMENTAL

PROCEEDINGS ON BEHALF OF THE GROUP

(other than the Group or related body corporate) that may arise from their position as Directors of the Group, except where the liability arises out of conduct involving a lack of good faith.

LEGISLATION

The consolidated entity is subject to significant environmental and monitoring requirements in respect of its natural resources’ exploration and development activities.

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

INDEMNITY OF AUDITORS

The Directors are not aware of The Group has agreed to indemnify any significant breaches of these its auditors, PricewaterhouseCoopers, requirements during the period. to the extent permitted by law, against any claim by a third party arising from the Group’s breach of their agreement. INDEMNIFICATION AND The indemnity stipulates that Hastings INSURANCE OF DIRECTORS Technology Metals Limited will meet AND OFFICERS the full amount of any such liabilities The consolidated entity has agreed to including a reasonable amount of indemnify all Directors of the Group legal costs. for any liabilities to another person

No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section 237 of the Corporations Act 2001.

REMUNERATION REPORT (AUDITED)

REMUNERATION PHILOSOPHY

This report outlines the remuneration arrangements in place for key management personnel of Hastings Technology Metals Limited for the financial year ended 30 June 2021.

The performance of the Group depends upon the quality of the Directors and Executives. The philosophy of the Group in determining remuneration levels is to:

The following people acted as key management personnel during the financial year:

Name Particulars

• Provide competitive remuneration, referencing appropriate industry market benchmarks;

Mr Charles Lew Executive Chairman Mr Guy Robertson Executive Director

• Present progressive incentive structures to encourage outstanding performance;

Mr Jean Claude Steinmetz Non-Executive Director • Present progressive structures to encourage Mr Neil Hackett Non-Executive Director outstanding performance; Mr Malcolm Randall Non-Executive Director • Provides a mix of rewards that will attract, retain, and Mr Bruce McFadzean Non-Executive Director – Appointed 1 January 2021 motivate Executives; Mr Andrew Reid Chief Operating Officer • Rewards behaviour and performance Mr Matthew Allen Chief Financial Officer – Appointed 1 February 2021 that are aligned to the company goals, values, and external stakeholder expectations.

REMUNERATION COMMITTEE

The Remuneration Committee of the Board of Directors of the Group is responsible for determining and reviewing remuneration arrangements for the Directors and Executives.

The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and Executives on a periodic basis referencing relevant employment market conditions, peer benchmarking and independent remuneration benchmarking with an overall objective of ensuring maximum stakeholder benefit from the retention of a high-quality Board and executive team.

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STATUTORY KEY PERFORMANCE INDICATORS OF THE GROUP OVER THE LAST FIVE YEARS

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OF THE GROUP OVER THE LAST FIVE YEARS
2021 2020 2019 2018 2017
Loss for the year attributable to owners of Hastings 6,334,423 4,230,338 5,143,029 2,891,278 1,523,429
Technology Metals Limited
Basic loss per share (cents) 0.48 0.43 0.65 0.43 0.30
Opening share price (cents) 11.5 15.0 22.5 9.0 7.3
Closing share price (cents) 17.0 11.5 15.0 22.5 9.0
Increase/(decrease) in share price 48% (23%) (33%) 150% 23%
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REMUNERATION STRUCTURE

annually. The Board considers advice from external shareholders as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process.

comparative remuneration in the market, performance of the executive, Company performance and, where appropriate, external advice on policies and practices. The Committee has access to external, independent advice where necessary. Fixed remuneration is paid in the form of cash payments.

In accordance with best practice corporate governance, the structure of non-executive director and senior management remuneration is separate and distinct.

Each director receives a fee for being a director of the Group.

NON-EXECUTIVE DIRECTOR REMUNERATION

The remuneration of directors for the period ended 30 June 2021 is detailed below.

The fixed remuneration component of the key management personnel is detailed below.

The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

All Directors have a letter of appointment. Remuneration of Non-Executive Directors is set at $60,000 per annum (inclusive of superannuation where applicable) and the Executive Chairman at $525,000 per annum. Non-Executive Director fees over and above $60,000 per annum are for additional consulting services paid at agreed rates. Due to the impact of COVID-19 on the Group, all Key Management Personnel had agreed to a 20% reduction in fees or salaries for the period April – September 2020. Key Management Personnel contract details are as follows:

SENIOR MANAGER AND EXECUTIVE DIRECTOR REMUNERATION

Remuneration consists of fixed remuneration and performance rights to shares (as determined from time-totime). In addition to Group employees and directors, the Group may contract key consultants on a contractual basis. These contracts stipulate the remuneration to be paid to the consultants.

The ASX Listing Rules specify that the aggregate remuneration of nonexecutive directors shall be determined from time to time by a general meeting. The latest determination was at the Annual General Meeting held on 30 November 2010 when shareholders approved an aggregate remuneration of up to $250,000 per year.

The amount of aggregate remuneration FIXED REMUNERATION sought to be approved by shareholders, Fixed remuneration is reviewed annually and the manner in which it is apportioned by the Remuneration Committee. The amongst Directors, is reviewed process consists of a review of relevant

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Name Position Directors’ Fee $ [3] Other Fees/Salary $ [3] Termination
Notice Period
Mr Charles Lew Executive Chairman 120,000 405,000 12 months
Mr Guy Robertson Executive Director 60,000 36,000 -
Mr Jean Claude Steinmetz [1] Non-Executive Director 60,000 - -
Mr Neil Hackett [2] Non-Executive Director 60,000 - -
Mr Malcolm Randall Non-Executive Director 60,000 - -
Mr Bruce McFadzean Non-Executive Director 60,000 - -
Mr Andrew Reid Chief Operating Officer - 413,568 3 months
Mr Matthew Allen Chief Financial Officer - 353,568 8 weeks
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FIXED REMUNERATION CONTINUED

1Mr Steinmetz’s agreement provides for additional consulting services at a daily rate

• 2Mr Hackett receives an hourly fee as joint company secretary, which are included in the table below

3All fees are per annum and inclusive of superannuation where applicable, pre the agreed 20% reduction in fees for all Key Management Personnel for April – September 2020, and include superannuation where applicable.

REMUNERATION OF KEY MANAGEMENT AND PERSONNEL

Table 1: Key management personnel remuneration for the year ended 30 June 2021

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Short-term Annual Post- Equity Total $ % Performance
employee leave employment Performance Related
benefits and long benefits Rights¹ $
Salary & service Superannuation $
Fees $ leave $
Mr Charles Lew 498,750 - - 616,291 1,115,041 55.3
Mr Guy Robertson [2] 96,000 - - 74,282 170,282 43.6
Mr Jean Claude Steinmetz 57,000 - - 74,282 131,282 56.6
Mr Neil Hackett [3] 70,036 - - 74,282 144,318 51.5
Mr Malcolm Randall 52,055 - 4,945 123,803 180,803 68.5
Mr Bruce McFadzean [4] 27,397 - 2,603 133,311 163,311 81.6
Mr Andrew Reid 376,502 10,676 21,694 96,282 505,154 19.1
Mr Matthew Allen [5] 137,500 11,579 9,039 99,960 258,078 38.7
Total 1,315,240 22,255 38,281 1,292,493 2,668,269 48.4
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• ¹ Performance rights have been granted and valued, however vesting is subject to performance hurdles except for the following which have vested: Mr Lew $77,500, and Mr Reid $59,500

• 2 Mr Robertson is paid through Integrated CFO Solutions Pty Ltd, a company in which he has a controlling interest

• 3 Mr Hackett is paid through Corporate-Starboard Pty Ltd, a company in which he has a controlling interest

• 4 Mr McFadzean was appointed 1 January 2021

• 5 Mr Allen was appointed 1 February 2021

Table 2: Key management personnel remuneration for the year ended 30 June 2020

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Short-term Annual Post- Equity Total $ % Performance
employee leave employment Performance Related
benefits and long benefits Rights¹ $
Salary & service Superannuation $
Fees $ leave $
Mr Charles Lew 498,750 - - 60,966 559,716 10.9
- - - -
Mr Guy Robertson [2] 92,000 92,000
Mr Jean Claude Steinmetz 62,500 - - 15,241 77,741 19.6
Mr Neil Hackett [3] 65,617 - - - 65,617 -
Mr Malcolm Randall 52,055 - 4,945 - 57,000 -
Mr Andrew Reid 370,502 7,791 25,000 66,068 469,361 14.1
Total 1,141,424 7,791 29,945 142,275 1,321,435 10.8
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¹ Performance rights have been granted and valued, however vesting is subject to performance hurdles except for the following which have vested: Mr Lew $60,966, Mr Steinmetz $15,241, Mr Reid $77,107

• 2 Mr Robertson is paid through Integrated CFO Solutions Pty Ltd, a company in which he has a controlling interest. Mr Robertson was reappointed as a director on 23 August 2019

• 3 Mr Hackett is paid through Corporate-Starboard Pty Ltd, a company in which he has a controlling interest

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Director performance rights in as Director on 1 January 2021. existence during the year ended 30 These performance rights June 2021 (and the prior comparative were issued on the same terms year) were approved for granting as the 17,000,000 Directors’ performance at either the 2019 Annual General rights and were valued at $0.18/ Meeting (27 November 2019) or 2020 performance right based the Black-Scholes Annual General Meetings (“AGM”) on Model utilising the following assumptions: 30 November 2020, except for the • $0.18 share price at grant date; Director performance rights issued to Mr McFadzean on his appointment as • 3 year maturity period; Director (1 January 2021).

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a 5% variance to time and budget according to the Master Schedule and Master Budget as of 31 December 2022.

• 0.001% risk-free interest rate; and

• 1,500,000 of these performance rights remain outstanding as at the date of this report.

At the 2020 Annual General Meeting (30 November 2020), shareholders approved the granting of 17,000,000 performance rights to Directors. The performance rights were valued at $0.16/performance right based on the Black-Scholes Model utilising the following assumptions:

• 0.04-0.16% volatility.

The 2,500,000 performance rights remain outstanding as at the date of On 23 October 2020, Mr Reid this report. was granted 1,700,000 employee performance rights on the same terms At the 2020 AGM shareholders also as Mr Lew’s employee performance approved the granting of an addition rights. These performance rights were 2,000,000 employee performance valued at $0.14 per performance right rights to Mr Lew. The performance based on the Black-Sholes Model rights were valued at $0.16/ utilising the following assumptions: performance right based on the Black-Scholes Model utilising the • $0.14 share price at grant date; following assumptions:

• $0.16 share price at grant date;

• 3 year maturity period;

• 0.09-0.11% risk-free interest rate; and

• 2.67-7.01% volatility.

• 2.2 year maturity period;

• $0.16 share price at grant date;

Vesting occurs up until the end of the last performance period ended 31 December 2023, with a nil exercise price, if the following performance conditions are met:

• 0.09-0.11% risk-free interest rate; and

• 2.2 year maturity period;

• 0.52-3.22% volatility.

• 0.09-0.11% risk-free interest rate; and

Mr Allen was granted 3,000,000 employee performance rights on his appointment as Chief Financial Officer on 1 February 2021. These performance rights were valued at $0.21 per performance right based on the Black-Sholes Model utilising the following assumptions:

• 0.52-3.22% volatility.

Non-market based performance conditions

These employee performance rights have a nil exercise price, and vest based on the following performance conditions being met:

• 30% of the performance rights will vest on commencement of construction of the beneficiation plant in 2021;

Non-market based performance conditions

• $0.21 share price at grant date;

• 30% of the performance rights will vest on commencement of construction of the hydrometallurgy plant before 31 December 2022; and

• 2 year maturity period;

• 25% of the performance rights will vest 31 December 2020 upon demonstrating improvement in project CAPEX estimate vs published in November 2019 - $517 million. Improvement in CAPEX must be greater than 10% or $52 million;

• 0.001% risk-free interest rate; and

• 0.34-0.36% volatility.

• 40% of the performance rights will vest on achieving production throughput performance of no less than 90% of beneficiation design capacity for a consecutive period of no less than 3 days post C3 commissioning but not exceeding 180 days post C3 commissioning.

Vesting of Mr Allen’s performance rights occurs up until the end of the last performance period ended 31 December 2022, with a nil exercise price, if the following performance conditions are met:

• 25% of the performance rights will vest 31 December 2021 on confirmation a) CAPEX is +/- 5% of $449 million, b) OPEX is within a +/- 5% variation from the November 2019 Life-Of-Mine of $20.50, and c) a 10% improvement in the net present valuation as published in November 2019 of $549 million; and

• 1,000,000 of the performance rights will vest in 2021 on confirmation a) CAPEX is +/- 5% of $449 million, b) OPEX is within a +/- 5% variation from the November 2019 Life-Of-Mine of $20.50, and c) a 10% improvement in the net present valuation as published in November 2019 of $549 million; and

All 17,000,000 performance rights remain outstanding as at the date of this report.

In addition to the 17,000,000 Directors’ performance rights granted at the 2020 AGM, 2,500,000 Director performance rights were issued to Mr McFadzean on his appointment

• 50% of the performance rights will vest 31 December 2022 on confirmation construction is on schedule and on budget within

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• 30% of the performance rights will vest on first ore into the SAG mill by the C3 Commissioning date, being the date of initial feeding of ore grade material into the crusher and SAG mill and the introduction of chemical reagents into the process plant under load so as to achieve stable operating conditions; and

• 0.88% risk-free interest rate; and

• 2,000,000 of the performance rights will vest in 2023 on confirmation construction is on schedule and on budget within a 5% variance to time and budget according to the Master Schedule and Master Budget as of 31 December 2022.

• 4.69% volatility.

These performance rights had a nil exercise price, and vested based on the following performance conditions being met:

At the 2019 AGM, on 27 November Non-market based performance 2019, shareholders approved the conditions granting of 17,000,000 performance rights to Directors. The performance • 30% of the performance rights will rights were valued at $0.06 per vest on positive determination of performance right based on the the final investment decision, being Black-Scholes Model utilising the the decision to proceed with the following assumptions: development of the Yangibana Rare Earths Project based on having the • $0.06 share price at grant date; requisite government permits and sufficient funds to fund construction • 3 year maturity period; of the mine and process plant;

• 40% of the performance rights will vest on achieving production throughput performance of no less than 90% of beneficiation design capacity for a consecutive period of no less than 3 days post C3 Commissioning but not exceeding 180 days post C3 Commissioning.

All 17,000,000 performance rights were cancelled at the 2020 Annual General Meeting.

SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL

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Balance at Purchased On vesting of Other Balance at end of
beginning of performance period
period rights
30 June 2021 Ord Ord Ord Ord Ord
Mr Charles Lew [1] 113,289,155 9,814,579 500,000 - 123,603,734
Mr Guy Robertson 331,472 120,000 - - 451,472
Mr Jean Claude Steinmetz 3,720,890 - - - 3,720,890
Mr Neil Hackett - - - - -
Mr Malcolm Randall [2] 115,074 60,000 - - 175,074
Mr Bruce McFadzean - 263,157 - - 263,157
Mr Andrew Reid 530,000 - 425,000 - 955,000
Mr Matthew Allen - - - - -
Total 117,986,591 10,257,736 925,000 - 129,169,327
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• 1 71,883,402 shares are held by nominee entities on Mr Lew’s behalf

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OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL

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During the year ended 30 June 2019, the Group issued listed options exercisable at 25 cents per share expiring on 12 April 2022. The options were issued as free attaching options to a share placement based on one option for every two new shares purchased.

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Balance at Purchased On vesting of Other Balance at end of
beginning of performance period
period rights
30 June 2021 Ord Ord Ord Ord Ord
Mr Charles Lew 2,941,177 1,951,500 - - 4,892,677
- - - - -
Mr Guy Robertson
Mr Jean Claude Steinmetz 100,000 - - - 100,000
Mr Neil Hackett - - - - -
Mr Malcolm Randall [1] 32,537 - - - 32,537
Mr Bruce McFadzean - - - - -
Mr Andrew Reid 15,000 - - - 15,000
Mr Matthew Allen - - - - -
Total 3,088,714 1,951,500 - - 5,040,214
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1 32,537 options are held by nominee entities on Mr Randall’s behalf

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Balance at Purchased On vesting of Other Balance at end of
beginning of performance period
period rights
30 June 2021 Ord Ord Ord Ord Ord
Mr Charles Lew 2,941,177 - - - 2,941,177
- - - - -
Mr Guy Robertson
Mr Jean Claude Steinmetz 100,000 - - - 100,000
Mr Neil Hackett - - - - -
Mr Malcolm Randall [1] 32,537 - - - 32,537
Mr Andrew Reid 15,000 - - - 15,000
Total 3,088,714 - - - 3,088,714
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• 1 32,537 options are held by nominee entities on Mr Randall’s behalf

2 175,074 shares are held by nominee entities on Mr Randall’s behalf

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Balance at Purchased On vesting of Other Balance at end of
beginning of performance period
period rights
30 June 2020 Ord Ord Ord Ord Ord
Mr Charles Lew1 103,289,155 - 10,000,000 - 113,289,155
- - -
Mr Guy Robertson 331,472 331,472
Mr Jean Claude Steinmetz 720,890 500,000 2,500,000 - 3,720,890
Mr Neil Hackett - - - - -
Mr Malcolm Randall [2] 115,074 - - - 115,074
Mr Andrew Reid 30,000 - 500,000 - 530,000
Total 104,155,119 500,000 13,000,000 331,472 117,986,591
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• 1 71,883,402 shares are held by nominee entities on Mr Lew’s behalf

2 115,074 shares are held by nominee entities on Mr Randall’s behalf

PERFORMANCE RIGHTS HELD BY DIRECTORS AND KEY MANAGEMENT PERSONNEL

The following performance rights were held during the current and prior year and are subject to the Group achieving certain milestones as set out above.

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Number Grant date Performance % vested % lapsed/
period to cancelled
Mr Charles Lew 10,000,000 28 November 2016 28 November 2019 100% -
Mr Charles Lew 10,000,000 27 November 2019 31 December 2022 - 100%
Mr Charles Lew 10,000,000 30 November 2020 31 December 2023 - -
Mr Charles Lew 2,000,000 30 November 2020 31 December 2022 25% -
Mr Guy Robertson 1,500,000 27 November 2019 31 December 2022 - 100%
Mr Guy Robertson 1,500,000 30 November 2020 31 December 2023 - -
Mr Jean Claude Steinmetz 2,500,000 28 November 2016 28 November 2019 100% -
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PERFORMANCE RIGHTS HELD BY DIRECTORS AND KEY MANAGEMENT PERSONNEL CONTINUED

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Mr Jean Claude Steinmetz 1,500,000 27 November 2019 31 December 2022 - 100%
Mr Jean Claude Steinmetz 1,500,000 30 November 2020 31 December 2023 - -
Mr Neil Hackett 1,500,000 27 November 2019 31 December 2022 - 100%
Mr Neil Hackett 1,500,000 30 November 2020 31 December 2023 - -
Mr Malcolm Randall 2,500,000 27 November 2019 31 December 2022 - 100%
Mr Malcolm Randall 2,500,000 30 November 2020 31 December 2023 - -
Mr Bruce McFadzean 2,500,000 1 January 2021 31 December 2023 - -
Mr Andrew Reid 3,000,000 4 June 2019 31 December 2021 17% 83%
Mr Andrew Reid 1,700,000 23 October 2020 31 December 2022 25% -
Mr Matthew Allen 3,000,000 19 January 2021 31 December 2022 - -
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PERFORMANCE RIGHTS

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30 June 2021 Balance at Vested and Granted as Lapsed or Balance at Max value
beginning Exercised remuneration Cancelled end of period yet to vest [1]
of period During Period
Mr Charles Lew 10,000,000 (500,000) 12,000,000 (10,000,000) 11,500,000 $1,243,709
Mr Guy Robertson 1,500,000 - 1,500,000 (1,500,000) 1,500,000 $158,218
Mr Jean Claude Steinmetz 1,500,000 - 1,500,000 (1,500,000) 1,500,000 $158,218
Mr Neil Hackett 1,500,000 - 1,500,000 (1,500,000) 1,500,000 $158,218
Mr Malcolm Randall 2,500,000 - 2,500,000 (2,500,000) 2,500,000 $263,697
Mr Bruce McFadzean - - 2,500,000 - 2,500,000 $329,189
Mr Andrew Reid 2,500,000 (425,000) 1,700,000 (2,500,000) 1,275,000 $141,718
Mr Matthew Allen - - 3,000,000 - 3,000,000 $530,040
Total 19,500,000 (925,000) 26,200,000 (19,500,000) 25,275,000 $2,983,007
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30 June 2020 Balance at Vested and Granted as Lapsed or Balance at Max value
beginning of Exercised remuneration Cancelled end of period yet to vest [1]
period During Period
Mr Charles Lew 10,000,000 (10,000,000) 10,000,000 - 10,000,000 $600,000
- - -
Mr Guy Robertson 1,500,000 1,500,000 $90,000
Mr Jean Claude Steinmetz 2,500,000 (2,500,000) 1,500,000 - 1,500,000 $90,000
Mr Neil Hackett - - 1,500,000 - 1,500,000 $90,000
Mr Malcolm Randall - - 2,500,000 - 2,500,000 $150,00
Mr Andrew Reid 3,000,000 (500,000) - - 2,500,000 $425,000
Total 15,500,000 (13,000,000) 17,000,000 - 19,500,000 $1,445,000
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1The maximum value of the deferred shares yet to vest has been determined as the amount of the grant date fair value of the rights that is yet to be expensed. For the 2020 grant, the maximum value yet to vest for this grant was estimated based on the share price of the Company at 30 June 2020. The minimum value of deferred shares yet to vest is nil, as the shares will be forfeited if the vesting conditions are not met.

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2020 $ 2020 $
87,478 91,702
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RELATED PARTY TRANSACTIONS

Office and administration costs[2]

2 Office and administration costs were paid to Equator Capital Pte Limited, a company in which Mr Charles Lew has a controlling interest. Of this amount $4,661 (2020: $12,253) remains payable as at 30 June 2021.

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RELIANCE ON EXTERNAL REMUNERATION CONSULTANTS

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The Company did not engage any external remuneration consultants during the financial year.

VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING

Hastings Technology Metals Limited received more than 95% of “yes” votes on its remuneration report for the 2020 financial year. The Company did not receive any specific feedback at the AGM on its remuneration practices.

End of audited remuneration report.

DIRECTORS’ MEETINGS

The number of meetings of Directors (including meetings of Committees of Directors) held during the year and the number of meetings attended by each Director was as follows:

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Director Meetings Audit Committee Remuneration Committee
Director Attended Eligible Attended Eligible Attended Eligible
to Attend to Attend to Attend
Mr Charles Lew 13 13 2 2 2 2
Mr Guy Robertson 13 13 2 2 2 2
Mr Jean Claude Steinmetz 13 13 - - 2 2
Mr Neil Hackett 11 13 2 2 - -
Mr Malcolm Randall 13 13 2 2 2 2
Mr Bruce McFadzean 7 8 - - - -
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In addition to the above meeting attendances, 5 circular resolutions were signed by the Board during the year.

AUDITOR’S INDEPENDENCE DECLARATION

Section 307C of the Corporations Act 2001 requires our auditors, PricewaterhouseCoopers, to provide the Directors of the Group with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 49 and forms part of this Directors’ Report for the year ended 30 June 2021.

AUDIT AND NON-AUDIT SERVICES

Details on the amounts paid or payable to the auditor (PricewaterhouseCoopers Australia) for audit and non-audit services during the year are disclosed in in note 24.

The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are important.

The Board, in accordance with advice provided by the Audit Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the auditor; and

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

Signed in accordance with a resolution of the Directors.

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Charles Lew Executive Chairman 30 September 2021

46 | Hastings Technology Metals

Annual Report 2021 | 47

Corporate Governance Statement

The Board of Directors of Hastings Technology Metals Ltd is responsible for the corporate governance of the Group.

Hastings Technology Metals Ltd, through its Board and executives, recognises the need to establish and maintain corporate governance policies and practices that reflect the requirements of the market regulators and participants, and the expectations of members and others who deal with the Company. These policies and practices remain under constant review as the corporate governance environment and good practices evolve.

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ASX CORPORATE GOVERNANCE PRINCIPLES AND RECOMMENDATIONS

The fourth edition of ASX Corporate Governance Council Principles and Recommendations (the “Principles”) sets out recommended corporate governance practices for entities listed on the ASX.

The Group has issued a Corporate Governance Statement which discloses the Group’s corporate governance practices and the extent to which the Group has followed the recommendations set out in the Principles.

The Corporate Governance Statement was approved by the Board on 30 September 2021 and is available on the Group’s website: hastingstechmetals.com/about-us/governance/

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Auditor’s Independence Declaration Authors Independence As lead auditor for the audit of Hastings Technology Metals Limited for the year ended 30 June 2021, I

As lead auditor for the audit of Hastings Technology Metals Limited for the year ended 30 June 2021, I declare that to the best of my knowledge and belief, there have been: Declaration (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in

• (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit, and

• (b) no contraventions of any applicable code of professional conduct in relation to the audit.

Content to be supplied This declaration is in respect of Hastings Technology Metals Limited and the entities it controlled during the period.

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Helen Bathurst Partner PricewaterhouseCoopers

Perth 30 September 2021

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

Liability limited by a scheme approved under Professional Standards Legislation.

48 | Hastings Technology Metals

Consolidated Statement of Profit or Loss and Other Comprehensive Income

FOR THE YEAR ENDED 30 JUNE 2021

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Consolidated
Notes 2021 $ 2020 $
Continuing operations
Other income 2 175,915 226,707
Administration expenses (532,305) (558,678)
Depreciation – plant and equipment 11 (130,484) (130,071)
Depreciation – right-of-use assets (187,459) (138,394)
Directors’ fees (808,786) (775,867)
Occupancy expenses (162,109) (137,288)
Employee benefits expense 3 (1,898,344) (1,826,396)
Legal fees (290,958) (84,611)
Consulting and professional fees (369,311) (262,487)
Travel expenses (19,976) (140,138)
Share-based payments 4 (2,091,034) (370,332)
Finance costs (18,301) (26,236)
Loss before income tax expense (6,333,152) (4,223,791)
Income tax benefit 5 - -
Net loss for the period (6,333,152) (4,223,791)
Other comprehensive loss (1,271) (6,547)
Total comprehensive loss for the period (6,334,423) (4,230,338)
2021 2020
Notes
Cents per Share Cents per Share
Basic and diluted loss per share 6 (0.48) (0.43)
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The accompanying notes form part of these consolidated financial statements.

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Consolidated Statement of Financial Position

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

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Consolidated
Notes 2021 $ 2020 $
Assets
Current assets
Cash and cash equivalents 7 28,067,095 9,453,516
Trade and other receivables 9 4,612,174 3,891,701
Other financial assets at amortised cost 10 82,000,000 -
Total current assets 114,679,269 13,345,217
Non-current assets
Plant and equipment 11 46,446,450 43,038,256
Right-of-use assets 78,926 266,385
Deferred exploration and evaluation expenditure 12 64,704,236 57,224,056
Total non-current assets 111,229,612 100,528,697
Total assets 225,908,881 113,873,914
Liabilities
Current liabilities
Trade and other payables 13 2,692,483 3,407,171
Lease liability 112,189 203,025
Borrowings 14 - 9,078
Employee benefit obligations 202,703 143,108
Total current liabilities 3,007,375 3,762,382
Non-current liabilities
-
Lease liability 112,189
-
Rehabilitation provision 883,683
Employee benefit obligations 86,394 56,343
Total non-current liabilities 970,077 168,532
Total Liabilities 3,977,452 3,930,914
Net Assets 221,931,429 109,943,000
Equity
Issued capital 15 242,275,502 125,691,027
Reserves 16 8,285,175 6,546,798
Accumulated losses (28,629,248) (22,294,825)
Total Equity 221,931,429 109,943,000
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The accompanying notes form part of these consolidated financial statements.

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Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED 30 JUNE 2021

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Issued Capital Accumulated Option Share-Based Total
Losses Revaluation Payment
Reserve Reserve
Notes $ $ $ $ $
-
Balance at 1 July 2020 125,691,027 (22,294,825) 6,546,798 109,943,000
- - -
Loss for the year (6,333,152) (6,333,152)
Other comprehensive loss - (1,271) - - (1,271)
- - -
Total comprehensive loss (6,334,423) (6,334,423)
for the year
- -
Shares/options issued 121,923,528 243,309 122,166,837
during the year
Exercised options 41 - (41) - -
Transaction costs on (5,935,019) - - - (5,935,019)
share issue
- - -
Share-based payments 2,091,034 2,091,034
Transfer from share-based 595,925 - - (595,925) -
payments
Balance at 30 June 2021 242,275,502 (28,629,248) 6,790,066 1,495,109 221,931,429
Balance at 1 July 2019 112,858,264 (18,055,028) 4,299,329 342,710 99,445,275
- - -
Change in (9,459) (9,459)
accounting policy
Restated total equity 112,858,264 (18,064,487) 4,299,329 342,710 99,435,816
at 1 July 2019
- - -
Loss for the year (4,223,791) (4,223,791)
Other comprehensive loss - (6,547) - - (6,547)
- - -
Total comprehensive loss (4,230,338) (4,230,338)
for the year
- -
Shares/options issued 12,816,363 2,247,469 15,063,832
during the year
Transaction costs on (696,642) - - - (696,642)
share issue
- - -
Share-based payments 370,332 370,332
Transfer from share-based 713,042 - - (713,042) -
payments
Balance at 30 June 2020 125,691,027 (22,294,825) 6,546,798 - 109,943,000
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Consolidated Statement of Cash Flows

FOR THE YEAR ENDED 30 JUNE 2021

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Consolidated
Notes
2021 $ 2020 $
Inflows/(Outflows)
Cash flows from operating activities
Payments to suppliers and employees (4,828,127) (6,749,618)
Interest and finance costs paid (10,872) (26,236)
Government grants received 61,918 50,000
Interest received 74,990 195,644
Net cash used in operating activities 8 (4,702,091) (6,530,210)
Cash flows from investing activities
Payments for exploration and evaluation expenditure (6,577,778) (4,434,688)
Payments for plant and equipment (4,172,677) (14,441,545)
Research and development tax offset in relation to 506,025 1,785,578
exploration assets
Payments for other financial assets at amortised cost 10 (82,000,000) -
Net cash used in investing activities (92,244,430) (17,090,655)
Cash flows from financing activities
Proceeds from issue of shares and options 121,531,669 15,063,831
Payments for share issue costs (5,755,020) (696,642)
Proceeds from borrowings 14 - 1,471,289
Repayment of borrowings 14 (9,078) (1,462,210)
Advance from Director - 455,169
Principal element of lease payments (203,024) (146,906)
Net cash provided by financing activities 115,564,547 14,684,531
Net increase/(decrease) in cash held 18,618,026 (8,936,334)
Foreign exchange loss (4,447) (607)
Cash and cash equivalents at the beginning of the period 9,453,516 18,390,457
Cash and cash equivalents at the end of the period 7 28,067,095 9,453,516
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The accompanying notes form part of these consolidated financial statements.

The accompanying notes form part of these consolidated financial statements.

52 | Hastings Technology Metals

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Financial Statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation

applied to all years presented unless Cost is based on the fair values of the otherwise stated. The consolidated consideration given in exchange for financial statements are for the assets. consolidated entity consisting of The Group is a listed public company, Hastings Technology Metals Ltd and incorporated and operating in Australia. its subsidiaries. Hastings Technology Metals Ltd is a for-profit entity for the The entity’s principal activity is exploration for and development of purpose of preparing the consolidated financial statements. natural resources.

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law.

The Group is a listed public company, incorporated and operating in Australia. The entity’s principal activity is exploration for and development of natural resources.

The accounting policies detailed The financial report has also been below have been consistently prepared on a historical cost basis.

(b) Statement of Compliance

The financial report was authorised for issue by the Board on 30 September 2021. The Board has the power to amend the consolidated financial statements after their issue.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the consolidated financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

(c) Effects of Changes in Accounting Policy

A number of amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of these amended standards. The Group has not applied any standards and amendment for the first time for their annual reporting period commencing 1 July 2020.

New standards not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2021 reporting period and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations is not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions.

(a) Going concern

The consolidated financial statements have been prepared on a going concern basis which contemplates the realisation of assets and the settlement of liabilities in the normal course of business.

As disclosed in the consolidated financial statements, the Group incurred a comprehensive loss of $6,334,423, had net cash outflows from operating activities of $4,702,091. Furthermore, the

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(b) Basis of consolidation

Group had outstanding commitments for construction contracts of $13,129,306, of which $8,943,421 are cancellable at the Group’s discretion. The outstanding commitments are all due within 12 months.

The consolidated financial statements incorporate the assets and liabilities of Hastings Technology Metals Ltd (“Company” or “parent entity”) as at 30 June 2021 and the results of subsidiaries for the year then ended. Hastings Technology Metals Ltd and its subsidiaries are referred to in this financial report as the Group or the Consolidated Entity. The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated.

Considering the Group’s positive net cash position of $109,954,906 (refer to Note 8(b)), and the forecasted cash outflows over the next 12 months, the Directors expect that the Group can continue its normal business activities, subject to any changes to the underlying assumptions on which those forecasts have been made. This includes the ability to extinguish liabilities as and when they fall due without the need for additional funding. The Directors therefore have determined it is appropriate for the financial statements to be prepared on a going concern basis.

A group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and can affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

The development of the Yangibana Project is dependent on the Group securing additional funding, the current status of which is set out below:

• The Northern Australia Infrastructure Facility (“NAIF”), an Australian Government implemented initiative, is currently undertaking a review of the Group for potential infrastructure debt financing;

(c) Critical accounting judgements and key sources of estimation uncertainty

• The Group received confirmation of in-principal eligibility from Finnerva Oyj for project financing of up to $93.8 million (refer to 1 July 2020 ASX announcement “Hastings Receives In-Principle Eligibility From Finnvera For The Project Financing Of Yangibana Rare Earth Project);

The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

• To assist the Group raise project debt capital, KPMG have been engaged for support with, but not limited to, senior debt and any form of junior capital including but not limited to subordinated and mezzanine finance, hybrid debt and debt like capital;

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in which the estimate is revised if it affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

• The Group has issued HASO share options with an expiry date of 12 April 2022, which if exercised by this date, would supplement the Group’s cash balance by a further $31.6 million; and

Deferred exploration expenditure:

• The Directors are of the view that the Group will be able to raise further equity capital.

The Directors continually assess the Group’s exploration projects

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54 | Hastings Technology Metals

Annual Report 2021 | 55

to determine the existence of any Government grants relate to the value plus transaction costs that are indications of impairment. Where stimulus grants paid by the Australian directly attributable to the acquisition any such indications are present, an and Singaporean Governments to of the financial asset. Subsequent impairment assessment is conducted boost employer cash flow impacted by measurement of the term deposits is under AASB 6 Exploration for and COVID-19. The grants are recognised at amortised cost. Interest income from Evaluation of Mineral Resources and when received. the term deposit is included in other any resulting impairment is expensed income using the effective interest rate (d) Cash and cash equivalents to profit and loss. During the current method. Any gain or loss arising on financial year, no impairment triggers derecognition is recognised directly in Cash comprises cash at bank and in were identified. profit or loss.

Cash comprises cash at bank and in were identified. hand. Cash equivalents are short term, highly liquid investments that are Property, plant, and equipment: readily convertible to known amounts The Directors continually assess the of cash and which are subject to an Group’s property, plant, and equipment insignificant risk of changes in value. to determine the existence of any Cash and cash equivalents exclude indications of impairment. Where term deposits with banks which any such indications are present, an mature beyond three months which are impairment assessment is conducted disclosed as other financial assets at under AASB 136 Impairment of Assets amortised cost. and any resulting impairment is expensed to profit and loss. During the (e) Trade and other receivables current financial year, no impairment Trade receivables are amounts due from triggers were identified.

The credit risk on term deposits with maturity terms >3 months is considered low as the counterparties are banks with high credit ratings assigned by international credit rating agencies. The Group deposits funds with financial institutions rated A- and above.

(g) Property, plant, and equipment

Property, plant, and equipment is stated at historical cost less depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains or losses on qualifying cash flow hedges of foreign currency purchases of property, plant, and equipment.

Trade receivables are amounts due from triggers were identified. customers for goods sold or services performed in the ordinary course of Share-based payment transactions: business. They are generally due for The Group measures the cost of equitysettlement within 30 days and therefore settled transactions by reference to are all classified as current. Other the fair value of the services provided. receivables are amounts generally Where the services provided cannot arising from transactions outside the be reliably estimated fair value is usual operating activities of the Group. measure by reference to the fair value Receivables are recognised initially of the equity instruments at the date at at fair value and then subsequently which they are granted. The fair value measured at amortised cost, less of share-based payments is determined provision for credit losses. As at 30 using either a Black-Scholes model or external valuations, refer to Note 4 and June 2021 the Group has determined Note 16. that the expected provision for credit

Receivables are recognised initially at fair value and then subsequently measured at amortised cost, less provision for credit losses. As at 30 June 2021 the Group has determined that the expected provision for credit losses is not material. In determining the recoverability of a trade or other receivable using the expected credit loss model, the Group performs a risk analysis considering the type and age of the outstanding receivables, the creditworthiness of the counterparty, contract provisions, and timing of payments.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

Issued options:

The Group issued options in conjunction with share placements and rights issues. The fair values of the options were determined using a Black-Scholes model, refer to Note 16.

The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the Group commencing from the time the asset is held ready for use.

(a) Other income recognition

(f) Other financial assets at amortised cost

Other income is recognised to the extent that it is probable that the economic benefits will flow to the Group and can be reliably measured. The current sources of other income are interest income and government grants.

Term deposits with maturity terms >3 month are classified by the Group as other financial assets at amortised cost. They are recognised as financial assets on contract execution and derecognised on term deposit maturity or when the term is broken and funds transferred to cash and cash equivalents.

Plant and equipment are depreciated over a period ranging from 2 to 20 years and in the case of mining plant over the life-of-mine, currently projected to be 15 years. The accommodation village is currently under construction.

(b) Interest income

Interest income is recognised on a time proportionate basis that considers the effective yield on the financial asset.

Software is depreciated over a period At initial recognition, the Group ranging from 3 to 5 years. measures a financial asset at its fair

(c) Government grants

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The assets’ residual values and useful larger than the relevant area lives are reviewed, and adjusted of interest) is estimated where appropriate, at the end of each to determine the extent of the reporting period. impairment loss (if any). Where an impairment loss subsequently Gains and losses on disposals are reverses, the carrying amount of determined by comparing proceeds with the asset is increased to the revised carrying amount. These are included in estimate of its recoverable amount, profit or loss. but only to the extent that the increased carrying amount does (h) Exploration and evaluation not exceed the carrying amount that Exploration and evaluation expenditures would have been determined had in relation to each separate area no impairment loss been recognised for of interest are recognised as an the asset in previous years.

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• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

A decision to proceed with development in respect of a particular area of interest is determined with reference to when the commercial viability and technical feasibility are demonstrated. Once a decision to proceed has occurred, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

• I. the rights to tenure of the area of interest are current; and

II. at least one of the following conditions is also met:

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

• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

Research and development tax offsets received are accounted for as a reduction of exploration and evaluation costs.

b) exploration and evaluation activities in the area of interest have not at the

(i) Income tax

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

reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

• when the deductible temporary difference is associated with investments in subsidiaries, associates, or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching, and sampling and associated activities and an allocation of depreciation and amortised of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Research and development tax offsets are recognised on receipt against deferred exploration expenditure.

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

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

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

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no

• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to

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56 | Hastings Technology Metals

Annual Report 2021 | 57

the year when the asset is realised asset’s recoverable amount is the higher or the liability is settled, based on tax of its fair value less costs of disposal rates (and tax laws) that have been and its value in use and is determined enacted or substantively enacted at the for an individual asset, unless the balance date. asset does not generate cash inflows that are largely independent of those Income taxes relating to items from other assets or groups of assets recognised directly in equity are and the asset’s value in use cannot be recognised in equity and not in profit estimated to be close to its fair value. or loss. In such cases the asset is tested for impairment as part of the cashDeferred tax assets and deferred tax generating unit to which it belongs. liabilities are offset only if a legally When the carrying amount of an asset enforceable right exists to set off or cash-generating unit exceeds its current tax assets against current tax recoverable amount, the asset or liabilities and the deferred tax assets cash-generating unit is considered and liabilities relate to the same taxable impaired and is written down to its entity and the same taxation authority. recoverable amount.

(j) Other taxes

In assessing value in use, the estimated Revenues, expenses, and assets are future cash flows are discounted to recognised net of the amount of Goods their present value using a pre-tax and Services Tax (“GST”) except: discount rate that reflects current market assessments of the time value • when the GST incurred on a purchase of of money and the risks specific to the goods and services is not recoverable asset. Impairment losses relating to from the taxation authority, in which continuing operations are recognised case the GST is recognised as part in those expense categories of the cost of acquisition of the asset consistent with the function of the or as part of the expense item as impaired asset unless the asset is applicable; and carried at revalued amount (in which case the impairment loss is treated as • receivables and payables, which a revaluation decrease). are stated with the amount of GST included.

An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable

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

amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase.

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

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

(k) Impairment of assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An

After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a

systematic basis over its remaining useful life.

(l) Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the reporting period that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.

(m) Lease accounting

The Group leases various offices, equipment, and software with varying lengths from 1 month to 4 years, some with extension options.

Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets. Leased assets may not be used as security for borrowing purposes.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed payments, less any lease incentives receivable.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

(s) Lease accounting (continued)

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security, and conditions.

To determine the incremental borrowing rate, the Group:

• where possible, uses recent third-party

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financing received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received;

are leases with a lease to employees (including senior term of 12 months or less. executives) and Directors of the Group in the form of share-based (t) Provisions payments, whereby employees and Directors receive performance Provisions are recognised when the rights over shares which will vest Group has a present obligation (legal or in the event performance hurdles constructive) as a result of past events, it are met (equity-settled transactions).

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group; which does not have recent third-party financing; and

The cost of these equity-settled transactions is measured by reference to the fair value of the equity instruments at the date at which they are granted.

• makes adjustments specific to the lease, for example for term, country, currency, and security.

When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.

The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Rehabilitation provision

The Group has obligations to dismantle and remove certain items of property, plant and equipment and to restore and rehabilitate the land on which they sit. A provision is raised for the estimated cost of settling the rehabilitation and restoration obligations existing at balance date, discounted to present value using an appropriate pre-tax discount rate.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability;

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

• any lease payments made at or before the commencement date less any lease incentives received;

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

• any initial direct costs; and

• restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

If an equity-settled award is cancelled due to market conditions, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. If an equity-settled award is cancelled due to non-market conditions, it is treated as if it had vested on the date of cancellation, and no further expense is recognised. Any vested balances recognised in the share-based payment reserve is transferred and offset against retained earnings. However, if a new award is

An increase in the provision associated with unwinding of the discount rate is recognised as a finance cost.

Payments associated with shortwith unwinding of the discount rate is term leases are recognised on a recognised as a finance cost. straight-line basis as an expense in profit or loss (unless capitalised as (u) Share-based payment transactions a component of Plant Construction in Progress). Short-term leases The Group provides incentives

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

(x) Interest in a joint operation

substituted for a cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The Group has an interest in a joint presented in the statement of profit or venture that is a joint operation. A joint loss on a net basis within other income venture is a contractual arrangement or other expenses. whereby two or more parties undertake an economic activity that is subject to Non-monetary items that are measured joint control. A joint operation involves at fair value in a foreign currency are use of assets and other resources of the translated using the exchange rates venturers rather than establishment of at the date when the fair value was a separate entity. The Group recognises determined. Translation differences on its interest in the joint operation by assets and liabilities carried at fair value recognising the assets that it controls are reported as part of the fair value and the liabilities that it incurs. The gain or loss. For example, translation Group also recognises the expenses differences on non-monetary assets that it incurs and its share of the income and liabilities such as equities held that it earns from the sale of goods or at fair value through profit or loss are services by the joint operation. recognised in profit or loss as part of the fair value gain or loss and translation (y) Segment reporting differences on non-monetary assets such as equities classified as availableOperating segments are reported in a manner consistent with the internal for-sale financial assets are recognised in other comprehensive income.

(u) Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(v) Earnings per share

Basic earnings per share is calculated as net profit/loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

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 Hastings Technology Metals Ltd.

(iii) Group Companies

The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

Diluted earnings per share is calculated as net profit/loss attributable to members of the parent, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;

(z) Foreign currency translation

(i) Functional and presentation

• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Australian dollar ($), which is Hastings Technology Metals Limited’s functional and presentation currency.

• income and expenses for each statement of profit or loss and other comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(ii) Transactions and balances

(w) Parent entity financial information

Foreign currency transactions are The financial information for the translated into the functional currency parent entity, Hastings Technology using the exchange rates at the dates Metals Ltd, disclosed in Note 27 has of the transactions. Foreign exchange been prepared on the same basis as the consolidated financial statements, gains and losses resulting from the settlement of such transactions and except as set out below: from the translation of monetary (i) Investments in subsidiaries, assets and liabilities denominated associates, and joint venture entities in foreign currencies at year end exchange rates are generally recognised Investments in subsidiaries are in profit or loss. accounted for at cost in the financial statements of Hastings Technology Foreign exchange gains and losses Metals Ltd. that relate to borrowings are presented in the statement of profit or loss,

• all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated

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exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.

construction of qualifying assets, Investment income earned on the where they are added to the cost of temporary investment of specific the qualifying asset until such time as borrowings pending their expenditure the assets are substantially ready for on qualifying assets is deducted their intended use or sale. Where funds from the borrowing costs eligible are used to finance a qualifying asset for capitalisation. form part of general borrowings, the (bb) Comparatives amount capitalised is calculated using a weighted average of rates applicable Where applicable, certain comparatives to relevant borrowings during the have been adjusted to conform with construction period.

(aa) Finance Costs

Finance costs principally represent interest expense, bank charges and the unwinding of discounts on lease liabilities. They are recognised in the statement of profit or loss except when directly attributable with the

Where applicable, certain comparatives have been adjusted to conform with current year presentation.

NOTE 2: OTHER INCOME

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Consolidated
2021 $ 2020 $
Interest income 113,997 176,707
Government grants 61,918 50,000
175,915 226,707
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NOTE 3: EMPLOYEE BENEFITS EXPENSE

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Consolidated
2021 $ 2020 $
Wages and salaries 3,758,635 4,235,703
Superannuation 286,908 331,907
Payroll tax 186,125 259,540
Recruitment 166,693 12,768
Provision for annual and long service leave 89,645 (1,344)
Other employee expenses 54,215 56,754
Geologist and technical costs capitalised (2,643,877) (3,068,932)
1,898,344 1,826,396
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021 NOTE 4: SHARE-BASED PAYMENTS

(a) Performance rights plan

in retaining and attracting highly skilled Performance rights are granted under and experienced people. Under the PR the PR Plan for no consideration and Plan, participants are granted rights carry no dividend or voting rights. When which only vest if certain performance exercisable, each performance right is standards are met (refer to the convertible into one ordinary share. Remuneration Report for performance Refer to Note 16 for movements in the conditions). Participation in the plan is at the Board’s discretion with no amount of performance rights on hand guarantee to receive any benefits. during the year. All performance rights have a nil exercise price.

The establishment of the Company’s Performance Rights Plan (“PR Plan”) was approved by shareholders at the 2012 annual general meeting and last re-approved at the 2019 annual general meeting. The PR Plan is designed to provide eligible participants with an opportunity to share in the growth of the Company and to assist the Group

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Consolidated
2021 $ 2020 $
Director granted performance rights 1,096,249 78,189
Employee granted performance rights 994,785 292,143
2,091,034 370,332
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NOTE 5: INCOME TAX Consolidated
2021 $ 2020 $
- -
(a) Income tax expense
Current tax - -
Deferred tax - -
(b) Income tax recognised in the statement of profit or loss and other
comprehensive income
Loss from ordinary activities before tax (6,333,152) (4,223,791)
Income tax using the Group’s domestic tax rate of 26.0% (2020: 27.5%) (1,646,620) (1,161,543)
Share-based payments 543,669 101,841
Other non-deductible items 262 83
Unused tax losses for which no deferred tax asset has been recognised 1,102,689 1,059,619
- -
Income tax benefit reported in the consolidated statement of profit or loss
and other comprehensive income
(c) Deferred tax balances
Deferred tax assets comprise: 9,589,017 9,251,887
Tax losses carried forward 208,972 100,439
Accrued expenses 1,683,218 595,052
Share issue costs 11,481,207 9,947,378
Deferr e d tax liabilities comprise:
Capitalised exploration costs (11,481,207) (9,947,378)
(11,481,207) (9,947,378)
(d) Income tax expense not brought to account in equity during the year
Share issue costs (1,543,105) (191,576)
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(e) Tax losses

Hastings Technology Metals Ltd and its wholly-owned Australia subsidiaries formed a tax consolidated group as of 1 July 2017 and have applied the tax consolidation legislation which means that these entities are taxed as a single entity. As a result, the deferred tax assets and deferred tax liabilities of these entities have been offset in the consolidated financial statements.

brought to account will only be brought to account if:

The Group has total carried forward tax losses of $54,688,429 (2020: $41,419,394) available for offset against future assessable income of the Group. The deferred tax asset in respect of these losses has been used to offset a deferred tax liability. The net deferred tax asset attributable to residual tax losses of $4,629,975 (2020: $2,138,446) has not been brought to account.

• Future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised; and

• The conditions for deductibility imposed by the relevant tax legislation continue to be complied with and no changes in tax legislation adversely affect the Group in realising the benefit.

(f) Tax consolidation

The benefit of deferred tax assets not

NOTE 6: EARNINGS PER SHARE

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2021 2020
Cents per Share Cents per Share
Basic loss per share:
Continuing operations (0.48) (0.43)
2021 $ 2020 $
Loss used in the calculation of total basic loss per share reconciles
to net loss in the statement of profit or loss and other comprehensive
income as follows :
Loss used in the calculation of basic loss per share (6,333,152) (4,223,791)
Loss used in the calculation of basic loss per share from continuing (6,333,152) (4,223,791)
operations
Number of Shares
The earnings and weighted average number of ordinary shares used in the 1,332,302,062 985,582,644
calculation of basic loss per share is as follows:
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The Group has 37,965,000 (2020: 20,250,000) performance rights on issue and a further 126,651,415 (2020: 120,060,577) listed options. The performance rights and options are not considered dilutive as the Group has a net loss.

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NOTE 7: CASH AND CASH EQUIVALENTS

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2021 $ 2020 $
Cash at bank and on hand 22,067,095 1,953,516
Short-term deposits 6,000,000 7,500,000
28,067,095 9,453,516
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Cash at bank earns interest at floating

The Group did not engage in non-cash • A $2,000,000 short-term working financing activities. capital overdraft facility overdrawn to a maximum of $1,380,320 for 20 days The Group’s only borrowing facility in July 2019. The facility expired in during the year ended 30 June 2021 was July 2019; and

rates based on daily bank deposit rates.

Short-term deposits are made for The Group’s only borrowing facility in July 2019. The facility expired in varying periods between one day during the year ended 30 June 2021 was July 2019; and and three months, depending on the a $9,078 insurance premium funding immediate cash requirements of facility carried forward from 2020. The • A $9,078 annual insurance premium the Group, and earn interest at the borrowing facility expired in July 2020. funding facility, refer to Note 14. respective short-term deposit rates.

During the year ended 30 June Short term deposits maturing after three 2020 the following borrowing months are shown as financial assets facilities existed: at amortised costs (refer Note 10).

NOTE 8: CASH FLOW INFORMATION

(a) Reconciliation of loss for the year to net cash flows from operating activities

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2021 $ 2020 $
Loss for the year (6,333,152) (4,223,791)
Share-based payments expense 2,091,034 370,332
Depreciation – plant and equipment 130,484 129,527
Depreciation – right-of-use assets 187,459 138,394
Loss on sale of assets - 810
Changes in working capital
Increase in trade and other receivables (716,422) (2,497,093)
Decrease in trade and other payables (61,494) (448,389)
Net cash (4,702,091) (6,530,210)
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(b) Net Cash reconciliation

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2021 $ 2020 $
Cash and cash equivalents 28,067,095 9,453,516
-
Other financial assets at amortised costs 82,000,000
(Term deposits expiring <12 months)
Lease Liability (112,189) (315,214)
-
Borrowings (9,078)
Net cash 109,954,906 810
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2021 $ 2020 $
Cash and cash equivalents 28,067,095 9,453,516
-
Gross assets – fixed interest rates 82,000,000
Gross debt – fixed interest rates (112,189) (334,292)
Net Cash used in operating activities 109,954,906 9,129,224
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Liabilities from financing activities Other assets
Borrowings Leases Subtotal Cash Other financial Total
$ $ $ $ assets at $
amortised costs
$
- - - -
Net cash as at 1 July 18,390,457 18,390,457
2019
- - -
Recognised on adoption (344,364) (344,364) (344,364)
of AASB 16
- -
(344,364) (344,364) 18,390,457 18,046,093
-
Cash flows 1,462,211 146,905 1,609,116 (8,936,334) (7,327,218)
- - -
New borrowings (1,471,289) (1,471,289) (1,471,289)
New leases - (117,755) (117,755) - - (117,755)
Foreign exchange loss - - - (607) - (607)
-
Net (debt)/cash as at 30 (9,078) (315,214) (324,292) 9,453,516 9,129,224
June 2020
-
Cash flows 9,078 203,025 212,103 18,618,026 18,830,129
- - - -
New other financial 82,000,000 82,000,000
assets at amortised costs
- - - -
Foreign exchange loss (4,447) (4,447)
-
Net (debt)/cash as at 30 (112,189) (112,189) 28,067,095 82,000,000 109,954,906
June 2021
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NOTE 9: TRADE AND OTHER RECEIVABLES

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2021 $ 2020 $
Prepayments [1] 4,336,214 3,660,730
GST recoverable 118,641 74,639
Interest receivable 50,683 11,676
Other receivables 106,636 144,656
Trade and other receivables 4,612,174 3,891,701
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1 Prepayments consist predominately of debt funding transaction costs to later be offset against the fair value of future debt associated with the transaction costs. After recognition of the debt, the transaction costs are to be subsequently measured at amortised cost using the effective interest method. Should such debt not eventuate, the transaction costs are to be transferred to the Profit and Loss and expensed in full.

The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance. No impairment losses were recognised against the prepayments, GST recoverable, interest receivable, and other receivables.

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NOTE 10: OTHER FINANCIAL ASSETS AT AMORTISED COST

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2021 $ 2020 $
-
Term deposits >3 months 82,000,000
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NOTE 11: PLANT AND EQUIPMENT

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Plant and Equipment Software Construction in Progress Total
Cost
Opening balance, 1 July 2020 529,757 453,986 42,323,866 43,307,609
- -
Foreign exchange (690) (690)
- -
Disposals (8,967) (8,967)
Additions 60,160 1,976 3,476,791 3,538,927
Closing balance, 30 June 2021 580,260 455,962 45,800,657 46,836,879
Opening balance, 1 July 2019 469,888 454,046 30,591,242 31,515,176
- -
Foreign exchange (116) (116)
-
Disposals (1,008) (60) (1,068)
Additions 60,993 - 11,732,624 11,793,617
Closing balance, 30 June 2020 529,757 453,986 42,323,866 43,307,609
Accumulated depreciation
-
Opening balance, 1 July 2020 (214,883) (54,470) (269,353)
Foreign exchange 441 - - 441
- -
Disposals 8,967 8,967
-
Depreciation (93,119) (37,365) (130,484)
Closing balance, 30 June 2021 (298,594) (91,835) - (390,429)
-
Opening balance, 1 July 2019 (118,074) (21,576) (139,650)
Foreign exchange 169 - - 169
Disposals 199 - - 199
-
Depreciation (97,177) (32,894) (130,071)
Closing balance, 30 June 2020 (214,883) (54,470) - (269,353)
Book value 30 June 2021 281,666 364,127 45,800,657 46,446,450
Book value 30 June 2020 314,874 399,516 42,323,866 43,038,256
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NOTE 12: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE

Costs carried forward in respect of areas of interest in the following phases:

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2021 $ 2020 $
Exploration and evaluation phase – at cost
Balance at beginning of year 57,224,056 55,087,366
Exploration expenditure 7,600,477 3,922,268
-
Rehabilitation provision 385,728
Less research and development tax offset (506,025) (1,785,578)
Total deferred exploration and evaluation expenditure 64,704,236 57,224,056
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The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phase is dependent on the successful development and commercial exploitation or sale of the respective areas.

NOTE 13: TRADE AND OTHER PAYABLES

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2021 $ 2020 $
Trade payables [1] 1,685,660 2,509,361
Accruals 803,739 442,641
Other payables 203,084 455,169 [2]
Total trade and other payables 2,692,483 3,407,171
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1 Trade payables are non-interest bearing and are normally settled on 45-day terms.

2 In December 2019, the Chairman, Mr Charles Lew subscribed for $455,169 shares in a share placement. The shares were subject to shareholder approval, with the funds received from Mr Lew treated as other payables until approved. Shareholder approval was received at the 2020 Annual General Meeting.

NOTE 14: BORROWINGS

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2021 $ 2020 $
-
Unsecured – payable within 1 year [1] 9,078
-
Total borrowings 9,078
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1 The Group entered into premium funding arrangements for its 2020 insurance obligations. The funding was short-term and payable within 12 months.

Movement in borrowings

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2021 $ 2020 $
-
Balance as at 1 July 9,078
-
Add: New borrowings 1,471,289
Less: Principal repayment (9,078) (1,462,211)
Balance as at 30 June - 9,078
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NOTE 15: ISSUED CAPITAL

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2021 $ 2020 $
Ordinary shares
At 1 July 125,691,027 112,858,264
Shares issued – placement 121,008,863 9,939,063
Shares issued – rights issue 914,500 2,877,300
Shares issued on vesting of performance rights 595,925 713,042
Exercised options 206 -
Less share issue costs (5,935,019) (696,642)
At 30 June 242,275,502 125,691,027
2021 $ 2020 $
Movements in ordinary shares on issue
At 1 July 1,034,649,093 917,161,676
Movements during the period
Shares issued on vesting of performance rights 4,030,000 16,054,333
Shares issued – share placement 692,460,173 80,733,084
Shares issued – rights issue 7,316,000 20,700,000
Exercised options 662 -
At 30 June 1,738,455,928 1,034,649,093
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Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

NOTE 16: RESERVES

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2021 $ 2020 $
Listed options 6,790,066 6,546,798
-
Performance rights 1,495,109
8,285,175 6,546,798
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Listed options carry no voting rights and carry no right to dividends:

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2021 $ 2020 $
Options
At 1 July 6,546,798 4,299,329
Options issued – placement 243,309 1,605,769
-
Options issued – rights issue 641,700
Exercised options (41) -
At 30 June 6,790,066 6,546,798
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The listed call options were valued using the Black-Scholes Option Pricing Model utilising the following parameters:

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Placement Placement Placement Rights Issue
18 December 2019 1 October 2020 30 November 2020
Price per option $0.040 $0.036 $0.040 $0.062
Number of options 40,366,543 5,000,000 1,591,500 10,350,000
Volatility 82.0% 98.0% 82.0% 64.0%
Reserve Bank of Australia 0.8% 0.2% 0.8% 1.5%
cash rate
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Movements in listed call options

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2021 $ 2020 $
At 1 July 120,060,577 69,344,034
Options issued – placement 6,591,500 40,366,543
-
Options issued – rights issue 10,350,000
Exercised options (662) -
At 30 June 126,651,415 120,060,577
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The following table illustrates the number (No.) and weighted average exercise prices of and movements in listed call options during the year:

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2021 Weighted average 2020 Weighted average
No. exercise price No . exercise price
2021 $ 2020 $
Outstanding at the beginning 120,060,577 $0.25 69,344,026 $0.25
of the year
Issued during the year 6,591,500 $0.25 50,716,543 $0.25
Exercised during the year 662 $0.25 - -
Outstanding at the end of the year 126,651,415 $0.25 120,060,577 $0.25
Exercisable at the end of the year 126,651,415 $0.25 120,060,577 $0.25
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All options have an expiry date of 12 April 2022.

Performance rights

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2021 $ 2020 $
Movements in the share-based payments reserve were as follows:
-
Balance 1 July 342,710
-
Performance rights lapsed – transferred from accumulated losses 149,352
Value of performance rights issued during the year 2,091,034 220,980
Performance rights vested – transferred to issued capital (595,925) (713,042)
Balance 30 June 1,495,109 -
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The share-based payments reserve is used to record the value of equity benefits provided to employees and directors as part of remuneration.

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2021 $ 2020 $
Movements in performance rights were as follows:
At 1 July 20,250,000 19,533,333
-
Performance rights cancelled during the year (20,250,000)
Performance rights issued during the year 43,120,000 17,474,000
Performance rights vested during the year (4,030,000) (16,054,333)
Performance rights lapsed during the year (1,125,000) (703,000)
At 30 June 37,965,000 20,250,000
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i. Details of the Directors’ issued performance rights during the period are as follows:

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Date granted Value per share Performance period ended
27 November 2019 6.0 cents 31 December 2020
27 November 2019 6.0 cents 31 December 2021
27 November 2019 6.0 cents 31 December 2020
30 November 2020 15.5 cents 31 December 2021
30 November 2020 15.5 cents 31 December 2022
30 November 2020 15.5 cents 31 December 2023
30 November 2020 15.5 cents 31 December 2020
30 November 2020 15.5 cents 31 December 2021
30 November 2020 15.5 cents 31 December 2022
1 January 2021 18.5 cents 31 December 2021
1 January 2021 18.5 cents 31 December 2022
1 January 2021 18.5 cents 31 December 2023
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Shareholders at the Annual General Meeting held on 30 November 2020 approved the granting of 17,000,000 performance rights to Directors. The performance rights, which are subject to a three-year performance period, were valued based on the share price on grant date at 15.5 cents per performance right based on the Black-Scholes Model and replaced the cancelled 17,000,000 performance rights held as at 30 June 2020. Additionally, on Mr Bruce McFadzean’s appointment as a Director on 1 January 2021, 2,500,000 performance rights valued at 18.5 cents per performance right were granted to Mr McFadzean on the same terms as the existing 17,000,000 Director performance rights.

An additional 2,000,000 performance rights were issued to the Chairman, Mr Charles Lew, on 30 November 2020 on the same terms as the employee performance rights issued 23 October 2020 (refer ii below).

At the 2019 Annual General Meeting shareholders approved the granting of 17,000,000 performance rights to Directors. The performance rights were valued at $0.06 per performance right based on the Black-Scholes Model with a nil exercise price. As at 30 June 2020, the Directors assessed the performance conditions for these performance rights as being unachievable within the performance period due to COVID-19 and therefore no expense has been recognised for the year ended 30 June 2020 in relation to these performance rights. These performance rights were subsequently cancelled and replaced at the 30 November 2020 Annual General Meeting.

An expense of $1,096,249 was recognised for the year ended 30 June 2021 (2020: $78,189) in relation to the Directors’ performance rights.

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i. Details of the employees’ issued performance rights during the period are as follows:

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Date granted Value per share Performance period ended
4 June 2019 17.0 cents 31 December 2020
4 June 2019 17.0 cents 31 December 2021
23 October 2020 14.0 cents 31 December 2020
23 October 2020 14.0 cents 31 December 2021
23 October 2020 14.0 cents 31 December 2022
19 January 2021 21.0 cents 31 December 2021
19 January 2021 21.0 cents 31 December 2022
22 January 2021 23.5 cents 31 December 2020
22 January 2021 23.5 cents 31 December 2021
22 January 2021 23.5 cents 31 December 2022
3 February 2021 22.0 cents 31 December 2021
3 February 2021 22.0 cents 31 December 2022
3 February 2021 22.0 cents 31 December 2023
12 March 2021 20.5 cents 31 December 2021
12 March 2021 20.5 cents 31 December 2022
14 April 2021 19.0 cents 31 December 2021
14 April 2021 19.0 cents 31 December 2022
29 April 2021 18.5 cents 31 December 2021
29 April 2021 18.5 cents 31 December 2022
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The vesting of the employee performance rights is conditional on non-market based performance conditions. These performance conditions are key objectives specific to each employee.

The Directors assessed the performance conditions for the 3,250,000 employee performance rights existing as at 30 June 2020 as being unachievable within the performance period due to COVID-19 and were subsequently cancelled. New employee performance rights with revised performance conditions were issued as replacements.

An expense of $994,785 (2020: $292,143) was recognised during the year in relation to the employee performance rights.

NOTE 17: FINANCIAL ASSETS AND FINANCIAL LIABILITIES

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2021 $ 2020 $
Financial assets
Cash and cash equivalents 28,067,095 9,453,516
Receivables 4,612,174 3,891,701
Other financial assets at amortised cost 82,000,000
114,679,269 13,345,217
Financial Liabilities
Trade and other payables 2,692,483 3,407,171
Lease liability 112,189 315,214
-
Borrowings 9,078
2,804,672 3,731,463
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The carrying amount of the financial assets and liabilities approximates their fair values.

The following table details the expected maturity for the Group’s non-derivative financial assets and liabilities. These have been drawn up based on undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different period.

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Weighted Less than 1 1 – 3 3 months 1 – 5 5+
average effective month months – 1 year years years
interest rate
2021 % $ $ $ $ $
Assets
- - - - - -
Non-interest bearing
Variable interest rate - 22,067,095 - - - -
instruments
Fixed interest rate instruments 0.3% - 6,000,000 82,000,000 - -
- -
22,067,095 6,000,000 82,000,000
Liabilities
Lease liability 4.2% 20,704 41,669 49,816 - -
- - - - - -
Borrowings
- -
20,704 41,669 49,816
Weighted Less than 1 1 – 3 3 months 1 – 5 5+
average effective month months – 1 year years years
interest rate
2020 % $ $ $ $ $
Assets
- - - - - -
Non-interest bearing
Variable interest rate - 1,953,516 - - - -
instruments
Fixed interest rate instruments 1.0% 1,500,000 6,000,000 - - -
- - -
3,453,516 6,000,000
Liabilities
Lease liability 4.1% 10,009 20,157 172,859 112,189 -
Borrowings 4.8% 9,078 - - - -
-
19,087 20,157 172,859 112,189
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NOTE 18: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

the above risks, their objectives, policies, The Group’s principal financial instruments and processes for measuring and comprise cash and term deposits. The main managing risk, and the management purpose of the financial instruments is to of capital. earn the maximum amount of interest at a low risk to the Group.

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

• Credit risk

The Board has overall responsibility • Liquidity risk for the establishment and oversight • Interest rate risk of the risk management framework. • Market risk The Board reviews and agrees policies for managing each of these risks as This note presents the information summarised below. about the Group’s exposure to each of

The Directors consider that the carrying value of the financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.

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(a) Credit risk management

(a) Credit risk management of investment grade and above. The credit risk on liquid funds is This information is supplied by limited because the counterparties Credit risk refers to the risk that independent rating agencies where are banks with high credit ratings a counterparty will default on its available and, if not available, the assigned by international credit contractual obligations resulting Group uses publicly available financial rating agencies. The Group deposits in financial loss to the Group. The information and its own trading record funds with financial institutions rate A- Group maintains a policy of dealing to rate its major customers. The and above. with creditworthy counterparties and Group’s exposure and the credit ratings mitigates the risk of financial loss Term deposits with maturity terms of of its counterparties are continuously from default by a counterparty by >3 months were held with the following monitored and the aggregate value obtaining sufficient collateral where of transactions concluded is spread financial institutions: appropriate. The Group transacts with amongst approved counterparties. entities that are rated the equivalent

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Name Standard & Poor’s Credit 2021 2020
Rating $ $
Westpac Banking AA- 52,000,000 -
Corporation
National Australia Bank AA- 30,000,000 -
82,000,000
The carrying amount of financial assets who have built an appropriate liquidity any undrawn facilities at its disposal as
recorded in the consolidated financial risk management framework for the at balance date.
statements, net of any allowance management of the Group’s short,
for losses, represents the Group’s medium and long-term funding and The tables below reflect an
undiscounted contractual maturity
maximum exposure to credit risk liquidity management requirements.
analysis for financial liabilities.
without taking account of the value of The Group manages liquidity risk by
any collateral obtained. maintaining adequate reserves, banking
facilities and reserve borrowing facilities
(b) Liquidity risk management
by continuously monitoring forecast
and actual cash flows and matching
Ultimate responsibility for liquidity risk
the maturity profiles of financial assets
management rests with the Board,
and liabilities. The Group did not have
Consolidated Group Within 1 year 1 to 5 years Over 5 years Total
2021 $ 2020 $ 2021 $ 2020 $ 2021 $ 2020 $ 2021 $ 2020 $
Financial liabilities –
due for payment:
- - - -
Trade and other payables 2,692,483 3,407,171 2,692,483 3,407,171
- - -
Lease liability 112,189 203,025 112,189 112,189 315,214
- - - - - -
Borrowings 9,078 9,078
- - -
Total contractual outflows 2,804,672 3,619,274 112,189 2,804,672 3,731,463
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Management and the Board monitor the Group’s liquidity reserve based on expected cash flows. The information that is prepared by senior management and reviewed by the Board includes:

(i) Annual cash flow budgets; and

(ii) Monthly rolling cash flow forecasts.

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The Group currently has commitments for expenditure as at balance date on its Australian exploration tenements as follows:

(c) 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 value of the holdings of financial instruments. The Group is exposed to movements in market interest rates on term deposits. The policy is to monitor the interest rate yield curve to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The Group does not have short or long-term debt, and therefore this risk is minimal.

Interest rate risk management

The Group is exposed to interest rate risk as the Group deposits the bulk of the Group’s cash reserves in term deposits with Westpac, National Australia Bank, and HSBC. The risk is managed by the Group by maintaining an appropriate mix of term deposits.

The following tables summarise the sensitivity of the Group’s financial assets and liabilities to interest rate risk. Had the relevant variables, as illustrated in the tables, moved, with all other variables held constant, post tax profit and equity would have been affected as shown. The analysis has been performed on the same basis for 2021 and 2020.

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Consolidated Carrying Interest Rate Risk Interest Rate Risk
30 June 2021 -1% +1%
Amount Profit Equity Profit Equity
$ $ $ $ $
Financial Assets Footnote
Cash and cash 1 28,067,095 (280,671) (280,671) 280,671 280,671
equivalents
Trade and other 106,636 - - - -
receivables
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Consolidated Carrying Interest Rate Risk Interest Rate Risk
30 June 2020 -1% +1%
Amount Profit Equity Profit Equity
$ $ $ $ $
Financial Assets Footnote
Cash and cash 1 9,453,516 (94,535) (94,535) 94,535 94,535
equivalents
Trade and other 106,636 - - - -
receivables
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1 Cash and cash equivalents are denominated in AUD include deposits at call at floating and short-term fixed interest rates.

NOTE 19: COMMITMENTS

three months. The Group also employs $106,636 for the year ended 30 June consultants who are contracted under 2021 (2020: $104,948). No liability has standard consultancy rates. There were been recognised in relation to these no other remuneration commitments financial guarantees. made.

Remuneration Commitments

The Group has a contract with the Executive Chairman with annual remuneration of $405,000 (excluding director’s fees of $120,000) which can be terminated by either party by giving 12 months’ notice. The Group has entered into employment contracts with termination periods of between one and

Western Australian Projects

Guarantees

The Group has minimum expenditure The Group has provided cash backed commitments on its beneficially owned financial guarantees in respect Western Australian granted tenements. of property leases amounting to

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2021 $ 2020 $
Not later than 12 months 1,463,467 1,622,803
Between 12 months and 5 years 4,225,869 4,834,192
Greater than 5 years 6,952,592 12,024,631
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As at 30 June 2021, outstanding commitments for construction contracts amounted to $13,129,306 (2020: $15,770,194), of which $8,943,421 are cancellable at the Group’s discretion. The outstanding commitments are all due within 12 months.

NOTE 20: SEGMENT REPORTING

IDENTIFICATION OF REPORTABLE SEGMENTS

LOCATION OF INTERESTS

Brockman Rare Earths Project

AND NATURE OF PROJECTS

Hastings is the owner of the Brockman Rare Earths Project, comprising of ten (10) wholly owned prospecting licenses, in the East Kimberley region of Western Australia. The project hosts significant JORC compliant resources of the rare metals zircon, niobium and tantalum, and the heavy rare earth yttrium.

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board in assessing performance and in determining the allocation of resources.

Yangibana Rare Earths Project

Hastings owns the Yangibana Rare that are reviewed and used by the Earths Project in the Gascoyne licenses, in the East Kimberley region Board in assessing performance and in region of Western Australia through of Western Australia. The project determining the allocation of resources. the 100% ownership of fifteen (15) hosts significant JORC compliant The operating segments are identified tenements/exploration licences, one (1) resources of the rare metals zircon, by the Board based on the nature of prospecting license, and six (6) mining niobium and tantalum, and the heavy its interests and projects. Discrete leases and through a 70% held joint rare earth yttrium. financial information about each venture comprising seven (7) granted Accounting policies and inter-segment of these projects is reported to the exploration licences and three (3) transactions executive management team on at mining lease, in all covering an area of least a monthly basis. approximately 590 square kilometres.

The accounting policies used by the Group in reporting segments internally are the same as those contained in Note 1 to the accounts and in the prior period.

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Project segments Brockman Rare Yangibana Unallocated Total
Earths Project Rare Earths $ $
30 June 2021 $ Project
$
Other income
Interest and other income - 61,918 113,997 175,915
Total segment other income - 61,918 113,997 175,915
Expenses
Administration - (4,687,435) (1,821,632) (6,509,067)
Loss before income tax expense - (4,625,517) (1,707,635) (6,333,152)
- - - -
Income tax benefit
Other comprehensive income - - (1,271) (1,271)
-
Segment result (4,625,517) (1,708,906) (6,334,423)
Cash flows from operating activities - (2,993,185) (1,708,906) (4,702,091)
Cash flows from investing activities (19,830) (10,224,600) (82,000,000) (92,244,430)
Cash flows from financing activities 19,830 - 115,544,717 115,564,547
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Project segments Brockman Rare Yangibana Unallocated Total
Earths Project Rare Earths $ $
30 June 2021 $ Project
$
Segment assets 15,252,240 115,841,786 94,814,855 225,908,881
Segment liabilities - 3,977,452 - 3,977,452
Acquisition of exploration assets 19,830 7,580,647 - 7,600,477
Acquisition of property, plant and equipment - 3,525,799 3,469 3,529,268
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Interest income of $113,997 was solely derived within Australia. $1,784 in non-current assets are located overseas.

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Project segments Brockman Rare Yangibana Unallocated Total
Earths Project Rare Earths $ $
30 June 2020 $ Project
$
Other income
Interest and other income - 50,000 176,707 226,707
Total segment other income - 50,000 176,707 226,707
Expenses
Administration (680) - (4,449,818) (4,450,498)
Total segment expenses (680) - (4,449,818) (4,450,498)
- - - -
Income tax benefit
Other comprehensive income - - (6,547) (6,547)
Segment result (680) 50,000 (4,279,658) (4,230,338)
Cash flows from operating activities (680) - (6,529,530) (6,530,210)
Cash flows from investing activities (36,384) (17,039,518) (14,753) (17,090,655)
Cash flows from financing activities 37,064 - 14,647,467 14,684,531
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Project segments Brockman Rare Yangibana Unallocated Total
Earths Project Rare Earths $ $
30 June 2020 $ Project
$
Segment assets 15,232,410 84,896,988 13,744,516 113,873,914
Segment liabilities - 3,407,171 523,743 3,930,914
Acquisition of exploration assets 36,384 3,885,884 - 3,922,268
Acquisition of property, plant and equipment - 11,753,653 39,964 11,793,617
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NOTE 21: DIVIDENDS

The directors of the Group have not declared any dividend for the year ended 30 June 2021 (2020: $Nil).

NOTE 22: CONTINGENT LIABILITIES

There are no contingent liabilities at year end.

NOTE 23: EVENTS SUBSEQUENT TO REPORTING DATE

Since 30 June 2021 the Group has announced:

• The Project’s total Ore Reserve increased 37% to 16.7Mt at 0.95% TREO, extending the mine’s life to at least 15 years. TREO tonnes rose 15% to 158,400t, with NdPr increasing 18% to 58,300t;

• Onslow selected as the site for the Project’s hydrometallurgical plan;

• Ore sorter testwork resulting in a 26% uplift in mine head grade;

• Site works commencement at the Project; and

• Western Australian State Government’s commendation for Yangibana Rare Earths Project and approval for Onslow hydrometallurgical plant site.

Other than as outlined above, there were no matters or circumstances that have arisen since the end of the financial period that have significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations, or state-of-affairs of the consolidated entity in future financial years.

NOTE 24: AUDITOR’S REMUNERATION

During the year the following fees were paid or payable for services provided by PricewaterhouseCoopers Australia (PwC) as the auditor of the parent entity, Hastings Technology Metals Limited, by PwC’s related network firms and by non-related audit firms:

PricewaterhouseCoopers Australia

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2021 $ 2020 $
Audit or review of the financial reports of the Group 75,000 61,840
Other services 17,000 -
92,000 61,840
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Network firms of PricewaterhouseCoopers Australia

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2021 $ 2020 $
Other services
-
Consulting on debt funding 289,334
-
289,334
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Interest income of $176,707 was solely derived within Australia. $5,019 in non-current assets are located overseas.

NOTE 25: DIRECTORS AND EXECUTIVES DISCLOSURES

Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report.

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2021 $ 2020 $
Short term benefits 1,337,495 1,149,215
Post-employment benefits 38,281 29,945
Performance rights 1,279,739 142,275
2,655,515 1,321,435
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NOTE 26: RELATED PARTY DISCLOSURES

The consolidated financial statements include the financial statements of Hastings Technology Metals Ltd and the subsidiaries listed in the following table.

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Country of Functional % Equity Interest Investment ($)
Incorporation Currency
Name 2021 2020 2021 2020
Ark Gold Pty Ltd Australia A$ 100% - 1 -
Brockman Project Australia A$ 100% 100% 4,000,000 4,000,000
Holdings Pty Ltd
Gascoyne Metals Pty Ltd Australia A$ 100% 100% 2,050,000 2,050,000
Yangibana Pty Ltd Australia A$ 100% 100% 85,000 85,000
Hastings Technology Hong Kong HK$ 100% 100% 100 100
Metals (Asia) Limited
Hastings Technology Singapore S$ 100% 100% 99,602 99,602
Metals Pte Ltd
Hastings Technology Metals Ltd is the ultimate Australian parent entity and ultimate parent of the Group.
Related party transactions with key management personnel
2021 $ 2020 $
Office rental and administration expenses1 87,478 91,702
-
Advance paid for purchase of shares2 455,169
1 Office rental and administration expenses were paid to Equator Capital Pte Ltd, a company associated with the Executive Chairman, Mr Charles
Lew. These fees are commensurate with those charged on an arm’s length basis.
2 In December 2019 Mr Lew subscribed for shares in a share placement. The issue of the shares was subject to shareholder approval which was
approved at the 2020 Annual General Meeting. The funds received from Mr Lew were treated as other payables prior to shareholder approval.
Shares and options acquired via placements and rights issues with key management personnel
30 June 2021 Ordinary Shares Purchased Options Purchased [1] $
Mr Charles Lew 9,814,579 1,951,500 1,910,338
-
Mr Guy Robertson 120,000 15,000
Mr Malcolm Randall 60,000 - 7,500
Mr Bruce McFadzean 263,157 - 50,000
Total 10,257,736 1,951,500 1,982,838
1 Options exercisable at 25 cents per share expiring on 12 April 2022.
30 June 2020 Ordinary Shares Purchased Options Purchased [1] $
Mr Jean Claude Steinmetz 500,000 - 35,000
Total 500,000 - 35,000
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NOTE 27: PARENT ENTITY DISCLOSURES
Company
2021 $ 2020 $
Assets
Current assets 114,470,221 13,194,975
Non-current assets 109,775,666 100,440,382
Total assets 224,245,887 113,635,357
Liabilities
Current liabilities 2,228,064 3,619,551
Non-current liabilities 86,394 168,532
Total liabilities 2,314,458 3,788,083
Net Assets 221,931,429 109,847,274
Equity
Issued capital 242,275,502 125,691,027
Reserves 8,285,175 6,546,798
Accumulated Losses (28,629,248) (22,390,551)
Total Equity 221,931,429 109,847,274
Financial performance
Loss for the year (6,238,697) (4,239,072)
- -
Other comprehensive income
Total comprehensive loss (6,238,697) (4,239,072)
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Contingent liabilities of the parent entity

For details on contingent liabilities, refer to Note 22.

Commitments of the parent entity

The parent entity has nil (2020: nil) tenement commitment obligations as at 30 June 2021.

NOTE 28: INTEREST IN JOINT OPERATION

The Group has a 70% joint venture interest (2020: 70%) in certain tenements (refer to page 31) that comprise part of the Yangibana Project. The Group is the manager of, and is sole funding, the joint venture tenements up until a decision to commission a Bankable Feasibility Study. Refer to Note 19 for details on capital commitments and guarantees. There were no impairment triggers identified in the jointly controlled operation.

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Directors’ Declaration

1. In the opinion of the directors of Hastings Technology Metals Ltd (“the Company” or “the Group”):

• a. The consolidated financial statements and notes thereto, as set out on pages 50 to 79, 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 the performance of the Group for the year then ended; and

• ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements.

• There are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

• The consolidated financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.

• This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.

This declaration is signed in accordance with a resolution of the Board of Directors made pursuant to s.303(5) of the Corporations Act 2001.

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Guy Robertson Executive Director 30 September 2021

80 | Hastings Technology Metals

Annual Report 2021 | 81

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Independent auditor’s report

To the members of Hastings Technology Metals Limited

Report on the audit of the financial report

Our opinion

In our opinion:

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

• (a) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial performance for the year then ended, and

• (b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

What we have audited

The Group financial report comprises:

• the consolidated statement of financial position as at 30 June 2021

• the consolidated statement of changes in equity for the year then ended

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Our audit approach

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

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

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• the consolidated statement of cash flows for the year then ended

• the consolidated statement of profit or loss and other comprehensive income for the year then ended

• the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information, and

• the directors’ declaration.

Basis for opinion

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

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

Independence

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

• Materiality Audit scope

• • For the purpose of our audit we used overall • Our audit focused on where the Group made Group materiality of $2,259,000, which subjective judgements; for example, significant represents approximately 1% of the Group’s total accounting estimates involving assumptions and assets. inherently uncertain future events.

• • We applied this threshold, together with • The Group’s operational and financial processes qualitative considerations, to determine the scope are managed by a corporate function in Perth, of our audit and the nature, timing and extent of where substantially all of our audit procedures our audit procedures and to evaluate the effect of were performed. misstatements on the financial report as a whole.

• We chose the Group’s total assets because, in our view, it is the benchmark against which the performance of the Group is most commonly measured whilst in the exploration and development phase.

• We utilised a 1% threshold based on our professional judgement, noting it is within the range of commonly acceptable thresholds.

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

Liability limited by a scheme approved under Professional Standards Legislation.

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Key audit matters

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

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

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

Responsibilities of the directors for the financial report

Key audit matter

Carrying amount of deferred exploration expenditure

(Refer to note 12)

As at 30 June 2021 the Group recognised deferred exploration expenditure totalling $64,704,236 in the statement of financial position relating to the Brockman and Yangibana projects.

Judgement was required by the Group to assess whether there were indicators of impairment of the deferred exploration expenditure due to the need to make estimates about future events and circumstances, such as whether the mineral resources may be economically viable to mine in the future.

This was a key audit matter because of the size of the balance and judgement in considering the risk of impairment of the assets, should results of exploration activities indicate these costs will not be recoverable.

How our audit addressed the key audit matter

We performed the following procedures, amongst others:

• Evaluated the Group’s assessment that there had been no indicators of impairment for its deferred exploration expenditure assets, including performing inquiries with management and directors to develop an understanding of the current status and future intentions for the Group’s exploration projects.

• Assessed whether the Group retained right of tenure for all of its exploration licence areas by obtaining licence status records from relevant government databases.

For a sample of additions to exploration and evaluation assets during the year inspected relevant supporting documentation, such as invoices, and compared the amounts to accounting records.

• Obtained the Group’s approved exploration expenditure forecasts supporting its assessment.

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

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

Auditor’s responsibilities for the audit of the financial report

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

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

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

Report on the remuneration report

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon.

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

Our opinion on the remuneration report

We have audited the remuneration report included in pages 40 to 47 of the directors’ report for the year ended 30 June 2021.

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

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Responsibilities

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

PricewaterhouseCoopers

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Helen Bathurst Perth Partner 30 September 2021

Information

A. Corporate Governance

1. Number of holders in each class of equity securities and the voting rights attached (as at 20 August 2021)

A statement disclosing the extent to which the Group has followed the best practice recommendations set by the ASX Corporate Governance Council during the period is contained within the Director’s Report.

Fully Paid Ordinary Shares

There are 5,519 holders of ordinary shares. Each shareholder is entitled to one vote per share held.

B. Shareholding

In accordance with the Company’s Constitution, on a show of hands every number present in person or by proxy or attorney or duly authorized representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorized representative has one vote for every fully paid ordinary share held.

1. Substantial Shareholders

The following substantial holders are listed on the Company’s register as at 20 August 2021:
1 L1 Capital Pty Ltd 131,578,948 7.57% 2 Charles Lew 123,603,734 7.11%

2. Distribution schedule of the number of holders in each class of equity security as at 20 August 2021.

Fully Paid Ordinary Shares

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Spread of holdings Holders Units % of issued capital
1-1,000 134 13,098 0.00%
1,001-5,000 975 3,579,500 0.21%
5,001-10,000 914 7,492,675 0.43%
10,001-100,000 2,611 108,107,739 6.22%
Over 100,000 885 1,619,262,254 93.14%
5,519 1,738,455,266 100.00%
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There are 257 shareholders with less than a marketable parcel.

4. Twenty largest holders of each class of quoted equity security

The names of the twenty largest holders of each class of quoted security, the number of equity security each holds and the percentage of capital each holds (as at 20 August 2021) is as follows:

Annual Report 2021 | 87

Ordinary Shares Top 20 holders and percentage held

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Position Holder Name Holding % IC
1 CITICORP NOMINEES PTY LIMITED 306,118,360 17.61%
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 217,715,791 12.52%
3 CS THIRD NOMINEES PTY LIMITED 133,616,713 7.69%
4 BNP PARIBAS NOMS PTY LTD 53,699,883 3.09%
5 BNP PARIBAS NOMINEES PTY LTD 51,870,706 2.98%
6 MR FOON KEONG LEW 51,720,332 2.98%
7 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 43,810,939 2.52%
8 MR MUN KEE CHANG 41,687,284 2.40%
9 BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD 40,241,281 2.31%
10 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 39,966,652 2.30%
11 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 32,413,835 1.86%
12 MR WING SOON YIM 32,076,470 1.85%
13 FF OKRAM PTY LTD 29,403,575 1.69%
14 BNP PARIBAS NOMINEES PTY LTD 19,561,309 1.13%
15 BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM 15,836,141 0.91%
16 MS SOCK-LAN ELEANOR LIM 14,520,000 0.84%
17 NATIONAL NOMINEES LIMITED 13,201,272 0.76%
18 UBS NOMINEES PTY LTD 12,596,731 0.72%
19 BNP PARIBAS NOMS PTY LTD 12,580,536 0.72%
20 MR HOE CHUAN SOON 12,554,341 0.72%
Total 1,175,192,151 67.60%
Total issued capital - selected security class(es) 1,738,455,266 100.00%
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1. Company Secretary

The joint company secretaries are Mr Guy Robertson and Mr Neil Hackett.

2. Address and contact details of the Company’s registered office and principle place of business:

Level 8, Westralia Plaza 167 St Georges Terrace Perth WA 6000 Australia Telephone: +61 (8) 6117 6118

3. Address and telephone details of the office at which a registry of securities is kept:

4. Stock exchange on which the Company’s securities are quoted:

The Company’s listed equity securities are quoted on the Australian Securities Exchange (ASX: HAS).

5. Restricted Securities

The Company does not have any restricted securities on issue.

6. Review of Operations

A review of operations is contained in the Directors’ Report.

Automic Group Lvl 2/267 St Georges Terrace Perth WA 6000

88 | Hastings Technology Metals

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HASTINGS TECHNOLOGY METALS LIMITED Tel: +61 2 9078 7674 Email: info@hastingstechmetals.com Web: hastingstechmetals.com