IRON BEAR RESOURCES LTD - Annual Report 2023

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2023 ANNUAL REPORT

For the Year Ended 30 June 2023

ASX: CLE

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Corporate Directory	1
Principal Activities and Review of Operations	2
Directors' Report	11
Auditor’s Independence Declaration	25
Corporate Governance Statement	26
Consolidated Statement of Profit or Loss and Other Comprehensive Income	27
Consolidated Statement of Financial Position	28
Consolidated Statement of Changes in Equity	29
Consolidated Statement of Cash Flows	31
Notes to the Consolidated Financial Statements	32
Directors' Declaration	67
Independent Auditor’s Report	68
Additional Stock Exchange Information	73

Corporate Directory

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Corporate Directory

Directors

Mr Tony Sage - Executive Chairman Mr Paul Berend – CEO and Executive Director Mr Tim Turner - Non-Executive Director Mr Will Scott – Non-Executive Director

Bankers

National Australia Bank 100 St George’s Terrace Perth, WA 6000

Company Secretary

Ms Melissa Chapman Ms Catherine Grant-Edwards

Stock Exchange Listing

Australian Securities Exchange ASX code: CLE Frankfurt Stock Exchange FRA: HM5

Auditors

BDO Audit (WA) Pty Ltd Level 9, Mia Yellagonga Tower 2, 5 Spring Street Perth, WA 6000 Tel: +61 8 6382,4600 Fax: +61 8 6382 4601

Website

www.cyclonemetals.com

Country of Incorporation Australia

Registered Address

Share Registry

Computershare Investor Services Limited Level 11, 172 St Georges Terrace Perth WA 6000 AUSTRALIA Tel: 1300 850 505 (Australia) +61 3 9415 4000 (Overseas)

32 Harrogate Street West Leederville, WA 6007 Australia Tel: +61 8 9380 9555

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ANNUAL REPORT 2023 1
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Principal Activities and Review of Operations

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Principal Activities and Review of Operations

Strategy

Cyclone Metals Limited ( Cyclone or the Company ) is focussed on developing its flagship iron ore project, Block 103 located in the Labrador Trough in Canada. The Company also has interests in several exploration and mining projects and companies, providing exposure to lithium, iron ore, copper and gold, assets globally. The interests include shares in listed ASX entities valued at $8,627,778 as of 30 June 2023. These secondary assets are being actively managed to maximise value for existing shareholders.

Flagship Project

Block 103

On the 4th of January 2023, Cyclone announced that it had entered into a binding term sheet with Labrador Iron Pty Ltd for the 100% acquisition of the Block 103 Magnetite Iron Ore Project located 30km northwest of Schefferville, Quebec, Canada ( Block 103 ). On 17 April 2023, the Company completed the acquisition of the Block 103 through the issue of 2,160,000,000 fully paid ordinary shares.

Block 103 is located the Labrador Trough in Canada, 20 km from the town of Schefferville and is within 20km of an open access heavy haul railway directly connected to the Port Sept Isles iron ore export facility (refer Figure 1).

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Figure 1 - Location of Block 103

As announced on 20 June 2023, Block 103 is a well-advanced project supported by an Inferred Mineral Resource of 7,200 Mt @ 32% Fe which has been reported in accordance with the provisions of both with the JORC 2012 code and the NI 43-101 standards (see further details below).

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ANNUAL REPORT 2023 2
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Principal Activities and Review of Operations

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A Preliminary Economic Assessment ( PEA ) study was completed by BBA Inc, of Toronto in June 2013. This report is publicly available in the SEDAR database[1] and concludes that a high-quality magnetite concentrate grading 69.5% Fe can be produced through simple beneficiation, and that blast furnace quality pellets can be produced and shipped to the Sept Isles port for a cash cost of USD 47 /t FOB. In comparison, blast furnace pellets currently trade at USD 1451/t CIF China and shipping costs are roughly 26 USD/t.

The PEA indicates that Block 103 benefits from a low stripping ratio of 0.4, is a relatively soft magnetite ore and has access to cheap hydropower – all of which contribute to a low OPEX and an extremely low carbon footprint. For more detailed information, please refer to the CLE announcement dated 17 April 2023.

The key activities relating directly to Block 103 carried out during the year included:

a) 17 April 2023: Completion of the acquisition of Block 103
b) 1 May 2023: Appointment of a highly credentialled iron ore and steel making executive, Paul Berend, as CEO and Executive Director of Cyclone (refer to Director’s report for further information)
c) 20 June 2023: Release of a JORC compliant Inferred Mineral Resource estimate of 7,200 Mt @ 32% Fe
d) Planning and resourcing of Block 103 value accretive project milestones, leading to the generation of bulk client DRI pellet samples by Q2 2024
e) Subsequent to financial year end: The start of field operations in Shefferville including the review of 28,000m of drill core and the creation of a 1,6 t of bulk sample for metallurgical test work

Release of a maiden Mineral Resource estimate of 7,200 Mt @ 32% Fe

On the 20 June 2023, the Company released its Mineral Resource statement for Block 103, stated in accordance with the provisions of the JORC Code.

Highlights

Inferred Mineral Resource of 7.2 billion tonnes containing 29.2% total Fe and 18.9% magnetic Fe.

			TFe	magFe
Category	Zone	Tonnes (Billion)
			%

Inferred	Greenbush	7.2	29.2	18.9

Block 103 Mineral Resource is based on the Greenbush zone which represents only ~ 25% of the total target mineralised area in Block 103 based on aeromagnetic surveys as indicated by geophysics and mapping
Initial metallurgical test work highlights:
The production of high-quality concentrate containing 69.5% Fe with low deleterious elements was achieved consistently through one stage grinding and wet magnetic separation,
Low Bond Work Index (BWi) (kWh/t at P80 32µm) of 15.5 is expected to drive low grinding costs – enhanced by access to cheap renewable hydropower,
Very high Fe magnetite recovery rate of 93.7% by mass.

Planning and resourcing of Block 103 value project milestones, with a target to generate bulk client DRI pellet samples by Q2 2024

The leadership team of Cyclone has defined a strategic development plan for Block 103 which has been designed to de-risk Block 103 upfront and maximise the value creation for early-stage shareholders and the local communities in and around Shefferville. The strategic development plan is predicated on the development of two separate and complimentary operations:

Direct Reduction (DR) Operation : The DR operation refers to the development and exploitation of the magnetite taconite resource defined by the maiden mineral resource announced 20 June 2023 and the production of magnetite concentrates and pellets. The PEA from BBA dated June 2013 envisaged the production of 16,6 Mta of blast furnace pellets, although Cyclone believes that DR grade concentrate and pellets are a much better option in the current market conditions.

1 www.sedar.com .Filter by search company database, then Document type: Technical report NI 43-101 and Company name: M3 Metals. Date of filling: 2013

Principal Activities and Review of Operations

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Direct Shipping Ore Operation (DSO). There are early indications that direct shipping ores could exist on the Block 103. Cyclone has exploration activities planned for Q2 2024 to identify and quantify this opportunity, which could deliver early cash flows for a modest Capex outlay. It is worth noting that there is already a Tata Steel DSO operation producing ~ 2Mta immediately adjacent to Block 103.

The chart below summarises the Company’s current strategic development plan which is underpinned by clear value creation milestones:

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It is important to note that the planned exploration activities may not deliver a Mineral Resource sufficient in quantity or quality to support a sustainable DSO operation, in which case the milestones indicated in blue will not be achieved. Similarly, whilst the initial exploration work is very positive for the magnetite Mineral Resource that supports the proposed DR magnetite operation, the achievement of future milestones required to achieve Decision To Mine carries risk. Some of the milestones such as the PFS for the DR operation will require additional funding which has not yet been secured.

The first milestone for the DR operation, the release of a Mineral Resource estimate, has already been achieved and field work for milestones (2) and (3) has commenced. Our objectives for the period ending December 2023, are:

To identify the optimum process flow sheet for the beneficiation of the magnetite ores
To demonstrate that a DR quality magnetite concentrate can be produced with a good yield based on the flow sheet and
To produce an initial bulk sample of 100 kg of DR grade magnetite concentrate grading 69.5% Fe with extremely low levels of deleterious elements.

Cyclone will start providing bulk samples of magnetite concentrate to steel mills early 2024, so that steel mills can start testing our product for their specific application. Cyclone will then move into the next 6-month phase, which will involve the production of DR pellets for target steel mills and testing these pellets for various direct reduction applications (Midrex, Energiron, etc.).

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ANNUAL REPORT 2023 4
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Principal Activities and Review of Operations

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One of the most exciting aspects of Block 103 is its potential to produce large volumes of very high-quality DR concentrates and pellets which will enable steel-making customers to substantially reduce their carbon footprint, with relatively low investments.

Cyclone is deliberately prioritising the production of bulk test samples of these low carbon steel making products rather than allocating funds to expand an already massive Mineral Resource.

DR grade products achieve more favourable prices than standard blast furnace pellets. The premium for blast furnace pellets is currently 14 USD/t, whilst the corresponding premium for DR grade pellet is 60-70 USD/t. It is important to note that none of the existing Brazilian or Australian DSO products are DR grade and that there are currently only three sources of DR grade pellets in the world, IOC (also in the Labrador Trough), Vale and LKAB. Cyclone will expand on this advantage in future communications.

Start of field operations in Shefferville, Canada

As mentioned above, the Company is actively working to achieve its year end objectives with the technical team having recently completed a trip to site.

The team has successfully located approximately 18 tonnes of drill cores in sea containers and has selected 1.6 tonnes of representative samples which have been shipped to a metallurgical laboratory in Canada. Cyclone is happy to report that the cores are in good condition and that there is ample material to complete the metallurgical test work including the generation of bulk DR client samples over the next 12 months, without any additional drilling or trenching required.

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Consulting Geologist and Mining Engineer
selecting and logging representative taconite
Pallets are being shipped by train to Quebec City
and then by truck to a laboratory
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Block 103 cores in sea container
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Selected cores are bagged– Each pallet is ~ 300kg Pallets are being shipped by train to Quebec City
and then by truck to a laboratory
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Cyclone anticipates reporting the results of this test work first quarter next year. If all goes well, the mineralogical test work and the associated bulk concentrate samples should demonstrate that the Block Mineral Resource is amenable to producing large quantities of DR grade concentrate.

Principal Activities and Review of Operations

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The Team has started engaging with the local stakeholders and communities in Shefferville, which is located less than 20km away from the Block 103 license areas. This is the beginning of a long journey to build trust and develop an understanding of the local challenges. Shefferville is extremely remote and is a former mining town with a prominent Inuit and Quebecois population. Cyclone’s interactions to date have been very friendly and constructive; helped by the fact that CLE’s CEO is a native French speaker.

Secondary Assets and Interests

Grand Port

Grand Port Resources Pty Ltd ( Grand Port ) and its wholly owned subsidiaries holds 6 projects over a diversified portfolio of gold, copper, nickel and PGE assets in New Zealand, with locations shown in Figure 2:

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Figure 2: Location of Grand Port Projects

South Island – Mareburn and Macraes South

The Mareburn Gold Project ( Mareburn Project ) and Macraes South Gold Project (both granted) ( Macraes Project ) covers 464km[2] within the Otago Goldfield of the South Island, which has 10Moz of proven historical gold production. The Mareburn Project sits 8km north of the producing Macraes Gold Mine and processing

Principal Activities and Review of Operations

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plant, New Zealand’s largest producing gold mine, and ~2km from the Coronation open pit. The Macraes Project is contiguous to the south of the Macraes Gold Mine and processing plant.

The Macraes Project is a Carlin style gold deposit, and previous work has only targeted the thrust system. The Macraes South Gold Project has had no substantive exploration and only regional mapping and structural interpretation. As with the Mareburn Project, Cyclone is targeting the cross-cutting fault system. At Carlin in Nevada, USA, gold resources within the thrust system contain approx. 20Mozs gold with approx. another 60Mozs gold located within the cross-cutting fault system, which was recognised at a later date. The Thrust system at the Macraes Project has produced some 10Moz to date, and Cyclone plans to test the cross-cutting fault systems for Nevada style gold mineralisation. Refer to ASX announcement dated 3 May 2022 for further details.

The Mareburn Project is a high priority target with significant gold mineralisation in historical drilling, within the Macraes type thrust lodes.

The Company announced on 28 November 2022 the commencement of a sampling program over Macraes South. The sampling program was designed to upgrade an extremely anomalous area to potentially define a drilling target with some complementary regional stream sediment samples. The grid area surrounded Line 4 (refer ASX announcement 11 July 2022) where extremely anomalous responses were obtained with 2 rock chips samples 200m & 1km to the SE with 1.78 and 7.96g/t Au respectively and with the area being SE of and on strike of the Nenthorn mining area. The Ionic geochemical sampling completed here returned multiple samples with >25x background responses for Au with is empirically indicative of mineralisation in the near proximity. This grid was spread across 2 properties with both landowners agreeable to soil sampling without an access agreement.

On 2 May 2023, the Company announced that soil geochemical sampling has successfully identified a series of gold anomalies within the Macraes South PP 60700 returning the following highlights:

Strong coherent and continuous geochemical responses over projected structural positions of gold lode zones at Macraes South
Anomalous responses up to 350m wide in orientation sampling line 4 resolved into 3 parallel lode systems
Potentially >5 mineralised lodes for drill testing identified at the Swampy Hill Prospect within the Macraes South project
Rock chip sampling of lodes up to 3.47g/t Au
Identified lode dipping 50o to northeast subparallel to Hyde-Macraes shear system
Anomalism open to Northwest, Southeast and northeast

South Island – Drybread and Waikerikeri

The Drybread – Waikerikeri Gold Project (granted) (Drybread Project) covers ~198km2 and crosses over Santana Minerals Limited’s (ASX: SMI) Bendigo-Ophir Project in Central Otago and contains historical alluvial workings contiguous to the Drybread Project. The area has been underexplored for hard rock potential with no primary gold exploration undertaken.

We continue to watch the developments of Santana Minerals, with significant primary mineralisation being intersected.

North Island – Muirs

Muirs Reef Gold Project (granted) (Muirs Project) covers 52.6km2 and is close to Oceania’s Hauraki Gold Field with 45Moz proven historical gold production.

The Muirs Project remains underexplored. The proposed work program on the Muirs Project is as follows:

Stage 1 – Detailed structural mapping from existing gradient array resistivity survey and highresolution magnetic survey, and field checking, in association with Ionic LeachTM geochemistry sampling as a first pass. Collection of LiDar (ultra-detailed DEM) may substantially improve understanding of the mineralisation. Petrographic studies on existing diamond core focusing on fluid inclusion temperature studies would assist in defining potential gold deposition levels.

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ANNUAL REPORT 2023 7
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Principal Activities and Review of Operations

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Stage 2 – Infill and step out drilling is recommended using diamond core drilling at both Massey Reef and Muirs Reef (Muirs Projects) to expand the resource, and test targets identified in Stage 1 work and convert the non JORC estimate to JORC (2012).

South Island - Longwood

Longwood Range Gold Copper PGE Project (application pending) ( Longwood Project ) is situated 40km west of Invercargill, New Zealand and covers 424km[2] . Historic production includes: ~88koz Au and 1,500oz of platinum. Previous drilling intersected a PGE reef with no follow up work and the project area has been identified as being fertile for copper and nickel by Otago University. There has been only four historic drill holes to date on the Longwood Project. On-ground work will kick off with a geochemical sampling program that will generate the maiden drill program.

Subsequent to the year-end on 14 July 2023, the Company announced that it has entered into a binding term sheet for the sale of its non-core gold assets that includes Grand Port to BVI registered company Moosh Moosh Limited ( Moosh ). Consideration for Grand Port is $3,000,000 in cash or equivalent in shares in an ASX-listed company or New Zealand-listed company to be paid by Moosh on Settlement. In addition, Moosh shall be entitled to a 1% net smelter royalty on minerals extracted. Settlement is conditional upon completion of the due diligence by both parties no later than 29 September 2023, and the payment of $100,000 from Moosh to the Company for maintaining the tenements in good standing order due the due diligence period. As of the date of this report, the Company had not received the aforementioned payment from Moosh and as such has impaired the carrying value of the New Zealand assets down to nil.

Nickol River Gold Project

The Nickol River Project ( NRP ) comprises seven granted Mining Leases (M47/87, M47/127, M47/401, M47/421, M47/435, M47/455, M47/577), two Prospecting Licences (P47/1524, P47/1812), one Exploration License E47/3176, five Miscellaneous Licences (L47/686, L47/687, L47/688, L47/689, L47/565 (application)) (refer Figure 3).

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Figure 3 - Nickol River Project location and tenements, located 10km east of Karratha in the West Pilbara of Western Australia

During the year, the Company completed the acquisition of P47/1812 through the issue of 60,000,000 fully paid ordinary shares at a deemed issue price of $0.002 per share and 30,000,000 unlisted options with an exercise price of $0.003 each expiring 22 February 2025 thus consolidating the central drilling target area.

Principal Activities and Review of Operations

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During the year minimal exploration activities were conducted at NRP whilst the Company continued to investigate options in relation to the divestment of NRP.

Subsequent to the year-end on 14 July 2023, the Company announced that it has entered into a binding term sheet for the sale of its non-core gold assets that includes NRP to BVI registered company Moosh Moosh Limited ( Moosh ). Consideration for the NRP is $1,000,000 in cash or equivalent in shares in an ASX-listed company or New Zealand-listed company to be paid by Moosh on Settlement. In addition, Moosh shall be entitled to a 1% net smelter royalty on minerals extracted. Settlement is conditional upon completion of the due diligence by both parties no later than 29 September 2023, and the payment of $100,000 from Moosh to the Company for maintaining the tenements in good standing order due the due diligence period. As of the date of this report, the Company had not received the aforementioned payment from Moosh and as such has impaired the carrying value of NRP down to nil.

Wee MacGregor Project

Cyclone holds a 20% interest in the Wee Macgregor project which comprises three granted mining licences, ML 2504, ML 2773 and ML 90098. These licences are located approximately 60km southeast of Mt Isa. The Wee Macgregor project (licence ML 2504) has an existing JORC 2012 estimated Inferred Resource of 1.65Mt @ 1.6% Copper and an exploration target of between 1.0 – 1.5Mt @ 2.3 – 3.7% Cu.

Cohiba Minerals Limited (Cohiba), through wholly owned subsidiary Cobalt X Pty Ltd, has earnt an 80% interest in mining licences ML 2504, ML 2773 and ML 90098 under a Farm-in agreement with Cyclone. The Company retains a 20% interest in the mining licences and a pre-emptive right over the remaining 80%.

The Lady Ethleen tenement (ML 2771) has been 100% retained by Cyclone ( Lady Ethleen ).

The Lady Ethleen tenement has been utilized for a trial mining and processing exercise using a newly developed green leach process known as GlyLeach TM (refer ASX announcement 4 October 2020).

Yalardy Project

The Yalardy tenements (E 09/2441 and E 09/2442) cover a combined 297 graticular blocks or a total of 914.5km[2] starting approximately 33km east of the Overlander roadhouse near the turnoff to Shark Bay. The Yalardy tenements were surrendered during the year to focus resources on core projects.

Marampa Project

Marampa is an iron ore project at the development stage, located 90km northeast of Freetown, Sierra Leone, West Africa ( Marampa or Marampa Project ). The Marampa Project includes one mining licence (ML05/2014) comprising 97.40km[2] and one exploration licence (EL46A/2011) comprising 145.86km[2] . The Company confirms that it does not currently have tenure over ML05/2014 however is engaging with the Sierra Leone Ministry of Mines ( SLMOM ) with the aim of having the Marampa Project license reinstated or reissued. The Company also confirms that tenure over EL46A/2011 remains uncertain.

The Board confirms that given the inherent uncertainties relating to the future of the Marampa Project, the carrying value of the Marampa Project in the Company’s audited accounts was fully impaired as at 30 June 2016 and remains fully impaired.

The Company is currently committing minimum expenditure on the Marampa Project and no exploration activities are currently underway at the Marampa Project.

Kukuna Project

The Kukuna Iron Ore Project ( Kukuna ) is located 120 km northeast of Freetown in the northwest of Sierra Leone and comprises one exploration licence covering 68km2. The licence area is located approximately 70km due north of Marampa. The Kukuna Project remains under care and maintenance.

Principal Activities and Review of Operations

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Cameroon

On 3 June 2022 the Company announced that it entered into a binding exclusivity agreement with Ewaah Cameroon Ltd ( Ewaah ) to secure the right to purchase 100% of the issued capital of Camdu Corporation Ltd (a company incorporated in Cameroon), which in turn has applied for the mining permit that covers the area of a world class cobalt deposit in southeastern Cameroon, the Nkamouna-Mada Project ( Cameroon Project ).

The exclusivity agreement has been entered into between Cyclone and Ewaah to secure Cyclone’s exclusive right to acquire the mining permit once it is granted to Camdu Corporation by the relevant mining authority in Cameroon. The mining permit covers an area of 1,645km2 and the Nkamouna and Mada deposits are located within that area.

During the year, the Company announced that it had terminated the contract with Ewaah.

Key Risks

The business, assets and operations of the Company are subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. The Board aims to manage these risks by carefully planning its activities and implementing risk control measures. Some of these risks are, however, highly unpredictable and the extent to which the Board can effectively manage them is limited.

A summary of the key risk areas of the Company are listed below:

Future capital requirements and associated dilution risk
Exploration and development risk including no defined resources, resource estimates, results of studies, metallurgy consideration
Operational risks including loss of key personnel, reliance on agents and contractors, environmental risks, regulatory compliance
Macro risks including climate risk, downturn in the resources industry, commodity prices and demand, Ukraine conflict

FORWARD LOOKING STATEMENTS

This Financial Report includes certain forward-looking statements that have been based on current expectations about future acts, events and circumstances. These forward-looking statements are, however, subject to risks, uncertainties and assumptions that could cause those acts, events and circumstances to differ materially from the expectations described in such forward-looking statements. These factors include, among other things, commercial and other risks associated with the meeting of objectives and other investment considerations, as well as other matters not yet known to the Group or not currently considered material by the Group.

COMPETENT PERSONS STATEMENT

The information in this report that relates to the Block 103 Project has been reviewed and compiled by Jeremy Peters FAusIMM CP (Mining, Geology), a Director of Burnt Shirt Pty Ltd, who has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration 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”.

The information in this report that relates to Wee MacGregor is compiled and collected by Mr Olaf Frederickson, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Frederickson has sufficient experience that is relevant to the style of mineralisation, and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration, Results, Mineral Resource and Ore Reserves (JORC Code 2012). Mr Frederickson consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

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ANNUAL REPORT 2023 10
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Principal Activities and Review of Operations

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The Information in this report that relates to Nickol River Project for exploration results, mineral resources or ore reserves is based on information compiled by Mr Edward Mead, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Mead is a consultant to the company and employed by Doraleda Pty Ltd. Mr Mead has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the `Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code). Mr Mead consents to the inclusion of this information in the form and context in which it appears in this report.

The Information in this report that relates to the Grand Port, New Zealand exploration results, mineral resources or ore reserves is based on information compiled by Mr Allan Younger, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Younger is an employee of the company. Mr Younger has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the `Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code). Mr Younger consents to the inclusion of this information in the form and context in which it appears in this report.

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Directors’ Report

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Directors’ Report

Your Directors submit the financial report of Cyclone Metals Limited ( Cyclone or the Company ) and its controlled entities (collectively referred to as the Group ) for the year ended 30 June 2023.

Directors

In order to comply with the provisions of the Corporations Act 2001 , the Directors’ report as follows:

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

Tony Sage Paul Berend (appointed 1 May 2023) Tim Turner Will Scott Terry Donnelly (resigned 13 April 2023) Stirling Ross (resigned 28 February 2023)

Tony Sage	Executive Chairman
Qualifications	B.Com, FCPA, CA, FTIA
Experience	Mr Sage has more than 35 years’ experience in the fields of corporate advisory
	services, funds management and capital raising. Mr Sage is based in Western
	Australia and has been involved in the management and financing of listed
	mining and exploration companies for the last 22 years.
Directorships of listed	CuFe Limited August 2009 to Present
companies held within the	International Petroleum Limited¹ January 2006 to June 2020
last three years	European Lithium Limited September 2016 to Present
	¹Company deregistered on 21 June 2020
Interest in securities at the	Fully Paid Ordinary Shares 423,625,858
date of this report
Paul Berend	Executive Director and CEO
Qualifications	Paul has a MBA from HEC (Paris, France), a MSc and DEA (~PhD) in chemical
	process design and chemistry from ENSIC (Nancy, France), a bachelor’s in
	applied mathematics and algebra from Harvard University and is a Graduate
	of the Australian Institute of Company Directors
Experience	Paul brings over 20 years of experience in the iron ore and steel industry
	acquired in blue chip as well as junior mining companies worldwide. His
	previous corporate roles include GM Business Development for Rio Tinto Iron
	Ore and GM Corporate Strategy for ArcelorMittal, the world’s largest steel
	producer. He has also worked for Hatch (director advisory services for
	Australasia), McKinsey & Company and Partners In Performance.

Paul has a successful track record in identifying and developing early-stage mining projects and is the founder and historic CEO of Trans-Tasman Resources Ltd (a titano-magnetite project in New Zealand ASX: MKR). He has worked extensively with private equity and specialised funds to identify and develop early-stage mining projects and turn around undervalued producing mineral assets. Paul’s successful track record in the iron ore industry, and specifically in the development of early-stage magnetite deposits, will be a key success driver for the development of Block 103.

Directors’ Report

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Directorships of listed	None
companies held within the
last three years
Interest in securities at the	Fully Paid Ordinary Shares 56,516,665
date of this report
Tim Turner	Non-Executive Director, Chairman of Remuneration Committee
Qualifications	B.Bus, FCPA, FTIA, Registered Company Auditor
Experience	Timothy Turner is the senior partner of accounting and advisory firm, HTG
	Partners. Mr Turner heads the audit and assurance division and is responsible
	for the issue of audit opinions for self-managed superannuation funds through
	to full reporting entities. He also has more than 30 years’ experience in
	business development, structuring and general business consultancy.
	Timothy has a Bachelor of Business (Accounting), is a Registered Company,
	SMSF and Organisation Auditor, is a Fellow of CPA Australia and a Fellow of
	the Tax Institute of Australia.
	With over 15 years’ experience on listed company boards and 30 years’
	experience in the Australian accounting, taxation and business fields, Mr
	Turner brings a wealth of experience and knowledge in corporate compliance,
	governance and corporate manoeuvring
Directorships of listed	International Petroleum Limited1 January 2006 to June 2020
companies held within the	Petronor E&P² November 2007 to February 2020
last three years	¹Company deregistered on 21 June 2020
	²Company delisted from the National Stock Exchange of Australia December
	2015 to list on the Oslo Stock Exchange, previously named African Petroleum
	Ltd
Interest in securities at the	Fully Paid Ordinary Shares 42,389,667
date of this report
Will Scott	Non-Executive Director, Remuneration Committee member
Experience	Mr William Scott spent 39 years as the owner/manager of pastoral properties
	in the Murchison Region of Western Australia where he successfully integrated
	prospecting and earth moving into his business model, as the owner and
	executive director of Wyn Contracting Pty Ltd.
	In 2012 Mr Scott relocated and integrated the earth moving component of his
	business to Karratha assuming the role of Operations Manager at Nickol River
	Fill Pty Ltd, establishing a successful sand and rock quarry. In 2016 Mr Scott
	focussed his attention to small scale mining and prospecting, with joint venture
	partnerships in the Karratha area of the West Pilbara. He has successfully
	explored and identified primary resource ore bodies as well as recovering
	substantial quantities of gold in alluvial/eluvial style, in both gold nugget and
	gold specimen form.

Mr Scott has undertaken extensive mapping of gold discovery locations, with the use of technologies such as Sub Audio Magnetics (SAM), which has identified primary gold ore bodies in the West Pilbara.

Directorships of listed None companies held within the last three years

Directors’ Report

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Interest in securities at the Fully Paid Ordinary Shares 80,401,556 date of this report Unlisted Options ($0.006 expiring 31 March 2,500,000 2024)

Company Secretary

Ms Chapman is a certified practising accountant with over 20 years of experience in the mining industry. She has worked extensively in Australia and the United Kingdom. Ms Chapman has a Bachelor of Accounting from Murdoch University and has been a member of CPA Australia since 2000. Ms Chapman has completed a Graduate Diploma of Corporate Governance with the Governance Institute of Australia, and the company directors course with the Australian Institute of Company Directors.

Catherine Grant-Edwards has over 20 years’ experience in the accounting and company secretarial professions with ASX/LSE-listed and private companies as well as practicing at Ernst & Young. Ms GrantEdwards has a Bachelor of Commerce from the University of Western Australia, majoring in Accounting and Finance, and qualified as an accountant with the Institute of Chartered Accountants Australia (ICAA) in 2006.

Ms Chapman and Ms Grant-Edwards are co-founders and Executive Directors of Bellatrix Corporate Pty Ltd, a company that provides company secretarial and accounting services to several ASX Listed companies.

Dividend and Return of Capital

No dividend was declared or paid during the current or prior year.

Review of Results and Operations

Principal Activity

The principal activity of the Group during the year was mineral investment, exploration and evaluation.

There were no significant changes in the nature of the principal activity during the year.

Review of Operations

A summary of the most significant transactions during the year ended 30 June 2023 is set out below:

Board and Officer Appointments

On 1 March 2023, the Company announced the resignation of Non-Executive Director Stirling Ross effective 28 February 2023.

On 14 April 2023, the Company announced the appointment of Paul Berend as Executive Director and Chief Executive Officer with effective 1 May 2023. On the same day, the Company announced the resignation of Non-Executive Chairman Terry Donnelly effective 13 April 2023 and the transition of Tony Sage from Executive Director to Executive Chairman. The Board restructure was implemented to align with the future direction of the Company.

Unmarketable Parcel Sale Facility

On 10 May 2022, the Company announced that it had established an Unmarketable Parcel Sale Facility ( Facility ) for shareholders who hold less than A$500 worth of fully paid ordinary shares ( Unmarketable Parcel ) in the Company. The Company established the Facility to enable shareholders who hold an Unmarketable Parcel to sell their shares without having to act through a broker or pay brokerage or handing fees. Shareholders with an Unmarketable Parcel were instructed to return the Share Retention Form

Directors’ Report

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( Retention Form ) by the closing date if they wished to retain their shareholding. On 6 July 2022, the Company confirmed that following receipt of Retention Forms, the final number of shares eligible to be sold under the Facility was 43,064,049 shares from a total of 2,588 shareholdings with proceeds from the sale being distributed to participating shareholders.

Shareholder Meetings

On 30 November 2022, the Company held its annual general meeting ( AGM ) of shareholders. All resolutions were carried at the AGM.

On 6 April 2023, the Company held a general meeting ( GM ) of shareholders. All resolutions were carried at the GM.

Conversion of Debt

On 7 December 2022, the Company advised that it has come to an agreement with the Directors of the Company to convert $241,667 of current debt into equity. On 17 April 2023, following receipt of shareholder approval at the GM, the Company issued 161,111,096 fully paid ordinary shares to current and past Directors of the Company to satisfy debts of $241,667.

The Company previously entered into loan agreements with European Lithium Ltd (ASX: EUR) and received funds from EUR totalling $2,250,000 ( EUR Loans ). On 2 June 2023, the Company issued 1,175,256,849 shares to EUR for the conversion of EUR Loans plus accrued interest into equity based on a share conversion price of AUD$0.002.

Placements

In July 2022, the Company issued 12,500,000 fully paid ordinary shares and 6,250,000 free attaching options ($0.005 each expiring 30 June 2024) to raise funds of $50,000 (before expenses).

At various dates between January 2023 to March 2023, the Company issued 540,000,000 fully paid ordinary shares to raise funds of $1,350,000 (before expenses). On 1 March 2023, the Company issued 25,000,000 fully paid ordinary shares to the lead broker of the placement.

Other Security Movements

On 30 November 2022, a total of 170,000,000 performance rights lapsed.

On 16 December 2022, a total of 12,222,223 unlisted options with an exercise price of $0.005 each lapsed.

On 18 December 2022, a total of 5,000,000 unlisted options with an exercise price of $0.005 each lapsed.

On 31 December 2022, a total of 50,000,000 performance rights lapsed.

On 4 February 2023, a total of 151,111,110 unlisted options with an exercise price of $0.005 each lapsed.

On 22 February 2023, the Company issued 60,000,000 fully paid ordinary shares and 30,000,000 unlisted options ($0.003 each expiring 22 February 2025) for consideration for the acquisition of tenement P47/1812.

On 1 March 2023, the Company issued 2,160,000,000 fully paid ordinary shares pursuant to the terms of the Block 103 Acquisition.

On 17 April 2023 and 28 April 2023, the Company issued a total of 26,400,000 fully paid ordinary shares in the Company for the provision of consulting services in relation to the acquisition of Block 103.

On 30 June 2023, a total of 11,200,000 unlisted options with an exercise price of $0.006 each lapsed.

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Directors’ Report

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Results

The Group made a loss after income tax for the year ended 30 June 2023 of $5,491,561 (2022: loss of $5,620,000). Included in this amount is:

a gain of $2,460,904 (2022: loss of $4,000,067) on fair value of financial assets through profit and loss (refer to note 3(d) in the notes to the consolidated financial statements for further details)
a loss of $6,279,048 (2022: $422,507) for the impairment of capitalised exploration spend (refer to note 12(b) in the notes to the consolidated financial statements for further details)

Changes in State of Affairs

During the financial year there was no significant change in the state of affairs of the Group other than those referred to in the Review of Operations.

Events Subsequent to Reporting Date

On 14 July 2023, the Company announced that it has entered into a binding term sheet for the sale of its noncore gold assets that include 100% interest in the Nickol River Gold Project tenements in Western Australia ( Nickol River Project ) and the Longwood Range Gold Copper PGE Project, Mareburn Gold Project, Macraes South Gold Project, Drybread – Waikerikeri Gold Project, and Muirs Gold Project located on the North and South Islands of New Zealand ( NZ Projects ), to BVI registered company Moosh Moosh Limited ( Moosh ). Consideration for the Nickol River Project and NZ Projects is $4,000,000 in cash or equivalent in shares in an ASX-listed company or New Zealand-listed company to be paid by Moosh on Settlement. In addition, Moosh shall be entitled to a 1% net smelter royalty on minerals extracted. Settlement is conditional upon completion of the due diligence by both parties no later than 29 September 2023, and the payment of $200,000 from Moosh to the Company for maintaining the tenements in good standing order during the due diligence period. As of the date of this report, the Company had not received the aforementioned payment from Moosh and as such has impaired the carrying value of the Nickol River Project and NZ Projects down to nil.

On 13 September 2023, the Company entered into a loan agreement and received funds of $200,000 from European Lithium Ltd (ASX: EUR). The loan is repayable on 31 December 2023 and accrues interest of 7.5% per annum. The loan is secured over 25,000,000 unencumbered shares held by the Company in CUFE Limited (ASX: CUF). Mr Antony Sage is a director of EUR.

There have been no other events subsequent to 30 June 2023 up to the date of this report that would materially affect the operations of the Group or its state of affairs which have not otherwise been disclosed in this financial report.

Likely Developments and Expected Results of Operations

The Board intends to continue to follow its strategy of acquiring and investing in undervalued assets and adding value through a hands-on approach to management, exploration and evaluation.

Environmental Regulation and Performance

The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it complies with all regulations when carrying out any exploration work. There have been no significant known breaches of the Group’s environmental regulations to which it is subject.

The Group is also subject to the reporting requirements of the National Greenhouse and Energy Reporting Act 2007 . The National Greenhouse and Energy Reporting Act 2007 requires the Group to report its annual greenhouse gas emissions and energy use.

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Directors’ Report

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For the year ended 30 June 2023 the Group was below the reported threshold for legislative reporting requirements, therefore, is not required to register or report. The Group will continue to monitor its registration and reporting requirements however it does not expect to have future reporting requirements.

Indemnification of Officers

In accordance with the Company’s constitution, except as may be prohibited by the Corporations Act 2001 , every officer or agent of the Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as officer or agent of the Company or any related corporation in respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.

During the financial year, the Company has paid insurance premiums in respect of directors’ and officers’ liability insurance. The insurance premiums relate to:

Costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or criminal and whatever their outcome; and
Other liabilities that may arise from their position, with the exception of conduct involving wilful breach of duty or improper use of information to gain a personal advantage.

In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to insurers has not been disclosed. This is permitted under section 300(9) of the Corporations Act 2001 .

Indemnification of Auditors

To the extent permitted by law, the Company has agreed to indemnify its auditors, BDO, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify BDO during or since the financial year.

Directors’ Meetings

The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member).

	Board of	Directors	Remuneration	Committee
	Eligible to		Eligible to
Directors	Attend	Attended	Attend	Attended
Tony Sage	5	5	-	-
Paul Berend	2	2	-	-
Tim Turner	5	5	1	1
Terry Donnelly	3	3	-	-
Will Scott	5	5	1	1
Stirling Ross	3	3	1	1

Remuneration Report (Audited)

This remuneration report for the year ended 30 June 2023 outlines the remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its regulations. The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

Remuneration Policy for Directors and Other Key Management Personnel

The remuneration report details the remuneration arrangements for key management personnel ( KMP ), defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Directors’ Report

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Details of Directors and Other Key Management Personnel

Directors

T Sage – Executive Chairman

P Berend – Executive Director and Chief Executive Office (appointed 1 May 2023) T Turner – Non-Executive Director

W Scott – Non-Executive Director

T Donnelly – Non-Executive Chairman (resigned 13 April 2023) S Ross – Non-Executive Director (resigned 28 February 2023)

Principles used to determine the nature and amount of remuneration

The remuneration policy of the Company has been designed to align director objectives with shareholder and business objectives by providing a fixed remuneration component which is assessed sporadically in line with market rates. The Board of the Company believes the remuneration policy to be appropriate and effective in its ability to attract and retain appropriately skilled directors to run and manage the Company.

The Board’s policy for determining the nature and amount of remuneration for Board members and other key management personnel is as follows:

All executives receive a base salary (which is based on factors such as length of service and experience).

The Group is an exploration entity, and therefore speculative in terms of performance. Consistent with attracting and retaining talented individuals, directors and senior executives are paid market rates associated with individuals in similar positions within the same industry. The Board endorses the use of incentive and bonus payments for directors and senior executives.

Options and performance incentives may also be issued as the Group invests in projects which are subsequently successfully monetised, and key performance indicators such as market capitalisation and growth can be used as measurements for assessing Board performance.

Shares awarded to directors and executives are valued as the difference between the market price of those shares and the amount paid by the director or executive. Options are valued using the Black-Scholes option pricing model. Performance rights are valued using the Black & Scholes or trinomial option pricing model.

The Board’s policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Executive Chairman determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. The maximum aggregate amount of fees that can be paid to non-executive directors as approved at the 2021 Annual General Meeting is $1,000,000. Any modifications to this amount is subject to approval by shareholders at the Company’s Annual General Meeting. To align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company. The Company did not engage external remuneration consultants to advise the Board on remuneration matters during the year.

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

The remuneration policy aims to increase goal congruence between shareholders and directors via the issue of options and performance rights to directors to encourage the alignment of personal and shareholder interests. During the financial year, the Company’s share price traded between a low of $0.001 and a high of $0.004. The price volatility is a concern to the Board but is not considered abnormal for medium sized exploration entities and in the context of volatile global equity markets. In order to keep all investors fully informed and minimise market fluctuations, the Board is determined to maintain promotional activity amongst the investment community so as to increase awareness of the Company and to stabilise the Company’s share price in line with a consistent and stable financial position and base value of assets.

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ANNUAL REPORT 2023 18
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Directors’ Report

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Closing Share Price 30 June (Loss) for the year attributable to members of Cyclone Metals Limited Basic EPS	2019 2020 2021 2022 2023
	$0.009 $0.002 $0.0091 $0.003 $0.001 ($6,459,163) ($1,534,482) ($5,412,150) ($5,620,000) ($5,491,561) ($0.64) ($0.13) ($0.14) ($0.10) ($0.08)

1 Based on closing share price prior the suspension of trading of shares on 16 October 2020 and reinstated for trading on the ASX on 3 August 2021 .

Details of Remuneration

Remuneration packages contain the key elements incorporated in the Company’s Remuneration Policy as detailed above. The following table discloses the remuneration of the directors and key management personnel of the Company:

	% of Total Remuneration Short-Term Benefits Cash Salary & Fees Post- employ ment benefits Long- Term benefit Leave Share- based Payments – Equity Total Fixed At Risk Short- Term Incentiv e At Risk Long- Term Incentive (Options) $ $ $ $ $ % % %
30 June 2023 Directors T Sage P Berend T Turner T Donnelly W Scott S Ross Total	400,000 - - 163,556 563,556 71% 0% 29% 45,833 - - - 45,833 100% 0% 0% 60,000 - - - 60,000 100% 0% 0% 94,333 - - 41,667 136,000 69% 0% 31% 60,000 - - 56,250 116,250 52% 0% 48% 40,000 - - - 40,000 100% 0% 0%
	700,167 - - 261,473 961,640 73% 0% 27%
	% of Total Remuneration Short-Term Benefits Cash Salary & Fees Post- employ ment benefits Long- Term benefit Leave Share- based Payments – Equity Total Fixed At Risk Short- Term Incentiv e At Risk Long- Term Incentive (Options) $ $ $ $ $ % % %
30 June 2022 Directors T Sage T Turner T Donnelly W Scott S Ross Total	400,000 - - 36,444 436,444 92% 0% 8% 60,000 - - - 60,000 100% 0% 0% 120,000 - - 58,333 178,333 67% 0% 33% 50,000 - - 78,750 128,750 39% 0% 61% 12,959 - - - 12,959 100% 0% 0%
	642,959 - - 173,527 816,486 79% 0% 21%

For executives who were appointed or resigned during the year, the remuneration reflected above is that from date of appointment or to date of resignation.

Additional disclosures relating to performance rights

Performance rights awarded, vested and lapsed

Details of performance shares of Cyclone held by directors and key management personnel are set out below:

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Directors’ Report

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Performance rights holdings of directors and key management personnel

Directors T Sage P Berend T Turner T Donnelly W Scott S Ross	Balance 1-Jul-22 Granted as remuneration Lapsed during the year Balance 30-Jun-23 Vested and exercisable 30-Jun-23 Unvested 30-Jun-23 No. No. No. No. No. No.
	50,000,000 - (50,000,000) - - - - - - - - - - - - - - - 120,000,000 - (120,000,000) - - - 50,000,000 - (50,000,000) - - - - - - - - -
	220,000,000 - (220,000,000) - - -

On 16 December 2021, the Company issued 50,000,000 performance rights to Will Scott in respect to his appointment as Director of the Company. The performance rights were issued following receipt of shareholder approval at the AGM held on 30 November 2021. The total fair value of the performance rights granted to Will Scott was $135,000 with $56,250 (30 June 2022: $78,750) being recognised in the year ended 30 June 2023.

On 16 October 2020, the Company issued 120,000,000 performance rights to Terry Donnelly upon his appointment as Non-Executive Chairman of the Company (Initial Performance Rights) following receipt of shareholder approval at the GM held 6 October 2020. As a result of the Company’s shares being suspended from 16 October 2020 to 3 August 2021, Terry Donnelly did not have the opportunity to meet the milestones associated with the Initial Performance Rights prior to their lapse on 6 October 2021. As such, the Company issued 120,000,000 new performance rights, with the same milestones as the Initial Performance Rights on 16 December 2021 following receipt of shareholder approval at the AGM held on 30 November 2021. The total fair value of all performance rights granted to Terry Donnelly was $100,000 with $41,667 (30 June 2022: $58,333) being recognised in the year ended 30 June 2023.

On 23 May 2022, the Company issued 50,000,000 incentive performance rights to Mr Tony Sage, Executive Director. The shares were issued following receipt of shareholder approval at the GM on 20 May 2022. The total fair value of the performance rights granted to Tony Sage was $200,000 with $163,556 (30 June 2022: $36,444) being recognised in the year ended 30 June 2023.

At 30 June 2023, all performance rights had expired unvested.

Shareholdings of directors and key management personnel

Details of fully paid ordinary shares of Cyclone held by directors and key management personnel are set out below:

Directors T Sage P Berend T Turner W Scott T Donnelly S Ross	Balance 1-Jul-22 On-market Purchase Conversion of Debt into Equity Other Balance 30-Jun-23 No. No. No. No. No.
	312,514,763 - 111,111,0954 - 423,625,858 - 6,000,000 - 50,516,6651 56,516,665 25,723,000 - 16,666,6675 - 42,389,667 63,734,889 - 16,666,6676 - - 20,000,000 - - (20,000,000)2 - 2,500,000 - - (2,500,000) -
	424,472,652 6,000,000 144,444,429 28,016,665 602,933,746

¹ Balance of shareholding held by Mr Berend on 1 May 2023 upon his appointment as Director 2 Balance of shareholding held by Mr Donnelly on 13 April 2023 upon his resignation as Director 3 Balance of shareholding held by Mr Ross on 28 February 2023 upon his resignation as Director

4 On 17 April 2023, the Company issued 111,111,095 shares to Okewood Pty Ltd, an entity owned by Mr Sage, to settle liabilities of $166,667 following receipt of shareholder approval on 6 April 2023.

Directors’ Report

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5 On 17 April 2023, the Company issued 16,666,667 shares to Mr Turner to settle liabilities of $25,000 following receipt of shareholder approval on 6 April 2023.

6 On 17 April 2023, the Company issued 16,666,667 shares to Mr Scott to settle liabilities of $25,000 following receipt of shareholder approval on 6 April 2023.

Options of directors and key management personnel

Details of options of Cyclone held by directors and key management personnel are set out below:

Directors T Sage P Berend T Turner W Scott T Donnelly S Ross	Balance 1-Jul-22 On-market Purchase Conversion of Debt into Equity Other Balance 30-Jun-23 No. No. No. No. No.
	- - - - - - - - - - - - - - - 2,500,000 - - - 2,500,000 - - - - - - - - - -
	2,500,000 - - - 2,500,000

Other transactions with director related entities

Loans with related parties

On 14 December 2021, the Company entered into a loan agreement and received funds of $500,000 from European Lithium Ltd (ASX: EUR). On 20 June 2022, the Company entered into a second loan agreement and received funds of $500,000 from EUR. On 17 August 2022, the Company entered into a third loan agreement and received funds of $500,000 from EUR. On 14 November 2022, the Company entered into a fourth loan agreement and received funds of $750,000 from EUR. On 2 June 2023, the Company issued 1,175,256,849 shares in the Company for the conversion of the loans plus accrued interest based on a share conversion price of $0.002 per share) (refer note 16). Mr Antony Sage is a director of EUR.

Agreements entered into with related parties

Office lease agreement with Okewood Pty Ltd

Effective 1 February 2021, the Company entered into a lease agreement with Okewood Pty Ltd, a company owned by Tony Sage, for the part-lease of 32 Harrogate Street, West Leederville WA 6007 ( Lease Agreement ). The term of the Lease Agreement is ongoing commencing 1 February 2021 for a rent of $2,500 per month. The lease covers the rental, outgoings and parking charges under agreements made on commercial terms and conditions at market rates.

Investments in related parties

During the year ended 30 June 2023, the Company sold 2,000,000 shares in European Lithium Ltd (ASX: EUR) (refer to note 9). Mr Tony Sage is a director of EUR.

Transactions with related parties

Transactions between related parties are on commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

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Directors’ Report

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The following table provides the total amount of transactions (excluding loans with related parties and remuneration) that have been entered into with related parties for the relevant financial year.

			Purchases	Amounts	Amounts
		Sales to	from	owed by	owed to
		related	related	related	related
		parties	parties	parties	parties
Director related entities:
CuFe Limited	2023	81,289	-	37,031	-
CuFe Limited	2022	686	250	-	250
European Lithium Limited	2023	32,510	1,000	4,559	-
European Lithium Limited	2022	686	16,060	150	8,772
Perth Glory Football Club	2023	-	-	-	-
Perth Glory Football Club	2022	-	27,000	-	-
Okewood Pty Ltd	2023	-	30,000	-	10,000
Okewood Pty Ltd	2022	-	30,000	-	5,000
Gambosch Consulting Pty Ltd	2023	-	77,415	-	9,082
Gambosch Consulting Pty Ltd	2022	-	-	-	-
Wyn Contracting Pty Ltd	2023	-	44,737	-	-
Wyn Contracting Pty Ltd	2022	-	230,195	-	27,434

Sales to and purchases from director related entities for the year ended 30 June 2022 are for the acquisition of the Nickol River tenements ($200,000) and the balance relating to the reimbursement of occupancy, investor relations, travel, capital raising and other costs.

Sales to and purchases from director related entities for the year ended 30 June 2023 relates to the reimbursement of occupancy, investor relations, travel, capital raising and other costs.

Relates party entities comprise:

Tony Sage is a director of European Lithium Limited and CuFe Limited
Okewood Pty Ltd is an entity controlled by Tony Sage
Perth Glory Football Club is an entity previously controlled by Tony Sage
Universal Trust is an entity controlled by Terry Donnelly
Wyn Contracting Pty Ltd is an entity controlled by Will Scott

Equity instrument disclosures relating to key management personnel

On 7 December 2022, the Company announced that it had come to an agreement with the Directors of the Company to convert $241,667 of debt into equity (subject to shareholder approval, which was subsequently received on 6 April 2023). On 17 April 2023, the Company issued 161,111,096 shares to Directors of the Company to settle liabilities of $241,667 at a deemed issue price of $0.0015 per share. The fair value of these shares on issue date was $0.002 per share which resulted in a loss in the extinguishment of liabilities of $80,556.

Service Agreements

Executive Chairman

Following receipt of shareholder approval at the general meeting held on 6 April 2023, the Company entered into a three-year term (effective from 1 April 2023) consultancy agreement with Okewood Pty Ltd ( Okewood ) to provide Director services to Cyclone including specific responsibilities for all negotiations and strategic networking to facilitate the acquisition and disposal of assets of the Company based on a set fee of $400,000 (plus GST) per annum. In addition, Okewood (or its nominee) is entitled to receive incentive payments subject to the achievement of certain criteria including $100,000 payable to Okewood on the sale by the Company of 75% or more of its shareholding in European Lithium Limited (ASX: EUR) at a share price at or above $0.25 per share, $100,000 payable to Okewood if the Company completes a priority capital raising of not less than $2.5m and $100,000 payable to Okewood upon the successful completion of an acquisition of a major project that significantly enhances the share price of the Company to exceed $0.015 continuously for more than 20 consecutive trading days during the term of the consultancy contract. The consultancy contract has a 3-month termination notice (or payment in lieu of notice, subject to the Corporations Act 2001 and Listing Rules), without cause, for either party.

Directors’ Report

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Executive Director

The Company entered into an ongoing consultancy contract effective from 1 May 2023 with Gambosch Consulting Pty Ltd to provide Executive Director and Chief Executive Officer services to Cyclone based on a set fee of $275,000 (plus GST) per annum. The consultancy contract has a 3-month termination notice (or payment in lieu of notice, subject to the Corporations Act 2001 and Listing Rules), without cause, for either party.

Non-Executive Directors

The engagement conditions of non-executive director Tim Turner were approved by the Board on 30 November 2007. A fee of $60,000 per annum plus GST was subsequently approved by the Board on 28 August 2009

The engagement conditions of non-executive director Will Scott was approved by the Board on 26 August 2021 with a fee of $60,000 per annum exclusive of GST.

Director Loans

There were no Director loans at 30 June 2023.

2022 Annual General Meeting

The Company received 98.75% of ‘yes’ votes and 1.09% ‘no’ votes on its remuneration report for the year ended 30 June 2022.

This is the end of the audited remuneration report

Proceedings on Behalf of the Company

The Company is pursuing legal against Cauldron Energy Limited (ASX:CXU) claiming loss and damage of $140,012.41. The claim relates to a tenancy sub-lease agreement in respect of CXU’s former premises at 32 Harrogate Street, West Leederville. The claim is being defended by Cauldron.

No other person has applied for leave of Court to bring proceedings on behalf of the Group or 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 any part of those proceedings. The Group was not a party to any such proceedings during the year.

Non-Audit Services

The Board of Directors is satisfied that the provision of any non-audit services by the Company’s auditors is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 because:

All non-audit services are reviewed and approved by the Board of Directors prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
The nature of the services provided is reviewed to ensure that they do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

During the year $Nil was paid or payable (2022: $Nil) to the auditor or its related practices for non-audit services.

Performance Rights

Performance Rights Granted to Directors and Employees and Consultants

There were no performance rights granted to Directors during the period.

Directors’ Report

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Share Options

Share Options Granted to Directors and Employees and Consultants

There were no options granted as remuneration to Directors, employees and consultants during the period.

Share Options on Issue at Year End

Unissued ordinary shares of Cyclone Metals under option at the date of this report are as follows:

Grant Date Exercise Price	Number of Options Expiry Date Listed/Unlisted
23 May 2022 $0.006 28 July 2022 $0.005 22 February 2023 $0.003	25,000,000 31/03/2024 Unlisted 6,250,000 30/06/2024 Unlisted 30,000,000 22/02/2025 Unlisted 61,250,000

No option holder has any right under the options to participate in any other share issue of the Company or any other entity.

Auditor’s Independence Declaration

The auditor’s independence declaration under section 307C of the Corporations Act 2001 is set out on page 25 for the year ended 30 June 2023.

This report is signed in accordance with a resolution of the Board of Directors.

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Tony Sage Executive Chairman Dated this 28th day of September 2023

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ANNUAL REPORT 2023 24
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Tel: +61 8 6382 4600 Level 9, Mia Yellagonga Tower 2 Fax: +61 8 6382 4601 5 Spring Street www.bdo.com.au Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia

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DECLARATION OF INDEPENDENCE BY NEIL SMITH TO THE DIRECTORS OF CYCLONE METALS LIMITED

As lead auditor of Cyclone Metals Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been:

No contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the audit; and
No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Cyclone Metals Limited and the entities it controlled during the period.

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Neil Smith

Director

BDO Audit (WA) Pty Ltd

Perth

28 September 2023

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

Corporate Governance Statement

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Corporate Governance Statement

The Company’s Corporate Governance Statement for the year ended 30 June 2023 (which reports against these ASX Principles) may be accessed from the Company’s website at www.cyclonemetals.com.

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ANNUAL REPORT 2023 26
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Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Year Ended 30 June 2023

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Note Revenue 3(a) Gain/(loss) on extinguishment of liabilities 18, 24 Other income 3(b) Share-based payments 21(d) Directors remuneration and employee benefits expenses Consulting and professional services Occupancy expenses 3(c) Compliance and regulatory expenses Travel and accommodation Depreciation and amortisation expense 10 (Loss)/Gain on fair value of financial assets through profit & loss 3(d) Finance expenses 3(e) Other administration expenses Exploration expenditure expensed Impairment of capitalised exploration 12(b) Gain on transfer from associate accounting to fair value through profit or loss 11(a) Loss before income tax Income tax (expense)/benefit 4 Net loss for the year Other comprehensive income/(expenditure) net of tax Items that may be reclassified subsequently to profit and loss Foreign exchange differences arising on translation of foreign operations Other comprehensive (loss)/income for the year Total comprehensive loss for the year Loss per share for the year: Basic loss per share (cents per share) 23 Diluted loss per share (cents per share) 23	2023 2022 $ $
	64 193 (54,855) - 126,624 8,865 (261,473) (373,527) (722,667) (704,896) (502,590) (614,940) (30,919) (64,992) (141,368) (102,011) (7,572) (74,112) (1,107) (2,896) 2,460,904 (4,000,067) 160,914 (6,457) (132,991) (231,279) (105,477) (138,493) (6,279,048) (422,507) - 1,107,119
	(5,491,561) (5,620,000) - -
	(5,491,561) (5,620,000)
	4,567 (18,031)
	4,567 (18,031)
	(5,486,994) (5,638,031)
	(0.08) (0.10) (0.08) (0.10)

The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2023

Consolidated Statement of Financial Position As at 30 June 2023

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Note CURRENT ASSETS Cash and cash equivalents 6 Restricted cash 7 Trade and other receivables 8 Financial assets at fair value through profit or loss 9(a) TOTAL CURRENT ASSETS NON-CURRENT ASSETS Other financial assets 9(b) Plant and equipment 10 Investments accounted for using equity method 11 Exploration and evaluation expenditure 12 TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables 13 Provisions 14 Convertible note 15 Short term loan payable 16 Current tax liabilities 17 TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Issued capital 18 Reserves 19 Accumulated losses 20 TOTAL EQUITY	2023 2022 $ $
	128,082 314,373 17,500 17,500 321,146 280,486 8,627,778 6,369,579
	9,094,506 6,981,938
	53,843 - 76,084 75,056 - - 4,478,637 5,700,632
	4,608,564 5,775,688

	13,703,070 12,757,626
	641,676 716,537 126,260 114,655 - - - 1,014,178 - 1,200,004
	767,936 3,045,374

	767,936 3,045,374

	12,935,134 9,712,252
	236,218,336 227,796,301 24,834,017 24,541,609 (248,117,219) (242,625,658)
	12,935,134 9,712,252

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2023

Consolidated Statement of Changes in Equity As at 30 June 2023

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Note At 30 June 2022 Loss for the year Forex (gain) on translation of foreign operations 19 Total comprehensive loss for the year Shares issued during the period: -Placement 18 -Placement – Unissued capital 18 -Placement – Broker shares 18 -Conversion of debt – Directors 24 -Conversion of debt - Consultant 18 -Conversion of debt – Loan 16 -Acquisition of P47/1812 31 -Acquisition of Block 103 31 Share-based payments expense 19 Capital raising costs 18 At 30 June 2023	Issued Capital Unissued Capital Reserve Accumulated Losses Share- based Payment Reserve Foreign Currency Translation Reserve Business Combination Reserve Total Equity $ $ $ $ $ $ $
	227,746,301 50,000 (242,625,658) 3,412,964 22,219,146 (1,090,501) 9,712,252 - - (5,491,561) - - - (5,491,561) - - - - 4,567 - 4,567
	- - (5,491,561) - 4,567 - (5,486,994)
	1,350,000 - - - - - 1,350,000 50,000 (50,000) - - - - - 50,000 - - - - - 50,000 322,221 - - - - - 322,221 52,800 - - - - - 52,800 2,350,514 - - - - - 2,350,514 120,000 - - 26,368 - - 146,368 4,320,000 - - - - - 4,320,000 (62,500) - - 261,473 - - 198,973 (81,000) - - - - - (81,000)
	236,218,336 - (248,117,219) 3,700,805 22,223,713 (1,090,501) 12,935,134

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2023

Consolidated Statement of Changes in Equity As at 30 June 2023

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Note At 30 June 2021 Loss for the year Forex (gain) on translation of foreign operations 19 Total comprehensive loss for the year Shares issued during the period: - Winance conversion 15 -Placement -Grand Port acquisition 31 -Nickol River acquisition 31 -Kay Trinder acquisition 31 -Director shares 24 -Unissued share capital Share-based payments expense 19 Capital raising costs 18 At 30 June 2022	Issued Capital Unissued Capital Reserve Accumulated Losses Share- based Payment Reserve Foreign Currency Translation Reserve Business Combination Reserve Total Equity $ $ $ $ $ $ $
	220,115,531 - (237,005,658) 3,239,437 22,237,177 (1,090,501) 7,495,986 - - (5,620,000) - - - (5,620,000) - - - - (18,031) - (18,031)
	- - (5,620,000) - (18,031) - (5,638,031) 10,000 - - - - - 10,000 2,460,000 - - - - - 2,460,000 4,500,000 - - - - - 4,500,000 500,000 - - - - - 500,000 70,000 - - - - - 70,000 200,000 - - - - - 200,000 - 50,000 - - - - 50,000 - - - 173,527 - - 173,527 (109,230) - - - - - (109,230)
	227,746,301 50,000 (242,625,658) 3,412,964 22,219,146 (1,090,501) 9,712,252

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2023

Consolidated Statement of Cash Flows

For the Year Ended 30 June 2023

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Note CASHFLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (inclusive of GST) Interest received Income tax paid 17 Net cash (used in) operating activities 6(b) CASHFLOWS FROM INVESTING ACTIVITIES Payment for acquisition equity investments 9(b) Payment for exploration tenements Payments for exploration and evaluation Purchase or property, plant and equipment 10 Proceeds from sale of financial assets at fair value through profit or loss Net cash (used in) investing activities CASHFLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 18 Transaction costs related to issue of shares, convertible notes or options Proceeds from issuing loan note 16 Unissued share capital 18 Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 6(a)	2023 2022 $ $
	(1,103,137) (1,495,896) 64 193 (952,754) (1,186,383)
	(2,055,827) (2,682,086)
	(53,843) - (98,305) (261,501) (699,669) (926,340) (352) (844) 202,705 503,625
	(649,464) (685,060)
	1,350,000 2,460,000 (81,000) (109,230) 1,250,000 1,000,000 - 50,000
	2,519,000 3,400,770
	(186,291) 33,624 314,373 280,749
	128,082 314,373

The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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1. CORPORATE INFORMATION

The consolidated financial statements of Cyclone Metals Limited and its subsidiaries (collectively, the Group ) for the year ended 30 June 2023 were authorised for issue in accordance with a resolution of the directors on 28 September 2023.

Cyclone Metals Limited (the Company or the Parent ) is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature and operations and principal activities of the Group are described in the Directors’ Report.

Information of the Group’s structure is provided in Note 28. Information on other related party relationships is provided in Note 24.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general-purpose financial report that has been prepared in accordance with Australian Accounting Standards including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 . The financial report has been prepared on the basis of historical cost, except for the revaluation of certain financial instruments. Cost is based on the fair values of the consideration given in exchange for assets.

The financial report is presented in Australian dollars.

The Group is a for-profit public listed company, incorporated and domiciled in Australia.

(b) Going concern

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

For the year ended 30 June 2023 the Group incurred a loss after income tax of $5,491,561 (30 June 2022: $5,620,000), net cash outflows from operating activities of $2,055,827 (30 June 2022: $2,682,086), a working capital surplus of $8,326,570 (30 June 2022: $3,936,564 surplus) and at that date had cash on hand of $128,082 (30 June 2022: $314,373).

The Group’s ability to continue as a going concern and to continue to fund its planned expanded activities is dependent on raising further capital, continued support from related party creditors and reducing operational costs.

These conditions indicate a material uncertainty that may cast a significant doubt about the Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

The Directors believe that it is reasonably foreseeable that the Group will continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report after consideration of the following factors:

The Group requires additional capital for its next phase. The Company continues to seek funding options; and
Ability to realise certain of the Group’s financial assets through the sale of its listed shares

Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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(c) Compliance with IFRS

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board ( IASB ).

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

(d) Changes in accounting policy, disclosures, standards and interpretations

New accounting standards adopted in the current year

In the year ended 30 June 2023, the Directors have reviewed all the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group and effective for the year end reporting period beginning on or after 1 July 2022. As a result of this review, the Directors have applied all new and amended Standards and Interpretations that were effective as at 1 July 2022 with no material impact on the amounts or disclosures included in the financial report.

New accounting standards and interpretations issued but not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2023 reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations has not identified any impact.

(e) Basis of consolidation

The consolidated financial statements comprise the financial statements of Cyclone Metals Limited ( Cyclone ) and its subsidiaries as at 30 June 2023 (the Group ).

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income ( OCI ) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

De-recognises the assets (including goodwill) and liabilities of the subsidiary
De-recognises the carrying amount of any non-controlling interests
De-recognises the cumulative translation differences recorded in equity
Recognises the fair value of the consideration received
Recognises the fair value of any investment retained
Recognises any surplus or deficit in profit or loss
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or liabilities

Business combinations are accounted for using the acquisition method.

(f) Associates

Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. The Group’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

The Group’s share of its associates’ post-acquisition profits or losses is recognised in the consolidated statement of comprehensive income, and its share of post-acquisition movements in reserves is recognised in the statement of comprehensive income and reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

(g) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position. Restricted cash relates to term deposits held with various financial institutions as security for bank guarantees.

(h) Trade and other receivables

Trade receivables are initially recognised at their transaction price and other receivables at fair value. Receivables that are held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest are classified and subsequently measured at amortised cost. Receivables that do not meet the criteria for amortised cost are measured at fair value through profit or loss.

The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Group always recognises the lifetime expected credit loss for trade receivables carried at amortised cost. The expected credit losses on these financial assets are estimated based on the Group’s historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as forecast conditions at the reporting date.

For all other receivables measured at amortised cost, the Group recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. If the credit risk on the financial

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to expected credit losses within the next 12 months.

The Group considers an event of default has occurred when a financial asset is more than 120 days past due or external sources indicate that the debtor is unlikely to pay its creditors, including the Group. A financial asset is credit impaired when there is evidence that the counterparty is in significant financial difficulty or a breach of contract, such as a default or past due event has occurred. The Group writes off a financial asset when there is information indicating the counterparty is in severe financial difficulty and there is no realistic prospect of recovery.

(i) Property, Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on plant and equipment. Depreciation is calculated on a straight-line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation: Office equipment 3 years Plant and equipment 3 years Motor vehicles 3 years Furniture and fittings 5 years Leasehold improvements over the period of the lease

(j) Financial Assets

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Other financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. The Group has the following financial assets:

Financial Assets at Fair Value through Profit or Loss

Certain shares and options held for trading have been classified as financial assets at fair value through profit or loss. Financial assets held for trading purposes are stated at fair value, with any resultant gain or loss recognised in profit or loss. The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. Assets in this category are classified as current assets if they are expected to be realised within 12 months, otherwise they are classified as non-current assets.

Loans and Receivables

Trade receivables, loans, and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are recorded at amortised cost less impairment. Impairment is determined by review of the nature and recoverability of the loan or receivable with reference to its terms of repayments and capacity of the debtor entity to repay the debt. If the recoverable amount of a receivable is estimated to be less than its carrying amount, the carrying amount of the receivable is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately. They are included in current assets, other than those with maturities greater than 12 months from reporting date, which are classified as non-current assets.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Impairment of financial assets

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

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

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

(k) Debt and Equity Instruments Issued by the Group

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the statement of financial position classification of the related debt or equity instruments or component parts of compound instruments.

(l) Foreign Currency

Foreign currency transactions and balances

All foreign currency transactions occurring during the financial year are recognised at the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Exchange differences are recognised in the profit or loss in the period in which they arise except those exchange differences which relate to assets under construction for future productive use which are included in the cost of those assets where they are regarded as an adjustment to interest costs on foreign currency borrowings.

Functional and presentation currency

Items included in the financial statements of each of the companies within the Group are measured using the currency of the primary economic environment in which they operate (the functional currency). The consolidated financial statements are presented in Australian dollars, which is Cyclone Metal’s functional and presentation currency.

Group companies

The results and financial position of all the Group entities (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:

a. assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position;
b. 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

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

c. 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 are recognised in other comprehensive income. When a foreign operation is sold, a proportionate share of such exchange differences is reclassified to profit or loss, as part of the gain or loss on sale where applicable.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entities and translated at the closing rate.

(m) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

Trade and other payables extinguished through issue of equity

When equity instruments are issued to a creditor to extinguish all or part of a financial liability are recognised, the Group measures them at the fair value on the date the equity instruments are issued, unless that fair value can’t be reliably measured. Any difference between the carrying amount of the liability extinguished and the fair value of the equity issued on the date of issuance is recognised in the profit or loss as a gain or loss on extinguishment of liability.

(n) Employee Benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefits expected to be wholly settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefits which are not expected to be wholly settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to the reporting date.

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date.

Refer also to note 2(t) for accounting policy regarding share-based payments.

(o) Provisions

Provisions are recognised when the Group has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

Costs of site restoration are provided over the life of the facility from when exploration commences and are

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology.

Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.

(p) Convertible notes

Convertible notes (with embedded derivatives), that do not contain an equity component are accounted for as a financial liability through profit or loss with a value equating to the total proceeds/face value with no day one gain or loss and subsequently value will change depending on the changes in the share price/ redemption event and or accretion of the value of the discount on the note. If the convertible note is converted, the carrying amounts of the derivative and liability components are transferred to share capital as consideration for the shares issued. If the note is redeemed, any difference between the amount paid and the carrying amounts of liability is recognised in the statement of profit or loss.

(q) Impairment of non-current assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(r) Income Tax

Current Tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred Tax

Deferred tax is accounted for using the comprehensive balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/Group intends to settle its current tax assets and liabilities on a net basis. The Group has implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the statement of profit or loss and other comprehensive income except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity.

(s) Revenue recognition

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration to which the Group expects to be entitled to in exchange for transferring goods or services to a customer.

Rent

Rent revenue is recognised on a straight-line basis over the lease term. Lease incentives granted are recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned.

Interest Revenue

Interest revenue is recognised using the effective interest rate method.

(t) Share-based Payments

Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is independently determined using either the trinomial option pricing model or the Black-Scholes option pricing model that takes into account the exercise price, the term of the option or right, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employee or consultant to receive payment. No account is taken of any other vesting conditions.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest.

(u) Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest where right of tenure is current and active and significant operations are continuing in the area of interest. Costs associated with these identifiable areas of interests are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.

Accumulated costs in relation to an abandoned area are impaired in full in the statement of profit or loss and other comprehensive income in the year in which the decision to abandon the area is made.

When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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forward costs in relation to that area of interest.

(v) Earnings per Share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interests and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(w) Business Combinations

The acquisition method of accounting is used to account for all business combinations. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to the former owners of the acquiree and the equity issued by the acquirer, and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Costs directly attributable to the acquisition are expensed.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling shareholders’ interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the Group’s share of the fair value of the identifiable net assets acquired, the difference is recognised directly in the statement of profit or loss and other comprehensive income, but only after a reassessment of the identification and measurement of the net assets acquired.

Any contingent consideration to be transferred by the acquiree is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with AASB 139 either in profit or loss or in other comprehensive income. If the contingent consideration is classified as equity, it shall not be remeasured.

(x) Leases

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

Leases of low value assets; and
Leases with a term of 12 months or less.

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group’s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying value of the lease liability also includes:

amounts expected to be payable under any residual value guarantee;
the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option;
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of the termination option being exercised.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset.

Subsequent to initial measurement, lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. Lease liabilities are remeasured when there is a change in future lease payments arising from a change in an index or rate or when there is a change in the assessment of the term of any lease.

(y) Contributed equity

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.

(z) Parent entity financial information

The financial information for the parent entity, Cyclone Metals Limited, disclosed in note 29 has been prepared on the same basis as the consolidated financial statements, except as set out below:

Investments in subsidiaries and associates

Investments in subsidiaries and associates are accounted for at cost in the financial statements of Cyclone Metals Limited. Dividends received from associates are recognised in the parent entity’s statement of profit or loss and other comprehensive income, rather than being deducted from the carrying amount of these investments.

Tax consolidation legislation

Cyclone Metals Limited and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand-alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, Cyclone Metals Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

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

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligation to pay tax instalments.

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

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

(aa) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at reporting date.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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(ab) Critical Judgements in Applying the Group’s Accounting Policies

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Asset Acquisition not Constituting a Business

When an asset acquisition does not constitute a business combination as defined in AASB 3, the assets and liabilities are assigned a carrying amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax under AASB 112 applies. No goodwill will arise on the acquisition and transaction costs of the acquisition will be included in the capitalised cost of the asset.

Exploration and Evaluation

The Group’s accounting policy for exploration and evaluation is set out at note 2(u). The application of this policy necessarily requires management to make certain estimates and assumptions as to future events and circumstances, in particular, the assessment of whether economic quantities of reserves can be determined. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised expenditure, it is determined that recovery of the expenditure by future exploitation or sale is unlikely, then the relevant capitalised amount is written off in the statement of profit or loss and other comprehensive income.

Income taxes

The Group is subject to income taxes in Australia and jurisdictions where it has foreign operations.

Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group estimates its tax liabilities based on the Group’s understanding of the tax laws in the relevant jurisdictions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

The Group recognises deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority against which the unused tax losses can be utilised. However, utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are recouped.

Impairment

The Group assesses impairment at each reporting date by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amounts of the assets are determined.

As at 30 June 2023, management have recognised impairment losses in respect of those assets which had a carrying value which exceeded their recoverable amounts.

Accounting for Investments

The Group makes judgements as to its level of influence over its investments, which impacts how it accounts for these investments. The Group may determine that control of an investment exists, despite its interest in it being less than 50%. The criteria for this assessment includes: power over the investee; the right to variable returns from its involvement with the investee; and the ability to use power over investee to affect investment returns. If, on the balance of these criteria, control is deemed to exist, the Group accounts for its investment using the consolidation method. The Group may also determine that significant influence of an investment exists, despite its interest in it being less than 20%. The criteria for this assessment includes: representation on the investee’s board of directors, participation in policy making processes; material transactions between investor and investee; interchange of managerial personnel; and the provision of essential technical information. If, on the balance of these criteria, significant influence is deemed to exist, the Group accounts for its investment using the equity method.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Share-based payment transactions

The Company measures the cost of equity-settled transactions with Directors by reference to the fair value of the equity instruments at the date at which they are granted. For options, the fair value is determined using the Black Scholes model. For performance rights with market conditions, the fair value is measured using a trinomial pricing model.

3. PROFIT/(LOSS) FROM OPERATIONS

(a) Revenue Interest income (b) Other income Unrealised foreign currency exchange gain/(loss) Foreign currency exchange (loss)/gain Other income (COVID-19 cash boost) Impairment of receivable (c) Occupancy expenses Rental expense relating to operating leases - minimum lease payments Other occupancy expenses (d) Gain / (loss) on fair value of financial assets through profit and loss (Loss) / Gain on fair value of financial assets (shares in listed entities) through profit and loss (note 9(a)) Realised loss on fair value of listed financial assets through profit and loss (note 9(a)) Gain on sale of unlisted shares (e) Finance expenses Interest on European Lithium loan (note 16) Accrued interest on ATO debt (note 17)1 Convertible note at fair value through profit or loss (note 15)	2023 2022 $ $
	64 193
	64 193
	(24) 57 (739) (1,192) - 10,000 127,387 -
	126,624 8,865
	(30,000) (51,807) (919) (13,185)
	(30,919) (64,992)
	2,460,904 (2,856,142) - (1,244,137) - 100,212
	2,460,904 (4,000,067)
	(86,336) (14,178) 247,250 (118,498) - 126,219
	160,914 (6,457)

¹ During the year, the Company made a payment of interest to the ATO in respect to the final amount owing to the ATO under the tax liability (refer to note 17). The gain in the current year represents the reversal of amounts accrued in previous years to reconcile to the final amount of interest paid to the ATO.

4. INCOME TAXES

Major components of income tax expense for the year are: Income statement Current income tax charge / (benefit) Statement of changes in equity Income tax expense reported in equity		2023 2022 $ $

		- -

		- -

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Reconciliation

A reconciliation of income tax expense / (benefit) applicable to accounting profit / (loss) before income tax at the statutory income tax rate to income tax expense / (benefit) at the Company’s effective income tax rate for the year is as follows:

Accounting (loss) before income tax Income tax benefit at the statutory income tax rate of 30% (2022: 30%) Adjusted for: Non-deductible expenses Share-based payments Deferred tax assets and tax losses not recognised Share of losses of associates Impairment of exploration assets Extinguishment of liability Income tax expense / (benefit) reported in income statement	2023 2022 $ $ (5,491,561) (5,620,000) (1,647,468) (1,686,000) 994 11,478 78,442 112,058 (307,172) 1,862,857 - (332,136) 1,858,750 31,743 16,454 - - -

Recognised deferred tax assets and liabilities

The deferred tax liability balance comprises temporary differences attributable to:

	2023	2022
	$	$
The deferred tax liability balance comprises temporary differences attributable to:
Accrued income	470,369	469,739
Capitalised expenditure	(489,550)	(373,363)
Unrealised foreign exchange losses	(683,645)	(683,645)
Financial assets	572,197	1,310,468
Bad debts	(20,687)	(20,687)
Costs deductible over five years	(89,268)	(45,813)
Deferred tax liability	(240,584)	656,699
The deferred tax asset balance comprises temporary differences attributable to:
Accrued expenses and provisions	240,584	(656,699)
Deferred tax asset	240,584	(656,699)

Net deferred tax asset /(liability)	-	-

Movement in temporary differences during the current year

Consolidated Accrued income Financial assets Capitalised exploration expenditure Unrealised foreign exchange losses Other Net deferred tax asset	Balance 1 July 2022 Recognised in Income Balance 30 June 2023 $ $ $
	469,739 630 470,369 1,310,468 (738,271) 572,197 (373,363) (116,187) (489,550) (683,645) - (683,645) (66,500) (43,455) (109,955)
	656,699 (897,283) (240,584)

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Movement in temporary differences during the prior year

Balance 1 July 2021 Recognised in Income Balance 30 June 2022 Consolidated $ $ $ Accrued income 467,832 1,907 469,739 Financial assets 2,026,583 (716,115) 1,310,468 Capitalised exploration expenditure (285,841) (87,522) (373,363) Unrealised foreign exchange losses (683,645) - (683,645) Other (14,617) (51,883) (66,500) Net deferred tax asset 1,510,312 (853,613) 656,699 2023 2022 $ $ Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following items: Tax losses 236,451,658 234,380,117 @ 30% 70,935,497 70,314,035	Balance 1 July 2021 $	Recognised in Income Balance 30 June 2022 $ $
	467,832 2,026,583 (285,841) (683,645) (14,617)	1,907 469,739 (716,115) 1,310,468 (87,522) (373,363) - (683,645) (51,883) (66,500)
	1,510,312	(853,613) 656,699
		2023 2022 $ $
		70,935,497 70,314,035

The tax losses do not expire under current legislation subject to meeting loss recovery tests under tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.

5. SEGMENT INFORMATION

AASB 8 Operating Segments requires operating segments to be identified based on internal reports that are regularly reviewed by the Chief Operating Decision Maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. In the case of the Group the CODM are the executive management team and all information reported to the CODM is based on the consolidated results of the Group as one operating segment, as the Group’s activities relate to mineral exploration.

Accordingly, the Group has only one reportable segment and the results are the same as the Group results.

Information by geographical region

The analysis of the location of non-current assets other than financial instruments and deferred tax assets is as follows:

Australia West Africa Canada New Zealand evenue by geographical region Australia West Africa Canada New Zealand	2023 2022 $ $
	404 1,127,411 75,680 72,922 4,478,637 - - 4,575,355
	4,554,721 5,775,688
	2023 2022 $ $
	64 193 - - - - - -
	64 193

Revenue by geographical region

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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6. NOTES TO THE CASH FLOW STATEMENT

(a) Reconciliation of Cash and Cash Equivalents

For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks. Cash and cash equivalents at the end of the financial year as shown in the cash flow statement is reconciled to the related items in the Statement of Financial Position as follows:

o the related items in the Statement of Financial Position as follows:
Cash and cash equivalents Cash in banks and on hand Cash and cash equivalents per consolidated statement of cash flows Cash and cash equivalents per consolidated statement of financial position	2023 2022 $ $
	128,082 314,373
	128,082 314,373
	128,082 314,373

(b) Reconciliation of Net Loss to Net Cash Flows from Operating Activities

Loss from ordinary activities after tax Adjusted for non-cash items: Loss/(gain) on fair value of financial assets through profit & loss Depreciation and amortisation of non-current assets Gain on transfer from associate accounting to fair value through profit & loss Finance expense (Loss)/gain on extinguishment of liabilities Interest on loan (investing activity) Share-based payments Exploration expenditure impaired during the year Impairment of investment Impairment of receivables Unrealised foreign currency exchange (losses)/gains Changes in net assets and liabilities (Increase) in trade and other receivables Increase in provisions Decrease in tax provisions Increase/(decrease) in trade and other payables Net cash (used in) operating activities	2023 2022 $ $
	(5,491,561) (5,620,000) (2,460,904) 4,100,279 1,107 2,896 - (1,107,119) - (126,219) 54,855 - 86,336 14,178 261,473 373,527 6,279,048 422,507 - (100,212) (127,387) - 24 (57) (43,430) (35,690) 11,606 29,390 (1,200,004) (970,695) 573,010 335,129
	(2,055,827) (2,682,086)

Loss from ordinary activities after tax
Adjusted for non-cash items:
Loss/(gain) on fair value of financial assets through profit & loss
Depreciation and amortisation of non-current assets
Gain on transfer from associate accounting to fair value through profit &
loss
Finance expense
(Loss)/gain on extinguishment of liabilities
Interest on loan (investing activity)
Share-based payments
Exploration expenditure impaired during the year
Impairment of investment
Impairment of receivables
Unrealised foreign currency exchange (losses)/gains
Changes in net assets and liabilities
(Increase) in trade and other receivables
Increase in provisions
Decrease in tax provisions
Increase/(decrease) in trade and other payables
Net cash (used in) operating activities

2023
2022
$
$

(5,491,561)
(5,620,000)
(2,460,904)
4,100,279
1,107
2,896
-
(1,107,119)
-
(126,219)
54,855
-
86,336
14,178
261,473
373,527
6,279,048
422,507
-
(100,212)
(127,387)
-
24
(57)
(43,430)
(35,690)
11,606
29,390
(1,200,004)
(970,695)
573,010
335,129

(2,055,827)
(2,682,086)

Non-cash investing and financing activities

Non-cash investing and financing activities disclosed in other notes are:

Shares issued as settlement of liabilities in accordance with IFRIC 19 (refer Note 18)
▪ Shares issued on conversion of convertible notes (refer Note 15)
Payment for exploration projects through the issue of shares (refer Note 12)

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Net debt reconciliation

This section sets out an analysis of net debt and the movements in net debt for the year.

			Loan	Convertible
			Payables at	Notes at Fair
			Amortised	Value
			Cost	Through
				Profit or Loss
			$	$
Net Debt at 30 June 2021			-	136,219
Cash flows			1,000,000	-
Other changes			-	(126,219)
Shares issued upon conversion			-	(10,000)
Net Debt at 30 June 2022			1,000,000	-
Cash flows			1,250,000	-
Shares issued upon conversion			(2,250,000)	-
Net Debt at 30 June 2023			-	-
7. RESTRICTED CASH
			2023	2022
			$	$
Term deposits			12,500	12,500
Credit card guarantee			5,000	5,000
			17,500	17,500
8. TRADE AND OTHER RECEIVABLES
	Note		2023	2022
			$	$
Trade debtors			232,870	190,285
GST recoverable and other debtors			59,513	52,708
Prepayments			28,763	37,493
			321,146	280,486
9. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR		LOSS
	Note		2023	2022
			$	$
Financial Assets at Fair value through Profit or Loss
Shares in listed entities	(a)		8,627,778	6,369,579
Shares in unlisted entities	(b)		53,843	-
Total Financial Assets			8,681,621	6,369,579
(a) Movements in the carrying amount of the shares in listed entities
	Note		2023	2022
			$	$
Carrying value at beginning of the year			6,369,579	4,863,742
Realised loss on fair value of listed financial assets	3(d)		-	(1,244,137)
Reclassification to Investments accounted for using the equity		11	-	5,992,094
method
Disposal of equity investments			(202,705)	(385,978)
(Loss)/gain on fair value of financial assets through profit or loss	3(d)		2,460,904	(2,856,142)
			8,627,778	6,369,579

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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(b) Movements in the carrying amount of the shares in unlisted entities

Note Carrying value at beginning of the year Investment in unlisted entity (a)	2023 2022 $ $
	- - 53,843 -
	53,843 -

(a) During the year ended 30 June 2023, the Company made an investment of $53,843 in an unlisted exploration and development company. This is a level 3 measurement basis on the fair value hierarchy.

10. PROPERTY, PLANT AND EQUIPMENT

Plant & Equipment Buildings $ $	Motor Vehicles $	Furniture & Fittings $	Leasehold Improvements Total $ $
	10,045 - - 10,045 - -	61,333 - 1 61,334 - -	1,464,351 1,747,069 - 844 - 5,983 1,464,351 1,753,896 - 352 - 1,783
144,621 75,680	10,045	61,334	1,464,351 1,756,031
(140,466) - (2,774) - (143,240) - (1,047) -	(10,045) - (10,045) -	(61,082) (122) (61,204) (60)	(1,464,351) (1,675,944) - (2,896) (1,464,351) (1,678,840) - (1,107)
(144,286) -	(10,045)	(61,264)	(1,464,351) (1,679,947)
3,924 66,950 844 - (2,774) - 9 5,973 2,003 72,923 352 - (1,047) - (974) 2,757	- - - - - - - -	251 - (122) 1 130 - (60) -	- 71,125 - 844 - (2,896) - 5,983 - 75,056 - 352 - (1,107) - 1,783
334 75,680	-	70	- 76,084

(a) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

(b) The impairment loss represents the write down of certain plant and equipment to the recoverable amount. An item of property, plant and equipment initially recognised is derecognised when no future economic benefits are expected from use or its disposal.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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11. INVESTMENTS IN ASSOCIATED ENTITIES

		2023	2022
		$	$
Investments in associates accounted for using the equity method		-	-
(a)	Movements in the carrying amount of the investment in associates
		2023	2022
		$	$
Balance at beginning of period		-	4,884,975
Gain	on transfer from associated accounting to fair value through	-	1,107,119
P&L1
Reclassification to financial assets at fair value through Profit and		-	(5,992,094)
Loss
		-	-

¹ Given the Company holds less than 20% interest in CuFe Limited (previously FE Limited) (CUF), and that Tony Sage is the only similar Director on CUF and Cyclone Metals Ltd, the Company is considered to no longer have significant influence over the investment and accordingly is no longer equity accounted for. Instead, the Company's shareholding in CUF is accounted for a fair value through profit and loss.

12. EXPLORATION AND EVALUATION EXPENDITURE

Exploration and evaluation phases Movements: Carrying value at beginning of the year Exploration and evaluation expenditure capitalised during the year (a) Exploration expenditure impaired during the year (b) Acquisition of Kay Trinder tenements (note 31) Acquisition of Nickol River tenements (note 31) Acquisition of Grand Port tenements (note 31) Acquisition of P47/1812 (note 31) Acquisition of Block 103 tenements (note 31) Total exploration and evaluation phases	2023 2022 $ $
	4,478,637 5,700,632
	5,700,632 - 594,686 947,750 (6,279,048) (422,507) - 100,000 - 700,000 - 4,375,389 146,367 - 4,316,000 -
	4,478,637 5,700,632

(a) The value of the exploration expenditure is dependent upon:
the continuance of the rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of interest, or alternatively, by their sale.

(b) Impairment

During the year ended 30 June 2023, the Company recognised impairment losses in respect of capitalised exploration and evaluation to the extent of $6,279,048 (30 June 2022: $422,507). The impairment made during the year was recognised on:

On 14 July 2023, the Company announced that it has entered into a binding term sheet for the sale of its non-core gold assets that include 100% interest in the Nickol River Gold Project tenements in Western Australia ( Nickol River Project ) and the Longwood Range Gold Copper PGE Project, Mareburn Gold Project, Macraes South Gold Project, Drybread – Waikerikeri Gold Project, and Muirs Gold Project located on the North and South Islands of New Zealand ( NZ Projects ), to BVI registered company Moosh Moosh Limited ( Moosh ). Consideration for the Nickol River Project and NZ Projects is $4,000,000 in cash or equivalent in shares in an ASX-listed company or New Zealand-listed company to be paid by Moosh on Settlement. In addition, Moosh shall be entitled to a 1% net smelter

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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royalty on minerals extracted. Settlement is conditional upon completion of the due diligence by both parties no later than 29 September 2023, and the payment of $200,000 from Moosh to the Company for maintaining the tenements in good standing order during the due diligence period. As of the date of this report, the Company had not received the aforementioned payment from Moosh and as such has impaired the carrying value of the Nickol River Project and NZ Projects down to nil, and

areas of interest where sufficient data existed at balance date to indicate that the carrying amount of the exploration and evaluation asset was unlikely to be recovered in full from successful development or by sale.

Certain of Cyclone’s exploration properties may be subjected to claim(s) under native title, or contain sacred sites, or sites of significance to Indigenous people. As a result, exploration properties or areas within the tenements may be subject to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum of such claims.

13. TRADE AND OTHER PAYABLES

Trade payables Other creditors and accruals Withholding tax	2023 2022 $ $
	523,022 589,967 113,640 121,738 5,014 4,832
	641,676 716,537

Risk Exposure

The Group’s exposure to risk is discussed in note 25.

Terms and Conditions

Terms and conditions relating to the above financial instruments:

(i) Trade creditors are non-interest bearing and are normally settled on 30-day terms. (ii) Sundry creditors and accruals are non-interest bearing and have an average term of 30 days.

14. PROVISIONS

	2023	2022
	$	$
Employee entitlements	126,260	114,655
	126,260	114,655
15. CONVERTIBLE NOTE AT FAIR VALUE THROUGH PROFIT OR LOSS
	2023	2022
	$	$
Balance at beginning of period	-	136,219
Finance (benefit)/charges	-	(126,219)
Amounts repaid through issue of shares (note 18)	-	(10,000)
Balance at end of period	-	-

16. LOAN PAYABLE AT AMORTISED COST

Current	2023 2022 $ $
	- 1,014,178

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Movements in the carrying amount of loan payable:

ovements in the carrying amount of loan payable:
Balance at beginning of period Drawdown of loan (a) Accrued interest (note 3(e)) Repayment of borrowings through the issue of shares (a)	2023 2022 $ $
	1,014,178 - 1,250,000 1,000,000 86,336 14,178 (2,350,514) -
	- 1,014,178

(a) On 14 December 2021, the Company entered into a loan agreement and received funds of $500,000 from European Lithium Ltd (ASX: EUR). On 20 June 2022, the Company entered into a second loan agreement and received funds of $500,000 from EUR. On 17 August 2022, the Company entered into a third loan agreement and received funds of $500,000 from EUR. On 14 November 2022, the Company entered into a fourth loan agreement and received funds of $750,000 from EUR. On 2 June 2023, the Company issued 1,175,256,849 shares in the Company for the conversion of the loans plus accrued interest based on a share conversion price of $0.002 per share).

17. TAX LIABILITY

Current Movements in the carrying amount of tax payable Balance at beginning of year Accrued interest (note 3(e)) Repayments of income tax Balance at end of year	2023 2022 $ $
	- 1,200,004
	- 1,200,004
	2023 2022 $ $
	1,200,004 2,267,889 (247,250) 118,498 (952,754) (1,186,383)
	- 1,200,004

18. ISSUED CAPITAL

10,264,504,927 fully paid ordinary shares (2022: 6,104,236,982) Unissued share capital	2023 2022 $ $
	236,218,336 227,746,301 - 50,000
	236,218,336 227,796,301

Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held and in proportion to the amount paid up on the shares held. At shareholders meetings, each ordinary share is entitled to one vote in proportion to the paid-up amount of the share when a poll is called, otherwise each shareholder has one vote on a show of hands.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Movement in ordinary shares on issue

2023 Shares on issue at 1 July 2022 Shares issued during the period – Placement (i) Shares issued during the period – Placement (i) Shares issued during the period – Broker shares (ii) Shares issued during the period – Directors (note 24) Shares issued during the period – Consultants (iii) Shares issued during the period – Conversion of loan (note 16) Shares issued during the period – P47/1812 acquisition (note 31) Shares issued during the period – Block 103 acquisition (note 31) Capital raising costs Shares on issue at 30 June 2023 2022 Shares on issue at 1 July 2021 Shares issued during the period – Winance conversion (note 15) Shares issued during the period – Nickol River acquisition (note 31) Shares issued during the period – Placement Shares issued during the period – Directors Shares issued during the period – Kay Trinder acquisition (note 31) Shares issued during the period – Grand Port acquisition (note 31) Unissued share capital Capital raising costs Shares on issue at 30 June 2022	Ordinary fully paid shares Number $
	6,104,236,982 227,796,301 540,000,000 1,350,000 12,500,000 - 25,000,000 50,000 161,111,096 322,221 26,400,000 52,800 1,175,256,849 2,350,514 60,000,000 120,000 2,160,000,000 4,320,000 - (143,500)
	10,264,504,927 236,218,336
	4,532,236,982 220,115,531 2,000,000 10,000 100,000,000 500,000 508,333,333 2,460,000 50,000,000 200,000 11,666,667 70,000 900,000,000 4,500,000 - 50,000 - (109,230)
	6,104,236,982 227,796,301

(i) Placements

The following shares were issued via share placement during the year ended 30 June 2023:

On 28 July 2022, the Company issued 12,500,000 shares at an issue price of $0.004 per share. The Company recognised the issue of these shares during the year ended 30 June 2022 with the movement reflected through the unissued share capital account
On 27 January 2023, the Company issued 60,000,000 shares as in issue price of $0.0025 per share to raise proceeds of $150,000 (before expenses)
On 22 February 2023, the Company issued 412,800,000 shares as in issue price of $0.0025 per share to raise proceeds of $1,032,000 (before expenses)
On 1 March 2023, the Company issued 67,200,000 shares as in issue price of $0.0025 per share to raise proceeds of $168,000 (before expenses)

(ii) Broker Shares

On 1 March 2023, the Company issued 25,000,000 shares at an issue price of $0.0025 per shares to the lead broker of the placement which completed during January through to March 2023 (note 18(i)). The fair value of these shares on issue date was $0.002 per share which resulted in a gain in the extinguishment of liabilities of $12,500.

(iii) Consultants Shares

The following shares were issued via share placement during the year ended 30 June 2023:

On 17 April 2023, the Company issued 19,800,000 shares at an issue price of $0.0025 per share for the provision of consulting services in relation to the acquisition of Block 103. The fair value of these shares on issue date was $0.002 per share which resulted in a gain in the extinguishment of liabilities of $9,900.
On 28 April 2023, the Company issued 6,600,000 shares at an issue price of $0.0025 per share for the provision of consulting services in relation to the acquisition of Block 103. The fair value of these

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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shares on issue date was $0.002 per share which resulted in a gain in the extinguishment of liabilities of $3,300.

Capital Risk Management

The Group’s objective when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

Consistent with others in the industry, the Group monitors capital based on the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including “borrowings” and “trade and other payables” as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as “equity” as shown in the statement of financial position plus net debt.

Total trade and other payables Loan payable less: cash and cash equivalents Net debt Total equity Total capital Gearing ratio	2023 2022 $ $
	641,676 716,537 - 1,014,178 (128,082) (314,373)
	513,594 1,416,342 12,935,134 9,712,252
	13,448,728 11,128,594
	4% 15%

19. RESERVES

Foreign currency translation reserve Share-based payments reserve Business combination reserve Foreign currency translation reserve Balance at beginning of financial year Foreign currency exchange differences arising on translation of foreign operations Balance at end of financial year Share-based payments reserve Balance at beginning of financial year Acquisition of P47/1812 (note 31) Share-based payments Balance at end of financial year	2023 2022 $ $
	22,223,713 22,219,146 3,700,805 3,412,964 (1,090,501) (1,090,501)
	24,834,017 24,541,609
	2023 2022 $ $
	22,219,146 22,237,177 4,567 (18,031)
	22,223,713 22,219,146
	3,412,964 3,239,437 26,368 - 261,473 173,527
	3,700,805 3,412,964

Nature and Purpose of Reserves

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of financial statements of foreign subsidiaries.

Share-based payments reserve

The share-based payments reserve records items recognised as expenses on valuation of employee share options, as well as options and performance rights issued to directors and consultants.

Business combination reserve

The equity reserve is used to record the differences which may arise as a result of transactions with non-

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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controlling interests that do not result in a loss of control.

20. ACCUMULATED LOSSES

Balance at beginning of financial year Loss for the year Balance at end of financial year	2023 2022 $ $
	(242,625,658) (237,005,658) (5,491,561) (5,620,000)
	(248,117,219) (242,625,658)

21. SHARE-BASED PAYMENT ARRANGEMENTS

(a) Shares

Share-based payments granted during the current year

There were no share-based payments made during the year ended 30 June 2023.

Share-based payments granted during the prior year

On 16 December 2021, the Company issued 50,000,000 fully paid ordinary shares as a sign-on bonus to Mr Will Scott, upon his appointment as a Non-Executive Director of the Company. The shares were issued following receipt of shareholder approval at the AGM on 30 November 2021.

(b) Options

Options granted as share-based payments during the current year

There were no options granted as share-based payment arrangements during the year ended 30 June 2023.

Options granted as share-based payments during the prior year

There were no options granted as share-based payment arrangements during the year ended 30 June 2022.

Options outstanding at reporting date for share-based payments The following options were outstanding at 30 June 2023:

The outstanding balance of options at 30 June 2023 is as follows:

Grant Date Exercise Price	Number of Options Expiry Date Listed/Unlisted
23 May 2022 $0.006 28 July 2022 $0.005 22 February 2023 $0.003	25,000,000 31/03/2024 Unlisted 6,250,000 30/06/2024 Unlisted 30,000,000 22/02/2025 Unlisted 61,250,000

Reconciliation of options on issue

The following reconciles the outstanding share options granted, exercised and lapsed during the financial year:

Balance at beginning of the financial year Granted during the financial year Exercised during the financial year Lapsed during the financial year Forfeited during the financial year Balance at end of the financial year Exercisable at end of the financial year	2023 Number of Options Weighted Average Exercise Price $ 204,533,333 0.005 36,250,000 0.003 - - (179,533,333) (0.0051) - - 61,250,000 0.004 61,250,000 0.004	2022 Number of Options Weighted Average Exercise Price $
		123,200,000 0.005 188,333,333 0.005 - - (107,000,000) 0.005 - -
		204,533,333 0.005
		204,533,333 0.005

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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(c) Performance rights

At 30 June 2023, all performance rights had expired unvested.

(d) Expenses arising from share-based payments

Total costs arising from share-based payment transactions recognised as expenses during the year are as follows:

Director shares Performance rights issued to directors (note 21(c)) Options issued to employees and consultants Total share-based payments expense recognised in profit or loss	2023 2022 $ $
	- 200,000 261,473 173,527 - -
	261,473 373,527

22. OTHER UNLISTED OPTIONS

The following refers to unlisted options issued by the Company which do not constitute a share-based payment.

(a) Options granted during the current year

On 22 February 2023, the Company issued 30,000,000 unlisted options ($0.003 each expiring 22 February 2025) in respect to the acquisition of P47/1812 (note 31).

Options issued for the acquisition of P47/1812	Number of Options Grant date Expiry Date Exercise Price Fair value at grant date Vesting date
	30,000,000 22 February 2023 22 February 2025 $0.003 $0.0009 22 February 2023

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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The fair value of the equity-settled share options granted is estimated as at the date of grant using the Black and Scholes model taking into account the terms and conditions upon which the options were granted.

Number options issued Dividend yield Expected volatility Risk-free interest rate Expected life of options Exercise price Grant date share price	Assumptions
	30,000,000 0.00% 100% 3.41% 3.00 years $0.003 $0.002

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

(b) Options granted during the prior year

On 16 December 2021, a total of 12,222,223 unlisted options with an exercise price of $0.005, expiring on 16 December 2022 were issued to investors pursuant to the placement which completed on the same day.

On 4 February 2022, a total of 151,111,110 unlisted options with an exercise price of $0.005, expiring on 4 February 2023 were issued to investors pursuant to the placement which completed on the same day.

On 23 May 2022, the Company issued 2,500,000 options to Mr Will Scott, Non-Executive Director, on the same terms and conditions as participations of the March placement (exercise price of $0.006 and expiring on 31 March 2024). The options were issued following receipt of shareholder approval at the GM on 20 May 2022.

On 23 May 2022, a total of 22,500,000 unlisted options with an exercise price of $0.006, expiring on 31 March 2024 were issued to investors pursuant to the placement which completed on the same day. The options were issued following receipt of shareholder approval at the GM on 20 May 2022.

23. LOSS PER SHARE

Basic and diluted loss per share (a) (a) Basic and Diluted Loss per Share	2023 Cents per Share 2022 Cents per Share
	(0.08) (0.10)

The loss and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

re as follows:
Loss for the year Weighted average number of ordinary shares for the purposes of basic earnings per share	2023 $ 2022 $
	(5,491,561) (5,620,000)
	2023 Number 2022 Number
	6,914,751,450 5,116,780,666

There are 61,250,000 share options (30 June 2022: 204,533,333) excluded from the calculation of diluted earnings per share that could potentially dilute basic earnings per share in the future because they are antidilutive for the current period presented.

Since 30 June 2023 and prior to the date of release of these financial statements, nil (30 June 2022: nil) share options have been forfeited and nil (30 June 2022: nil) share options have been exercised.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Since 30 June 2023 and prior to the date of release of these financial statements, nil (30 June 2022: nil) performance rights have lapsed and nil (30 June 2022: nil) performance rights have vested.

24. RELATED PARTY DISCLOSURES

Loans with related parties

Agreements entered into with related parties

Office lease agreement with Okewood Pty Ltd

Investments in related parties

During the year ended 30 June 2023, the Company sold 2,000,000 shares in European Lithium Ltd (ASX: EUR) (refer to note 9). Mr Tony Sage is a director of EUR.

Transactions with related parties

Transactions between related parties are on commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

The following table provides the total amount of transactions (excluding loans with related parties and remuneration) that have been entered into with related parties for the relevant financial year.

			Purchases
		Sales to	from	Amounts	Amounts
		related	related	owed by	owed to
		parties	parties	related parties	related parties
Director related entities:
CuFe Limited	2023	81,289	-	37,031	-
CuFe Limited	2022	686	250	-	250
European Lithium Limited	2023	32,510	1,000	4,559	-
European Lithium Limited	2022	686	16,060	150	8,772
Perth Glory Football Club	2023	-	-	-	-
Perth Glory Football Club	2022	-	27,000	-	-
Okewood Pty Ltd	2023	-	30,000	-	10,000
Okewood Pty Ltd	2022	-	30,000	-	5,000
Gambosch Consulting Pty Ltd	2023	-	77,415	-	9,082
Gambosch Consulting Pty Ltd	2022	-	-	-	-
Wyn Contracting Pty Ltd	2023	-	44,737	-	-
Wyn Contracting Pty Ltd	2022	-	230,195	-	27,434

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Sales to and purchases from director related entities for the year ended 30 June 2023 relates to the reimbursement of occupancy, investor relations, travel, capital raising and other costs.

Relates party entities comprise:

Tony Sage is a director of European Lithium Limited and CuFe Limited
Okewood Pty Ltd is an entity controlled by Tony Sage
Perth Glory Football Club is an entity previously controlled by Tony Sage
Universal Trust is an entity controlled by Terry Donnelly
Wyn Contracting Pty Ltd is an entity controlled by Will Scott

Key management personnel

The following table discloses the remuneration of the directors and key management personnel of the Company:

Short-term employee benefits Post-employment benefits Share-based payments Long-term employee benefits	2023 2022 $ $
	700,167 642,959 - - 261,473 173,527 - -
	961,640 816,486

Detailed remuneration disclosures are provided in the remuneration report.

Equity instrument disclosures relating to key management personnel

25. FINANCIAL RISK MANAGEMENT

The Group is exposed to a variety of financial risks including market risk (currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to meet its financial targets whilst minimising potential adverse effects on financial performance. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out by the Board.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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The Group holds the following financial instruments at 30 June 2023:

Financial assets Trade and other receivables Financial assets at fair value through profit or loss Total current Other financial assets Total non-current Total assets Financial liabilities Trade and other payables Total current Total liabilities	Fair value At amortised cost Through profit and loss Through other comprehensive income $ $ $
	321,144 - - - 8,627,778 -
	321,144 8,627,778 - - 53,843 -
	- 53,843 -
	321,144 8,627,778 -
	641,676 - -
	641,676 - -
	641,676 - -

The Group holds the following financial instruments at 30 June 2022:

Financial assets Trade and other receivables Financial assets at fair value through profit or loss Total current Total assets Financial liabilities Trade and other payables Short term loan payable Total current Total liabilities	Fair value At amortised cost Through profit and loss Through other comprehensive income $ $ $
	280,486 - - - 6,369,579 -
	280,486 6,369,579 -
	280,486 6,369,579 -
	716,537 - - 1,014,178 - -
	1,730,715 - -
	1,730,715 - -

(a) Market Risk

(i) Foreign Currency Risk

The Group operates internationally and is exposed to foreign exchange risk arising from commercial transactions. The Group converted assets and liabilities into the functional currency where balances were denominated in a currency other than the Australian dollars.

The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating entity in currencies other than the functional currency.

At the reporting date, the Group did not have any material balances of cash held in a foreign currency and therefore a movement of 10% in the foreign currency exchange rates as at 30 June 2023 would not have a material impact on the consolidated loss or equity.

Managements have set up a policy to monitor and measure this risk using sensitivity analysis and cash flow forecasting.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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(ii) Cash Flow Interest Rate Risk

The Group’s exposure to market interest rates relates primarily to the Group’s cash and cash equivalents. The Group is exposed to movements in market interest rates on short term deposits.

At the reporting date, the Group had the following variable rate cash and cash equivalents and restricted cash:

Financial assets: Cash and cash equivalents Restricted cash Weighted average interest rate	2023 2022 $ $
	128,082 314,373 17,500 17,500
	145,582 331,873
	1.95% 0.06%

Movement of 50 basis points on the interest rate (considered a reasonably possible change) would not have a material impact on the consolidated loss or equity.

(iii) Price Risk

The Group is exposed to equity securities price risk. This arises from investments held and classified on the statement of financial position as at fair value through profit or loss. The Group is not exposed to commodity price risk.

To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio which is done in accordance with the limits set by the Board of Directors.

The majority of the Group’s equity investments are publicly traded on the Australian Securities Exchange (ASX) and are recognised as financial assets carried at fair value through profit or loss.

(b) Credit Risk

Credit risk is managed on a consolidated basis. Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The maximum credit risk on financial assets, excluding investments, of the Group, which have been recognised on the statement of financial position, is the carrying amount, net of any provision for doubtful debts.

The Group is exposed to credit risk as a result of subscribing to loan notes and convertible loan notes issued by listed and unlisted entities. This credit risk is managed by obtaining adequate security over the loans, generally in the form of a fixed and floating charge over the assets of the borrower. Details of the loan notes and convertible loan notes to which the Group had subscribed during the year are listed in notes 15 and 16. Credit risk arises from trade receivables. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from defaults. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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The Company holds 91% (2022: 91%) of its cash and cash equivalents with banks with a Moody’s credit rating on Aa3.

Financial assets Cash and cash equivalents and restricted cash Loans and receivables Financial assets at fair value through profit or loss Other financial assets	2023 2022 $ $
	145,582 331,873 321,144 280,486 8,627,778 6,369,579 53,843 -
	9,148,347 6,981,938

(c) Liquidity Risk

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows in relation to its operational, investing and financing activities. At the reporting date, the Group has financing arrangements in place as disclosed under note 16.

(d) Fair Value Estimation

The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure purposes. The Directors consider that the carrying amounts of financial assets and financial liabilities recorded in the financial statements approximate their fair values. The carrying values of trade and other receivables net of impairment and the carrying value of payables approximate fair values due to their short-term nature.

AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The carrying value of trade and other receivables, financial assets, trade and other payables and short term loan payables approximates to fair value.

Valuation techniques to derive level 1 fair values

Investments

The fair value of listed investments is based on quoted market prices at the end of the reporting period.

Valuation techniques to derive level 3 fair values

Convertible notes at fair value through profit or loss

The fair value of the convertible notes is determined based on probability being applied to the each of the fair value of the conversion option (i.e., Number of Convertible Notes x Share Price) and the fair value of the redemption option (being amount payable on redemption). The adjusting event represents a ratchet feature and has nil value until one of the adjusting events take place. The ratchet feature adjusts the conversion ratio of the convertible notes to ordinary shares of the Company. The observable input in the valuation of the convertible notes is the share price and the unobservable inputs are the probability rate, the redeeming, the adjusting events and credit risk of the Company.

Investments

The fair value of unlisted investments is based on cost at the end of the reporting period.

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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26. COMMITMENTS

The Group has approximately $276,071 in relation to its exploration tenements.

27. CONTINGENT ASSETS AND LIABILITIES

Contingent asset for future royalties payable from the Mayoko Iron Ore Project

In March 2012, Johannesburg Stock Exchange listed Exxaro Resources Limited ( Exxaro ) completed a takeover offer for all of the shares and listed options in African Iron Limited, a company in which the Company held 126,700,000 shares, delivering $72.2 million in cash to the Company. African Iron Limited owns the Mayoko Iron Ore Project which is located in the Republic of Congo ( Mayoko Project ). As part of the takeover transaction, the Company retains a production royalty of AUD$1.00 (indexed annually to the CPI) per tonne of iron ore shipped from the Mayoko Project ( Mayoko Royalty ). On 6 February 2014, the Company released an announcement advising shareholders that Exxaro has been granted a Mining Convention for the Mayoko Project. In September 2016 Exxaro announcement the completion of the sale of the Mayoko Project to Sapro SA. On 13 February 2017, the Company released an announcement that it had sold the Mayoko Royalty for A$1,000,000 subject to the formality of the new owners signing off on the transaction. As at 30 June 2018, the Company had received A$500,000 in cash with the remaining A$500,000 to be received as deferred consideration.

Contingent license fees for Sierra Leone projects

During the year ended 30 June 2019, the Company received a letter from the Sierra Leone Ministry of Mines ( MoM ) informing Marampa Iron Ore (SL) Limited ( Marampa SL ) of the cancellation of the Marampa mining license ML05/2014 due to non-payment of fees. In September 2014, Marampa SL submitted to the MoM an application letter entitled “Force Majeure to all Cape Lambert Operations in Sierra Leone” which was acknowledged by the MoM. The Company understood that the agreement with the MoM was that force majeure events were acknowledged and authorised and as such no fees would accrue or be payable until a processing facility was operating and Marampa SL is producing iron ore from Marampa. The Company understands that the notice of cancellation of license letter has incorrectly been issued by the new Sierra Leone government who are not aware of the agreement. The Company is of the view that there is no present obligation with respect to accrued exploration license fees since 2015 for its Sierra Leone projects due to the Company declaring force majeure and therefore the liability has been reversed in the financial statements.

28. SUBSIDIARIES

Name of Entity
Cyclone Metals Limited
Subsidiaries
African Minerals Exploration Ltd
Cape Lambert Minsec Pty Ltd
Danae Resources Pty Ltd
Dempsey Resources (Bermuda) Limited1
Dempsey Resources Pty Ltd
Grand Port Resources Pty Ltd
Iron Block 103 Corporation
Labrador Iron Pty Ltd
Marampa Iron Ore (Bermuda) Limited
Marampa Iron Ore (SL) Limited
Metals Exploration (Australia) Pty Ltd
Metal Exploration (SL) Limited
Midway Resources Limited
Mineral Resources (Bermuda) Limited1
Mineral Securities Investments (Australia) Pty Ltd
Mineral Securities Operations Pty Ltd
Mining International Pty Ltd
Nimitz Resources Limited
Pinnacle Group Assets (SL) Limited
1In the process of being liquidated or wound up.

Ownership Interest
Country of
Incorporation
2023
%
2022
%

Australia
-
-
Australia
100%
100%
Australia
100%
100%
Australia
100%
100%
Bermuda
100%
100%
Australia
100%
100%
Australia
100%
100%
Canada
100%
-
Australia
100%
-
Bermuda
100%
100%
Sierra Leone
100%
100%
Australia
100%
100%
Sierra Leone
100%
100%
New Zealand
100%
100%
Bermuda
100%
100%
Australia
100%
100%
Australia
100%
100%
Australia
100%
100%
New Zealand
100%
100%
Sierra Leone
100%
100%

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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29. PARENT ENTITY FINANCIAL INFORMATION

(a) Summary financial information

The individual financial statements of the parent entity show the following aggregate amounts:

Statement of financial position Current assets Total assets Current liabilities Total liabilities Shareholders’ equity Issued capital Reserves Retained earnings Total deficit Net loss for the year Total comprehensive loss	2023 2022 $ $
	378,594 513,966 2,543,194 2,805,442 (25,714,082) (22,549,855) (26,376,067) (23,738,569) 227,218,336 227,796,300 2,448,497 2,160,656 (262,499,705) (250,890,084)
	(23,832,872) (20,933,127)
	(11,609,621) (9,444,908) (11,609,621) (9,444,908)

(b) Guarantees entered into by the parent entity

The parent entity has provided financial guarantees in respect of environmental performance bonds for subsidiaries during the current year amounting to nil (2022: nil).

(c) Tax Consolidation

The Company and its 100% owned controlled entities have formed a tax consolidated group. Members of the Group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned controlled entities on a pro-rata basis. The agreement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. At reporting date, the possibility of default is remote. The head entity of the tax consolidated group is Cyclone Metals Limited.

Tax Effect Accounting by Members of the Tax Consolidated Group

Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides for the allocation of current taxes to members of the tax consolidated group. Deferred taxes are allocated to members of the tax consolidated group in accordance with a group allocation approach which is consistent with the principles of AASB 112 Income Taxes . The allocation of tax under the tax funding agreement is recognised as an increase/decrease in the controlled entities’ intercompany accounts with the tax consolidated group head Company, Cyclone Metals Limited. In this regard, the Company has assumed the benefit of tax losses from controlled entities of $129,491 (2022: $606,171) as of the reporting date. The Company has received a payment from the controlled entities of nil (2022: nil) as of the reporting date in respect of the current year tax liability for the tax consolidated group. The nature of the tax funding agreement is such that no tax consolidation contributions by or distributions to equity participants are required.

30. REMUNERATION OF AUDITORS

The auditor of Cyclone Metals Limited is BDO (WA) Pty Ltd.

Amounts received or due and receivable by BDO (WA) Pty Ltd for: An audit or review of the financial report of the entity and any other entity in the Group	2023 2022 $ $
	53,836 56,403
	53,836 56,403

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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31. ACQUISITION OF ASSETS

Block 103 Acquisition

On 17 April 2023, the Company completed the acquisition of 100% of the issued share capital and voting rights of Labrador Iron Pty Ltd ( Labrador Iron ) which owns 100% of Block 103 magnetite iron ore project, in Canada ( Block 103 Acquisition ). Consideration for the Block 103 Acquisition consisted of 2,160,000,000 shares in the Company at a deemed issue price of $0.0025 per share. The fair value of the shares on the date of issue was $0.002 per share which resulted in a gain of $1,080,000 being recognized as part of exploration and evaluation expenditure.

The fair value of the Block 103 Acquisition shares, together with the take on balances of Labrador has been used to record the value of exploration and evaluation assets on initial recognition in accordance with the Group’s accounting policies:

Consideration Shares Issued (2,160,000,000) Fair value adjustment Assets Acquired Exploration assets Financial liabilities (a) Net assets acquired Deferred exploration and evaluation expenditure	Note	Total
	18 12	5,400,000 (1,080,000)
		4,320,000 1,804,000 (1,800,000)
		4,000 4,316,000

(a) the financial liabilities acquired were extinguished immediately following acquisition through the issue of consideration shares to holders of the financial liabilities.

P47/1812 Acquisition

On 28 December 2022, the Company announced the acquisition of tenement P47/1812 from Stonefield Developments Pty Ltd. Consideration for the acquisition comprised the issue of 60,000,000 fully paid ordinary shares in the Company at a deemed issue price of $0.002 per share and 30,000,000 unlisted options ($0.003 each expiring 22 February 2025) ( P47/1812 Acquisition ).

The fair value of the P47/1812 Acquisition shares as at the date of acquisition are:

Consideration Shares Issued (60,000,000) Options Issued (30,000,000) Assets Acquired Exploration assets Deferred exploration and evaluation expenditure	Note	Total
	18 22 12	120,000 26,368
		146,368 -
		- 146,367

Kay Trinder Acquisition

On 6 October 2021, the Company announced the acquisition of tenements E47/3176 and P47/1524 from Kay Trinder. Consideration for the acquisition comprised a cash payment of $30,000 and the issue of 11,666,667 fully paid ordinary shares in the Company at a deemed issue price of $0.006 per share ( Kay Trinder Acquisition ).

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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The fair value of the Kay Trinder Acquisition shares as at the date of acquisition are:

Consideration Cash Shares Issued (11,666,667) Assets Acquired Exploration assets Deferred exploration and evaluation expenditure	Note	Total
	18 12	30,000 70,000
		100,000 -
		- 100,000

Nickol River Acquisition

On 23 August 2021, the Company announced the acquisition of a package of tenements from D&K Corps Investments Pty Ltd ( D&K ) that form the central part of the Nickol River Gold Project (NRP) area, located approximately 13km east of Karratha in the Pilbara region of Western Australia. The NRP comprises seven granted Mining Leases (M47/87, M47/127, M47/401, M47/421, M47/435, M47/455, M47/577) and five Miscellaneous Licences (L47/686, L47/687, L47/688, L47/689, and L47/565 (application)) and a Water Licence 177790. Consideration for the acquisition of the NRP tenements comprised a facilitation fee of $200,000 payable to Rich Minerals Pty Ltd (refer to note 24) and the issue of 100,000,000 fully paid ordinary shares in the Company to D&K at a deemed issue price of $0.005 per share ( Nickol River Acquisition ).

The fair value of the Nickol River Acquisition shares as at the date of acquisition are:

Consideration Shares Issued (100,000,000) Facilitation fee Assets Acquired Exploration assets Deferred exploration and evaluation expenditure	Note	Total
	18 12	500,000 200,000
		700,000 -
		- 700,000

Grand Port Acquisition

On 23 March 2022, the Company completed the acquisition of 100% of the issued share capital and voting rights of Grand Port Resources Pty Ltd ( Grand Port ) and its wholly owned subsidiaries Midway Resources Limited ( Midway ) and Nimitz Resources Limited ( Nimitz ) which together owns or has applications over a diversified portfolio of gold, copper, nickel and PGE assets in New Zealand ( Grand Port Acquisition ). Consideration for the Grand Port Acquisition consisted of 500,000,000 Tranche 1 shares in the Company (issued 23 March 2022) and 400,000,000 Tranche 2 shares in the Company (issued 23 May 2022) at a deemed issue price of $0.005 per share. The fair value of the shares on the date of issue of the Tranche 1 shares was $0.004 per share which resulted in a gain of $500,000 being recognized as part of exploration and evaluation expenditure.

The fair value of the Grand Port Acquisition shares, together with the take on balances of Grand Port, Midway and Nimitz has been used to record the value of exploration and evaluation assets on initial recognition in accordance with the Group’s accounting policies:

ANNUAL REPORT 2023

Notes to the Consolidated Financial Statements

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Consideration Shares Issued (900,000,000) Assets Acquired Cash acquired Trade and other receivables Exploration assets Trade and other payables Deferred exploration and evaluation expenditure	Note	Total
	18 12	4,500,000 11,479 240 135,141 (22,249)
		124,611 4,375,389

32. EVENTS SUBSEQUENT TO REPORTING DATE

On 14 July 2023, the Company announced that it has entered into a binding term sheet for the sale of its noncore gold assets that include 100% interest in the Nickol River Gold Project tenements in Western Australia ( Nickol River Project ) and the Longwood Range Gold Copper PGE Project, Mareburn Gold Project, Macraes South Gold Project, Drybread – Waikerikeri Gold Project, and Muirs Gold Project located on the North and South Islands of New Zealand ( NZ Projects ), to BVI registered company Moosh Moosh Limited ( Moosh ). Consideration for the Nickol River Project and NZ Projects is $4,000,000 in cash or equivalent in shares in an ASX-listed company or New Zealand-listed company to be paid by Moosh on Settlement. In addition, Moosh shall be entitled to a 1% net smelter royalty on minerals extracted. Settlement is conditional upon completion of the due diligence by both parties no later than 29 September 2023, and the payment of $200,000 from Moosh to the Company for maintaining the tenements in good standing order due the due diligence period. As of the date of this report, the Company had not received the aforementioned payment from Moosh.

ANNUAL REPORT 2023

Directors’ Declaration

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Directors’ Declaration

In accordance with a resolution of the directors of Cyclone Metals Limited, I state that:

In the opinion of the directors:
(a) the financial statements and notes of Cyclone Metals Limited for the financial year ended 30 June 2023 are in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the financial position of the Group as at 30 June 2023 and of its performance, for the period ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements; and
(iii) complying with International Financial Reporting Standards as disclosed in note 2(c).
(b) Subject to the matters set out in note 2(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
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 year ended 30 June 2023.

Signed in accordance with a resolution of the Directors:

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________ Tony Sage Executive Chairman

Perth, 28 September 2023

ANNUAL REPORT 2023

Tel: +61 8 6382 4600 Level 9, Mia Yellagonga Tower 2 Fax: +61 8 6382 4601 5 Spring Street www.bdo.com.au Perth, WA 6000 PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR'S REPORT

To the members of Cyclone Metals Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Cyclone Metals Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration.

In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001 , including:

(i) Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for the year ended on that date; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001 .

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

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

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

Material uncertainty related to going concern

We draw attention to Note 2(b) in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter.

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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 of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Accounting for exploration and evaluation assets

Key audit matter

How the matter was addressed in our audit

As disclosed in Note 12 of the financial report, the carrying value of exploration and evaluation assets represents a significant asset of the Group.

Judgement is applied in determining the treatment of exploration expenditure in accordance with Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources . In particular:

Whether the conditions for capitalisation are satisfied;
Which elements of exploration and evaluation expenditure qualify for recognition; and
Whether facts and circumstances indicate that the exploration and expenditure assets should be tested for impairment.

The accounting for exploration and evaluation assets is therefore considered as a key audit matter.

Our procedures included, but were not limited to the following:

Obtaining a schedule of the area of interest held by the Group and assessing whether the rights to tenure of this area of interest remained current at balance date;
Considering the status of the ongoing exploration programmes in the area of interest by holding discussions with management, and reviewing the Group’s exploration budgets, ASX announcements and directors’ minutes;
Verifying, on a sample basis, exploration and evaluation expenditure capitalised during the year for compliance with the recognition and measurement criteria of AASB 6;
Considering whether any facts or circumstances existed to suggest impairment testing was required and for impairment expense recorded, agreeing details to supporting documentary evidence; and
Assessing the adequacy of the related disclosures in Note 12 of the Financial Report.

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Accounting for acquisition of Labrador and key tenement P47/1812

Key audit matter

How the matter was addressed in our audit

During the year ended 30 June 2023, the Group entered into a binding term sheet with Labrador Iron Pty Ltd for the 100% acquisition of the Block 103 Magnetite Iron Ore Project located 30km northwest of Schefferville, Quebec, Canada (Block 103), as disclosed in Note 31 of the financial report. The Company has also acquired tenement P47/1812 from Stonefield Developments Pty Ltd.

Refer to Note 2(ab) and Note 31 of the financial report for a description of the accounting policy and significant estimates and judgements applied to these arrangements.

Our procedures included, but were not limited to:

Reviewing copies of all executed agreements in order to understand the structure, terms and conditions of the transactions;
Reviewing management's assessment of the accounting treatments and review the treatments are in accordance with accounting standards.
Verified the appropriateness of the transaction settlement date to supporting documentation.
Reviewing the accounting treatment of transaction costs and ensure these have been recorded in line with accounting standards.
Assessing the adequacy of the related disclosures in Note 2(ab) and Note 31 of the financial report.

Accounting for acquisition of assets is a complex accounting area and due to the judgemental estimates used. Therefore, we consider the Group’s accounting for acquisition of assets to be a key audit matter.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and the auditor’s report thereon.

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

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

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

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Responsibilities of the directors for the Financial Report

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

In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has 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 this 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 (http://www.auasb.gov.au/Home.aspx) at:

https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf

This description forms part of our auditor’s report.

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Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 17 to 23 of the directors’ report for the year ended 30 June 2023.

In our opinion, the Remuneration Report of Cyclone Metals Limited, for the year ended 30 June 2023, complies with section 300A of the Corporations Act 2001 .

Responsibilities

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

BDO Audit (WA) Pty Ltd

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Neil Smith

Director

Perth,

28 September 2023

Additional Stock Exchange Information

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Additional Stock Exchange Information

Cyclone Metals Limited is a listed public company, incorporated in Australia.

The Company’s registered and principal place of business is 32 Harrogate Street, West Leederville, Western Australia 6007 Australia.

(a) Distribution of equity securities

The distribution of members and their holdings of equity securities in the Company as at 31 August 2023 are as follows:

Category (size of holding)	Total Holders Number of Units %
1- 1,000 1,001- 5,000 5,001- 10,000 10,001- 100,000 100,001 – 999,999,999 Total	46 10,467 0.00 81 237,978 0.00 62 505,270 0.00 309 19,624,161 0.19 1,875 10,244,127,051 99.80
	2,373 10,264,504,927 100.00

Equity Securities

As at 31 August 2023, there were 2,373 shareholders, holding 10,264,504,927 fully paid ordinary shares.

All issued ordinary shares carry one vote per share and are entitled to dividends.

The number of shareholders holding less than a marketable parcel of shares is 1,307.

(b) Twenty Largest Shareholders

The names of the twenty largest fully paid ordinary shareholders as at 31 August 2023 are as follows:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20	Name	Number of Fully Paid Ordinary Shares Held % held of Issued Capital
	EUROPEAN LITHIUM LIMITED BNP PARIBAS NOMS PTY LTD OKEWOOD PTY LTD M3 METALS CORP FIRST INVESTMENTS HOLDING LIMITED GILMORE CAPITAL LIMITED ANGKOR IMPERIAL RESOURCES PTY LTD A/C> BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM CAPRETTI INVESTMENTS PTY LTD CELTIC CAPITAL PTY LTD E-MERGE FZE ESPLANADE CONSULTANCY PTY LTD ALPHA CAPITAL ANSTALT DORALEDA PTY LTD STONEFIELD DEVELOPMENTS PTY LTD DISCRETIONARY A/C> WESTCAP PTY LTD GHAN RESOURCES PTY LTD TRIBECA NOMINEES PTY LTD MR BRUNO SENEQUE EXCHANGE MINERALS LIMITED	1,180,256,849 11.50 793,062,119 7.73 423,375,858 4.12 400,000,000 3.90 278,178,538 2.71 225,000,000 2.19 222,000,000 2.16 197,938,352 1.93 190,000,000 1.85 185,647,059 1.81 160,000,000 1.56 160,000,000 1.56 155,000,000 1.51 150,387,500 1.47 109,337,223 1.07 100,203,127 0.98 91,804,278 0.89 80,000,000 0.78 75,000,000 0.73 72,939,201 0.71
		5,250,130,104 51.15

ANNUAL REPORT 2023

Additional Stock Exchange Information (c) Substantial shareholders The names of the substantial shareholders in accordance with_section 671B_of the_Corporations Act 2001_ at 31 August 2023 are as follows: Fully paid ordinary shareholders Number of shares held % held of Issued Capital 1 EUROPEAN LITHIUM LIMITED 1,180,256,849 11.50 (d) Voting Rights In accordance with the Company’s constitution, on show of hands every member present in person or by proxy or attorney or duly authorised representative had one vote. On a poll every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held. Options do not carry a right to vote. (e) Unquoted securities At 31 August 2023 the Company has 61,250,000 unlisted options on issue. The names of security holders holding more than 20% of an unlisted class of security are listed below: Name Unlisted Options Exercisable at $0.003 Expiring 22 February 2025 Unlisted Options Exercisable at $0.006 Expiring 31 March 2024 Unlisted Options Exercisable at $0.005 Expiring 30 June 2024	Additional Stock Exchange Information (c) Substantial shareholders The names of the substantial shareholders in accordance with_section 671B_of the_Corporations Act 2001_ at 31 August 2023 are as follows: Fully paid ordinary shareholders Number of shares held % held of Issued Capital 1 EUROPEAN LITHIUM LIMITED 1,180,256,849 11.50 (d) Voting Rights In accordance with the Company’s constitution, on show of hands every member present in person or by proxy or attorney or duly authorised representative had one vote. On a poll every member present in person or by proxy or attorney or duly authorised representative has one vote for every fully paid ordinary share held. Options do not carry a right to vote. (e) Unquoted securities At 31 August 2023 the Company has 61,250,000 unlisted options on issue. The names of security holders holding more than 20% of an unlisted class of security are listed below: Name Unlisted Options Exercisable at $0.003 Expiring 22 February 2025 Unlisted Options Exercisable at $0.006 Expiring 31 March 2024 Unlisted Options Exercisable at $0.005 Expiring 30 June 2024
ANNUAL REPORT 2023 Belstar Holdings Pty Ltd Mr Ian Barrie Murie Spartan Nominees Pty Ltd D&K Corps Investments Pty Ltd Stonefield Developments Pty Ltd Holders < 20%	- - 2,500,000 - - 2,500,000 - - 1,250,000 - 7,500,000 - 30,000,000 - - - 17,500,000 -
	30,000,000 25,000,000 6,250,000
	74

Additional Stock Exchange Information

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Schedule of Mineral Tenements Held at 30 June 2023

Tenement	Project & Location	Interest
Kukuna Project-EL 22/2012	Kukuna–Sierra Leone	100%
ML 90098	Wee MacGregor-Queensland	20%
ML 2504	Wee MacGregor-Queensland	20%
ML 2771	Wee MacGregor-Queensland	100%
ML 2773	Wee MacGregor-Queensland	20%
E47/3176	Nickol River–Western Australia	100%
L47/565	Nickol River–Western Australia	100%
L47/686	Nickol River–Western Australia	100%
L47/687	Nickol River–Western Australia	100%
L47/688	Nickol River–Western Australia	100%
L47/689	Nickol River–Western Australia	100%
M47/087	Nickol River–Western Australia	100%
M47/127	Nickol River–Western Australia	100%
M47/401	Nickol River–Western Australia	100%
M47/421	Nickol River–Western Australia	100%
M47/435	Nickol River–Western Australia	100%
M47/455	Nickol River–Western Australia	100%
M47/577	Nickol River–Western Australia	100%
P47/1524	Nickol River–Western Australia	100%
P47/1812	Nickol River–Western Australia	100%
EP60671	Muirs Reef–New Zealand	100%
PP60709	Muirs Surrounds–New Zealand	100%
EP60663	Mareburn–New Zealand	100%
PP60700	Macraes South–New Zealand	100%
PP60707	Drybread–New Zealand	100%
PP60708	Waikerikeri–New Zealand	100%
EP60694	Longwood Range Prinz–New Zealand	100%
PP60693	Longwood Range M'vale–New Zealand	100%
EP60692	Longwood Range Tops–New Zealand	100%
Block 103	Labrador Trough-Canada	100%

ANNUAL REPORT 2023

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cyclonemetals.com

Cyclone Metals Ltd ABN: 71 095 047 920

AI assistant

IRON BEAR RESOURCES LTD — Annual Report 2023

65091_rns_2023-09-28_75730ff4-0ff2-471b-bc88-b5b46323612d.pdf

2023 ANNUAL REPORT

Contents

Contents

Corporate Directory

Directors

Bankers

Company Secretary

Stock Exchange Listing

Auditors

Website

Registered Address

Share Registry

Principal Activities and Review of Operations

Strategy

Flagship Project

Block 103

Release of a maiden Mineral Resource estimate of 7,200 Mt @ 32% Fe

Highlights

Planning and resourcing of Block 103 value project milestones, with a target to generate bulk client DRI pellet samples by Q2 2024

Principal Activities and Review of Operations

Start of field operations in Shefferville, Canada

Principal Activities and Review of Operations

Secondary Assets and Interests

Grand Port

South Island – Mareburn and Macraes South

South Island – Drybread and Waikerikeri

North Island – Muirs

South Island - Longwood

Nickol River Gold Project

Wee MacGregor Project

Yalardy Project

Marampa Project

Kukuna Project

Cameroon

Key Risks

FORWARD LOOKING STATEMENTS

COMPETENT PERSONS STATEMENT

Directors’ Report

Directors

Company Secretary

Dividend and Return of Capital

Review of Results and Operations

Principal Activity

Review of Operations

Board and Officer Appointments

Unmarketable Parcel Sale Facility

Shareholder Meetings

Conversion of Debt

Placements

Other Security Movements

Results

Changes in State of Affairs

Events Subsequent to Reporting Date

Likely Developments and Expected Results of Operations

Environmental Regulation and Performance

Indemnification of Officers

Indemnification of Auditors

Directors’ Meetings

Remuneration Report (Audited)

Remuneration Policy for Directors and Other Key Management Personnel

Details of Directors and Other Key Management Personnel

Directors

Principles used to determine the nature and amount of remuneration

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

Directors’ Report

Details of Remuneration

Additional disclosures relating to performance rights

Performance rights awarded, vested and lapsed

Shareholdings of directors and key management personnel

Options of directors and key management personnel

Other transactions with director related entities

Loans with related parties

Agreements entered into with related parties

Office lease agreement with Okewood Pty Ltd

Investments in related parties

Transactions with related parties

Equity instrument disclosures relating to key management personnel

IRON BEAR RESOURCES LTD Annual Report 2023