KAISER REEF LIMITED — Annual Report 2019

Jan 24, 2021

Centennial Mining Limited (Subject to Deed of Company Arrangement) ABN: 50 149 308 921

Annual Report 30 June 2019

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Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Contents	Contents	Contents	Contents	Contents	Contents						Page
Corporate Information											1
Review of Operations											2
											5
Consolidated Statement								of Profit		or Loss and other Comprehensive Income	15
Consolidated Statement								of Financial Position			16
Consolidated Statement								of Changes in Equity			17
Consolidated Statement								of Cash		Flows	18
Notes to the Financial Statements											19
											55
											56
											57

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Corporate Information

Centennial Mining Limited

ABN 50 149 308 921

Directors

Dale Rogers Executive Chairman ( terminated 17 March 2020 ) Anthony Gray Non-Executive Director

Company Secretary

Dennis Wilkins

Registered Office

C/- KordaMentha Level 10, 40 St Georges Terrace PERTH WA 6000 Telephone: (08) 9220 9333

Principal Place of Business

A1 Gold Mine Woods Point Road MANSFIELD VIC 3722 Telephone: +61 3 5777 8125

Website

www.centennialmining.com

Share Registry

Security Transfer Australia Pty Ltd 770 Canning Highway APPLECROSS WA 6153 Telephone 1300 992 916 Facsimile +61 8 9315 2233

Bankers

Macquarie Bank Limited 101 Collins Street MELBOURNE VIC 3000

Auditors

BDO Audit (WA) Pty Ltd 38 Station Street SUBIACO WA 6008

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Review of Operations

Centennial Mining Limited (subject to Deed of Company Arrangement[1] ) is an emerging junior gold producer that is developing and producing from the A1 Underground Gold Mine near Woods Point and Union Hill Underground Mine at Maldon in Victoria. Mined ore s Porcupine Flat CIL gold processing facility, near Maldon.

Location of Projects

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Centennial is pleased to report its activities for the year ended 30 June 2019.

1 Named throughout this report as either Centennial Mining Limited, Group or the Company

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Year in Review

Through FY 2019 ore was mined from both A1 mine and Union Hill. Mine development and mining A1 Mine saw the 1320 level established with a production grade of around 5.0 gt from the jumbo development ore. Handheld mining continued in various areas with a head grade of around 7gt while some long hole production was sub 4gt. Mining at Union Hill was from long hole open stoping between the 1060 through to 1100 levels. Production grade was circa 3.0 gt however due to the close proximity to the process plant the mine remained in operation while processing capacity was available.

The process plant saw operational issues with throughput capacity in November and December 2018, due to worn mill liners, resulting in higher production costs and a reduction of around 20% of capacity. Union Hill was placed into care and maintenance from November 2018 due to lower head grade, compared to A1 financial stress due to the inability to raise additional working capital and the company entered Voluntary Administration on 21st March 2019.

The Voluntary Administrators which saw production from hand held mining methods at circa 20% of previous production capacity. The forecast saw around a 50% reduction of the A1 Mine workforce and 75% reduction at the process plant. This limited mining strategy continued through the remainder

Prior to the company entering Voluntary Administration, the main decline at A1 Mine was progressively extended from the 1315 level down to the 1300 level, approximately 15 m vertically, enabling production level development on the 1320, 1310 and 1300 mRL levels. Long hole stoping was conducted from the 1360. Headings within these areas were a combination of air-leg mining production and mechanised jumbo headings where access was favourable. Access to historic workings provided opportunities to mine accessible high grade ore in the form of high grade laminar quartz veins.

In addition, a significant proportion of production also came from mining of high grade mineralisation and exploration drives as air-leg intermediate stopes including 1320-830 sub-level, 1310 and 1300. A total of Plant at Maldon in Central Victoria, producing a total of 10,940 ounces of gold.

Further detailed resource definition diamond drilling program was completed underground, targeting the Victory North area resource definition between the 1320RL below the 110m0RL. The results from this drilling program along with historic drilling results informed the updated shape definition and block modelling of the Victory North long hole stope and Queens Exploration Target.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Summary of tenements

Tenement	Equity		Status	Company
Woodspoint - Walhalla Goldfield (Victoria)
MIN5294	100%		Granted	A1 Consolidated Gold Ltd
Maldon Goldfield (Victoria)
MIN5146	100%		Granted	Maldon Resources Pty Ltd
MIN5528	100%		Granted	Maldon Resources Pty Ltd
MIN5529	100%		Granted	Maldon Resources Pty Ltd

Governance Arrangements & Internal Controls

Centennial Mining Limited maintains an internally audited drilling database for all projects at its A1 Gold Operation and Maldon Gold Operations that is backed up on a regular basis. Company geologists are responsible for collecting drilling data and entering it into the drilling database and the Exploration Manager is responsible for the auditing and integrity of the drilling database.

Interpretation of drilling data is supported by detailed surface geological mapping, open pit mine mapping, and underground mine mapping.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Your directors submit the annual financial report of the Group consisting of Centennial Mining Limited ( ) and the entities it controlled for the financial year ended 30 June 2019. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

The names of directors who held office during or since the end of the year and until the date of this report are as follows:

Dale Rogers (Executive Chairman) terminated 17 March 2020 :

BEng (Hons)

technical background, having experience in operations management, project development and start-ups, project optimisation, improvement programmes and organisational development. His working experience includes operational roles from underground miner to operations manager level in the gold industry being responsible, at one time, for management through to profit and loss of gold operations encompassing three operating mills, processing a combined total of +4 million tonnes per annum, and being fed by three underground and five open cut gold mines.

Mr Rogers has been responsible for the commencement and development of half a dozen underground mines and a similar number of open cut mines in Australia and overseas.

In addition to his operational experience, he has managed scoping and bankable feasibility studies and subsequently been responsible for financing, construction and development of several projects. Mr Rogers also has experience in debt and equity raising, toll treatment agreements, negotiating off-take agreements and project approvals, negotiation of development, finance and taxation agreements, mergers, takeovers, acquisitions and divestments, joint ventures and valuations. committee.

Mr Rogers was Managing Director of a junior resources Company when it went from a market capitalisation of $40m to just under $1.0bn over a period of four years. He was the founding Chairman of Primary Gold Limited and Phoenix Gold Limited, acquired by Evolution Mining in 2016.

Directorships held in other listed entities during the last three years:

Formerly a director and Chairman of Primary Gold Ltd and Phoenix Gold Ltd.

Anthony Gray (Non-Executive Director):

BSc (Hons) Geology MAIG

the Australian mining industry. His experience ranges across mineral exploration, investment analysis, project and corporate transactions, mine development and fundraising.

During his career Mt Gray has explored for greenstone and slate belt hosted orogenic gold deposits, nickel sulphide and laterite deposits, and porphyry copper-gold deposits. He is a member of the Australian Institute of Geoscientists and a Competent Person, as defined by the JORC Code 2012, for the reporting of Exploration Results and Mineral Resources for a number of styles of gold and base metal deposit. Mr Gray is a member

Directorships held in other listed entities in the last three years:

Formerly the Managing Director of Octagonal Resources Ltd.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Company Secretary

Dennis Wilkins

B.Bus ACIS, AGIA

Mr Dennis Wilkins is an accountant who has been a director, company secretary or acted in a corporate advisory capacity to listed resource companies for over 20 years. Mr Wilkins previously served as the Finance Director and Company Secretary for a mid-tier gold producer and also spent five years working for a leading merchant bank in the United Kingdom. Resource postings to Indonesia, South Africa and New Zealand in managerial roles has broadened his international experience.

Mr Wilkins has extensive experience in capital raising specifically for the resources industry and is the principal of DW Corporate which provides advisory, funding and administrative management services to the resource sector. He is a former director of the Company from 24 November 2014 to 11 May 2015.

Interests in the securities of the Company and related bodies corporate

The following relevant interests in securities of the Company or a related body corporate were held by the directors or their immediate family as at the date of this report.

Directors	Number of fully paid ordinary shares	Number of options over ordinary shares	Number of convertible notes
Anthony Gray	1,895,090	4,601,014	Nil

Principal Activities

The principal activities of the Company during the year were gold exploration, development and production mining activities within central and eastern Victoria.

Dividends

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

Operating Results for the Year

The operating loss after income tax of the Company for the year ended 30 June 2019 was $33,360,733 (2018: $8,318,780). Summarised operating results are as follows:

	2019 2018
	Revenue Results Revenue Results
Revenues and (loss) after income tax expense	$22,238,045 $(33,360,733) $24,739,944 $(8,318,780)

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Matters Subsequent to the End of the Financial Year

The impact of the Coronavirus (COVID-19) pandemic is ongoing and it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.

Voluntary administration and deed administration

Details surrounding the appointment of Voluntary Administrators and Deed Administrators of the subsequent

Appointment of voluntary administrators

On 21 March 2019, Richard Tucker, John Bumbak and Leanne Chesser were appointed as the joint and several Voluntary Administrators of the Company and its fully owned subsidiary, Maldon Resources Pty Ltd (both defined as the Group

Upon their appointment, the Voluntary ascertain whether they should:

• continue to trade the Group on a business as usual basis;

• selective/limited mining

• program; or

• program.

the lowest net funding requirement (as it allowed for revenue to be generated from gold sales) ($0.17 million surplus) when compared to the forecast trading loss on a care and maintenance basis over 14 weeks of a $1.06 million trading loss and allowed th

First DoCA

The Voluntary Administrators became the Deed A

On 7 June 2019, the First DoCA was executed by the Deed Administrators and Avior. A detailed overview of the First DoCA is . For reference, a high-level overview is as follows:

New money of $8.5 million would be raised via a capital raising with $3.85 million of this being made available 5 million available for future working capital of the Group. Employee entitlements for continuing employees of the Group would be preserved in full and employee entitlements for employees whose employment had been terminated was expected to be paid in full.

Creditors would be dealt with in separate classes.

Varied DoCA

On 8 July 2019 the Deed Administrators received correspondence from Avior advising that it was their opinion that the First DoCA could not be completed due to an inability to raise the capital under the terms of the First DoCA and as such a variation would be required. Avior required an alternate method to raise capital due to unforeseen external economic conditions, including but not limited to:

• An introduction of royalties on gold production charged by the Victorian State Government in January 2020;

• Various high-profile trading issues in the Australian gold sector; and Introduction of a new DoCA contributor.

the material nature of the variations to the First DoCA, creditor approval was required. Accordingly, the Deed Varied DoCA Propo Administrators remained the Deed Administrators.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

The Varied DoCA was executed on 27 September 2019 by the Deed Administrators and Avior.

An overview of the Varied DoCA is as follows:

New money of $5.65 million to be raised via capital raisings by Centennial ($1.25 million) and Austar ($4.4 be paid to creditors in full and final settlement of their claims and $2.25 million made available for the Voluntary retain $2.0 million of cash.

Court approval under section 444GA of the Corporations Act would be required to transfer the shares from current Centennial shareholders to participating creditors as per the terms of the Varied DoCA.

Prior to effectuation of the Varied DoCA, the Group and Austar Gold Limit a merger/acquisition transaction whereby the new Centennial shareholders (post the 444GA application and

Employee entitlements for continuing employees of the Group would be preserved in full and employee entitlements for employees whose employment had been terminated were expected to be paid in full.

Creditors would be dealt with in separate classes.

Amended Varied DoCA

On 21 October 2019, the Deed Administrators received correspondence from Avior advising that it was their opinion that the Varied DoCA was required to be amended further due to:

The reduction in gold revenue produced in the period 1 August 2019 to 23 September 2019;

• facility by a further $0.50 million to allow the Deed Administrators to continue operations;

  • star post the effectuation of the Varied DoCA needing to be increased

• to take into consideration the additional lending;

• to terminate the options held to acquire shares in Centennial;

• allow parties who held options to acquire shares in Centennial to be admitted as a contingent creditor of Centennial and to vote at a meeting of creditors in relation to a resolution that the company enter an amended Varied DoCA; and

the merger and any costs incurred by the Deed Administrators).

In addition:

• ctober 2019 that creditors ;

• and

• There was a subsequent unexpected increase in gold production in the period 1 October 2019 to 29 October 2019.

Avior con

Administrators on 28 October 2019.

The Amended Varied DoCA was approved at meetings of creditors held on 15 November 2019 and the Amended Varied DoCA was subsequently executed on 20 November 2019.

A further extension for the effectuation of the Amended Varied DoCA to 24 January 2020 was approved between Avior and the Deed Administrators on 12 December 2019, to allow for Austar to complete its capital raisings, as Austar raising up to $4.4 million in capital was a condition precedent to the Amended Varied DoCA, and $2.4 million of this capital was to be contributed to the Amended Varied DoCA.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

On 11 January 2020, Mining Lending entered into an agreement to assign its debt to Austar.

The Deed Administrators consented to the assignment of the debt subject to a further DoCA being submitted and:

• receiving a bank guarantee/cash for $0.3 million to f meetings by 17 January 2020; meetings and effectuation of any revised DoCA approved by creditors; and

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• drawing of their remuneration approved by creditors and costs (including legal costs) from the cash

This assignment of debt to Austar did not complete due to:

• issues arising between Austar and Mining Lending in relation to the assignment of the debt; and

• Austar not complying with the terms of the assignment, by failing to provide the bank guarantee/cash to

For the reasons detailed above, the Amended Varied DoCA could no longer be effectuated.

Oldfield DoCA

Execution

On 21 January 2020, a DoCA proposal was received from Oldfield Investments Pty Ltd atf Oldfield Family conditions precedent to the Oldfield DoCA proposal was the acceptance by the Deed Administrators of a loan agreement with Oldfield Investments to refinance the Mining Lending facility in full. The Deed Administrators refinanced in full on 22 January 2020 with Oldfield Investments becoming a secured creditor of the Group.

The Oldfield DoCA was approved by creditors at meetings held on 12 February 2020. However, on 26 February -enlivened the proceedings in the Federal Court of Australia vid 688 Oldfield Investments agreed with Gandel that the DoCA would be amended by way of Court Order honouring has a statutory priority pursuant to section 560 of the Act.

On 28 February 2020, the Oldfield DoCA was executed between the Group, Oldfield Investments and the Deed Administrators.

Overview

upplementary report to

creditors dated 28 January 2020. A high-level overview of the provisions of the Oldfield DoCA is as follows:

• $2.01 million on effectuation of the Oldfield DoCA. This contribution was increased to $2.36 million after it was determined to honour the section 560 loans provided by Gandel to the Group; million at 30 June 2021 (i.e. conditional distribution); and

• million at 30 June 2022 (i.e. conditional distribution)

• The following Centennial secured creditors:

• Montlodge Pty Ltd atf Stanley Family Trust;

• Bendan Superannuation Pty Ltd atf Crooks Superannuation Fund; and

• being provided 10% of the issued shares in Centennial

• Oldfield Investments receiving 90% of the issued shares in Centennial pursuant to a section 444GA Court application and section 606 consent from ASIC;

• Gandel being treated as an unsecured creditor; and

• Creditors being dealt with in separate classes.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Oldfield DoCA extensions

The Oldfield DoCA was extended three times from the original completion date of 31 March 2020.

The first extension was to 30 June 2020 to allow the Gandel Proceedings to be determined. The second to 30 September 2020 to allow the appeal to the Gandel Proceedings to be determined. The third extension to 31 December 2020 was to allow the appeal to the Gandel Decision to be heard and subsequent decision to be handed down.

Ability to complete

The Deed Administrators had concerns that the Oldfield DoCA would be unable to be effectuated due to a number of factors, including:

• Secured Creditors (excluding Gandel) stated that they were not supportive of receiving equity in accordance with the Oldfield DoCA and would not release their security over Centennial at effectuation, being a condition to the Oldfield DoCA;

• the Court decision in the Gandel Proceedings that Gandel holds security over the A1 Mine (the Oldfield DoCA treated Gandel as an unsecured creditor);

• both Oldfield and Gandel indicating they would appeal to the High Court if they were unsuccessful in relation to the Gandel Decision which would cause further delays and risks to the trading operations; and that the second distribution to creditors (whilst always contingent) would not proceed given the estimated timeline to complete the Oldfield DoCA given that the Gandel Proceedings were appealed.

Sale of Debt

Oldfield Investments, with the consent of the Deed Administrators, sold its debt and the secured debt it bought from Langsung Pty Ltd atf Langsung Superannuation Fund, to Golden River Resources Pty Ltd on 23

ation (detailed further below).

Investments dismissed the injunction hearing and the appeal to the Gandel Proceedings.

GRR DoCA

Overview

On 17 September 2020, GRR submitted a proposed variation to the Oldfield DoCA. The key terms of the GRR DoCA are summarised below:

• GRR will make available cash of $13.5 million which will be used to pay the Oldfield Investments, Secured Creditors, Gandel, and pr

• Administrator for their trading costs and fees. The Deed Administrators have received evidence that $13.5

• GRR will eithe

• this has been completed

• GRR will assume liabilities which will not be transferred to the Creditors Trust including employee entitlements owing to employees who continue with the Group post completion of the GRR DoCA and Environmental Bonding

• the Deed Administrator convened a meeting of creditors on 13 October 2020 where the

• creditors approved the GRR DoCA

• an order was obtained from the Court pursuant to section 444GA of the Act and consent was obtained from ASIC for relief pursuant to section 606 of the Act to transfer the existing Centennial shares from shareholders to GRR

• termination of

• intercompany

• creditors are dealt with in separate classes as follows:

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

		Cents	in the dollar of claim
Date contribution crystallised		Effectuation of DoCA
Estimated timing of payment to creditors		6 April	2021
Return to creditors		Cash	single payment
Payment outside of Creditors Trust
Gandel inc section 560 Loans, costs, secured and unsecured loans		78.1
Bendan & Montlodge Secured and unsecured debt		74.5
Class A superannuation and wages		100.0
Class B employee entitlements for terminated employees		100.0
Class C Dale Rogers		18.9
Class D All unsecured	creditors, excluding class C, E, & F	19.9
Class E creditors owed less than $5k		89.4
Class F ATO		7.3

GRR will continue as a secured creditor for the full amount of its debt and continue to hold its security over the Companies until effectuation of its DoCA at which time its debt will either be forgiven or converted into Centennial shares;

the completion of a transaction between GRR and an ASX listed entity (ListCo) for the acquisition by ListCo of a 100% equity interest in GRR (ListCo Transaction) (which condition may be waived by GRR);

• the Secured Creditors consenting to release their security at settlement; and

sunset date of 31 December 2020 or such later date as agreed between the Deed Administrator an GRR.

Current Position

Condition Precedent Status Completed The Deed Administrators applying to Court for leave pursuant to section 444GA of the Act and to Completed ASIC for relief from the prohibitions in section 606 of the Act; GRR making $13.5 million available to the Deed Administrators, less any amounts already paid Ongoing Payment of the Cash Contribution by the Deed Administrators into the Creditors' Trust, together At effectuation with the other available property being transferred into Cr the date of effectuation and unsold gold / proceeds from the unsold gold produced on the last remuneration and expenses; Deeds of release being entered into with the Secured Creditors and Dale Rogers, whereby those Ongoing parties release all of their rights, title and claims they may have against the Group and the Deed Administrators and agree to release their security; Payment of $2.85 million being made to Gandel Parties in full and final settlement of all their debts At effectuation including the section 560 loan, unsecured loan, costs, secured loan to the Group and the Gandel Parties releasing their security over the Group; Payment of $1.14 million being made to Montlodge (and its related party) and payment of $191,000 At effectuation being made to Bendan in full and final settlement of all their debts including unsecured debt and their secured loan to the Group and Bendan and Montlodge (and its related party) releasing their security over the Group; At effectuation as instructed by GRR;

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Condition Precedent	Condition Precedent				Status
The completion of	a transaction between GRR and Kaiser for the acquisition by Kaiser of a				Ongoing
100% equity interest in GRR, which may be waived by GRR;
GRR doing all things necessary to release its security interest against the Group and doing all					At effectuation
things necessary to release and remove any registrations against the Group in favour of Oldfield
and Langsung;
GRR informing the Deed Administrators as to whether GRR will forgive the Oldfield and					At effectuation
The execution of a Creditors' Trust Deed and establishment of the Creditors' Trust					At effectuation

Incomplete records

To prepare this financial report, the Deed Administrators who were not appointed during the periods presented in this report have reconstructed the financial records of the Group accounting system for the year. However, there may be information that the administrators have not been able to obtain, the impact of which may or may not be material on the financial statements.

These financial statements do not contain all the required information or disclosures in relation to transactions undertaken by the Company as this information is unascertainable due to the external administration process and/or the change in directorships and key management personnel of the Company.

Consequently, and although the Deed Administrators have prepared this financial report to the best of their knowledge based on the information that is available to them, they are of the opinion that it is not possible to state that this financial report has been prepared in accordance with Australian Accounting Standards including Australian interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Act, nor is it possible to s position as at 30 June 2019.

Likely Developments and Expected Results of Operations

Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental Legislation

cordance with the Mineral Resources (Sustainable

Development) Act 1990 (MRSDA). the MRSDA.

As part of the process for obtaining a Registered Mine Plan under the MRSDA, there is a section on Environmental Management which requires the following matters to be addressed:

• cultural heritage management; surface and groundwater management; air blast and vibration; noise; dust; waste management; recording of data; and monitoring programme.

The Company has complied with all of the abovementioned requirements in accordance with the Registered Mine Plan.

Indemnification and Insurance of Directors and Officers

The Company has agreed, by entering into deeds of access, indemnity and insurance with each of the directors and the Company Secretary, to indemnify all the directors of the Company for any liabilities to another person (other than the Company or related body corporate) that may arise from their position as directors of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

During or since the financial year, the company has paid premiums insuring all the directors and the Company Secretary of Centennial Mining Limited against costs incurred in defending proceedings for conduct involving:

a) a wilful breach of duty; or

b) a contravention of sections 182 or 183 of the Corporations Act 2001,

as permitted by section 199B of the Corporations Act 2001.

	2019	2018	2017	2016	2015
	$	$	$	$	$
Revenue	22,238,045	24,739,944	306,118	193,575	24,658
Net loss	(33,360,732)	(8,318,780)	(1,608,653)	(1,436,383)	(14,071,900)
Loss per share (cents)	(3.19)	(0.9)	(0.2)	(0.3)	(5.9)
Share price year end (cents)	N/A	0.9	1.8	2.1	3.2

The directors held two board meetings and no audit committee meetings during the year ended 30 June 2019 up to the date that the Company entered into voluntary administration, being 21 March 2019. The attendance of directors at these meetings was:

of directors at these meetings was:
	Board	Meetings	Audit	Committee
Directors	A	B	A		B
Dale Rogers	2	2	-	-
Anthony Gray	2	2	-	-

A: Number of meetings attended.

• B: Number of meetings held during the time the director held office during the year.

The full board performs the role of the Nomination Committee and considered all the matters required by the Nomination Committee Charter once during the year. There was one Remuneration Committee meeting held during the year.

Proceedings on behalf of the Company

There were no proceedings on behalf of the Company.

Non-Audit Services

There were no nonBDO Audit (WA) Pty Ltd, or associated entities during the year.

Auditor Independence

Section 307C of the Corporations Act 2001 requires our auditors, BDO Audit (WA) Pty Ltd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on page 56 an June 2019.

Auditor

BDO Audit (WA) Pty Ltd continues in office as auditors in accordance with section 327 of the Act.

Centennial Mining Limited (subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

Shares under option

As at 30 June 2019 there were 383,057,651 unissued ordinary shares in respect of which options were outstanding. Subsequent to 30 June 2019, on 7 October 2019, all options outstanding were cancelled.

		Number of options
Balance at the beginning of the year		399,557,631
Movements of share options during the year:
2 July 2018, cancellation of options exercisable at 2.55 cents	on or before 2 October
2021, following resignation of an executive		(12,000,000)
2 July 2018, cancellation of options exercisable at 4.438 cents on or before 30
November 2019 following resignation of executive		(4,500,000)
Total number of options outstanding as at 30 June 2019		383,057,631
Movements subsequent to reporting date:
7 October 2019, cancellation of all outstanding options in issue by KordaMentha as
administrators of the Company.		(383,057,631)
Total number of options outstanding at date of this report		Nil
Expiry date	Exercise price (cents) Number of options
30 November 2019	2.938	288,557,631
30 November 2019	4.938	3,000,000
30 November 2019	4.438	10,500,000
24 November 2020	3.6	64,000,000
2 October 2021	2.55	17,000,000
Total number of options outstanding as at 30 June 2019		383,057,631

No person entitled to exercise any option referred to above have or had, by virtue of the option, a right to participate in any share issue of any other body corporate.

There have been no ordinary shares issued by the Company during or since the end of the financial period as a result of the exercise of an option.

There are no unpaid amounts on the shares issued.

This report is made in accordance with a resolution of the Administrators (acting in their capacity as Joint and Several Deed Administrators of the Company and each of its wholly-owned subsidiaries).

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Richard Tucker

Deed Administrator

c/ - KordaMentha Perth, Western Australia 4 December 2020

Centennial Mining Limited Annual Financial Report 30 June 2019

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019

		Consolidated	Consolidated
	Notes	2019	2018
		$	$
Revenue	2(a)	22,238,045	24,739,944
Other income	2(a)	262,835	364,682
Mine operating expenses	2(b)	(27,232,766)	(28,739,128)
Impairment of development assets, property, plant and
equipment, exploration and evaluation assets	2(b)/10	(23,919,915)	(1,881,165)
Professional fees		(1,355,111)	(480,230)
Personnel costs		(1,100,275)	(81,095)
Finance costs	2(b)	(677,280)	(769,080)
General and administrative costs		(919,083)	(752,936)
Other gains / (losses)		244,780	(1,945,405)
Share basedpayment expense	17	(901,963)	(46,058)
Loss before income tax expense		(33,360,733)	(9,590,471)
Income tax benefit	3	-	1,271,691
Net loss for the year		(33,360,733)	(8,318,780)
Other comprehensive income for theyear net of tax		-	-
Total comprehensive loss for the year		(33,360,733)	(8,318,780)
Basic and diluted loss per share (cents per share)	4	(3.19)	(0.94)
The accompanying notes form part of these financial statements.

Centennial Mining Limited Annual Financial Report 30 June 2019

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019

AS AT 30 JUNE 2019
		Consolidated
		2019	2018
	Notes	$	$
Assets
Current Assets
Cash and cash equivalents	5	1,746,426	400,189
Trade and other receivables	6	11,687	164,355
Inventories	7	454,088	1,375,139
Other current assets	8	6,540	424,770
Total Current Assets		2,218,741	2,364,453
Non-Current Assets
Property, plant and equipment	9	2,698,749	7,667,103
Exploration and evaluation assets	10	600,000	1,509,965
Development assets	11	6,380,000	26,904,966
Other non-current assets	8	877,000	1,002,440
Total Non-Current Assets		10,555,749	37,084,474
Total Assets		12,774,490	39,448,927
Liabilities
Current Liabilities
Trade and other payables	12	10,969,871	7,508,190
Borrowings	13	6,051,441	3,321,270
Provisions	14	389,554	788,751
Total Current Liabilities		17,410,866	11,618,211
Non-Current Liabilities
Provisions	14	1,178,178	1,186,500
Total Non-Current Liabilities		1,178,178	1,186,500
Total Liabilities		18,589,044	12,804,711
Net (Liabilities) / Assets		(5,814,554)	26,644,216
Equity
Issued capital	15	51,991,717	51,991,717
Reserves	16	4,651,823	6,035,274
Accumulated losses		(62,458,094)	(31,382,775)
Total Equity		(5,814,554)	26,644,216

The accompanying notes form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019

		Issued Capital	Convertible Note	Share-Based
			Reserve	Payments Reserve
	Notes	$	$	$
Balance as at 1 July 2018		51,991,717	66,854	5,968,420
Total comprehensive loss for the year		-	-	-
Shares issued during the year net of costs	15	-	-	-
Transfer of equity component convertible note to
retained earnings on repayment		-	(66,854)	-
Share based payment expense	17	-	-	901,963
Transfer of equity component of lapsed options to
retained earnings	17	-	-	(2,218,560)
Balance at 30 June 2019		51,991,717	-	4,651,823
Balance as at 1 July 2017		48,410,129	66,854	5,922,364
Total comprehensive loss for the year		-	-	-
Shares issued during the year net of costs	15	3,581,588	-	-
Share based payment expense	17	-	-	46,056
Balance at 30 June 2018		51,991,717	66,854	5,968,420

The accompanying notes form part of these financial statements

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019

Notes	Consolidated 2019 $ 2018 $
Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Finance costs	Inflows/(Outflows)
	22,238,045 24,742,713 (23,596,401) (24,211,472) 16,781 3,744 (83,747) (786,616)
Net cash used in operating activities 5(ii)	(1,425,322) (251,632)
Cash flows from investing activities Purchase of property, plant and equipment Proceeds from non-current assets Exploration and evaluation expenditure Development expenditure capitalised	(108,412) (1,190,838) 283,374 - - (64,202) - (2,324,584)
Net cash provided by / (used in) investing activities	174,962 (3,579,624)
Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings 5(ii) Repayment of borrowings	- 3,640,920 3,433,900 62,862 (837,303) -
Net cash provided by financing activities	2,596,597 3,703,782
Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year	1,346,237 (127,474) 400,189 527,663
Cash and cash equivalents at end of year 5(i)	1,746,426 400,189

The accompanying notes form part of these financial statements.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

These financial statements are general purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and comply with other requirements of the law.

The financial statements comprise the consolidated statements for the Group. For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.

The accounting policies detailed below have been consistently applied to all of the periods presented unless otherwise stated. The financial statements are for the Group consisting of Centennial Mining Limited and its subsidiaries.

The financial statements have been prepared on a historical cost basis. Historical cost is based on the fair values of the consideration given in exchange for goods and services. Assets have been valued at the expected net returns on a distressed sale basis.

The financial statements are presented in Australian dollars.

The company is an unlisted public company, incorporated in Australia and operating in the state of Victoria. The the mining and development of gold bearing ore and the processing of mined gold ore, within central and eastern Victoria.

Incomplete Records

On 21 March 2019, the company was placed into Voluntary Administration. The duties and responsibilities of the Directors were suspended from what date . Prior to their appointment, the administrators did not have oversight or control over the

To prepare this financial report, the administrators who were not in office during the periods presented in this report have reconstructed the financial record

accounting system for the year. However, there may be information that the administrators have not been able to obtain, the impact of which may or may not be material on the financial statements.

These financial statements do not contain all the required information or disclosures in relation to transactions undertaken by the Group as this information is unascertainable due to the external administration process and/or the change in directorships and key management personnel of the Group.

Consequently, and although the administrators have prepared this financial report to the best of their knowledge based on the information that is available to them, they are of the opinion that it is not possible to state that this financial report has been prepared in accordance with Australian Accounting Standards including Australian interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Ac

financial position as at 30 June 2019. Refer Note 22: Events subsequent to reporting date for further information.

Going concern

The financial statements have been prepared on a going concern basis, which assumes the continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. The Group had a working capital deficiency of $15,192,125 at 30 June 2019 and incurred a loss for the year of $33,360,733, of which $23,919,915 related to an impairment expense. The net cash outflow from operating and investing activities was $1,250,360. At 30 June 2019 the Group had cash and cash equivalents of $1,746,426.

On 21 March 2019, Richard Tucker, John Bumbak and Leanne Chesser were appointed as the joint and several Voluntary A

Upon their appointment, the Voluntary ascertain whether they should:

• Continue to trade the Group on a business as usual basis;

mining

• program; or

program.

lowest net funding requirement (as it allowed for revenue to be generated from gold sales) ($0.17 million surplus) when compared to the forecast trading loss on a care and maintenance basis over 14 weeks of a $1.06 million to be preserved to maximise the value of its assets.

First DoCA

The Voluntary Administrators became the Deed A Deed Administrators

On 7 June 2019, the First DoCA was executed by the Deed Administrators and Avior. A detailed overview of the Report dated 10 May 2019, and a high-level overview is detailed in note 22.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation (continued)

On 8 July 2019 the Deed Administrators received correspondence from Avior advising that it was their opinion that the First DoCA could not be completed due to an inability to raise the capital under the terms of the First DoCA and as such a variation would be required. Avior required an alternate method to raise capital due to unforeseen external economic conditions, including but not limited to:

An introduction of royalties on gold production charged by the Victorian State Government in January 2020. Various high-profile trading issues in the Australia gold sector. Introduction of a new DoCA contributor.

material nature of the variations to the First DoCA, creditor approval was required. Accordingly, the Deed d Administrators remained the Deed Administrators.

The Varied DoCA was executed on 27 September 2019 by the Deed Administrators and Avior. An overview is detailed in note 22. On 21 October 2019, the Deed Administrators received correspondence from Avior advising that it was their opinion that the Varied DoCA was required to be amended further. Avior consequently provided a proposal to amend the Varied DoCA to the Deed Administrators of 28 October 2019.

The Amended Varied DoCA was approved at a meeting of creditors held on 15 November 2019 and the Amended Varied DoCA was subsequently executed on 20 November 2019.

A further extension for the effectuation of the Amended Varied DoCA to 24 January 2020 was approved between Avior and the Deed Administrators on 12 December 2019, to allow for Austar to complete its capital raisings, as Austar raising up to $4.4 million in capital was a condition precedent to the Amended Varied DoCA, and $2.4 million of this capital was to be contributed to the Amended Varied DoCA.

On 11 January 2020, Mining Lending entered into an agreement to assign its debt to Austar.

On 21 January 2020, a DoCA proposal was received from Oldfield Investments Pty Ltd atf Oldfield Family Trust precedents to the Oldfield DoCA proposal was the acceptance by the Deed Administrators of a loan agreement with Oldfield Investments to refinance the Mining Lending facility in full. The Deed Administrators entered into a 22 January 2020 with Oldfield Investments becoming a secured creditor of the Group.

The Oldfield DoCA was approved by creditors at meetings held on 12 February 2020. However, on 26 February -enlivened the proceedings in the Federal Court of Australia vid 688 of 2019 in relation to whether Gandel held security over the Group or its assets

voluntary administration loans to the Group to enable employee entitlements to be paid, which has a statutory priority pursuant to section 560 of the Corporations Act.

On 28 February 2020, the Oldfield DoCA was executed between the Group, Oldfield Investments and the Deed Administrators.

Oldfield Investments, with the consent of the Deed Administrators, sold its debt and the secured debt it bought from Langsung Pty Ltd atf Langsung Superannuation Fund to Golden River Resources Pty Ltd on 23 September Resources Pt GRR

Investments dismissed the injunction hearing and the appeal to the Gandel Proceedings.

On 17 September 2020, GRR submitted a proposed variation to the Oldfield DoCA. The key terms of the GRR DoCA are summarised below:

GRR will make available cash of $13.5 million which will be used to pay the Oldfield Investments, Secured Administrator for their trading costs and fees. The Deed Administrators have received evidence that $13.5 st account;

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation (continued)

• GRR full and repay the Langsung Debt this has been completed; GRR will assume liabilities which will not be transferred to the Creditors Trust including employee entitlements owing to employees who continue with the Group post completion of the GRR DoCA and Environmental Bonding;

• The Deed Administrator creditors approved the GRR DoCA;

• An order was obtained from the Court pursuant to section 444GA of the Act and consent was obtained from ASIC for relief pursuant to section 606 of the Act to transfer the existing Centennial shares from shareholders to GRR;

• as already occurred 7 October 2019);

• Creditors are dealt with in separate classes as detailed in note 22;

• GRR will continue as a secured creditor for the full amount of its debt and continue to hold its security over the Companies until effectuation of its DoCA at which time its debt will either be forgiven or converted into Centennial shares;

• The completion of a transaction between GRR and an ASX listed entity (ListCo) for the acquisition by ListCo of a 100% equity interest in GRR (ListCo Transaction) (which condition may be waived by GRR);

  • was discontinued;

• the Secured Creditors consenting to release their security at settlement; and

• sunset date of 31 December 2020 or such later date as agreed between the Deed Administrator an GRR.

The Administrators believe that the ability for the Group to continue to remain as a going concern is dependent upon, amongst other factors, the following key assumptions:

• the DOCA effectuating and the recapitalisation completing on our about 31 December 2020;

• gold production from the A1 Mine at rates and costs generally consistent with those contained in the 2020 financial report

• the price received for gold sold by the Group being higher than the prevailing cost of gold production at A1 Mine; and

Based on the above, the Directors have reasonable grounds to believe that the DOCA will effectuate on or about 31 December 2020, that the Company will be able to pay its debts as and when they fall due, and the Directors consider that the going concern basis of preparation to be appropriate for these financial statements.

as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial statements.

To support this view, a comprehensive mine forecast and cashflow model shows that, subject to continued positive resource definition drilling and any unforeseen events, it is expected that continued mining, processing and sale of gold will be successful and will enable the Group to continue as a going concern.

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, and at amounts that differ from those stated in the financial statements and that 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.

(b) Adoption of new and revised standards

Standards and Interpretations applicable to 30 June 2019

In the year ended 30 June 2019, the directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period. The Group has adopted all of the new and revised standards and interpretations issued by the AASB that are relevant to its operations and effective for the current reporting period.

The adoption of new and revised standards and interpretations has had no effect on the amounts reported for the current or prior periods.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Adoption of new and revised standards (continued)

Standards and Interpretations applicable to 30 June 2019 (continued)

AASB 9 Financial Instruments

AASB 9 Financial Instruments replaces the requirements of AASB 139 Financial Instruments: Recognition and Measurement and is effective for financial periods beginning on or after 1 January 2018.

AASB 9 replaces the provisions of AASB 139 that relate to the recognition, classification and measurement of financial assets and financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge accounting.

Impact of AASB 9 on the Group

			Original
			carrying	Carrying
			amount	amount
	Original classification	Classification	AASB 139	AASB 9
Financial Instrument	under AASB 139	under AASB 9	$	$
Financial Assets
Cash and cash equivalents	Loans and receivables	Amortised cost	400,189	400,189
Trade and other receivables	Loans and receivables	Amortised cost	164355	164,355
Term deposits and bonds	Held-to-maturity	Amortised cost	991,522	991,522
Financial Liabilities
Trade and other payables	Amortised cost	Amortised cost	7,508,190	7,508,190
Borrowings	Amortised cost	Amortised cost	3,321,270	3,321,270

Impairment of financial assets

The incurred credit loss model under AASB 139 has been replaced by a forward-looking expected credit loss model under AASB 9, where anticipated rather than impending credit losses will be recognized, resulting in the likely earlier recognition of impairmen

receivables given the Group sells gold exclusively to an organisation with a strong credit rating and a historically low risk of default along with the short-term nature of the Grou

AASB 15 Revenue from Contracts with Customers

AASB 15 Revenue from Contracts with Customers replaces the requirements of AASB 118 Revenue , AASB 111 Construction contracts and related interpretations and is effective for financial periods beginning on or after 1 January 2018.

AASB 15 establishes a new revenue recognition framework for determining how much revenue is to be recognized and when, requiring entities to recognize revenue arising from contracts with customers when control of the goods or services transfers to the customer. Control of goods or services refers to the ability to direct the use of, and obtain substantially all of the remaining benefits from, the goods or services.

In determining revenue recognition, a contract-based five-step analysis of transactions is to be applied before revenue can be recognized: identify contracts with customers, identify the separate performance obligations, determine the transaction price of the contract, allocate the transaction price to each of the separate performance obligations, and recognize the revenue as each performance obligation is satisfied, either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised goods or services to customers.

Impact of AASB 15 on the Group

Revenue is currently recognized by the Group at the point of physical deliver, which is also when title passes to the customer, therefore there is no change in the timing of revenue recognition on the settlement date.

AASB 15 requires entities to apportion the transaction price into distinct performance obligations on a relative standalone selling price basis, for example, onward freight services to the customer following the transfer of control of the product. Where material, revenue from these freight services is to be deferred and recognised over time as the to transfer product to the customer.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Adoption of new and revised standards (continued)

Standards and Interpretations in issue not yet adopted

The directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2019. The directors are in the process of assessing the impact of AASB16 (Leases).

(c) Statement of compliance

The financial report was authorised for issue on 4 December 2020.

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

(d) Significant accounting estimates and judgements

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

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

Share-based payment transactions:

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black and Scholes model, using the assumptions detailed in Note 17.

Exploration and evaluation costs carried forward

The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off, since feasibility studies in such areas have not yet been concluded.

Mine Properties

The recoverability of the carrying amount of mine development expenditure carried forward has been reviewed by the directors. In conducting the review, the recoverable amount has been assessed by reference to the higher of

• Estimates of ore reserves and mineral resources for which there is a high degree of confidence of economic extraction;

• Estimated production and sales levels;

• Estimated future commodity prices;

• Future costs of production;

• Future capital expenditure; and/or

• Future exchange rates

Mine properties represent the accumulation of all exploration, evaluation and development expenditure incurred in respect of areas of interest in which mining has commenced or in the process of commencing. When further development expenditure is incurred in respect of mine property after the commencement of production, such expenditure is carried forward as part of the mine property only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.

Amortisation is provided on a unit of production basis (other than restoration and rehabilitation expenditure detailed below) which results in a write off of the cost proportional to the depletion of the proven and probable mineral reserves.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Significant accounting estimates and judgements (continued)

The net carrying value of each area of interest is reviewed regularly and to the extent to which this value exceeds its recoverable amount, the excess is either fully provided against or written off in the financial year in which this is determined.

The Group provides for environmental restoration and rehabilitation at site which includes any costs to dismantle and remove certain items of plant and equipment. The cost of an item includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs when an item is acquired or as a consequence of having used the item during that period. This asset is depreciated on the basis of the current estimate of the useful life of the asset.

In accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets an entity is also required to recognise as a provision the best estimate of the present value of expenditure required to settle the obligation. The present value of estimated future cash flows is measured using a current market discount rate.

Units-of-production depreciation

Estimated recoverable reserves are used in determining the depreciation and/or amortisation of mineral specific assets. This results in a depreciation/amortisation charge proportional to the depletion of the anticipated remaining and to present assessments of economically recoverable reserves of the mine property at which the asset is located. These calculations require the use of estimates and assumptions, including the volume of recoverable reserves and estimates of future capital expenditure.

Variations to expected future cash flows, and timing thereof, could result in significant changes to the impairment test results, which in turn could impact future financial results.

In conducting their impairment assessment, the directors considered impairment indicators were present, due to ongoing operating losses. Accordingly, an impairment assessment has been conducted. Further details of on the impairment assessment and material assumptions are set out in note 11.

Inventories

Costs incurred in, or benefits, of the productive process are accumulated as stockpiles, gold in process and product inventory. Net realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on prevailing spot metal prices at the reporting date, less estimated costs to complete production and bring the product to sale.

Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile tonnages are verified by periodic surveys.

The metallurgic balancing process is constantly monitored and the recovery estimates are refined based on reconciliations with actual results.

Rehabilitation provision

A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The consolidated entity's mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The consolidated entity recognises management's best estimate for assets retirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.

Coronavirus (COVID-19) pandemic

Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the company based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the company operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the company unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.

Allowance for expected credit losses

The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected credit losses, as disclosed in note 1(r), is calculated based on the information available at the time of preparation. The actual credit losses in future years may be higher or lower.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Significant accounting estimates and judgements (continued)

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.

(e) Provision for restoration and rehabilitation

ject to various laws and regulations governing the protection of the environment. The Group recognises managements best estimate for asset retirement obligations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of the provision.

A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of abandoning sites, removing facilities and restoring the affected areas.

The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each balance date.

The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises from the production of inventory in the period, in which case the amount is included in the cost of production for the period. Changes in the estimate of the provision for restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the related asset.

(f) Exploration and evaluation

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

• (i) the rights to tenure of the area of interest are current; and

• (ii) at least one of the following conditions is also met:

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

• (b) exploration and evaluation activities in the area of interest have not at the balance date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the area of interest are continuing.

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

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(g) Ore Reserve and Resource estimate

The group estimates its ore reserves and mineral resources based on information compiled by a Competent Persons (as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves [the JORC Code]). Resources determined in this way are taken into account in the calculation of depreciation, amortisation, impairment, rehabilitation and environmental expenditure.

In estimating the remaining life of the mine for the purposes of amortisation and depreciation calculations, due regard is given to limitations which could arise from the potential for changes in technology, demand, and other issues which are inherently difficult to estimate over a lengthy time frame.

(h) Development expenditure

Development expenditure is recognised at cost less accumulated amortisation and any impairment losses. Exploration and evaluation expenditure is reclassified to development expenditure once the technical feasibility and commercial viability of extracting the related mineral resource is demonstrable. Where commercial production in an area of interest has commenced, the associated costs together with any forecast future capital expenditure necessary to develop proved and probable reserves are amortised over the estimated economic life of the mine on a units-of-production basis.

Changes in factors such as estimates of proved and probable reserves that affect unit-of-production calculations are dealt with on a prospective basis.

(i) Basis of consolidation

The consolidated financial statements incorporate the financial statements of Centennial Mining the Company owns 100% of the share capital of all its subsidiaries it has full control of each entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. Investments in subsidiaries held by Centennial Mining Limited are accounted for at cost in the financial statements of the parent entity less any impairment charges.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired. The identifiable assets and the liabilities assumed are measured at their acquisition date fair values.

(j) Segment reporting

Since incorporation the Company has been engaged in the minerals industry at one location in Victoria and

(k) Revenue recognition

Sales revenue is recognised when:

• Control of the goods has been transferred to the customer, which occurs when physical goods are delivered to the customer;

• The customer has the significant risks and rewards of ownership through the ability to direct the use of and obtain substantially all of the remaining benefits from the goods;

• Payment is due from the customer.

The amount of revenue recognised reflects the consideration to which the Group is, or expects to be, entitled in exchange for the goods. Revenue is measured at the transaction price agreed under a sales contract.

Gold bullion and silver sales

Revenue from gold bullion and silver sales is recognised at the time of physical delivery on the settlement date, when control of the physical goods passes to the customer, satisfying the sole performance obligation to deliver gold bullion and silver. For gold bullion and silver sales, the transfer of control is generally at the point in time when the gold bullion and silver is credited to the metal account of the customer on the settlement date.

(l) Leases operating

Operating lease payments are recognised as an expense on a straight-line basis over the lease term.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(m) Income Tax

ed

on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date.

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

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

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

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

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

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

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

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

Tax consolidation legislation

Centennial Mining Limited its 100% owned Australian resident subsidiaries have implemented the tax consolidation legislation. Current and deferred tax amounts are accounted for in each individual entity as if each entity continued to act as a taxpayer on its own. Centennial Mining Limited recognises its own current and deferred tax amounts and those current tax liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has assumed from its controlled entities within the tax consolidated Group. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts payable or receivable from or payable to other entities in the Group. Any difference between the amounts

receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) controlled entities in the tax consolidated Group.

(n) Deferred tax

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date. Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(o) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, which are stated with the amount of GST included.

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

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

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(p) Impairment of assets

The Group assesses at each balance date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).

An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates unt since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation systematic basis over its remaining useful life. Due to the company entering administration and assessments by a number of knowledgeable independent parties, the board decided to value the assets based on a distressed sale scenario, which resulted in significant impairment costs.

(q) Cash and cash equivalents

Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(r) Trade and other receivables

Trade and other receivables are amounts due from customers for goods sold in the ordinary course of business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method. The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 30 June 2019 and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. As at balance date, the amount due from customers was considered to be immaterial to justify calculation of an expected credit loss provision to be put in place.

(s) Inventories

Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary of selling the final product.

(t) Plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(t) Plant and equipment (continued)

With the exception of the Maldon Mill, depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:

• Motor vehicles over 8 years

• Office equipment over 3 to 10 years

Plant & equipment over 5 to 20 years

Exploration, evaluation and development assets are amortised on a units of production basis being based on tonnes mined relevant to the estimated total indicated and inferred resource of the A1 mine and Union Hill mines.

Maldon Mill is depreciated on a units of production basis being based on tonnes processed relative to the estimated total indicated and inferred resource of the A1 mine and Union Hill mine.

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

(u) Financial assets

Classification and measurement of financial assets are based on the business model in which they are managed and their contractual cash flow characteristics. On initial recognition, financial assets, other than those designated and effective as hedging instruments, are classified as measured at amortised cost using the effective interest method, fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI).

(i) Financial assets at amortised cost

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding.

For financial assets subsequently measured at amortised cost, any interest income, impairment losses, foreign exchange gains and losses are recognised in profit or loss.

(ii) Financial assets at FVTPL

Financial assets whose contractual cash flows are not solely payments of principal and interest, or are not classified as measured at amortised cost of FVOCI, are measure at FVTPL. Derivative financial assets are measured at FVTPL. For financial assets subsequently measured at FVTPL, net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Impairment of financial assets

The Group assess, on a forward-looking basis, the expected credit losses associated with debt instruments measured at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Derecognition

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards of ownership are transferred. Any gain or loss on derecognition is recognised in profit or loss.

(v) Financial liabilities

Financial liabilities are classified as measured at amortised cost of FVTPL. A financial liability is classified as measured at FVTPL if it is classified as held for trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method.

Derecognition

Financial liabilities are derecognised when they are extinguished, discharged, cancelled or expire. Any gain or loss on derecognition is recognised in profit or loss.

(w) Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(x) Interest-bearing loans and borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method.

The fair value of the liability portion of a convertible note is determined using a market interest rate for an equivalent non-convertible note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the note. The remainder of the proceeds is allocated to the conversion

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(y) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

the present obligation at the end of the reporting period.

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

When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.

(z) Employee entitlements

Annual leave

Liabilities accruing to employees in respect of annual leave expected to be settled within 12 months of the balance are measured at the amounts expected to be paid when the liabilities are settled.

Liabilities accruing to employees in respect of annual leave not expected to be settled within 12 months of the balance date are recognised in nonto the balance date. They are measured as the present value of the estimated future outflow to be made by the Group.

Long service leave

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 balance date. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the balance date on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

(aa) Share-based payment transactions

Equity settled transactions:

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model, further details of which are given in Note 17. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Centennial Mining Limited (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant persons become fully entitled to the award.

The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects

instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(aa) Share-based payment transactions (continued)

statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

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

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings/loss per share (see Note 4).

Where the company acquires some form of interest in an exploration tenement or an exploration area of interest and the consideration comprises share based payment transactions, the fair value of the equity instruments granted is measured at the grant date. The cost of equity securities is recognised within capitalised mineral exploration and evaluation expenditure, together with a corresponding increase in equity.

(ab) Issued capital

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

(ac) Earnings/loss per share

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

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

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

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

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

(ad) Parent entity financial information

The financial information for the parent entity, Centennial Mining Limited, disclosed in Note 21 has been prepared on the same basis as the consolidated financial statements, except as set out below.

Investments in subsidiaries

financial statements. Dividends

carrying amount of these investments.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 2: REVENUE AND EXPENSES

NOTE 2: REVENUE AND EXPENSES
		Consolidated
	2019	2018
	$	$
(a) Revenue and other income
Sale of fine metals	22,238,045	24,739,944
Bank interest received	16,782	3,744
Fuel tax credits received	155,270	358,168
Insurance claim received	90,783
Other	-	2,770
	22,500,880	25,104,626
(b) Expenses
Depreciation and amortisation	2,332,235	2,654,718
Employee expenses	8,851,049	10,884,135
Impairment expenses	23,919,915	1,881,165
Development	-	13,796,763
Exploration	-	197,276
Gold operational expenditure	15,065,061	12,347,271
Finance costs interest expense	677,280	769,080
Short-term rental expenses	977,638	13,504

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 3: INCOME TAX

	Consolidated	Consolidated	Consolidated
	2019		2018
	$		$
(a) Income tax expense / (benefit):
Current tax	-		-
Deferred tax	-	(1,271,691)
Income tax expense / (benefit) calculated at 30%	-	(1,271,691)
(b) Amounts recognised directly in equity:
Aggregate current and deferred tax arising in the reporting period and not
recognised in net profit or loss or other comprehensive income but directly
debited or credited to equity.
Current tax	-		-
Deferred tax	-		-
	-		-
	Consolidated
	2019		2018
(c) Reconciliation of income tax expense to prima facie tax payable:	$		$
Profit/(loss) from continuing operations before income tax expense	(33,360,733)	(9,590,471)
Tax at the Australian tax rate of 30% (2018: 30%)	(9,174,201)	(2,877,142)
Tax effect of amounts that are not deductible (taxable) in calculating taxable
income:
- Share based payments	247,965		13,817
-	(45,849)		-
- Accounting revaluation not deductible for tax purposes	-		-
- Other permanent differences	129,435		96,262
- (Over) / under provision	-		-
- Deferred tax assets not brought to account	6,582,133		(577,878)
- Tax losses not brought to account	2,260,517		2,073,251
Income tax expense/(benefit) reported in the statement of comprehensive	-	(1,271,690)
income

(d) Deferred tax liabilities:

The following deferred tax assets and (liabilities) have not been brought to account:

	2019	2018
	$	$
PPE	-	486,637
Exploration and development expenses	-	4,110,935
	-	4,597,571
Offset of deferred tax assets	-	(4,597,571)
	-	-

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 3: INCOME TAX (continued)

		Consolidated
	2019		2018
	$		$
(e) Deferred tax assets:
Tax losses	13,843,471	11,582,954
Share issue costs	1,190,285		189,004
Borrowing costs	353,738		-
PPE	9,763	1,607,544
Accrued expenses and liabilities	657,391		28,869
Employee entitlements	8,337		260,057
Provision for rehabilitation	242,976		285,175
	285,175	12,346,058
Off-set against deferred tax liabilities	16,591,136	(4,459,571)
Net unrecognised deferred tax assets	-	7,748,487

The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items as the recognition criteria in AASB112 Income Taxes are not yet met.

Tax Consolidation

Centennial Mining Limited and its subsidiaries implemented the tax consolidation legislation from 1 July 2016. The accounting policy for the implementation of the tax consolidation legislation is set out in note 1(m).

The entities in the tax consolidated group entered into a tax sharing agreement on adoption of the tax consolidation legislation which, in the opinion of the Directors, limits the joint and several liability of the controlled entities in the case of a default by the head entity, Centennial Mining Limited.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 4: EARNINGS/LOSS PER SHARE

NOTE 4: EARNINGS/LOSS PER SHARE
	2019	2018
	Cents per share	Cents per share
Basic and diluted (loss) per share	(3.19)	(0.94)
Basic and diluted loss per share
The earnings and weighted average number of ordinary shares used in the calculation of basic and diluted loss per
share is as follows:
	$	$
(Loss) (refer (i))	(33,360,733)	(8,318,780)
	Number	Number
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share	1,044,434,244	882,551,160

(i) Earnings used in the calculation of total basic and diluted loss per share equals the net loss in the statement of comprehensive income as no adjustments were required.

(ii) The weighted average number of ordinary shares for the purposes of diluted loss per share equals the weighted average number of ordinary shares used in the calculation of basic earnings per share as no adjustments were required.

(iii) The following potential ordinary shares are not dilutive and are therefore excluded from the calculation in (ii) above:

	Number	Number
Options to purchase ordinary shares	383,057,631	399,557,651

NOTE 5: CASH AND CASH EQUIVALENTS

NOTE 5: CASH AND CASH EQUIVALENTS
		Consolidated
	2019	2018
	$	$
Cash at bank and on hand	1,746,426	400,189
	1,746,426	400,189

As at 30 June 2019, the Group had $35,000 undrawn financing facilities available (2018: $Nil).

(i) Reconciliation to the Statement of Cash Flows:

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank and investments in money market instruments, net of outstanding bank overdrafts.

Cash and cash equivalents as shown in the statement of	cash flows are reconciled to the related items in the statement of	cash flows are reconciled to the related items in the statement of
financial position as follows:
Cash and cash equivalents	1,746,426	400,189
	1,746,426	400,189

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 5: CASH AND CASH EQUIVALENTS (continued))

			Consolidated
			2019	2018
			$	$
(ii) Reconciliation of loss for the year to net cash flows from
operating activities:
Net loss for the year after tax		(33,360,733)		(8,318,780)
Non-cash flows in loss:
Depreciation and amortisation		2,332,235		2,654,718
Impairment of exploration expenditure			909,965	1,881,165
Impairment of development expenditure		18,996,639		-
Impairment of property, plant and equipment		4,013,311		-
Net gain on disposal of property, plant and equipment			(80,721)	-
Net gain on disposal of subsidiary			(164,058)	-
Equity settled share-based payment			901,963	46,059
Provisions for employee entitlements			-	522,322
Change in net assets and liabilities
Decrease / (Increase) in assets:
Current receivables			(17,545)	(97,186)
Inventories			921,052	(275,580)
Other current assets			299,198	-
Increase /(Decrease) in liabilities:
Current payables		3,142,305		4,607,341
Deferred tax liabilities			-	(1,271,691)
Interest bearing liabilities			573,526	-
Current tax liabilities			171,672	-
Employee entitlements			(64,131)	-
Net cash (used in) operating activities		(1,425,322)		(251,632)
Changes in liabilities arising from financing activities:
	Insurance	Convertible	Borrowings	Total
	Funding	Notes
	$	$	$	$
Balance as at 1 July 2018	329,058	2,500,000	-	2,829,058
Net cash (used in) / received from
financing activities	(337,302)	(500,000)	3,433,900	2,596,598
Debt assumption external party	-	(2,000,000)	2,000,000	-
Amortised interest	8,244	-	617,541	625,785
Balance at 30 June 2019	-	-	6,051,441	6,051,441

During the year, $2,000,000 of convertible notes outstanding was paid on behalf of the Company (2018: $Nil). This payment formed assumption of debt by a separate external party for borrowings disclosed above.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 6: CURRENT TRADE AND OTHER RECEIVABLES

	Consolidated
	2019	2018
	$	$
GST recoverable	-	163,538
Other receivables	11,687	817
	11,687	164,355
NOTE 7: INVENTORIES
	2019	2018
	$	$
Gold in transit and in circuit at net realisable value	425,817	1,242,358
Ore stockpile at net realisable value	-	90,328
Consumables at cost	28,271	42,453
	454,088	1,375,139

No inventory write downs to profit and loss noted during 2019 (2018: $53,805)

NOTE 8: OTHER ASSETS

	2019 $ 2018 $
	Current Prepayments 150 289,348 Rental bonds 6,390 5,022 Term deposit - 10,000 Debt service reserve account - 120,400
	6,540 424,770
	Non-Current Environmental bonds 877,000 976,500 Vegetation offset allowance - 25,940
	877,000 1,002,440

The environmental bonds represent restricted cash held in a financial institution in accordance with the relevant environmental requirements. They will be released upon the successful rehabilitation of the relevant mine sites.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 9: PROPERTY, PLANT AND EQUIPMENT

NOTE 9: PROPERTY,	PLANT AND EQUIPMENT	Consolidated
		2019	2018
		$	$
Property
Freehold land at cost		62,299	62,299
Net carrying amount		62,299	62,299
Plant and equipment
Plant and equipment	at cost	11,457,989	11,768,256
Accumulated depreciation		(4,903,134)	(4,301,579)
Impairment		(3,980,807)	-
Net carrying amount		2,574,050	7,466,677
Office equipment
Office equipment at cost		135,128	133,030
Accumulated depreciation		(107,306)	(97,036)
Impairment		(20,922)	-
Net carrying amount		6,900	35,994
Motor vehicles
Motor vehicles at cost		304,089	332,575
Accumulated depreciation		(237,005)	(230,442)
Impairment		(11,584)	-
Net carrying amount		55,500	102,133
Total property, plant and equipment net carrying amount		2,698,749	7,667,103

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 9: PROPERTY, PLANT AND EQUIPMENT (continued)

NOTE 9: PROPERTY, PLANT AND EQUIPMENT (continued)
	Consolidated
	2019	2018
	$	$
Reconciliation of property
Carrying amount at beginning of the year	62,299	62,299
Carrying amount at end of the year	62,299	62,299
Reconciliation of plant and equipment
Carrying amount at beginning of the year	7,468,674	7,058,409
Additions	70,150	1,192,675
Disposals	(219,020)	(14,628)
Depreciation	(764,949)	(769,779)
Impairment (i)	(3,980,805)	-
Carrying amount at end of the year	2,574,050	7,466,677
Reconciliation of office equipment
Carrying amount at beginning of the year	35,996	33,142
Additions	2,096	12,494
Depreciation	(10,270)	(9,642)
Impairment (i)	(20,922)	-
Carrying amount at end the year	6,900	35,994
Reconciliation of motor vehicles
Carrying amount at beginning of the year	102,131	132,788
Additions	-	1,041
Disposals	(6,359)	-
Depreciation	(28,689)	(31,696)
Impairment (i)	(11,583)	-
Carrying amount at end of the year	55,500	102,133

Assets pledged as security:

No assets pledged as security as at 30 June 2019 (2018: Centennial Mining Limited (the company) has granted a Personal Property Securities Act security interest over all of the present and future property of the company and a mortgage over the mining licenc ).

Impairment of property, plant and equipment

During the year, the property, plant and equipment held by the Group were professionally valued. The valuation presented to the Group noted a fair market value for continued use of assets that detailed a considerable impairment to the written down values at period end. As a result, a large amount of property, plant and equipment has been impaired at year end.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
	Consolidated
	2019 $ 2018 $
NOTE 10: EXPLORATION AND EVALUATION ASSETS Costs carried forward in respect of areas of interest in the following phases: Exploration and evaluation phases at cost Balance at beginning of year Impairment (10 Mile/Star) Impairment (Walhalla) Impairment (Nuggetty Reef/Pearl Croydon/Specimen Reef) Exploration and evaluation costs incurred during the year Balance at end of year
	1,509,965 3,326,928
	- (635,000)
	- (1,246,165)
	(909,965) -
	- 64,202
	600,000 1,509,965

The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent on the successful development and commercial exploitation or sale of the respective areas.

Impairment of exploration and evaluation assets

During the year the recoverable amounts for the Nuggetty Reef, Pearl Croydon and Specimen Reef tenements were assessed to be less than the carrying amounts of these assets, which resulted in the assets being written down to their recoverable amounts. These three tenements were valued at $600,000 cumulatively.

NOTE 11: DEVELOPMENT ASSETS

Development phase at	cost
Balance at beginning of year		26,904,966	26,714,417
Adjustment of Union Hill	Stamp Duty	-	(289,691)
Capital development costs		-	2,324,584
Amortisation		(1,528,326)	(1,844,344)
Impairment		(18,996,640)	-
Balance at end ofyear		6,380,000	26,904,966

In the normal course of business mine properties and associated plant and equipment will be recouped through the successful production and sale of gold from the respective properties. Due to ongoing operating losses and the Company being entered into administration during the year, a valuation was undertaken by RPM Global of the estimated value range of the development and exploration assets. RPM noted that the distressed nature of the assets has accounted for the likelihood of a discount expected on the value by any prospective buyer of the assets which has driven the value down. The valuation performed resulted in significant impairment costs ($18,996,640) to development assets captured in the consolidated statement of profit or loss and other comprehensive income.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019
	Consolidated
NOTE 12: TRADE AND OTHER PAYABLES	2019	2018
	$	$
Trade payables (i)	205,324	5,651,775
Accrued expenses	576,889	662,629
ATO liabilities payable	101,726	-
Pre-administration payables	9,599,726	-
Related party payables (ii)	-	904,898
Employee benefits	486,206	248,088
Share application fundspendingallotment	-	40,800
	10,969,871	7,508,190

(i) Trade payables are non-interest bearing and are normally settled on 60-day terms.

(ii) Related party payables are unsecured, interest free and settlement occurs in cash. Refer Note 20. Information regarding the liquidity and interest rate risk exposure is set out in Note 18.

NOTE 13: BORROWINGS	Effective Interest		2019	2018	2018
	Rate	Maturity	$	$
CURRENT
Unsecured
Insurance premium funding	3.20%	28/02/2018	-	329,058
Loan 1 (Gandel wages CTL/MAL)	12.50%	05/12/2018	374,399		-
Secured
Convertible Notes (refer Note 14)	12.50%	10/08/2018	-	2,500,000
Loan 2 (Gandel con note)	18.00%	10/02/2019	2,444,911		-
Loan 3 (Bendan x2)	12.50%	21/08/2020	182,263		-
Loan 4 (Montlodge)	12.50%	22/08/2020	1,217,158		-
Loan 5 (Langsung)	12.50%	21/12/2018	218,493		-
Loan 6 (Mining Lending)	28.95%	20/01/2020	1,614,217		-
Total borrowings			6,051,441	2,829,058

Assets pledged as security.

Centennial Mining Limited (the company) has granted a Personal Property Securities Act security interest over all of the security for the issue of $2,500,000 of convertible notes.

Financing facilities available

As at 30 June 2019, the Group had $35,000 in undrawn finance facilities (2018: $Nil).

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 14: PROVISIONS

NOTE 14: PROVISIONS
	Employee
	benefits	Restorative	Other
	(i)	obligations (ii)	(iii)	Total
	$	$	$	$
Balance at beginning of year	697,573	1,186,500	91,178	1,975,251
Arising during the year	346,488	-	-	346,488
Utilised	(654,507)	-	-	(654,507)
Obligation transferred on sale	-	(99,500)	-	(99,500)
Balance at the end ofyear	389,554	1,087,000	91,178	1,567,732
Current	389,554	-	-	389,554
Non-current	-	1,087,000	91,178	1,178,178
	389,554	1,087,000	91,178	1,567,732

• i) The provision for employee benefits represents accrued annual and long service leave.

• ii) The provision for restorative obligations relates to the estimated cost of rehabilitation work to be carried out in relation to the removal of facilities, closure of sites and restoring the affected areas. The provision represents the best estimate of the expenditure required to settle the restoration obligation at the reporting date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each reporting date.

• iii) Provision for Duties

On 19 September 2017, the Directors were notified by the State Revenue Office in Victoria of a potential duty liability under the landholder duty provisions of the acquisition of Maldon Resources Pty Limited. As such, the Board has taken the conservative view to raise a provision of $111,677 in the financial statements to allow for any potential duties which may be payable. An amount of $20,499 has to date been paid on the estimated liability. The Board is not convinced that the company is liable for these duties and the matter has been referred to subject matter experts for review and advice. To date the Company has not been formally assessed in this matter.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 15: ISSUED CAPITAL

			2019	2018
			$	$
1,044,434,244	Ordinary shares issued and fully paid (2018:	1,044,434,244)	51,991,717	51,991,717

Ordinary shares entitle the holder to participate in dividends in proportion to the number of and amounts paid on the shares held and the proceeds on winding up of the Company in proportion to the number of shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll one vote for each fully paid share and a fraction of one vote for each partly paid up share. Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

	Consolidated
	2019 2018
	No. $ No. $
Movement in ordinary shares on issue Balance at beginning of financial year Shares issued during the period for cash November 2017 February 2018 March 2018 Share issue costs	1,044,434,244 51,991,717 705,444,920 48,410,129 - - 271,119,984 3,095,920 - - 16,922,775 193,241 - - 50,946,565 639,000 - - - (346,573)
Balance at end of financialyear	1,044,434,244 51,991,717 1,044,434,244 51,991,717

	2019 2018
	No. Weighted average exercise price No. Weighted average exercise price
Movement in options over ordinary shares on issue: At start of year Granted Exercised Expired Cancelled	399,557,631 $0.031 370,557,631 $0.032 - - 29,000,000 $0.025 - - - - - - - - (16,500,000) $0.031 - -
At end of year	383,057,631 $0.031 399,557,631 $0.031
Exercisable	5,000,000 5,000,000

The options on issue at the reporting date have expiry dates ranging from 30 November 2019 to 2 October 2021. No options lapsed or were cancelled during the year. Due to a change of control event occurring during the year upon entering administration, options disclosed in Note 17a) and b) have vested fully during the year presenting an expense of $865,702 being recorded in the consolidated statement of profit or loss and other comprehensive income.

Centennial Mining Limited (Subject to Deed of Company Arrangement) Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 16: RESERVES

Share-based payments reserve

The share-based payments reserve is used to record the value of equity benefits provided to directors and employees as part of their remuneration and to other parties for services rendered and in connection with raising capital and acquisition of subsidiaries. Refer to Note 17 for further details.

NOTE 17: SHARE BASED PAYMENTS

• a) On 3 October 2017 Centennial issued 29,000,000 unlisted options to executives of the company as mid to long term performance incentives. These options are exercisable at $0.0255 on or before 2 October 2021 and vest in eleven tranches on delivery of eleven performance milestones, as per disclosure in the 2018 financial statements. On 2 July 2018 12,000,000 of these options were cancelled due to the resignation of the applicable executive. Under AASB 2, paragraph 28(a) the residual vesting expense for these options has been recognised in full in the current financial year.

These unlisted options issued to executives also contained a clause in their terms and conditions detailing that they would vest in full upon the occurrence of a change of control event. The entering of voluntary administration has been determined to be such a change of control event and as such the residual vesting expense for these options has been recognised in full during the current financial year.

The share options were valued using a risk-free rate based on the 3 year bond yield rate of 1.90%, as published by the Reserve Bank of Australia, a share price of $0.014 and a share volatility of 105%.

An amount of $16,475 had been recognised to 30 June 2018. A further $118,514 has been recorded as a share-based payment expense in the current financial year.

• b) On 25 November 2016 Centennial issued 64,000,000 unlisted options to D Rogers, a director of the company as mid to long term performance incentives. These options are exercisable at $0.036 on or before 24 October 2020 and vest in eleven tranches on delivery of eleven performance milestones.

These unlisted options contained a clause in their terms and conditions detailing that they would vest in full upon the occurrence of a change of control event. The entering of voluntary administration has been determined to be such a change of control event and as such the residual vesting expense for these options has been recognised in full during the current financial year.

An amount of $364,662 had been recognised to 30 June 2018. A further $747,188 has been recorded as a share-based payment expense in the current financial year.

The share options were valued using a risk free rate based on the 3 year bond yield rate of 1.90%, as published by the Reserve Bank of Australia, a share price of $0.014 and a share volatility of 105%

• c) On 4 December 2015 Centennial issued 24,000,000 unlisted options to directors as mid to long term performance incentives. These options are exercisable at $0.045 on or before 30 November 2019 and vest in three tranches on delivery of three performance milestones. They have been valued at $334,400 at the grant date of 11 November 2015 using the Monte-

following assumptions.

Underlying value of shares	$0.029
Exercise price	$0.045
Risk free rate of return	2.29%
Volatility factor	81%

An amount of $110,040 had been recognised to 30 June 2018. As part of the administration process, all options were identified as requiring cancellation in September 2019. As such, the vesting expense on these options has been accelerated in the current year under AASB 2 paragraph 28 (a) and an amount of $36,260 was recorded as a share-based payment expense.

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 18: FINANCIAL INSTRUMENTS

(a) Capital risk management

Pre-

the Group will be able to continue as a going concern. This strategy had remained unchanged since 2015. The Group entered voluntary administration on 21 March 2019 refer to Note 22: Events After the Reporting Period.

The capital structure of the Group consists of debt, cash and cash equivalents and equity comprising issued capital and reserves reduced by accumulated losses.

(b) Categories of financial instruments

(b) Categories of financial instruments
	2019	2018
	$	$
Financial assets
Cash and cash equivalents	1,746,426	400,189
Receivables	11,687	285,755
Rental bonds	6,389	5,022
Term deposit	-	10,000
Environmental bonds	877,000	976,500
Total financial assets	2,641,502	1,676,466

	2019	2018
Financial liabilities	$	$
Trade and other payables	10,483,665	7,508,190
Borrowings	6,051,441	3,321,270
Total financial liabilities	16,535,106	10,843,281

All the above financial assets and liabilities are carried at amortised cost and the carrying amount is equivalent to fair value.

(c) Financial risk management objectives

The Group is exposed to credit risk,

i) Credit Risk

Credit Risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults.

The credit risk of liquid funds is limited because the counterparty is a bank with high credit ratings assigned by international credit rating agencies. Apart from credit risk on liquid funds the Group does not have any significant risk exposure to any single counterparty or any group of counterparties having similar characteristics.

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 18: FINANCIAL INSTRUMENTS (continued)

(c) Financial risk management objectives (continued)

ii) Liquidity Risk

The Group manages liquidity risk by maintaining adequate banking facilities by continuously monitoring forecast and actual cash flows.

			Less than	1 3	3 Months	1	5	5+
2019			1 Month	Months	1 Year	Years*		Years
			$	$	$		$	$
Non-interest bearing			233,282	650,657	-	9,599,727		-
Fixed	interest	rate	3,037,803	-	1,875,402	1,600,228		-
instruments
			3,271,085	650,657	1,875,402	11,199,955		-
2018
Non-interest bearing			1,878,878	6,418,063	-		-	-
Fixed	interest	rate	32,905	3,090,929	197,435		-	-
instruments
			1,911,783	9,508,992	197,435		-	-

* Non-interest bearing payments between 1-5 years includes all amounts quarantined for settlement in effectuation of DOCA. As this amount cannot be determined until such a time as the effectuation takes place, the total amount due to creditors prior to administration has been included within this section.

iii) Interest Rate Risk

-bearing financial instruments was:

	2019 $ 2018 $
	Carrying Amount Carrying Amount
Financial assets	877,000 976,500
Financial liabilities	6,051,441 2,829,058

Interest rate risk sensitivity analysis

The sensitivity analysis below has been determined on the exposure to interest rates for non-derivative instruments at the balance date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period.

At balance date, if interest rates had been 50 basis points higher and all othe net loss would increase by $25,872 (2018: decrease $4,883). There would be a corresponding effect on equity.

Market risk

The Group s activities expose it to the financial risks of changes in commodity prices. A 5% change in the gold price would have changed the result for the year by $1,111,902 (2018: $1,302,832) and changed the value of inventory by $21,290 (2018: $66,634).

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 19: COMMITMENTS AND CONTINGENCIES

Capital commitments and contingencies

There were no capital commitments as at 30 June 2019 or 30 June 2018. As at the date of this report, the Company has a contingent liability in respect of an outstanding dispute for equipment hire with a party to the DoCA for amounts claimed to be due to the equipment provider. The potential undiscounted amount of total payments that the Group could be required to make if there was an adverse decision related to the claim is estimated to be approximately $160,000 before interest charges of 6.25%.

Short-term lease commitments

Company as lessee

Due to the Company being entered into administration during the current financial year, all commercial leases previously entered into have been required to be cancelled and month-by-month rolling operating leases have been entered into. On this basis, the leases are capable of being terminated on short notice and as such, the Company has no short-term lease commitments exceeding one-month.

Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:

	2019		2018
	$		$
Within one year		-	10,371
After one year but not more than five years		-	34,570
More than five years		-	-
		-	44,941

NOTE 20: RELATED PARTY DISCLOSURE

The consolidated financial statements include the financial statements of Centennial Mining Limited and the subsidiaries listed in the following table.

Maldon Resources Pty Limited Highlake Resources Pty Limited Matrix Gold Pty Limited	% Equity interest Investment
	2019 2018 2019 2018
	$ $
	100% 100% 6,813,410 6,813,410
	100% 100% 48 48
	Nil 100% Nil 23

Centennial Mining Limited is the ultimate Australian parent entity and ultimate parent of the Group. All subsidiaries are incorporated in Australia.

During the year, Matrix Gold Pty Ltd was sold along with all exploration licenses held and all restoration provisions it was encumbered with.

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and not disclosed in this note. Details of transactions between the Group and other related entities are disclosed below.

The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year.

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 20: RELATED PARTY DISCLOSURE (continued)

						Amounts	Amounts
				Income from	Expenditure	Owed by	Owed to
				Related	Related	Related	Related
				Parties	Parties	parties	parties
Related party				$	$	$	$
Director related parties
Amounts owing to directors for:
-	Directors fees and superannuation
	D Rogers	Executive Chairman	2019	-	1,060,806	-	1,041,423
			2018	-	576,849	-	846,158
	J Cullen	Non Executive Director	2019	-	-	-	-
	(resigned 21 June 2018)		2018	-	17,721	-	58,740
	A Gray	Non Executive Director	2019	-	40,635	-	83,835
			2018	-	64,881	-	15,056

Mr Anthony Gray is a Key Management Personnel member of Octagonal Resources Pty Ltd and Octagonal Resources (WA) invoiced by Octagonal Resources Pty Ltd. No payments were made to either of these two companies during the financial year.

NOTE 21: PARENT ENTITY DISCLOSURES

Financial position

NOTE 21: PARENT ENTITY DISCLOSURES Financial position
	2019	2018
	$	$
Assets
Current assets	568,610	4,222,397
Non-current assets	6,973,456	30,535,812
Total assets	7,542,066	34,758,209
Liabilities
Current liabilities	15,547,194	9,425,480
Non-current liabilities	394,178	434,517
Total liabilities	15,941,372	9,859,517
Equity
Issued capital	51,991,717	51,991,717
Reserves
Option premium on convertible notes	-	66,854
Share-based payments	4,651,823	5,901,082
Accumulated losses	(65,042,846)	(33,061,441)
Total equity	(8,399,306)	(24,898,212)
Financial performance
	2019	2018
	$	$
(Loss) for the year	(29,695,989)	(9,997,446)
Other comprehensive income	-	-
Total comprehensive loss for theyear	(29,695,989)	(9,997,446)

There were no capital commitments or contingencies as at 30 June 2019 or 30 June 2018.

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 22: EVENTS AFTER THE REPORTING PERIOD

The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the entity up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.

Voluntary administration and deed administration

Details surrounding the appointment of Voluntary Administrators and Deed Administrators of the subsequent deeds of

Appointment of voluntary administrators

On 21 March 2019, Richard Tucker, John Bumbak and Leanne Chesser were appointed as the joint and several Voluntary A whether they should:

• continue to trade the Group on a business as usual basis;

ce program.

net funding requirement (as it allowed for revenue to be generated from gold sales) ($0.17 million surplus) when compared to the forecast trading loss on a care and maintenance basis over 14 weeks of a $1.06 million trading loss and

First DoCA

At meetings of creditors held on 17 May 2019, the Gr Administrators became the Deed A

On 7 June 2019, the First DoCA was executed by the Deed Administrators and Avior. A detailed overview of the First . For reference, a high-level overview is as follows:

New money of $8.5 million would be raised via a capital raising with $3.85 million of this being made available to the Employee entitlements for continuing employees of the Group would be preserved in full and employee entitlements for employees whose employment had been terminated was expected to be paid in full.

Creditors would be dealt with in separate classes.

Varied DoCA

On 8 July 2019 the Deed Administrators received correspondence from Avior advising that it was their opinion that the First DoCA could not be completed due to an inability to raise the capital under the terms of the First DoCA and as such a variation would be required. Avior required an alternate method to raise capital due to unforeseen external economic conditions, including but not limited to:

• An introduction of royalties on gold production charged by the Victorian State Government in January 2020;

• Various high-profile trading issues in the Australian gold sector; and

• Introduction of a new DoCA contributor.

Gandel Metals claiming to be a secured creditor of the Group, which was disputed by the Deed Administrators.

al nature of the variations to the First DoCA, creditor approval was required. Accordingly, the Deed Administrators convened the Group en

The Varied DoCA was executed on 27 September 2019 by the Deed Administrators and Avior.

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 NOTE 22: EVENTS AFTER THE REPORTING PERIOD (continued)

An overview of the Varied DoCA is as follows :

New money of $5.65 million to be raised via capital raisings by Centennial ($1.25 million) and Austar ($4.4 million). $3.65 ull Administrato

Court approval under section 444GA of the Act would be required to transfer the shares from current Centennial shareholders to participating creditors as per the terms of the Varied DoCA.

merger/acquisition transaction whereby the new Centennial shareholders (post the 444GA application and distribution from

Employee entitlements for continuing employees of the Group would be preserved in full and employee entitlements for employees whose employment had been terminated were expected to be paid in full.

Creditors would be dealt with in separate classes.

Amended Varied DoCA

On 21 October 2019, the Deed Administrators received correspondence from Avior advising that it was their opinion that the Varied DoCA was required to be amended further due to:

• The reduction in gold revenue produced in the period 1 August 2019 to 23 September 2019;

• further $0.50 million to allow the Deed Administrators to continue operations;

• into consideration the additional lending;

• The Deed Administra

• to terminate the options held to acquire shares in Centennial;

• allow parties who held options to acquire shares in Centennial to be admitted as a contingent creditor of Centennial and to vote at a meeting of creditors in relation to a resolution that the company enter an amended Varied DoCA; and

• llow surplus cash to remain in the Group (after adjusting for legal fees relating to the merger

• and any costs incurred by the Deed Administrators).

In addition:

itors should be

• There was a subsequent unexpected increase in gold production in the period 1 October 2019 to 29 October 2019.

Avior consequently provided a on 28 October 2019.

The Amended Varied DoCA was approved at meetings of creditors held on 15 November 2019 and the Amended Varied DoCA was subsequently executed on 20 November 2019.

A further extension for the effectuation of the Amended Varied DoCA to 24 January 2020 was approved between Avior and the Deed Administrators on 12 December 2019, to allow for Austar to complete its capital raisings, as Austar raising up to $4.4 million in capital was a condition precedent to the Amended Varied DoCA, and $2.4 million of this capital was to be contributed to the Amended Varied DoCA.

On 11 January 2020, Mining Lending entered into an agreement to assign its debt to Austar.

The Deed Administrators consented to the assignment of the debt subject to a further DoCA being submitted and:

by 17 January 2020;

• further supp effectuation of any revised DoCA approved by creditors; and

• drawing of their remuneration approved by creditors and costs (including legal costs) from the cash generated by the

This assignment of debt to Austar did not complete due to:

• issues arising between Austar and Mining Lending in relation to the assignment of the debt; and

• Austar not complying with the terms of the assignment, by failing to provide the bank guarantee/cash to fund the

For the reasons detailed above, the Amended Varied DoCA could no longer be effectuated.

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 NOTE 22: EVENTS AFTER THE REPORTING PERIOD (continued)

Oldfield DoCA

Execution

On 21 January 2020, a DoCA proposal was received from Oldfield Investments Pty Ltd atf Oldfield Family Trust No 3 Oldfield DoCA proposal was the acceptance by the Deed Administrators of a loan agreement with Oldfield Investments to refinance the Mining Lending facility in full. The Deed Administrators entered into a loan agreement on 20 January 2020 becoming a secured creditor of the Group.

The Oldfield DoCA was approved by creditors at meetings held on 12 February 2020. However, on 26 February 2020 -enlivened the proceedings in the Federal Court of Australia vid 688 of 2019 in relation t the Group to enable employee entitlements to be paid, which has a statutory priority pursuant to section 560 of the Act.

On 28 February 2020, the Oldfield DoCA was executed between the Group, Oldfield Investments and the Deed Administrators.

Overview

A detailed overview of dated 28 January 2020. A high-level overview of the provisions of the Oldfield DoCA is as follows:

Three DoCA contributions being made into the

• $2.01 million on effectuation of the Oldfield DoCA. This contribution was increased to $2.36 million after it was determined to honour the section 560 loans provided by Gandel to the Group;

• $0.94 million by 31 December 2021 sub June 2021 (i.e. conditional distribution); and

• June 2022 (i.e. conditional distribution)

• The following Centennial secured creditors:

• Montlodge Pty Ltd atf Stanley Family Trust;

• Bendan Superannuation Pty Ltd atf Crooks Superannuation Fund; and

being provided 10% of the issued shares in Centennial

• Oldfield Investments receiving 90% of the issued shares in Centennial pursuant to a section 444GA Court application and section 606 consent from ASIC;

• Gandel being treated as an unsecured creditor; and

• Creditors being dealt with in separate classes.

Oldfield DoCA extensions

The Oldfield DoCA was extended three times from the original completion date of 31 March 2020.

The first extension was to 30 June 2020 to allow the Gandel Proceedings to be determined. The second to 30 September 2020 to allow the appeal to the Gandel Proceedings to be determined. The third extension to 31 December 2020 was to allow the appeal to the Gandel Decision to be heard and subsequent decision to be handed down.

Ability to complete

The Deed Administrators had concerns that the Oldfield DoCA would be unable to be effectuated due to a number of factors, including:

• Secured Creditors (excluding Gandel) stated that they were not supportive of receiving equity in accordance with the Oldfield DoCA and would not release their security over Centennial at effectuation, being a condition to the Oldfield DoCA;

• the Court decision in the Gandel Proceedings that Gandel holds security over the A1 Mine (the Oldfield DoCA treated Gandel as an unsecured creditor);

• both Oldfield and Gandel indicating they would appeal to the High Court if they were unsuccessful in relation to the Gandel Decision which would cause further delays and risks to the trading operations; and

• that the second distribution to creditors (whilst always contingent) would not proceed given the estimated timeline to complete the Oldfield DoCA given that the Gandel Proceedings were appealed.

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 NOTE 22: EVENTS AFTER THE REPORTING PERIOD (continued)

Sale of Debt

Oldfield Investments, with the consent of the Deed Administrators, sold its debt and the secured debt it bought from Langsung Pty Ltd atf Langsung Superannuation Fund, to Golden River Resources Pty Ltd on 23 September 2020. The

The

dismissed the injunction hearing and the appeal to the Gandel Proceedings.

GRR DoCA

Overview

On 17 September 2020, GRR submitted a proposed variation to the Oldfield DoCA. The key terms of the GRR DoCA are summarised below:

• GRR will make available cash of $13.5 million which will be used to pay the Oldfield Investments, Secured Creditors, Gandel, and priority creditors and unsecured credi trading costs and fees. The Deed Administrators have received evidence that $13.5 million has been paid into a

• GRR will either refinance or acquire the Oldfield this has been completed GRR will assume liabilities which will not be transferred to the Creditors Trust including employee entitlements owing to employees who continue with the Group post completion of the GRR DoCA and Environmental Bonding

approved the GRR DoCA

• an order was obtained from the Court pursuant to section 444GA of the Act and consent was obtained from ASIC for relief pursuant to section 606 of the Act to transfer the existing Centennial shares from shareholders to GRR

• intercompany creditors will not participate in

• creditors are dealt with in different classes as follows:

		Cents in the	dollar of claim
Date contribution crystallised		Effectuation of DoCA
Estimated timing of payment to creditors			6 April 2021
Return to creditors		Cash	single payment
Payment outside of Creditors Trust
Gandel inc section 560 Loans, costs, secured and unsecured loans			78.1
Bendan & Montlodge Secured and unsecured debt			74.5
Class A superannuation and wages			100.0
Class B employee entitlements for terminated employees			100.0
Class C Dale Rogers			18.9
Class D All unsecured	creditors, excluding class C, E, & F		19.9
Class E creditors owed less than $5k			89.4
Class F ATO			7.3

GRR will continue as a secured creditor for the full amount of its debt and continue to hold its security over the Companies until effectuation of its DoCA at which time its debt will either be forgiven or converted into Centennial shares;

the completion of a transaction between GRR and an ASX listed entity (ListCo) for the acquisition by ListCo of a 100% equity interest in GRR (ListCo Transaction) (which condition may be waived by GRR);

the Secured Creditors consenting to release their security at settlement; and

sunset date of 31 December 2020 or such later date as agreed between the Deed Administrator an GRR

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 22: EVENTS AFTER THE REPORTING PERIOD (continued)

Current Position

An updated position for the completion of the GRR DoCA is as follows:

Condition	Condition	Condition	Condition	Condition	Precedent	Precedent	Precedent																	Status
																								Completed
The Deed Administrators applying to Court for leave pursuant to section 444GA of the Act and																								Completed
to ASIC for relief from							the prohibitions in section 606 of								the Act;
GRR making						$13.5 million available to the Deed Administrators, less														any amounts already				Ongoing
Payment of the Cash Contribution by the Deed												Administrators into the Creditors' Trust,												At effectuation
includes				debtors as at the date of effectuation and unsold gold / proceeds from the unsold gold
produced on the last Wednesday prior to effectuation and any residual cash less																						the Deed
Deeds			of release being entered							into with the	Secured Creditors and Dale Rogers, whereby													Ongoing
those parties						release all of their				rights, title and claims				they may have against the								Group and
the Deed Administrators and agree to release their security;

Condition Precedent	Condition Precedent	Condition Precedent	Condition Precedent											Status
Payment of $2.85 million being made to Gandel Parties in full and final settlement of all their														At effectuation
debts including	the section 560 loan, unsecured loan, costs, secured								loan to the				Group and
the Gandel Parties releasing their security over							the Group;
Payment of $1.14			million being made to Montlodge (and its related party) and payment of											At effectuation
$191,000 being made to Bendan in full and final settlement of all their										debts including
unsecured debt and their secured loan to the Group and								Bendan and Montlodge (and its
related party) releasing their						security over the Group;
														At effectuation
directors as instructed by GRR;
The completion of			a transaction between GRR and Kaiser for the acquisition by Kaiser of a											Ongoing
100% equity interest in GRR, which may be waived by GRR;
GRR doing all things necessary to release its security interest against the Group and doing all														At effectuation
things necessary		to release			and remove any registrations against the Group in favour of
Oldfield and Langsung;
GRR informing	the Deed Administrators as to whether GRR will forgive the Oldfield and													At effectuation
The execution of		a Creditors' Trust Deed and establishment of the Creditors' Trust												At effectuation

Centennial Mining Limited Annual Financial Report 30 June 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019

NOTE 23

The auditor of Centennial Mining Limited group is BDO Audit (WA) Pty Ltd. In prior years, the auditor of Centennial Mining Limited Group was HLB Mann Judd.

		2019	2018
		$	$
Amounts received or due and receivable by HLB Mann Judd for:
Audit of the financial statements	accrual for current period	-	66,000
	(over)/under accrual from prior period	(74,664)	5,291
Review of half yearly financial statements		-	35,000
		(74,664)	106,291
Amounts received or due and receivable by BDO for:
Audit of the financial statements	accrual for current period	40,000	40,000
	over/under accrual from prior period	-	-
Review of half yearly financial statements		-	-
		40,000	40,000

NOTE 24: KEY MANAGEMENT PERSONNEL

The totals of remuneration paid to key management personnel during the year are as follows:

	2019	2018
	$	$
Short-term employee benefits	293,742	480,000
Post-employment benefits	24,251	30,499
Share-based payment	783,448	(30,972)
	1,101,441	479,527

NOTE 25: SEGMENT REPORTING

The Group has operated in one segment being the mineral exploration sector in Victoria and accordingly no further disclosure is required in the notes to the consolidated financial statements.

Centennial Mining Limited Annual Financial Report 30 June 2019

In the Deed

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DECLARATION

As set out in Note 1, although the Deed Administrators have prepared the financial statements, notes thereto, to the best of their knowledge based on the information made available to them, they are of the opinion that it is not possible to state that the financial statements, notes thereto, are in accordance with the Corporations Act 2001, including:

1. 9 and of its performance for the financial year ended on that date;

2. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

3. Complying with International Financial Reporting Standards.

Subject to the matters highlighted in Note 1, 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 declaration required to be made in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2019.

This declaration is made in accordance with a resolution of the Administrators (acting in their capacity as Joint and Several Deed Administrators of the Company and each of its wholly owned subsidiaries).

________ Richard Tucker

Deed Administrator

Centennial Mining Limited (Subject to Deed of Company Arrangement) c/-KordaMentha

4 December 2020

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DEED ADMINISTRATORS OF CENTENNIAL MINING LIMITED (SUBJECT TO DEED OF COMPANY ARRANGEMENT)

As lead auditor of Centennial Mining Limited for the year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been:

1. No contraventions of the auditor independence requirements of the Corporations Act 2001 relation to the audit; and

2. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Centennial Mining Limited and the entities it controlled during the period.

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Dean Just

Director

BDO Audit (WA) Pty Ltd

Perth,4 December 2020

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.

Tel: +61 8 6382 4600 38 Station Street Fax: +61 8 6382 4601 Subiaco, WA 6008 www.bdo.com.au PO Box 700 West Perth WA 6872 Australia

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INDEPENDENT AUDITOR'S REPORT

To the members of Centennial Mining Limited (Subject to Deed of Company Arrangement)

Report on the Audit of the Financial Report

Disclaimer of opinion

We were engaged to audit the financial report of Centennial Mining Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2019, 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 Administrators’ declaration.

We do not express an opinion on the accompanying financial report of the Group. Because of the significance of the matters described in the Basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on this financial report.

Basis for disclaimer of opinion

We were appointed as auditors of the Company on 27 November 2020. On 21 March 2019, Centennial Mining Limited was placed into Administration (subject to a Deed of Company Arrangement). As set out in note 1(a) to the financial report, the Deed Administrators were unable to access financial records to enable the finalisation of the financial report for the year ended 30 June 2019. This prevented them from being able to state that the financial report has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001 . Consequently, they were unable to state that the financial report gives a true and fair view of the Group’s financial position as at 30 June 2019 and of the financial performance for the year ended on that date.

As a result of the matter described above we were unable to form an opinion on the financial report taken as a whole for the year ended 30 June 2019.

Responsibilities of the Administrators for the Financial Report

The Administrators 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 Administrators 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.

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.

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Auditor’s responsibilities for the audit of the Financial Report

Our responsibility is to conduct an audit of the financial report in accordance with Australian Auditing Standards and to issue an auditor’s report. However, because of the matter described in the Basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the financial 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.

BDO Audit (WA) Pty Ltd

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Dean Just Director

Perth, 4 December 2020