LEGEND MINING LIMITED — Interim / Quarterly Report 2021

Sep 9, 2021

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HALF YEAR REPORT 30 JUNE 2021 ASX : LEG ACN: 060 966 145

Diamond Drillrig Mawson, Rockford Project, Fraser Range

CONTENTS

COMPANY DIRECTORY

Directors

Michael William Atkins (Non-Executive Chairman) Mark William Wilson (Managing Director) Oliver Charles Kiddie (Executive Director)

	Page
Company Directory	1
Directors’ Report	2
Consolidated Statement of Comprehensive Income 4
Consolidated Statement of Financial Position	5
Consolidated Statement of Cash Flows	6
Consolidated Statement of Changes in Equity	7
Notes to the Financial Statements	8
Directors’ Declaration	14
Auditor’s Independence Declaration	15
Auditor’s Review Report	16

Company Secretary

Anthony Michael Walsh

Registered Office

Level 1 8 Kings Park Road WEST PERTH, WA 6005

Telephone: (08) 9212 0600 Facsimile: (08) 9212 0611

Bankers

Australian and New Zealand Banking Group Ltd 1275 Hay Street WEST PERTH, WA 6005

Auditors

Ernst & Young 11 Mounts Bay Road PERTH, WA 6000

Home Exchange

Australian Securities Exchange Ltd Level 40, Central Park 152-158 St George’s Terrace PERTH WA 6000

Web

www.legendmining.com.au

Email

legend@legendmining.com.au

ASX Code

Share Registry

Advanced Share Registry Services 110 Stirling Highway NEDLANDS, WA 6009

Telephone: (08) 9389 8033 Facsimile: (08) 9389 7871

LEG – ordinary shares

Lawyers

Thomson Geer Level 27, Exchange Tower 2 The Esplanade PERTH WA 6000

Legend Mining Limited Half Year Report 2021

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DIRECTORS’ REPORT

The Directors submit their report for the half-year ended 30 June 2021.

DIRECTORS

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

• Michael Atkins (Chairman, Non-Executive Director)

• Mark Wilson (Managing Director)

• Oliver Kiddie (Executive Director)

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

The principal activities during the period of the entities within the consolidated entity were exploration for nickel and copper deposits in Western Australia.

RESULTS OF OPERATIONS

The profit of the consolidated entity for the half-year after tax was $687,323 (2020: $170,249 loss).

REVIEW OF OPERATIONS

Legend continued with exploration activities on the Rockford Project tenements in the Fraser Range District of Western Australia, which includes ongoing testing and development of innovative geophysical exploration techniques some of which the Company expects to claim in its R&D Tax Incentive application, and comprised:

• Diamond drilling and DHTEM testing at Mawson

• Preparation of regional MLTEM, aircore and diamond drilling programs (Worsley, Crean, Hurley, Magnus and Octagonal). These regional programmes have been delayed by the impact of COVID19 on subcontractors in particular.

On 3 March 2021, 74,900,000 4 cent 30 March 2021 and 2,000,000 7.2 cent 30 September 2022 unlisted options were exercised. This exercise of options added $3,140,000 to the Company’s cash at bank.

The Company continues to proactively manage the potential impact of COVID-19 and has developed systems and policies to ensure the health and safety of our employees and contractors and limiting the risk to our operations. These systems and policies have been developed in line with the formal guidance of State and Federal health authorities and with the assistance of our contractors.

To ensure the health and wellbeing of our employees and contractors, the Company has implemented a range of measures to minimise the risk of infection and rate of transmission of COVID-19. These measures include employees and contractors completing a COVID-19 Exposure Questionnaire, increased hygiene practices, restrictions on non-essential travel, establishing strong infection control systems and protocols across the business and facilitating remote working arrangements, where practicable. The Company will continue to monitor the formal requirements and guidance of State and Federal health authorities and act accordingly.

Legend Mining Limited Half Year Report 2021

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EVENTS AFTER THE BALANCE SHEET DATE

On 7 September 2021, Legend received $1,000,000 in principal and $12,500 in interest from Jindal Steel and Power. As a result, at 7 September 2021, $500,000 plus interest is receivable from Jindal.

No other matters or circumstances have arisen since the end of the half-year to the date of this report which have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity.

AUDITOR’S INDEPENDENCE

The Auditor’s Independence Declaration under S307C of the Corporations Act 2001 has been received from Ernst & Young, the Company’s auditor, and is available for review on page 15.

SIGNED in accordance with a Resolution of the Directors on behalf of the Board

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________ M Wilson Managing Director

Dated this 10th day of September 2021

Legend Mining Limited Half Year Report 2021

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 30 JUNE 2021

Notes Finance revenue 3(a) Other Income 3(b) Net (loss)/gain on revaluation of financial assets held for trading 3(b) Employee benefits expense 3(c) Financial expenses 3(d) Other expenses 3(d) Corporate expenses Share-based payments expense 13 Net profit /(loss) before income tax expense Income tax benefit Profit/ (loss) for the period attributable to Owners of Legend Mining Limited Other comprehensive income Total comprehensive income/(loss) for the period attributable to Owners of Legend Mining Limited PROFIT/(LOSS) PER SHARE (cents per share) Basic profit/(loss) for the period attributable to ordinary equity holders of the parent 4 Diluted profit/(loss) for the period attributable to ordinary equity holders of the parent 4	CONSOLIDATED 30 Jun 2021 $ 30 Jun 2020 $ 78,103 115,801 1,506,466 62,500 - (23,094) (148,006) (77,613) (1,557) (1,386) (31,136) (17,394) (495,762) (229,063) (282,506) -
	625,602 (170,249) 61,721 -
	687,323 (170,249)
	- -
	687,323 (170,249)
	0.0246 (0.0061) 0.0246 (0.0061)

The accompanying notes form part of these financial statements

Legend Mining Limited Half Year Report 2021

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

Notes ASSETS Current Assets Cash and cash equivalents 6 Receivables 7 Other financial assets 8 Total Current Assets Non-Current Assets Other financial assets 8 Property, plant and equipment 9 Right-of-use asset Deferred exploration assets 10 Total Non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Trade and other payables 11 Provisions Lease liability Total Current Liabilities Non-Current Liabilities Provisions Lease liability Deferred tax liability Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Equity attributable to equity holders of the parent Contributed equity 12 Share option premium reserve Accumulated losses TOTAL EQUITY	CONSOLIDATED As at 30 Jun 2021 $ As at 31 Dec 2020 $ 24,725,650 25,191,146 1,122,506 2,707,333 100,000 50,000
	25,948,156 27,948,479
	5,775 5,775 862,883 536,121 150,684 54,187 28,182,601 22,296,113
	29,201,943 22,892,196
	55,150,099 50,840,675
	726,776 582,959 198,765 170,154 45,282 39,357
	970,823 792,470
	135,302 129,469 106,634 16,377 - 39,278
	241,936 185,124
	1,212,759 977,594
	53,937,340 49,863,081
	101,477,491 98,373,061 24,134,305 23,851,799 (71,674,456) (72,361,779)
	53,937,340 49,863,081

The accompanying notes form part of these financial statements

Legend Mining Limited Half Year Report 2021

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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 30 JUNE 2021

CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees Interest received ATO Cashflow Boost Payment for financial assets Proceeds from Jindal Receivables Net cash flows from/(used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment Payments for exploration and evaluation Receipt of research & development tax incentive grant Proceeds from sale of assets Net cash flows (used in)/from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from capital raising Proceeds from conversion of options Payment for capital raising costs Principal elements of lease payments Net cash flows from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at end of period	CONSOLIDATED 30 Jun 2021 $ 30 Jun 2020 $ (959,715) (336,727) 54,834 108,521 - 50,000 (2,333) - 500,000 250,000
	(407,214) 71,794 (412,671) (208,322) (5,320,117) (3,174,102) 2,598,394 - - 75,179
	(3,134,394) (3,307,245) - 20,400,000 3,140,000 - (18,059) (721,367) (45,829) (35,912)
	3,076,112 19,642,721 (465,496) 16,407,270 25,191,146 10,133,887
	24,725,650 26,541,157

The accompanying notes form part of these financial statements

Legend Mining Limited Half Year Report 2021

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 30 JUNE 2021

Consolidated At 1 January 2021 Profit for the period Total comprehensive income for the period Issued capital Capital raising costs Employee options At 30 June 2021 At 1 January 2020 Loss for the period Total comprehensive loss for the period Issued capital Capital raising costs At 30 June 2020	Issued Capital Share Option Premium Reserve Accumulated Losses Total Equity $ $ $ $ 98,373,061 23,851,799 (72,361,779) 49,863,081
	- - 687,323 687,323
	- - 687,323 687,323
	3,140,000 - - 3,140,000
	(35,570) - - (35,570)
	- 282,506 - 282,506
	101,477,491 24,134,305 (71,674,456) 53,937,340
	72,479,184 23,615,178 (71,299,169) 24,795,193
	- - (170,249) (170,249)
	- - (170,249) (170,249)
	20,400,000 - - 20,400,000
	(804,547) - - (804,547)
	92,074,637 23,615,178 (71,469,418) 44,220,397

The accompanying notes form part of these financial statements

Legend Mining Limited Half-Year Report 2021

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2021

NOTE 1: CORPORATE INFORMATION

The financial report of Legend Mining Limited (the Company) for the half-year ended 30 June 2021 was authorised for issue in accordance with a resolution of the Directors on 8 September 2021.

Legend Mining Limited is a company incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.

The nature of the operations and principal activities of the Group are exploration for nickel and copper deposits in Australia.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The half-year financial report should be read in conjunction with the Annual Financial Report of Legend Mining Limited for the year ended 31 December 2020.

It is also recommended that the half-year financial report be considered together with any public announcements made by Legend Mining Limited and its controlled entities during the half-year ended 30 June 2021 in accordance with the continuance disclosure obligations arising under the Corporations Act 2001.

(a) Basis of preparation

The half-year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. The half-year financial report has been prepared on a historical cost basis except for certain financial instruments, which have been measured at fair value.

The half-year financial report is presented in Australian dollars and all values are expressed as whole dollars. For the purpose of preparing the half-year financial report, the half-year has been treated as a discreet reporting period.

(b) New Standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2020, except for the adoption of new standards effective as of 1 January 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

(c) Estimates

The preparation of the half-year financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

Legend Mining Limited Half Year Report 2021

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2021

NOTE 3: REVENUE AND EXPENSES Revenues and expenses from continuing operations (a) Finance Revenue Bank interest received and receivable Interest on Jindal receivable (refer note 7(a)) (b) Other Income ATO Cashflow boost Impairment loss recovery (refer note 7 (a)) Other (c) Employee Benefits Expense Salaries, on-costs and other employee benefits (d) Other Expenses Depreciation - office Financial expenses - office Depreciation – Office rent Sale of plant and equipment Other NOTE 4: EARNINGS/(LOSS) PER SHARE (a) Earnings used in the calculation of basic earnings/(loss)per share Net profit/(loss) attributable to ordinary equity holders of Legend Mining Limited (b) Weighted average number of shares on issue during the financial period used in the calculation of basic earnings/(loss) per share Weighted average number of ordinary shares on issue used in the calculation of diluted earnings/(loss) per share		CONSOLIDATED 30 Jun 2021 $ 30 Jun 2020 $ 46,027 71,027 32,076 44,774 78,103 115,801 - 62,500 1,500,000 - 6,466 - 1,506,466 62,500 148,006 77,613 148,006 77,613 3,624 1,611 1,557 1,386 34,945 21,814 2,573 - (10,006) (6,031) 32,693 18,780 CONSOLIDATED 30 Jun 2021 $ 30 Jun 2020 $ 687,323 (170,249)
		2,797,892,153 2,787,530,333
		2,797,892,153 2,787,530,333

(c) Information on the classification of options

For the half year ended 30 June 2021, all options on issue were dilutive as the various exercise prices were all lower than the average market price of the Company’s shares during the year. This has resulted in the diluted earnings per share being different from the basic earnings per share. These options could potentially dilute basic earnings per share in the future. The number of dilutive potentially issuable ordinary shares at 30 June 2021 is 155,211,111 (30 June 2020: 377,111,111).

Legend Mining Limited Half Year Report 2021

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2021

NOTE 5: SEGMENT INFORMATION

AASB 8 requires operating segments to be identified on the basis of internal reports that are used by the chief operating decision maker (“CODM”) in order to allocate resources to the segment and to assess its performance. The CODM of the Group is the Board of Directors.

The Group has identified its operating segments based on the internal reports that are provided to the CODM on a regular basis. The Group has one reportable segment being exploration and evaluation activities in Australia.

NOTE 6: CASH AND CASH EQUIVALENTS Cash at bank and in hand Term deposits Total cash and cash equivalents NOTE 7: TRADE AND OTHER RECEIVABLES Current Jindal receivable (a) Other receivable (b) Jindal receivable Receivable from Jindal Mining and Exploration Limited (a) Provision for Jindal receivables	CONSOLIDATED 30 Jun 2021 $ 31 Dec 2020 $ 725,650 2,191,146 24,000,000 23,000,000
	24,725,650 25,191,146
	CONSOLIDATED 30 Jun 2021 $ 31 Dec 2020 $ 1,014,071 - 108,435 2,707,333 1,122,506 2,707,333 1,514,071 2,000,000 (500,000) (2,000,000)
	1,014,071 -

Terms and conditions relating to the above financial instruments:

• (a) On 4 January 2017, the Company announced that it had received a request from Jindal Steel and Power (Mauritius) Limited (“Jindal”) to consider a further deferral of the payment of the final amount of $3 million owing to Legend from the sale of the Cameroon Iron Ore project. At that time, Legend agreed to this request in principle, and expected to report to the ASX as soon as an agreement of new payment terms was reached.

On 6 May 2019, Legend and Jindal agreed to a payment schedule for the final amount of $3 million owing to Legend from the sale of the Cameroon Iron Ore project. Four payments of $250,000 plus interest were received between October 2019 and December 2020.

On 23 April 2021, Legend received a further payment of $518,005 from Jindal representing January 2021 and March 2021 principal and interest of $18,005. As at 30 June 2021 the loan amount outstanding was $1,500,000. On 7 September 2021, Legend received $1,000,000 in principal and $12,500 in interest from Jindal. At 7 September 2021, the loan outstanding was $500,000 which continues to accrue interest at 4% pa. The Company intends to show continued patience on this matter. The provision of $500,000 has not been adjusted in the absence of further evidence of recoverability.

• (b) Other receivables are interest accruals on Term Deposits.

Legend Mining Limited Half Year Report 2021

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2021

NOTE 8: OTHER FINANCIAL ASSETS

OTE 8: OTHER FINANCIAL ASSETS
Details of the above financial instruments: Current Security Bond (a) Non-current Rental property bond (b)	CONSOLIDATED 30 Jun 2020 $ 31 Dec 2019 $ 100,000 50,000
	100,000 50,000
	5,775 5,775

• a) Security Bond - bank deposit held as security for credit cards. At 30 June 2021, this deposit is held on term deposit for 1) $50,000 held for 6 months with an interest rate of 0.20% per annum maturing on 21 December 2021, 2) $50,000 held for 1 year with an interest rate of 0.25% per annum maturing on 9 June 2021.

• b) Rental Property Bond – this bond relates to a rental property in Kalgoorlie WA. No interest is received on this bond.

NOTE 9: PROPERTY, PLANT AND EQUIPMENT

Cost Accumulated depreciation Net carrying amount Movement Opening net carrying amount Additions Disposals Depreciation expense - Admin Depreciation expense - Exploration Closing net carrying amount	CONSOLIDATED 30 Jun 2021 $ 31 Dec 2020 $ 1,190,140 824,625 (327,257) (288,504)
	862,883 536,121
	6 Months Ended 30 Jun 2021 $ 6 Months Ended 30 Jun 2020 $ 536,121 84,777 434,575 208,522 (2,573) - (3,624) (1,611) (101,616) (27,064)
	862,883 264,624

Legend Mining Limited Half Year Report 2021

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2021

NOTE 10: DEFERRED EXPLORATION ASSETS

Deferred exploration costs (a) Deferred exploration and evaluation assets At 1 January, at cost Expenditure incurred during the period At 30 June, at cost (i)	CONSOLIDATED 30 Jun 2021 $ 31 Dec 2020 $ 28,182,601 22,296,113 6 Months Ended 30 Jun 2021 $ 6 Months Ended 30 Jun 2020 $ 22,296,113 14,622,473 5,886,488 3,733,542 28,182,601 18,356,015

Note:

(i) The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

NOTE 11: TRADE AND OTHER PAYABLES Current – unsecured Trade payables (i) Other payables and accruals (ii) Lease liability Non-Current Lease liability	30 Jun 2021 $ 31 Dec 2020 $ 530,875 582,959 195,901 - 45,282 39,357
	772,058 622,316
	106,634 16,377
	106,634 16,377

Terms and conditions relating to the above financial instruments

(i) Trade payables are non-interest bearing and normally settled on 30-day terms.

(ii) Other payables are non-interest bearing and normally settled as they fall due.

NOTE 12: CONTRIBUTED EQUITY

Ordinary shares Issued and fully paid Issue costs Movement in ordinary shares on issue At 1 January 2021 Conversion of Options – Employees (March 2021) Costs of Placement At 30 June 2021	CONSOLIDATED AND COMPANY 30 Jun 2021 $ 31 Dec 2020 $ 105,460,173 102,320,174 (3,982,682) (3,947,113)
	101,477,491 98,373,061
	30 June 2021 30 June 2021 No. of Shares $ 2,678,235,721 98,373,061 76,900,000 3,140,000 - (35,570)
	2,755,135,721 101,477,491

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Legend Mining Limited Half Year Report 2021

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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED 30 JUNE 2021

NOTE 13: SHARE-BASED PAYMENTS

On 26 March 2021, the Company issued 1.25 million zero exercise priced unlisted options expiring 10 August 2025 to two employees pursuant to its employee incentive plan (ESOP) approved at the 2020 Annual General Meeting on 6 May 2020. The zero exercise price options vest when the 20 day VWAP of share is greater than the Vesting Price of 28 cents per share for a minimum period of 20 continuous ASX trading days during the life of the zero exercise price options, and on other terms and conditions determined by the Company’s ESOP.

During the 2021 half-year there were no other share-based payment transactions.

NOTE 14: COMMITMENTS

(a) Exploration expenditure commitments

In order to maintain current rights of tenure to exploration tenements, the Group will be required to outlay approximately $2,353,000 (2020: $2,207,500) in the following twelve months in respect of tenement lease rentals and to meet minimum expenditure requirements of the Department of Mines, Industry Regulation and Safety. These obligations are expected to be fulfilled in the normal course of operations and have not been provided for in the financial report.

NOTE 15: CONTINGENT LIABILITIES

There are no contingent liabilities at the reporting date.

NOTE 16: EVENTS AFTER THE BALANCE SHEET DATE

On 7 September 2021, Legend received $1,000,000 in principal and $12,500 in interest from Jindal Steel and Power. As a result, at 7 September 2021, $500,000 plus interest is receivable from Jindal.

No other matters or circumstances have arisen since the end of the half-year to the date of this report which have significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity.

NOTE 17: DIVIDENDS PAID AND PROPOSED

No dividends were paid or proposed this financial period.

NOTE 18: FAIR VALUES

The carrying amounts of the Group’s financial assets and financial liabilities at 30 June 2021 and 31 December 2020 are reasonable approximations of their fair values at those dates.

Management assessed that cash and cash equivalents, trade and other receivables, and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these instruments.

There have been no transfers between Level 1 and Level 2 during the period.

The fair value of the financial assets is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Fair value of the quoted equity instruments is based on price quotations at the reporting date.

Legend Mining Limited Half Year Report 2021

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DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Legend Mining Limited, I state that:

In the opinion of the Directors:

• a) the financial statements and notes, of the consolidated entity, are in accordance with the Corporations Act 2001, including;

• i. Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and its performance for the period ended on that date; and

• ii. Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and

• b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board.

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---

Mark Wilson Managing Director

Dated this 10th day of September 2021

Legend Mining Limited Half Year Report 2021

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AUDITOR’S REVIEW REPORT

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Legend Mining Limited Half Year Report 2021

AUDITOR’S REVIEW REPORT

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Legend Mining Limited Half Year Report 2021

AUDITOR’S REVIEW REPORT

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Legend Mining Limited Half Year Report 2021