MANUKA RESOURCES LTD. — Interim / Quarterly Report 2023

Mar 15, 2023

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31 December 2022 Interim Financial Report

For the 6-month period ended 31 December 2022

Manuka Resources Ltd and its controlled entity

ABN 80 611 963 225

Manuka Resources Ltd For the half-year ended 31 December 2022

i

CORPORATE DIRECTORY

Directors

Dennis Karp – Executive Chairman

Alan J Eggers –Executive Director

Lawyers

K&L Gates Level 31, 1 O’Connell Street Sydney NSW 2000

Auditor

Anthony McPaul – Non-Executive Director

John Seton – Non-Executive Director

Ernst and Young 200 George Street Sydney NSW 2000

Key Management

Share Registry

Haydn Lynch – Chief Operating Officer

Company Secretary

Toni Gilholme

Automic Group Pty Ltd Level 5, 126 Phillip Street Sydney , NSW 2000

Stock Exchange Listing

Registered Office

Level 4, Grafton Bond Building 201 Kent Street Sydney NSW 2000

Manuka Resources Limited shares (Code: MKR) are listed on the Australian Securities Exchange.

www.manukaresources.com.au

Manuka Resources Ltd For the half-year ended 31 December 2022

Contents

Contents
	Page
Directors’ Report	3
Auditor’s Independence Declaration	8
Consolidated Statement of Profit or Loss and Other Comprehensive Income	9
Consolidated Statement of Financial Position	10
Consolidated Statement of Changes in Equity	12
Consolidated Statement of Cash Flows	13
Notes to the Financial Statements	14
Directors’ Declaration	31
Independent Auditor’s Report	32

Manuka Resources Ltd For the half-year ended 31 December 2022

3

Directors’ Report

The Directors of Manuka Resources Ltd (‘Manuka Resources’) present their report together with the financial statements of the Entity or the Group, being Manuka Resources (‘the Company’) and its subsidiaries Mt Boppy Resources Pty Ltd (‘Mt Boppy’) and Trans-Tasman Resources Ltd (TTR) for the six months ended 31 December 2022.

Director details

The following persons were Directors of Manuka Resources during or since the end of the financial period and up to the date of this report:

• Mr Dennis Karp

• Mr Anthony McPaul

• Mr Nicholas Lindsay (resigned 24 November 2022)

• Mr John Seton (Appointed 10 November 2022)

• Mr Alan J Eggers (Appointed 10 November 2022)

Review of operations and financial results

The past six months of operations focused on a trial phase of silver oxide processing of the existing stockpiles at the Wonawinta plant. These activities enabled the company to assess and optimise its metallurgical flow sheet, as well as consider ways to materially increase the plant capacity. We have now amassed considerable full-scale data on material handling and have developed procedures to effectively process. Due to the bimodal nature of the softer ores (some clays) the company constructed a secondary classification circuit to screen out sub 38 micron particles (containing negligible silver) and send that stream directly to waste.

As well as the secondary classification circuit, the production flow sheet was further enhanced by the addition of a deslime circuit which incorporated its own ball mill. This circuit was used in conjunction with the larger mill, leading to an increase in the combined capacity of the plant from 850,000t/a to >1.0M t/a.

Our geology department worked closely with Wonawinta plant operations to provide accurate data on ore feed material given the various stockpile lithologies on the Wonawinta ROM from previous periods of mining operations. Whilst sufficient records of the mineralogy of these stockpiles exist the Company preferred to work off first principles to ensure historical records could be verified and corrected where needed.

The balance of work performed by Geology on our various exploration licences was desktop based and entailed a complete review of all prospects and targets on the entire EL package with a summary of this review released on the ASX on 14 February 2023. The Company welcomed as its new Chief Geologist, Phil Bentley during December 2022. Phil has a 30 plus year career over a variety of mineralisation styles in precious and base metals and spent a significant portion of his career in southern Africa. The half year saw a comprehensive review of all historic geophysics data and reports over the EL package completed by Mitre Geophysics P/L (Nick Direen PhD) which has provided an excellent additional information to further define new drill targets as well as identify further geophysics programs to be pursued during the course of this year.

Manuka Resources Ltd For the half-year ended 31 December 2022

The Company also closed on its acquisition of the very exciting iron and vanadium project in the South Taranaki Bight in New Zealand. Manuka acquired Trans-Tasman Resources Limited (now a wholly owned subsidiary) in November 2022 and is in the preliminary stages of its bankable feasibility study (BFS) which is largely focused on detailed engineering and costings for the integrated mining vessel upon which mining and processing activities will be conducted. Vanadium, apart from its traditional application as a steel alloying element which contributes considerable tensile strength, is rapidly building demand as an electrolyte in vanadium redox flow batteries. These batteries have recently become the preferred IP for large high-capacity battery stations (utility and grid storage solutions) due to their longevity and fire safety characteristics, ahead of all competing technologies.

Exploration Program

Drilling activities were placed on hold in the half year to accommodate support for the processing team and allow for desktop review of the entire tenement package including geophysical review as mentioned in the preceding section. In anticipation of recommencing drilling activities, the Company has been in preliminary discussion with local drilling contractors to ascertain current fleet availability, suitability and crewing capacity. During the peak of the Covid restrictions it was difficult to source suitably qualified personnel to support these activities. Pleasingly those constrictions have eased considerably, and we expect to recommence field activities during Q2 2023.

Operating Summary

The loss for the consolidated entity for the half-year ended 31 December 2022 was $13,246,268 (2021 Profit: $11,832,946). As at 31 December 2022, the consolidated entity had $952,538 in cash. The Company produced 73,680 ounces of Ag during the half-year and sold at an average unhedged price of $AU30.50/oz.

Production summary		31 Dec 2022
Tonnes Milled	t	19,584
Silver in Circuit	oz	73,680
Silver Sold	oz	245,230
Gold Sold	oz	551
Silver Recoveries	%	64%
Revenues	AUD$’000	8,809

Significant changes in state of affairs

During the half-year there have been no significant changes in the state of affairs of the Group, but the following events are noteworthy:

• Acquisition of Trans-Tasman Resources Ltd (TTR)

On 1 August 2022, the Company announced to ASX that it had entered into a legally binding term sheet (Term Sheet) in relation to the acquisition (subject to Shareholder approval) by the Company of all of the issued share (and option) capital of the emerging vanadiferous titanomagnetite iron sands developer Trans-Tasman Resources Limited (TTR) (Acquisition). TTR’s main asset is the Taranaki VTM Iron Sand Project located with New Zealand’s Exclusive Economic Zone (EEZ) 22Km to 36Km offshore in the South Taranaki Bight (STB).

On Monday, 9 August 2022, MKR responded to reports that a Mãori Party sponsored private member’s bill to ban seabed mining in New Zealand (the Bill) was drawn from the Ballot Box in the New Zealand

Manuka Resources Ltd For the half-year ended 31 December 2022

Parliament[1] . However, while there can be no certainty that the regulatory settings in NZ will ultimately allow the STB project to be brought into production, the Company notes positive subsequent developments in which the NZ Minister for Foreign Affairs confirmed during parliamentary question time that the NZ Government does not support a moratorium or ban on seabed mining. The environmental approvals to operate are subject to the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (EEZ Act) that permits seabed mining to occur subject to appropriate environmental safeguards and other interests, including economic benefit and efficient use and development of natural resources, are met.

On 10 November 2022, the Manuka completed the acquisition of TTR. The Taranaki VTM project is in preliminary stages of its bankable feasibility study (BFS) which is largely focused on detailed engineering and costing for the integrated mining vessel upon which mining and processing activities are conducted. The completed pre-feasibility study (PFS) and the initial BFS work have demonstrated a low-cost iron ore concentrate production operation with CO2 emissions generated per tonne of shipped concentrate less than half of other global iron ore concentrates[2] .

TTR was granted Mining Permit MP55581 in 2014 and subsequently granted a Marine Consent and Marine Discharge Consent to operate (Consents) the Taranaki VTM Project by NZ Environmental Protection Authority (EPA) in 2017. The EPA’s grant of the environmental consents was then subject to third party legal challenge. Following judgments in the High Court in 2018 and the Court of Appeal in 2020 the New Zealand Supreme Court judgment in 2021[3] summarised the legal deficiencies of the original EPA’s Decision Making Committee (DMC) Consent grants and the legal framework for the DMC to address when the grants are reconsidered.

The Supreme Court (SC) referred the Consents back to the EPA for final reconsideration by their DMC on five narrowly defined points of law. The EPA’s DMC convened its first meeting on 3 March 2023[4] . TTR believes the expert evidence provided to the DMC enables it to satisfy the SC’s requirements and accordingly there are no aspects of the judgment that are an impediment to having the Consents reapproved by the reconvened DMC[5] .

In parallel with this formal EPA engagement process, Manuka will commission additional metallurgical test work to optimise the flowsheet for processing of the VTM concentrate (as well as the recovery of the vanadium and titanium) during 2H 2023 and will undertake marketing (and related) studies building on work completed during the PFS.

Vanadium apart from its traditional application as a steel alloying element is rapidly building demand as an electrolyte in vanadium redox batteries which are fast becoming the preferred IP for large high-capacity battery stations due to their longevity and fire safety characteristics, ahead of all competing technologies.

With concerns over the sovereign security of vanadium supply from key producing nations China (comprising 55% of global production), Russia (20% of global production), Brazil (15%) and South Africa (10%), vanadium has critical mineral status in Australia, USA and the EU. This factor, together with rapidly growing demand underpinning rising prices, suggests the vanadium potential of our Taranaki VTM Iron Sand Project, along with its green steel low carbon emissions profile, will be of huge interest to end-users.

1 Refer ASX announcement dated 9 August 2022 2 Refer ASX announcement dated 1 March 2023

3 Judgement delivered 30 September 2021

4 Refer EPA Public consultation disclosures at www.epa.govt.nz/public-consultations/in-progress/trans-tasman-resources-limited-2016/ 5 Refer ASX announcement 1 August 2022

Manuka Resources Ltd For the half-year ended 31 December 2022

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A BFS is being progressed based on offshore recovery and processing of this resource into an iron ore concentrate with vanadium (and potentially titanium) credits.

Events arising since the end of the reporting period

• Strategic exploration Review

On 14 February 2023, the Company announced the completion of its Strategic Exploration Review highlighting near-mine resource upside[6] . The Review provides Manuka with the exploration plan to add significant resources of Gold, Silver, Copper and other Base Metals and included a comprehensive review of over 30 years of geophysical data and reports that has defined new targets and information gaps which will further define exploration tools and strategy.

• Maiden Vanadium Resource at Taranaki VTM Iron Sand Project (New Zealand)

In March 2023, the Company released its maiden Vanadium Resource for the Taranaki VTM Iron Sand Project in New Zealand[7] , making it one of the largest aspiring vanadium producers on the ASX. The company will commission additional metallurgical test work to optimise the flowsheet for processing of the VTM concentrate to confirm economic recovery of vanadium as a separate product stream (this test work will be scoped to target >70% recoverable metal). Revenue derived from vanadium pentoxide (V2O5) (either as co-product or separate product) and potentially titanium dioxide (TiO2) sales would provide material by-product credits to further offset already low iron ore operating expenses. The Project has already secured a 5Mtpa mining licence (MP55581) with an initial 20 year mine life proposed with a bankable feasibility study (BFS) already commenced. MP55581 is located within New Zealand’s EEZ.

• Appointment of Mr Alan J Eggers as Executive Director

On 1 February 2023[8] , the Company appointed Mr Eggers as an Executive Director pursuant to a consultancy agreement to provide his management services, extensive industry experience and professional technical expertise to MKR on corporate administration, compliance, resource development, financial and commercial activities and generative growth opportunities in the sector and other key business functions as an executive director of MKR.

Apart from the matters noted above and as disclosed in the financial statements, there are no other matters or circumstances that have arisen since the end of the period that has significantly affected or may significantly affect either:

• the entity’s operations in future financial years;

• the results of those operations in future financial years; or

• • the entity’s state of affairs in future financial years.

Dividends

No dividends were paid or declared during the period and no recommendation is made as to dividends.

6 Refer ASX announcement 14 February 2023 7 Refer ASX announcement 1 March 2023

8 Refer ASX announcement 6 February 2023

Manuka Resources Ltd For the half-year ended 31 December 2022

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Auditor’s Independence Declaration

A copy of the Auditor’s Independence Declaration as required under s.307C of the Corporations Act 2001 is included on the following page of this financial report and forms part of this Director’s Report.

Signed in accordance with a resolution of the Directors.

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Dennis Karp

Director

Date: 16 March 2023

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Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com.au

Auditor’s Independence Declaration to the Directors of Manuka Resources Limited

As lead auditor for the review of the half-year financial report of Manuka Resources Limited for the half-year ended 31 December 2022, I declare to the best of my knowledge and belief, there have been:

• a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review;

• b. No contraventions of any applicable code of professional conduct in relation to the review; and

• c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the review.

This declaration is in respect of Manuka Resources Limited and the entities it controlled during the financial period.

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Ernst & Young

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Siobhan Hughes Partner 16 March 2023

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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

Manuka Resources Ltd For the half-year ended 31 December 2022

Consolidated Condensed Interim Statement of Profit or Loss and Other Comprehensive Income

For the half-year ended 31 December 2022

Notes	31 December 2022 31 December 2021 $ $
Sales revenue 5(a) Cost of sales 6(a) Operating profit / (loss) Other income 5(b) Other expenses 6(c) Share based payment credit / (expense) Foreign exchange gains / (losses) Profit /(loss) before finance expenses Finance expenses 6(d) Profit / (loss) before income tax Income tax expense Profit / (loss) for the period attributable to members of Manuka Resources Limited Other comprehensive profit / (loss) - items that will be reclassified subsequently to profit or loss Cashflow hedging profit / (loss) Total comprehensive profit / (loss) for the year attributable to members of Manuka Resources Limited Profit / (loss) per share for loss attributable to the ordinary equity holders of the Company Basic profit /(loss) per share (cents per share) Diluted profit /(loss) per share (cents per share)	8,926,069 38,926,147 (16,456,776) (23,881,749)
	(7,530,707) 15,044,398 385,225 237,402 (5,309,258) (1,152,796) - (69,718) 356,353 (435,826)
	(12,098,387) 13,623,460
	(1,147,881) (1,796,811)
	(13,246,268) 11,826,649
	- -
	(13,246,268) 11,826,649
	- 6,297
	- 6,297
	(13,246,268) 11,832,946
	(4.61) 4.39 (4.61) 3.99

This statement should be read in conjunction with the notes to the financial statements.

Manuka Resources Ltd For the half-year ended 31 December 2022

10

Consolidated Condensed Interim Statement of Financial Position

As of 31 December 2022

Notes	31 December 2022 Restated9 30 June 2022 $ $
Assets Current Cash and cash equivalents Trade and other receivables Inventories 7 Prepayments Other financial assets 8 Total current assets Non-current Mine properties and development assets 9 Exploration and evaluation assets 10 Property, plant and equipment 11 Right of use asset Other financial assets Total non-current assets Total assets Liabilities Current Trade and other payables 12 Provisions 13 Contract liabilities Borrowings 14 Lease liabilities Total current liabilities Non-current Provisions 13 Lease liabilities Borrowings 14 Total non-current liabilities Total liabilities Net assets / (deficit)	952,538 1,160,615 374,435 430,582 2,907,405 2,889,123 642,986 770,552 186,000 186,000
	5,063,364 5,436,872
	474,496 4,371,830 35,578,507 8,457,839 15,774,780 16,403,110 303,530 374,641 6,626,793 6,552,225
	58,758,106 36,159,645
	63,821,470 41,596,517
	8,042,887 6,242,625 583,796 628,315 70,943 62,183 16,347,182 13,053,251 136,012 124,901
	25,180,820 20,111,275
	8,125,000 7,594,510 188,754 259,040 50,420 57,927
	8,364,174 7,911,477
	33,544,994 28,022,752
	30,276,476 13,573,765

9 Certain capitalised costs relating to the Wonawinta processing plant have been reclassified from Mine Properties and Development Assets to Property, Plant and Equipment in the comparative period to better reflect the nature of the costs capitalised and to align with current period presentation.

Manuka Resources Ltd For the half-year ended 31 December 2022

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Consolidated Condensed Interim Statement of Financial Position (continued)

As of 31 December 2022

Notes	31 December 2022 30 June 2022 $ $
Equity Share Capital 16 Share based payment reserve Accumulated losses Total equity / (deficit)	54,762,154 25,771,113 3,797,192 2,839,254 (28,282,870) (15,036,602)
	30,276,476 13,573,765

This statement should be read in conjunction with the notes to the financial statements.

Manuka Resources Ltd For the half-year ended 31 December 2022

12

Consolidated Condensed Interim Statement of Changes in Equity

For the half-year ended 31 December 2022

Balance at 1 July 2021 Profit for the period Other comprehensive profit Total comprehensive profit for the period Share based payments Balance at 31 December 2021 Balance at 1 July 2022 Loss for the period Other comprehensive profit Total comprehensive loss for the period Contribution of equity Share based payments Share issue costs Reserves Balance at 31 December 2022	Share Capital Other Contributed Equity Share-based payment reserve Reserves Accumulated losses Total equity $ $ $ $ $ $
	21,512,355 - 1,486,077 (6,297) (20,318,022) 2,674,113
	- - - - 11,826,649 11,826,649 - - - 6,297 - 6,297
	- - - 6,297 11,826,649 11,832,946
	- - 941,126 - - 941,126
	21,512,355 - 2,427,203 - (8,491,373) 15,448,185
	25,771,113 - 2,839,254 - (15,036,602) 13,573,765
	- - - - (13,246,268) (13,246,268) - - - - - -
	- - - - (13,246,268) (13,246,268)
	29,766,053 - - - - 29,766,053 (513,470) - 975,065 - - 461,595 (261,542) - - - - (261,542) - - - (17,127) - (17,127)
	54,762,154 - 3,814,319 (17,127) (28,282,870) 30,276,476

This statement should be read in conjunction with the notes to the financial statements.

Manuka Resources Ltd For the half-year ended 31 December 2022

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Consolidated Condensed Interim Statement of Cash Flows

For the half-year ended 31 December 2022

	31 December 2022 31 December 2021 $ $
Operating activities Receipts from customers Payments to suppliers and employees Other income Finance costs paid Net cash from/ (used in) operating activities Investing activities Acquisition of property, plant and equipment Disposal of property, plant and equipment Payments for development and exploration assets Payment for other assets Net cash used in investing activities Financing activities Repayments of borrowings Proceeds from borrowings Repayment of lease liabilities Proceeds from issues of ordinary shares Net cash from / (used in) financing activities Net change in cash and cash equivalents Cash and cash equivalents, at beginning of the period Cash and cash equivalents, at end of period	8,982,216 38,822,130 (14,826,247) (25,607,641) 385,225 237,402 (66,346) (1,953,597)
	(5,525,152) 11,498,294
	(597,410) (465,120) 224,068 225,128 (377,270) (3,354,505) - (148,000)
	(750,612) (3,742,497)
	(1,556,673) (4,417,445) 3,857,094 - (81,191) (77,497) 3,848,457 -
	6,067,687 (4,494,942)
	(208,077) 3,260,855 1,160,615 1,018,035
	952,538 4,278,890

This statement should be read in conjunction with the notes to the financial statements.

Manuka Resources Ltd For the half-year ended 31 December 2022

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Notes to the Financial Statements

1 Nature of operations

The principal activities of Manuka Resources Ltd comprise of exploration, mine development, mining and processing of silver and gold.

During the financial half-year ending 31 December 2022, the Company’s principal activities related to the Wonawinta Silver trial production program and the processing of the Wonawinta ROM stockpile ores which has yielded important metallurgical testwork data as well as operational changes, all targeted at improving recoveries. Field activities focused on stockpile sampling and assessment in consultation with metallurgical department. This included identification of ore grade stockpiles located off the ROM at the Wonawinta plant. In addition, during the period, the Company acquired the assets of Trans-Tasman Resources Ltd and is progressing the development of their Taranaki VTM Iron Sand Project (New Zealand).

2 Basis of preparation

The interim consolidated financial statements of the Group are for the six months ended 31 December 2022 and are presented in Australian dollars ($), which is the functional currency of the parent company.

These interim condensed consolidated financial statements have been prepared in accordance with the requirements of the Corporations Act 2001 and AASB 134 Interim Financial Reporting. They do not include all the information required in annual financial statements in accordance with Australian Accounting Standards and should be read in conjunction with the consolidated financial statements of the Group for the year ended 30 June 2022 together with any public announcements made during the half-year ended 31 December 2022.

The interim financial report has been approved and authorised for issue by the board of directors on 16 March 2023.

2.1 Going Concern

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

During the six months ended 31 December 2022, the Group generated an operating loss of $13,246,269 (2021: profit of $11,832,946) and negative operating cash flows of $5,525,152 (2021: positive operating cash flows of $11,498,294), primarily driven by high production and operating costs at Wonawinta on a per ounce of silver produced basis, due to low volumes of ore through the plant. This gives rise to a material uncertainty that may cast doubt on the Group’s ability to continue as a going concern.

The Group was successful in raising $4.1m in equity in December 2022, which has been used for payment of the costs of the placement and for working capital until the end of December 2022 and for the completion of the strategic exploration review, a summary of which was released to the market through the ASX on 14 February 2023.

At 31 December 2022 the Group had $952,538 (2021: 1,015,418) of cash on hand and remained in a net current liability position of $20,117,456, due primarily to $16,347,182 in current debt (refer to note 14) and $8,042,887 (2021: $6,242,625) in trade and other creditors. The most significant loan balance amounts to

Manuka Resources Ltd For the half-year ended 31 December 2022

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$13.2Million and is repayable at 30 September 2023. The remaining loans relate to loans from related parties and asset backed funding and are repayable over the period end of March and May 2023. In the period since 31 December 2022, the Group has been managing its cash position through the sale of silver ores, negotiated deferral of creditor payment terms and utilisation of existing cash and cutting of operational costs.

The Directors, in their consideration of the appropriateness of the going concern basis for the preparation of the financial statements, have prepared cash flow projections through to 15 March 2024 which supports the ability of the Group to have sufficient cash to continue as a going concern over the coming 12 month period. However, in order to repay its current liabilities in the timeframe required, these cash flow projections rely on the following:

• The ability of the group to complete a private placement in the short term to an existing shareholder. This will be used to fund working capital and creditor requirements.

• The ability of the group to complete an equity placement in the short term to an institutional investor. These funds will be used for ongoing working capital requirements and the recommencement of gold production at Mt Boppy.

• The group has agreed to in principle terms and is in the process of documenting a trade facility which will provide ongoing funding during the window between commencement of stockpile screening at Mt Boppy and extending until cashflow is received from deliveries to the refinery. This facility will continue for 12-24 months.

• The ability of the Group to successfully restart gold production profitably from Mt Boppy, based on the forecast gold prices, the cut-off grade, and the planned recoveries from known resources and stockpiles. Current forecasts assume a gold price of US$1,875/oz and an exchange rate of AUD/USD of $0.695 (AUD$2698/oz gold).

• The ability to renegotiate with TransAsia Private Capital Limited (“TPC”) the terms of the facility beyond 30 September 2023 (if required) and/or finding alternative financing arrangements, if required based on the timing of cash receipts from gold production. The Group is currently in discussions in this regard.

• The ability to repay current creditors through profits from gold mining or to successfully negotiate payment extensions with long dated creditors. Should the group be unable to do this, further shortterm financing may be required to manage short term cash flow.

Should the Group be unsuccessful in achieving the matters set out above, this may cast significant doubt on the ability of the Group to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the ordinary course of business.

The Directors are confident that the above steps can be achieved based on:

• History of being able to successfully extend the current debt facilities, noting the facility with TransAsia Private Capital Limited (as disclosed in Note 14) has been successfully extended twice previously;

• Successfully raising funds in the market as required to fund mining activities including $5,000,000 in March 2022 and $4,110,000 in December 2022;

Manuka Resources Ltd For the half-year ended 31 December 2022

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• The company has already commenced discussions with a number of parties with the intention of refinancing the TPC facility, being the current secured debt facility.

• The Company is in final stage documentation of a commodity trade finance facility which will assist in improving working capital during the recommencement of gold production.

• The level of support extended from key suppliers and creditors to date all of whom are displaying a strong interest in seeing the Company return to steady gold production.

• Historical ability to achieve significant profits from Mt Boppy ($12.8Million in net profit achieved in the 2022 fiscal period to 31 March 2022 being the end of gold processing) and the continued high gold prices.

• Discussions with key creditors and suppliers as to their continued support of the Group whilst in the process of recommencing operations at Mt. Boppy.

At the date of signing this report, the Directors have reasonable grounds to believe that due to the matters noted above and the actions taken to date that it is appropriate to prepare the financial statements on the going concern basis.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not be able to continue as a going concern.

3 Significant accounting policies

These general-purpose financial statements for the interim half-year reporting period ended 31 December 2022 have been prepared in accordance with Australian Accounting Standard 134 ‘Interim Financial Reporting’ and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 ‘Interim Financial Reporting’.

These general-purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

As outlined within Note 17, the Company acquired the assets of Trans-Tasman Resources Limited (“TTR”) during the period. Judgement is exercised in assessing whether the transaction is an asset acquisition or a business combination under AASB 3. Given the transaction does not acquire inputs, processes and outputs of TTR, it has been classified as an asset acquisition.

All other accounting policies and methods of computation are consistent with those of the most recent annual financial statements.

New, revised or amending Accounting Standards and Interpretations adopted

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those following in the preparation of the Group’s annual consolidated financial statements for the year ended 30 June 2022.

Manuka Resources Ltd For the half-year ended 31 December 2022

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Any new, revised or amending Accounting Standards or Interpretations that are not yet effective have not been adopted.

4 Segment reporting

Identification of reportable segments

The Group has identified operating segments based on the internal reports that are reviewed and used by the board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources. Currently all the Group’s gold and silver tenements and resources are in New South Wales. Three operating segments have been identified:

• Exploration - Aus: Exploration of existing gold and silver leases and exploration leases at Wonawinta and Mt Boppy projects

• Exploration – NZ: Exploration of acquired mining and exploration leases at the Taranaki VTM Iron Sand Project (New Zealand)

• Operations: being the appraisal, development and processing of gold and silver deposits

The following table presents revenue and loss information regarding operating segments for the half-year periods ended 31 December 2022 and 31 December 2021.

Half-year ended 31 December 2022	Exploration NZ	Exploration Australia Operations Total $
Segment revenue (external customers) Segment cost of sales Segment operating contribution Other income Expenses Share based payments Finance expenses Profit / (loss) before income tax Half-year ended 31 December 2021	- -	- 8,926,069 8,926,069 - (16,456,776) (16,456,776)
	- - - - - - Exploration NZ	- (7,530,707) (7,530,707) - 385,225 385,225 (5,229) (5,304,029) (5,309,258) - 356,353 356,353 - (1,147,881) (1,147,881) (5,229) (13,241,039) (13,246,268) Exploration Operations Total Australia $
Segment revenue (external customers) Segment cost of sales Segment operating contribution Other income Expenses Finance expenses Profit / (loss) before income tax	- - - - - - -	- 38,926,147 38,926,147 - (23,881,749) (23,881,749)
		- 15,044,398 15,044,398 - 237,402 237,402 (2) (1,222,512) (1,222,514) - (2,232,637) (2,232,637) (2) 11,826,651 11,826,649

Manuka Resources Ltd For the half-year ended 31 December 2022

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The following table presents segment assets and liabilities of operating segments at 31 December 2022 and 30 June 2022.

Segment Assets	Exploration NZ Exploration Australia Operations Total $
As at 31 December 2022 As at 30 June 2022 Segment Liabilities	26,748,275 8,830,232 28,242,963 63,821,470
	- 8,457,839 33,138,678 41,596,517
	Exploration NZ Exploration Australia Operations Total $
As at 31 December 2022 As at 30 June 2022	- 49,516 33,495,478 33,544,994
	- 115,800 27,906,952 28,022,752

Revenue and assets by geographical region

The Company's revenue is derived from sources and assets located wholly within Australia.

Major customers

The Company currently delivers all its product to one off-taker.

5 Revenue and other income

Notes (a) Operating sales revenue Sale of mineralised ore – gold Sale of mineralised ore – silver Total revenue from contracts with customers (b) Other income Income from insurance claims Other income Total other income 6 Expenses (a) Cost of sales Operating expenses b Royalties Inventory movements Total operating expenses	31 December 2022 31 December 2021 $ $
	1,445,718 38,509,809 7,480,351 416,338
	8,926,069 38,926,147
	195,573 150,000 189,652 87,402
	385,225 237,402
	31 December 2022 31 December 2021 $ $ 17,055,117 22,195,824 - 1,172,375 (598,341) 513,550 16,456,776 23,881,749

Manuka Resources Ltd For the half-year ended 31 December 2022

19

(b) Operating expenses

(b) Operating expenses
Mining expenses Hauling and crushing expenses Processing and refining expenses Site administration expenses Amortisation of mine properties 9 Total operating expenses (c) Other expenses Professional expenses Employment expenses Depreciation and amortisation Impairment expenses 9(a) Other expenses Total other expenses (d) Finance expenses / (income) Interest expense Amortisation of prepaid borrowing costs Other finance charges / (income) Total finance expenses / (income)	31 December 2022 31 December 2021 $ $
	233,497 3,710,924 2,525,288 6,030,962 11,186,461 8,963,492 2,447,027 2,819,289 662,844 671,157
	17,055,117 22,195,824
	31 December 2022 31 December 2021 $ $
	434,028 361,596 513,661 539,079 72,303 67,138 4,001,581 - 287,685 254,701
	5,309,258 1,222,514
	31 December 2022 31 December 2021 $ $
	1,075,487 1,186,620 289,161 269,918 (216,767) 340,273
	1,147,881 1,796,811

7 Inventories

Inventories consist of the following:

Consumables supplies and spares Gold or Silver concentrate in circuit at cost Ore stockpiles Inventories at cost or net realisable value	31 December 2022 30 June 2022 $ $ 528,439 1,108,498 2,378,966 1,759,657 - 20,968 2,907,405 2,889,123

Manuka Resources Ltd For the half-year ended 31 December 2022

20

8 Other financial assets

Notes Other financial assets comprise the following: Current assets at historical cost Deposits for exploration bonds (a) Non-current assets at amortised cost Manuka Resources - Deposit for environmental bond (b) Mt Boppy Resources – Deposit for environmental bond (c) Term Deposit	31 December 2022 30 June 2022 $ $
	186,000 186,000 5,111,709 5,021,967 1,333,657 1,352,016 181,427 178,242
	6,812,793 6,738,225

The carrying amount of other financial assets is considered a reasonable approximation of fair value unless stated below:

• (a) Environmental Bonds have been lodged with the Department in relation to the current areas of exploration. These will be refunded on completion of the exploration program in each relevant area.

• (b) The Environmental Bond in the name of Manuka Resources Ltd have been amortised with reference to a discount rate of 3.04% (2022: 1.32%). The Environmental Bond has been discounted over a 3.25 year period which is a reasonable approximation as to when the rehabilitation work will have to be conducted.

• (c) The Environmental Bond Deposit in the name of Mt Boppy Resources Pty Ltd has been amortised with reference to a discount rate of 3.1% (2022: 1.32%). The Environmental Bond has been discounted over a 1 year period which is a reasonable approximation as to when the bond will be returned to the company.

9 Development assets and mine properties

Development assets at cost and net carrying amount Impairment of development assets (a) Accumulated amortisation Net carrying amount Mine properties at cost Rehabilitation cost estimates Impairment of mine properties (a) Accumulated amortisation Net carrying amount	31 December 2022 Restated10 30 June 2022 $ $
	197,500 197,500 (182,767) - (14,733) (14,733)
	- 182,767
	8,673,399 9,032,520 20,865 1,387,287 (1,642,938) - (6,576,830) (6,230,744)
	474,496 4,189,063

10 Certain capitalised costs relating to the Wonawinta processing plant have been reclassified from Mine Properties and Development Assets to Property, Plant and Equipment in the comparative period to better reflect the nature of the costs capitalised and to align with current period presentation.

Manuka Resources Ltd

21

For the half-year ended 31 December 2022

Total development assets and mine properties at cost Rehabilitation cost estimates Impairment of mine properties and development assets (a) Accumulated amortisation Total net carrying amount	31 December 2022 Restated11 30 June 2022 8,870,899 9,230,020 20,865 1,387,287 (1,825,705) - (6,591,563) (6,245,477)
	474,496 4,371,830

During the period, the Company was focused on the Wonawinta Silver Trial project and undertook a number of activities in relation to mine development including the use of consultants which have been for the most part been expensed in the profit and loss during the period. Additionally, our geology department worked closely with plant operations to provide accurate data on ore feed material given the various lithologies sitting on the ROM from previous periods of mining operations.

• (a) The Company undertook a strategic exploration review, which included a comprehensive review of over 30 years of geophysical data and reports completed over the past 24 months. This has allowed the Company to define new targets and refine the Company’s exploration and mining strategy over the coming 2 year period with the aim of adding significant resources of Gold, Silver, Copper and other Base Metals. As a result of this refinement, certain historical development costs relating to areas which are no longer a priority have been written off.

10 Exploration and evaluation assets

Exploration and evaluation costs carried forward in respect of areas of interest:

Exploration assets Opening net book amount NZ Exploration assets acquired at cost Exploration and evaluation costs during the year Net book value	31 December 2022 30 June 2022 $ $
	8,457,839 4,780,492 26,748,275 - 372,393 3,677,347
	35,578,507 8,457,839

During the period, the Company acquired the assets and liabilities of Trans-Tasman Resources Ltd (Refer Note 17), including the mining and exploration licences and exploration assets in relation to their Taranaki VTM Iron Sand Project in New Zealand. In addition, the Company undertook the following activities as part of the followup-phase exploration on the Company’s regional exploration tenements:

• (a) Field activities focused on a comprehensive desktop review of the entire tenement package including geophysical review;

• (b) Sourcing and pricing fleet availability, suitability and crewing capacity in anticipation of recommencing drilling activities.

11 Certain capitalised costs relating to the Wonawinta processing plant have been reclassified from Mine Properties and Development Assets to Property, Plant and Equipment in the comparative period to better reflect the nature of the costs capitalised and to align with current period presentation.

Manuka Resources Ltd For the half-year ended 31 December 2022

22

11 Property, plant and equipment

The following tables show the movements in property, plant and equipment:

Land IT Equipment Plant & Equipment Fixtures & Fittings Motor Vehicles $ $ $ $ $ Restated Year ended 30 June 202212 Balance as at 1 July 2021 754,994 25,673 10,994,911 20,901 416,437 Additions - 20,265 5,491,095 27,353 242,109 Disposals - - (247,600) - - Depreciation - (26,947) (1,240,545) (9,301) (66,335) Closing net book value 754,994 18,991 14,997,861 38,952 592,211 Restated Balance 30 June 2022 Cost 754,994 100,186 17,254,861 53,939 805,939 Accumulated Depreciation - (81,195) (2,257,000) (14,987) (213,728) Net book value 754,994 18,991 14,997,861 38,952 592,211 Balance as at 1 July 2022 754,994 18,991 14,997,861 38,952 592,211 Additions - 1,064 342,058 26,657 - Disposals - - (192,250) - (31,819) Depreciation - (5,780) (733,798) (5,150) (29,211) Closing net book value 754,994 14,275 14,413,871 60,459 531,181 Balance 31 December 2022 Cost 754,994 101,250 17,404,669 80,596 774,120 Accumulated Depreciation - (86,975) (2,990,798) (20,137) (242,939) Net book value 754,994 14,275 14,413,871 60,459 531,181	Land IT Equipment Plant & Equipment Fixtures & Fittings Motor Vehicles $ $ $ $ $	Total $
		12,212,916 5,780,822 (247,600) (1,343,128)
	754,994 18,991 14,997,861 38,952 592,211	16,403,110
		18,970,020 (2,566,910)
	754,994 18,991 14,997,861 38,952 592,211	16,403,110
	754,994 18,991 14,997,861 38,952 592,211 - 1,064 342,058 26,657 - - - (192,250) - (31,819) - (5,780) (733,798) (5,150) (29,211)	16,403,110 369,776 (224,069) (774,038)
	754,994 14,275 14,413,871 60,459 531,181	15,774,780
	754,994 101,250 17,404,669 80,596 774,120 - (86,975) (2,990,798) (20,137) (242,939)	19,115,629 (3,340,849)
	754,994 14,275 14,413,871 60,459 531,181	15,774,780

Included within Plant and Equipment is an amount of $192,250 (30 June 2022: $401,449) representing costs incurred on equipment which was not brought to use as at 31 December 2022 and as such represents capital works in progress.

• 12 Certain capitalised costs relating to the Wonawinta processing plant have been reclassified from Mine Properties and Development Assets to Property, Plant and Equipment in the comparative period to better reflect the nature of the costs capitalised and to align with current period presentation.

Manuka Resources Ltd For the half-year ended 31 December 2022

23

12 Trade and other payables

Current Trade creditors Other creditors and accruals Total trade and other payables	31 December 2022 30 June 2022 $ $
	6,450,808 4,520,381 1,592,079 1,722,244
	8,042,887 6,242,625

Trade and other payables amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable approximation of fair value.

13 Provisions

Current Employment provisions Total current provisions Non-current Employment provisions Rehabilitation provisions 13.1 Total non-current provisions Total provisions	31 December 2022 30 June 2022 $ $
	583,796 628,315
	583,796 628,315
	48,070 29,107 8,076,930 7,565,403
	8,125,000 7,594,510
	8,708,796 8,222,825

13.1 Rehabilitation provisions

Rehabilitation provisions split between the parent and subsidiary are as follows:

Rehabilitation provisions Manuka Resources Ltd Mt Boppy Resources Ltd Total rehabilitation provisions	31 December 2022 30 June 2022 $ $
	6,934,461 6,422,934 1,142,469 1,142,469
	8,076,930 7,565,403

Provisions made for rehabilitation are recognised where there is a present obligation as a result of exploration, development or production activities having been undertaken, and it is probable that an outflow of economic benefits will be required to settle the obligation. The estimated future obligations include the costs of removing facilities, abandoning mining activities and restoring the affected areas. The provision for future rehabilitation costs is the best estimate of the present value of the expenditure required to settle the obligation at the reporting date, based on current legal requirements and technology. Future rehabilitation costs are reviewed annually, and any changes are reflected in the present value of the rehabilitation provision at the end of the reporting period. The amount of the provision for future rehabilitation costs relating to exploration and development activities is capitalised as a cost of those activities. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money, and where appropriate the risks specific to the liability. The fair value of the rehabilitation provision for Manuka Resources has been calculated with reference to an

Manuka Resources Ltd For the half-year ended 31 December 2022

24

inflation rate of 7.83% (2022: 5.09%) and a discount rate of 3.04% (2022: 3.12%) over 3.25 years (2022: 3.75 years). As there is no committed mine plan for Mt Boppy, it has been assumed that rehabilitation work will be completed within twelve to eighteen months. If a mine plan is implemented that results in further mining activity this assumption will be amended.

The Company is required by the relevant regulatory authorities to ensure that appropriate rehabilitation is carried out on tenements that are mined. The amount of rehabilitation cost is an estimate based upon the estimated life of each mined tenement, as well as the future timing and cost of such rehabilitation. The provision is constantly revised as information about the life of mine, depth of mining and cost estimates are updated.

14 Borrowings

Borrowings include the following financial liabilities:

Notes Current Related party loans 14(a) Senior secured debt facility (net of borrowing costs) 14(b) Asset backed finance Other loans Total current borrowings Non-current Other loans Total non-current borrowings Total borrowings	31 December 2022 30 June 2022 $ $ 1,409,260 909,959 12,990,679 12,128,978 1,432,446 - 514,797 14,314
	16,347,182 13,053,251
	50,420 57,927
	50,420 57,927
	16,397,602 13,111,178

All borrowings are denominated in Australian Dollars except for the senior debt facility agreement (TPC Facility) with TransAsia Private Capital Limited (TPC) which is denominated in US Dollars.

• (a) The related party loans include the following:

ResCap Investments Pty Ltd Minvest Securities (New Zealand) Ltd	31 December 2022 30 June 2022 $ $
	1,341,538 909,959 67,722 -

The related party loan provided by ResCap Investments Pty Ltd includes working capital drawn down during the period and amounts owing for services provided. The loan on the working capital portion has an interest rate of 16%, amounts advanced to Mt Boppy and the portion relating to services rendered do not attract interest.

The loan provided by Minvest Securities (New Zealand) Ltd includes working capital drawn down during the period prior to the acquisition of TTR by the Company. The loan has an interest rate of the overnight cash rate published by the Reserve Bank of New Zealand plus 6%, compounded daily.

Manuka Resources Ltd For the half-year ended 31 December 2022

25

• (b) The Company signed a debt facility agreement (TPC Facility) with TransAsia Private Capital Limited (TPC) during July 2019, with the first drawdown occurring in July 2019. The TPC Facility limit was for a total of US$14 Million (AU$20,664,116). As at 31 December 2022, the principal amount owing under the facility was US$8Million (AU$11,808,066). The interest rate attributable to this facility is 12.5% per annum payable quarterly, with service and management fees of 2.5% per annum. Repayment of the balance of $13,244,861, including interest and fees, is due on 30 September 2023.

Details of the unamortised borrowing costs in relation to Senior secured debt facility is as follows:

Senior secured debt facility Less: Borrowing Costs Total senior secured debt facility (net of borrowing costs) 5 Earnings / (Loss) per share Profit / (loss) for the period attributable to equity holders of the Company Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share * Basic earnings / (loss) per share Diluted earnings / (loss) per share	31 December 2022 30 June 2022 $ $ 13,244,861 12,332,456 (254,182) (203,479) 12,990,679 12,128,977 Six months to 31 December 2022 Restated Six months to 31 December 2021 $ $	31 December 2022 30 June 2022 $ $
		13,244,861 12,332,456 (254,182) (203,479)
		12,990,679 12,128,977
	(13,246,268) 11,826,649 No of shares No of shares
	287,601,208 269,353,712 Cents per share Cents per share
	(4.61) 4.39 (4.61) 3.99

15 Earnings / (Loss) per share

• As the Group made a loss for the period ended 31 December 2022, none of the potentially dilutive securities were included in the calculation of diluted earnings per share.

Manuka Resources Ltd For the half-year ended 31 December 2022

26

16 Share Capital

The share capital of Manuka Resources consists only of fully paid ordinary shares; the shares do not have a par value. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of Manuka Resources.

Shares issued and fully paid: • At beginning of period • share issue 4 March 2022(a) • Share issue 10 November 2022 for TTR acquisition(b) • share issue 15 and 22 December 2022 (c) • issue costs - options issued to broker • issue costs – options issued to shareholders(d) • Share Placement expenses(d) Total share capital at end of period	31 December 2022 30 June 2022 6 months to 31 December 2022 12 months to 30 June 2022 # Shares # Shares $ $
	286,020,381 269,353,712 25,771,113 21,512,355 - 16,666,669 - 5,000,000 176,938,295 - 25,656,053 - 39,142,856 - 4,110,000 - - - - (70,831) - - (513,470) (341,220) - - (261,542) (329,191)
	502,101,532 286,020,381 54,762,154 25,771,113

• a) On 4 March 2022 the Company completed a Placement of $5,000,000 before costs through the issue of 16,666,669 ordinary shares at $0.30 per share, to sophisticated, professional and institutional investors.

• b) On 10 November 2022, the Company completed its acquisition of Trans-Tasman Resources Ltd (refer Note 18.1) with the issue of 176,938,295 shares to existing TTR shareholders.

• c) On 12 December 2022, the Company completed a Placement of $4,110,000 before costs through the issue of 39,142,846 ordinary shares at $0.105 per share, to sophisticated, professional and institutional investors.

• d) The Share Placement of $4,110,000 noted above also included the issue of 0.5 options for each share issued under the Placement. 19,571,419 options were issued with and expiry date of 16 December 2025 and an exercise price of 17 cents (refer Note 18.2). Share placement expenses are the amounts payable to the brokers in relation to this Share Placement.

17 Asset Acquisition – Trans-Tasman Resources Ltd

The Company acquired 100% of the fully paid shares in Trans-Tasman Resources Limited on 10 November 2022 in accordance with the terms of the Heads of Agreement between the company and TTR.

The Group has assessed the acquisition does not meet the definition of a business combination in accordance with the accounting standards and therefore recognises the individual identifiable assets acquired and liabilities assumed. The cost of the acquisition has been allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase.

Manuka Resources Ltd For the half-year ended 31 December 2022

27

The NZ department of Petroleum and Minerals approved the transfer of the related mining and exploration permits on 2 November 2022[14] and Manuka completed the acquisition through the issuance of 176,938,295 shares and 12 million options on 10 November 2022.

TTR’s main asset is the Taranaki VTM Iron Sand Project in New Zealand for which it holds a Mineral Mining Permit MP55581 and an Exploration Mining Permit EP54068. The project is in preliminary stages of its BFS which is largely focused on detailed engineering and costing for the integrated mining vessel upon which mining and processing activities are conducted.

Details of the purchase consideration and the net assets acquired are as follows:

Purchase Consideration Shares issued 10 November 2022 Options issued 24 November 2022 Transaction Costs Total	# Shares/options	AUD $’000
	176,938,295 12,000,000	25,656 122 225
		26,003

The cost of acquisition has been allocated to the acquired assets and liabilities as follows:

Cash and cash equivalents Prepayments Exploration and evaluation assets Trade and other creditors	AUD $’000
	2 9 26,208 (216)

TTR was granted Mining Permit MP55581 in 2014 and subsequently granted a Marine Consent and Marine Discharge Consent to operate (Consents) the STB Project by NZ Environmental Protection Authority (EPA) in 2017. The EPA’s grant of the environmental Consents was then subject to third party legal challenge. Following judgments in the High Court in 2018 and the Court of Appeal in 2020 the New Zealand Supreme Court judgment in 2021[15 ] summarised the legal deficiencies of the original EPA’s Decision Making Committee (DMC) Consent grants and the legal framework for the DMC to address when the grants are reconsidered.

The Supreme Court (SC) referred the Consents back to the EPA for final reconsideration by their DMC on five narrowly defined points of law. The EPA’s DMC convened its first meeting on 3 March 2023[16] . TTR believes the expert evidence provided to the DMC enables it to satisfy the SC’s requirements and accordingly there are no aspects of the judgment that are an impediment to having the Consents re-approved by the reconvened DMC[17] .

TTR has been requested by the reconvened DMC to provide any additional evidence, reports, or updated material in relation to their Consent grants by 19 May 2023 for the DMC’s reconsideration.

Acquisition costs incurred during the period were $224,784. The costs were directly attributable to the issue of shares and have been capitalised.

14 23YE MKR - Transfer of Licence Title Approval

15 Judgement delivered 30 September 2021

16 Refer EPA Public consultation disclosures at www.epa.govt.nz/public-consultations/in-progress/trans-tasman-resources-limited-2016/ 17 Refer ASX announcement 1 August 2022

Manuka Resources Ltd For the half-year ended 31 December 2022

28

18 Share-based payments

Options over ordinary shares have been granted to employees and Directors and finance providers from time to time, on a discretionary basis.

Set out below is a summary of the share-based payment options granted:

Beginning of the period Granted Forfeited Outstanding at period end Exercisable at period end	31 December 2022 30 June 2022 # Options Weighted average exercise price cents # Options Weighted average exercise price cents
	54,016,669 37 21,250,000 25 40,571,419 22 32,766,669 44 - - - -
	94,588,088 30 54,016,669 37
	94,588,088 30 54,016,669 37

No share options were exercised during the period ended 31 December 2022.

The fair values of options granted were determined using a variation of the binomial option pricing model that takes into account factors such as the vesting period. The weighted average remaining contractual life of share options outstanding at the end of the financial period was 1.2 years (2022: 1.4 years), and the weighted average exercise price is at 30 cents (2022: 37 cents).

At 31 December 2022 the total value of the share based payment reserve is $3,814,319 (30 June 2022: $2,839,254).

18.1 Lender Options

In August 2022, the Company negotiated an extension of the Senior Secured Debt Facility to 30 September 2023[18.] Key features of the revised facility include:

• No upfront payments and a single bullet payment due on 30 September 2023;

• No early repayment penalties;

• No hedging requirement; and

• The issue of 5 Million options expiring in October 2024 with a strike price based on a VWAP formula, with up to an additional 12 Million options based on the outstanding principal owing, again with a strike price based on a VWAP formula.

In relation to the issue of the options negotiated as part of the loan extension and issued August 2022 and December 2022, a finance charge representing the option value of $270,647 (2021: $871,408) has been capitalised against the borrowings (refer Note 16(b)) and credited to the share option reserve. The finance charge will be amortised over the remaining life of the loan. During the period $251,844 of these options plus previous options has been amortised through the profit and loss.

18.2 Placement Options

In December 2022, the Company completed a Share Placement with attaching options[19] . Participants in the Placement received one free option (not listed) for every two Placement Shares subscribed for under the Placement, with an exercise price of $0.17 per share and an expiration date of 16 December 2025. The value of the options is included as a deduction against the Share Capital (Refer Note 16(d)).

18 Refer ASX announcement dated 24 August 2022.

19 Refer ASX announcement of the Placement dated 12 December 2022

Manuka Resources Ltd For the half-year ended 31 December 2022

29

18.3 Options to Alan J Eggers

At the Company’s 2022 AGM held in November 2022, shareholders voted approve the issue 12,000,000 options to Alan J Eggers (or his nominee). The options were issued with an expiration date 30 September 2024 and a $0.35 per share exercise price[20] . These options were granted and issued in November 2022. The option value of $121,731 (2022: $69,718) has been included in the balance sheet included in the cost of acquisition of TTR.

19 Commitments for expenditure

19.1 Tenement Commitments

In order to maintain current rights of tenure to exploration tenements, the Company is required to perform minimum exploration work to meet the minimum expenditure requirements specified by the State Government. Due to the nature of the Company’s operations in exploring and evaluating areas of interest, exploration expenditure commitments beyond twelve months cannot be reliably determined. It is anticipated that expenditure commitments in subsequent years will be similar to that for the forthcoming twelve months.

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

Not later than one year Between 1 year and 5 years	31 December 2022 30 June 2022 $ $
	1,082,712 1,106,667 2,753,332 4,383,333
	3,836,044 5,490,000

If the Company decides to relinquish certain leases and/or does not meet these obligations, assets recognised in the Statement of Financial Position may require review to determine the appropriateness of carrying values.

20 Related party transactions

20.1 Transactions with related parties and outstanding balances

The Company’s related parties include key management personnel, and others as described below. Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given or received. Outstanding balances are usually settled in cash.

		31 December	30 June
	Notes	2022	2022
		$	$
DETAILS OF TRANSACTIONS WITH RELATED PARTIES:
Details of related party transactions with ResCap Investments Pty Ltd,an entity		controlled by a member of KMP:
• interest charged on intercompany loan		66,864	29,184
DETAILS OF BALANCES WITH RELATED PARTIES:
Balance of loan with Manuka Resources Ltd
- payable to ResCap Investments Pty Ltd	14(a)	1,341,538	909,959
Balance of loan with Trans-Tasman Resources Ltd
- payable to Minvest Securities (New Zealand) Ltd		67,722	-

20 Refer ASX announcement of the Supplement to the Notice of the 2022 AGM dated 11 November 2022

Manuka Resources Ltd For the half-year ended 31 December 2022

30

20.2 Transactions with key management personnel

Key management personnel remuneration includes the following expenses:

Notes Short-term employee benefits Post-employment benefits Share based payment expenses Total remuneration	31 December 2022 31 December 2021 $ $
	486,679 330,858 25,292 22,060 - 69,718
	511,971 422,636

21 Events subsequent to the end of the reporting period

• Strategic exploration Review

On 14 February 2023, the Company announced the completion of its Strategic Exploration Review highlighting near-mine resource upside21. The Review provides Manuka with the exploration plan to add significant resources of Gold, Silver, Copper and other Base Metals and included a comprehensive review of over 30 years of geophysical data and reports that has defined new targets and information gaps which will further define exploration tools and strategy.

Apart from the matters noted above, there are no other matters or circumstances that have arisen since the end of the period that has significantly affected or may significantly affect either:

• the entity’s operations in future financial years;

• the results of those operations in future financial years; or

• the entity’s state of affairs in future financial years.

22 Company Details

The registered office and principal place of business of the Company is:

Manuka Resources Ltd Level 4 Grafton Bond Building 201 Kent Street, Sydney, New South Wales

21 Refer ASX announcement 14 February 2023

Manuka Resources Ltd For the half-year ended 31 December 2022

31

Directors’ Declaration

In the opinion of the Directors of Manuka Resources Ltd:

• a The financial statements and notes of Manuka Resources Ltd are in accordance with the Corporations Act 2001 , including:

• i. Giving a true and fair view of its financial position as at 31 December 2022 and of its performance for the period ended on that date; and

• ii. Complying with Australian Accounting Standards AASB 134 Interim Financial Reporting; and

• b There are reasonable grounds to believe that Manuka Resources Ltd will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the Directors

==> picture [48 x 47] intentionally omitted <==

Director Dennis Karp

Dated the 16[th] March 2023

==> picture [86 x 101] intentionally omitted <==

Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com.au

Independent auditor’s review report to the members of Manuka Resources Limited

Report on the Half Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Manuka Resources Limited (the Company) and its subsidiaries (collectively the Group), which comprises the condensed statement of financial position as at 31 December 2022, the condensed statement of comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of the Group does not comply with the Corporations Act 2001 , including:

• a. Giving a true and fair view of the consolidated financial position of the Group as of 31 December 2022 and of its consolidated financial performance for the half-year ended on that date; and

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

Basis for conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (ASRE 2410). Our responsibilities are further described in the Auditor’s responsibilities for the review of the half-year financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional 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 annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Material uncertainty related to going concern

We draw attention to Note 2.1 in the financial report, which indicates that the Group’s current liabilities exceeded its current assets by $20,117,456 as at 31 December 2022. This condition, along with other matters set forth in Note 2.1 indicate the existence of a material uncertainty which may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Directors’ responsibilities for the half-year financial report

The directors of the Company are responsible for the preparation of the half-year 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 half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

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Auditor’s responsibilities for the review of the half-year financial report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as of 31 December 2022 and its performance for the half-year ended on that date and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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Ernst & Young

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Siobhan Hughes Partner Sydney 16 March 2023

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