MARMOTA LIMITED — Interim / Quarterly Report 2021

Mar 7, 2021

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Marmota Limited

Consolidated Half-Year Financial Report

31 December 2020

CORPORATE DIRECTORY

Marmota Limited ACN 119 270 816 ABN 38 119 270 816 Incorporated in SA

Registered Office Marmota Limited Unit 6, 79-81 Brighton Road Glenelg SA 5045 Telephone: (08) 8294 0899 Facsimile: (08) 8376 8633 Email: info@marmota.com.au Web: www.marmota.com.au

Share Registrar Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia Telephone: +61 1300 554 474 Facsimile: +61 2 9287 0303 Email: registrars@linkmarketservices.com.au Web: www.linkmarketservices.com.au

Auditor

BDO Audit (SA) Pty Ltd Chartered Accountants Level 7, 420 King William Street Adelaide SA 5000

Marmota Limited and Controlled Entities

Directors’ Report

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The directors present their report together with the half-year financial report of Marmota Limited (“the Company”) and its controlled entities (“Consolidated entity”) for the period ended 31 December 2020 and the auditor’s independent review report thereon.

Directors

The directors of the Company at any time during or since the end of the half-year are:

Dr Colin Rose Executive Chairman1 Dr Kevin Wills_Executive Director – Exploration_ Mr Shane Barker_Executive Director – Production_	Date Appointed Date Resigned
	1 May 2015 - 5 June 2017 - 1 September 2019 -

Principal activities

The consolidated entity’s principal activity is minerals exploration.

Review and results of operations

The net loss after income tax for the half-year was $126,799 (Dec 2019 loss: $2,223,976).

During the half-year ended 31 December 2020, Marmota focused exploration on its highly prospective gold tenements in the Gawler Craton.

Gold exploration update: Aurora Tank 100% ownership

During the half-year period, Marmota carried out its largest RC drill program at Aurora Tank with more than 12,000m of RC drilling. The program produced outstanding gold intersections [ ASX:MEU 4 Feb 2021], including Marmota’s highest ever 1m gold intersection of 165 g/t gold approx. 57m from surface [Hole 20ATRC324]. This was the fourth drilling program at Aurora Tank to intersect grades of about 100 g/t gold (or more) over 1m, and now in 4 distinct zones. The program tripled the strike of the new high-grade NW flank from 95m to over 285m, intersected high-grade gold at depth for the first time (1m at 36g/t at 122m downhole), and remains open to the North and West.

New Semi-Permanent Camp at Aurora Tank

As Marmota transitions to a pathway to production at its Aurora Tank gold discovery, in July 2020, the Company set up a semi-permanent at Aurora Tank. The camp includes multiple sleeping quarters, separate kitchen and separate management office. The new camp has already transformed the Company’s operational capabilities at Aurora Tank and the Company is delighted with its performance.

Aurora Tank Ecological Study

In December 2020, Marmota’s first ever environmental study at Aurora Tank was carried out with the arrival of a specialist ecology team. The survey (fauna and flora) is a necessary component for a Mining Lease application and production pathway at Aurora Tank. The study appears to have been very successful.

Covid-19

The COVID-19 pandemic has had minimal impact on the Company’s operations. In part, this is because the Company’s exploration ground and activities are located in remote and largely uninhabited areas of South Australia, and in part because the incidence of COVID-19 in South Australia itself has been minimal. Both of the Company’s core underlying fundamentals (gold and uranium) have seen significant strength over the course of the half-year period.

1 Changed from Non-Executive Chairman to Executive Chairman on 5 June 2017

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Marmota Limited and Controlled Entities

Directors’ Report (continued)

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Jumbuck Gold Project asset acquisition

On 30 November 2020, Marmota entered into a binding agreement with Tyranna Resources to acquire all of the rights, title and interest of Tyranna Resources Ltd in the Jumbuck Gold project, adjacent to MEU ground in a $3million deal composed of $2.5m cash and $500,000 in shares in Marmota. For full details, see ASX:MEU 30 Nov 2020. Marmota expects the transaction to complete before the end of May 2021.

Capital injections

In July 2020, the Company raised $6.5m (before costs) via a heavily oversubscribed placement to sophisticated and professional investors at a price of 5.3c per share, with 1 attaching option for every 2 shares subscribed for (exercisable at 10 cents per share with a 2 year expiry). The strength of the support has placed the Company not only with its strongest exploration results ever, but also with its strongest financial position in many years.

Competent person statement

The information in this Release relating to Exploration Results and Mineral Resources is based on information compiled by Dr Kevin Wills who is a Fellow of the Australasian Institute of Mining and Metallurgy. He has sufficient experience which is relevant to the styles of mineralisation and types of deposits under consideration and to the activities being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Wills consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Auditors independence declaration

Section 307C of the Corporations Act 2001 requires the Company’s auditors, BDO Audit (SA) Pty Ltd, to provide the directors of Marmota Limited with an Independence Declaration in relation to the review of the halfyear financial report. The Independence Declaration is set out on the following page and forms part of this Directors’ Report.

Dated at Sydney this 8[th] day of March 2021

Signed in accordance with a resolution of the Board of Directors:

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Dr Colin Rose Chairman

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Tel: +61 8 7324 6000 Level 7, BDO Centre Fax: +61 8 7324 6111 420 King William Street www.bdo.com.au Adelaide SA 5000 GPO Box 2018, Adelaide SA 5001 AUSTRALIA

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DECLARATION OF INDEPENDENCE

BY ANDREW TICKLE

TO THE DIRECTORS OF MARMOTA LIMITED

As lead auditor for the review of Marmota Limited for the half-year ended 31 December 2020, I declare that, to the best of my knowledge and belief, there have been:

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

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

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

Andrew Tickle Director

BDO Audit (SA) Pty Ltd

Adelaide, 8 March 2021

BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

Marmota Limited and Controlled Entities

Consolidated Statement of Profit or Loss and Other Comprehensive Income For the half-year ended 31 December 2020

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Note	Consolidated Dec 2020 $ Dec 2019 $
Other revenues from ordinary activities 3 Total other revenue Administrative expenses Consultancy expenses Depreciation Employment expenses Occupancy expenses Impairment of assets (Loss) before income tax expense Income tax (expense) (Loss) for the period Other comprehensive income Items that will not be reclassified subsequently to profit or loss Fair value movement on other financial assets Total comprehensive income for the period Basic earnings per share (cents) Diluted earnings per share (cents)	60,019 9,582
	60,019 9,582 (101,436) (96,609) (5,180) (17,980) (3,899) (781) (75,825) (51,485) (478) (2,906) - (2,063,797)
	(126,799) (2,223,976) - -
	(126,799) (2,223,976)
	(1,500) -
	(128,299) (2,223,976)
	(0.01 cents) (0.30 cents) (0.01 cents) (0.30 cents)

The accompanying notes form part of these financial statements.

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Marmota Limited and Controlled Entities Consolidated Statement of Financial Position

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As at 31 December 2020

Note	Consolidated Dec 2020 $ Jun 2020 $
Current assets Cash and cash equivalents 7 Short term investments Trade and other receivables Other assets Total current assets Non-current assets Trade and other receivables Plant and equipment Right of use assets Deposit for Jumbuck Project Other financial assets 9 Exploration and evaluation expenditure 10 Total non-current assets Total assets Current liabilities Trade and other payables Provisions Lease liabilities Total current liabilities Non-current liabilities Provisions Lease liabilities Total non-current liabilities Total liabilities Net assets Equity Issued capital 11 Reserves 12 Retained losses Total equity	7,175,776 2,411,717 39,298 37,500 24,230 11,563 27,515 17,021
	7,266,819 2,477,801
	30,000 30,000 131,458 34,193 91,524 107,630 100,000 - 3,500 5,000 7,857,976 6,735,962
	8,214,458 6,912,785
	15,481,277 9,390,586
	220,799 148,110 18,939 11,547 35,155 35,051
	274,893 194,708
	10,796 16,438 56,369 72,579
	67,165 89,017
	342,058 283,725
	15,139,219 9,106,861
	47,269,360 41,120,619 6,374 (2,731) (32,136,515) (32,011,027)
	15,139,219 9,106,861

The accompanying notes form part of these financial statements.

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Marmota Limited and Controlled Entities Consolidated Statement of Changes in Equity

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For the half-year ended 31 December 2020

	Issued capital $ Share option reserve (Note 12) $ FVOCI reserve (Note 12) Retained losses $ Total $
Balance at 1 July 2019 Transactions with owners in their capacity as owners: Shares issued during the period Cost associated with shares issued during period Options expired during the period Total comprehensive income Balance as at 31 December 2019 Balance at 1 July 2020 Transactions with owners in their capacity as owners: Shares issued during the period Cost associated with shares issued during period Options issued during the period Options expired during the period Total comprehensive income Balance as at 31 December 2020	38,616,749 21,856 (11,500) (29,752,924) 8,874,181 - 2,500,000 - - - 2,500,000 (12,798) - - - (12,798) - (4,400) - 4,400 -
	2,487,202 (4,400) - 4,400 2,487,202 - - - (2,223,976) (2,223,976)
	41,103,951 17,456 (11,500) (31,972,500) 9,137,407
	41,120,619 7,769 (10,500) (32,011,027) 9,106,861 - 6,515,000 - - - 6,515,000 (366,259) - - - (366,259) 11,916 11,916 - (1,311) - 1,311 -
	6,148,741 10,605 - 1,311 6,160,657 - - (1,500) (126,799) (128,299)
	47,269,360 18,374 (12,000) (32,136,515) 15,139,219

The accompanying notes form part of these financial statements.

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Marmota Limited and Controlled Entities Consolidated Statement of Cash Flows

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For the half-year ended 31 December 2020

Note	Consolidated Dec 2020 $ Dec 2019 $
Cash flows from operating activities Cash payments in the course of operations Interest received Income tax Net cash (used in) operating activities Cash flows from investing activities Payments for mining tenements and exploration Payments for plant and equipment Payments for acquisition of tenements Cash receipts from sale of assets Net cash (used in) investing activities Cash flows from financing activities Proceeds from issue of shares Payments associated with capital raising Repayment of leasing liabilities Net cash provided by financing activities Net increase in cash held Cash at the beginning of the half-year Cash at the end of the half-year 7	(124,618) (169,546) 22,197 9,128 - -
	(102,421) (160,418)
	(1,055,379) (578,189) (109,796) (5,089) (100,000) - - 454
	(1,265,175) (582,824)
	6,515,000 2,500,000 (367,239) (12,798) (16,106) -
	6,131,655 2,487,202
	4,764,059 1,743,960 2,411,717 1,374,131
	7,175,776 3,118,091

The accompanying notes form part of these financial statements.

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Marmota Limited and Controlled Entities Directors’ Declaration

For the half-year ended 31 December 2020

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1 Basis of preparation of interim report

Marmota Limited (Marmota or the Company) is a company domiciled in Australia. The consolidated interim financial report of the Company for the six months ended 31 December 2020 comprises the Company and its subsidiaries (together referred to as the consolidated entity).

The consolidated annual financial report of the consolidated entity for the year ended 30 June 2020 is available upon request from the Company’s registered office at Unit 6, 79-81 Brighton Road, Glenelg SA or at: www.marmota.com.au

The interim consolidated financial statements are a general purpose report prepared in accordance with AASB 134 Interim Financial Reporting, and the Corporations Act 2001. This interim financial report is intended to provide users with an update on the latest annual financial statements of the consolidated entity. As such, this interim financial report does not include full disclosures of the type normally included in the annual report. It is recommended that this interim financial report be read in conjunction with the annual financial report for the year ended 30 June 2020 and any public announcements made by Marmota during the interim reporting period in accordance with the continuous disclosure requirements of the ASX Listing Rules.

The interim financial statements have been approved and authorised for issue by the Board of Directors on 8[th] March 2021.

2 Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 30 June 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. Several other amendments and interpretations apply for the first time in 2021, but do not have an impact on the interim condensed consolidated financial statements of the Group.

The accounting policies have been applied consistently throughout the Group for the purposes of preparation of these interim financial statements.

New or amended Accounting Standards and interpretations adopted

The group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.

3 Other revenues from ordinary activities

Other revenues from ordinary activities
	Consolidated
	Dec 2020 $ Dec 2019 $
Included in other revenues from ordinary activities: Interest: other parties Other revenue	22,197 9,128 37,822 454
	60,019 9,582

4 Contingent liabilities

There have been no material changes to the aggregate of contingent liabilities since 30 June 2020.

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Marmota Limited and Controlled Entities Directors’ Declaration

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For the half-year ended 31 December 2020

5 Commitments

On 30 November 2020, Marmota entered into a binding agreement with Tyranna Resources to acquire all of the rights, title and interest of Tyranna Resources Ltd in the Jumbuck Gold project, adjacent to MEU ground, in a $3million deal composed of $2.5m cash and $500,000 in shares in Marmota. For full details, see ASX:MEU 30 Nov 2020. Marmota expects the transaction to complete before the end of May 2021.

6 Estimates

When preparing the interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results.

The judgements, estimates and assumptions applied in the interim financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group’s last annual financial statements for the year ended 30 June 2020.

7 Cash on hand

	Consolidated
	Dec 2020 $ Jun 2020 $
Cash and cash equivalents Deposits at call	7,175,776 2,411,717 - -
	7,175,776 2,411,717

8 Controlled entities

Entities forming part of the Marmota Limited consolidated group are as follows:

	Country of	Percentage	owned (%)
	incorporation
		Dec 2020	Jun 2020
Parent entity:
Marmota Limited	Australia	-	-
Subsidiaries of Marmota Limited:
Marmosa Pty Ltd	Australia	100	100

9

Financial Assets

Financial Assets
	Consolidated
	Dec 2020 $ Jun 2020 $
Equity instruments at fair value through OCI – shares in listed companies Opening balance Fair value movement Balance at end of period	5,000 4,000
	(1,500) 1,000
	3,500 5,000

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Marmota Limited and Controlled Entities

Directors’ Declaration

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For the half-year ended 31 December 2020

10 Exploration and evaluation expenditure

Exploration and evaluation expenditure
	Consolidated
	Dec 2020 $ Jun 2020 $
Movement: Carrying amount at beginning of the period Additional costs capitalised during the period Impairment Carrying amount at end of the period Closing balance comprises: Exploration and evaluation - 100% owned Exploration and evaluation - Joint Venture	6,735,962 7,800,723 1,122,014 999,033 - (2,063,796)
	7,857,976 6,735,962
	7,857,976 6,537,018 - 198,943
	7,857,976 6,735,962

11	Issued capital

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Marmota Limited and Controlled Entities Directors’ Declaration

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For the half-year ended 31 December 2020

12 Reserves

(a) Share options reserve

The share options reserve records items recognised as expenses on valuation of employee share options and retention rights.

(b) Fair Value through Other Comprehensive Income (FVOCI) reserve (previously available for sale reserve)

The FVOCI reserve comprises gains and losses relating to these types of financial instruments.

	Consolidated
	Dec 2020 $ Jun 2020 $
Reserves (a) Share option reserve Opening balance at beginning of period Fair value of options issued to employees Options exercised or expired Balance at end of period (b) FVOCI reserve Opening balance at beginning of period Fair value movement Balance at end of period Total Reserves	7,769 21,856 11,916 - (1,311) (14,087)
	18,374 7,769
	(10,500) (11,500) (1,500) 1,000
	(12,000) (10,500)
	6,374 (2,731)

During the period, 4,500,000 options were issued on 24 August 2020 under the Director and Employee Share Option Plan (DESOP) that was approved at the November 2016 AGM. The options are exercisable at 10 cents per share, expiring 23 August 2023.

An additional 4,000,000 options were issued under the DESOP on 9 December 2020, exercisable at 10 cents per share, expiring 8 December 2023.

All options issued were valued using the Black–Scholes pricing model which takes into account the term of the options, the exercise price and the expected price volatility of the underlying share,.

13 Fair value measurement of financial instruments

AASB 13 requires disclosure of fair value measurements by level of the fair value hierarchy, as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as sales prices) or indirectly (i.e. derived from prices);

• Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The group’s financial asset and financial liabilities measured and recognised at fair value at 31 December 2020 and 30 June 2020 on a recurring basis are as follows:

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Marmota Limited and Controlled Entities Directors’ Declaration

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For the half-year ended 31 December 2020

Financial assets at fair value Equity instruments designated at FVOCI Listed securities Net fair value	- - - - - - - - 3,500 - - 3,500
	3,500 - - 3,500
30 June 2020	Level 1 $ Level 2 $ Level 3 $ Total $
Financial assets at fair value Equity instruments classified as available for sale Listed securities Net fair value	- - - - - - - - 5,000 - - 5,000
	5,000 - - 5,000

Measurement of fair value of financial instruments

The methods and fair valuation techniques used for the purpose of measuring fair value are unchanged compared to the previous reporting period.

Listed securities

Fair values have been determined by reference to their quoted bid prices at the reporting date.

Fair values of other financial assets and financial liabilities

The carrying amounts of other current and non-current receivables and payables are considered to be a reasonable approximation of their fair value.

14 Operating segments

The Directors have considered the requirements of AASB8 – Operating Segments and the internal reports that are reviewed by the chief operating decision maker (the Board) in allocating resources and have concluded that at this time there are no separately identifiable segments.

15 Events subsequent to reporting date

In the interval between 31 December 2020 and the date of this report there are no items, transactions or events of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity, in future years.

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Marmota Limited and Controlled Entities

Directors’ Declaration

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For the half-year ended 31 December 2020 Directors’ Declaration

The Directors of the Company declare that:

• (a) the half-year financial statements and notes, set out on pages 5 to 13, are in accordance with the Corporations Act 2001, including:

• (i) giving a true and fair view of the financial position of the consolidated entity as at 31 December 2020 and of its performance, as represented by the results of its operations and its cash flows, for the half year ended on that date; and

• (ii) complying with Accounting Standard AASB 134: Interim Financial Reporting;

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

Dated at Sydney this 8[th] day of March 2021.

This declaration is made in accordance with a resolution of the directors:

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Dr Colin Rose Chairman

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Tel: +61 8 7324 6000 Level 7, BDO Centre Fax: +61 8 7324 6111 420 King William Street www.bdo.com.au Adelaide SA 5000 GPO Box 2018, Adelaide SA 5001 AUSTRALIA

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INDEPENDENT AUDITOR’S REVIEW REPORT

TO THE MEMBERS OF MARMOTA LIMITED

Report on the Half-Year Financial Report

Conclusion

We have reviewed the half-year financial report of Marmota Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 31 December 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, a summary of statement of 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 accompanying half-year financial report of the Group does not comply with the Corporations Act 2001 including:

• (i) Giving a true and fair view of the Group ’s financial position as at 31 December 2020 and of its financial performance for the half-year ended on that date; and

• (ii) 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 . Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company 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 the audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

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

Responsibility of the directors for the 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.

BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.

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Auditor’s r esponsibility for the review of the 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 at 31 December 2020 and its financial 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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BDO Audit (SA) Pty Ltd

Andrew Tickle Director

Adelaide, 8 March 2021