OZAURUM RESOURCES LIMITED — Interim / Quarterly Report 2020

Feb 3, 2021

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OzAurum Resources Limited ABN 63 643 244 544 42 Hannan St, Kalgoorlie WA 6430 PO Box 10396, Kalgoorlie WA 6430 Ph: 08 6211 5099 E: info@ozaurumresources.com

Pro-Forma Statement of Financial Position

1.1 Introduction

The Company was incorporated on 05 August 2020, and incorporated a wholly owned subsidiary OzAurum Mines Pty Limited (together “the Group”). The Group entered into an Option Agreement to acquire 100% interest in WA gold exploration tenements and following exercise of the option, completed the transaction on 26 October 2020.

The information below includes the consolidated historical statement of financial position as at 31 October 2020 and the pro forma consolidated historical statement of financial position as at 31 October 2020 ("Financial Information") on the basis of a subscription for 48,000,000 Shares at an issue price of $0.25 per share to raise $12,000,000.

1.2 Basis of Preparation of the Financial Information

(a) Basis of preparation

The Directors are responsible for the preparation and presentation of the Financial Information.

The Financial Information has been prepared in connection with the Offer. The unaudited Pro Forma Historical Statement of Financial Position as at 31 October 2020 has been prepared for illustrative purposes to reflect the consolidated financial position of OzAurum on the basis that OzAurum completed the transactions outlined in this Prospectus as at 31 October 2020. The presentation currency for the Group is Australian dollars.

The Financial Information is presented in an abbreviated form, insofar as it does not include all of the presentation, statements, comparative information and disclosures required by Australian Accounting Standards and other mandatory professional reporting requirements applicable to general purpose financial reports prepared in accordance with the Corporations Act 2001.

(b) Preparation of Historical Financial Information

The Historical Financial Information of OzAurum has been derived from its unaudited trial balance as at 31 October 2020, incorporating activities undertaken for the period from incorporation on 5 August 2020 to 31 October 2020. No audit opinion or limited assurance conclusion has been issued on the trial balance. This date has been chosen as, it is the date on which the latest financial information was available.

The Historical Financial Information has been prepared in accordance with the recognition and measurement principles contained in Australian Accounting Standards ( AAS ) issued by Australian Accounting Standards Board ( AASB ).

Pro Forma Statement of Financial Position

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(c) Preparation of Pro Forma Historical Financial Information

The Pro Forma Historical Financial Information has been derived from the Historical Financial Information of OzAurum, and adjusted for the effects of pro forma transactions described below.

The Pro Forma Historical Financial Information has been prepared in accordance with the recognition and measurement principles contained in AAS other than it includes adjustments prepared in a manner consistent with AAS that reflect the impact of certain transactions as if they had occurred as at 31 October 2020.

Due to its nature, the Pro Forma Historical Financial Information does not represent the Company’s actual or prospective financial position.

1.3 Historical and Pro Forma Historical Statements of Financial Position

Current assets Note Cash and cash equivalents a Trade and other receivables a Total current assets Non-current assets Exploration and Evaluation Assets Total Non-current assets Total assets Current liabilities Trade and other payables Total liabilities Net assets Equity Issued capital a Reserves b Accumulated losses a Total equity	Historical as at 31-Oct-20 $ 464,478 50,780	Maximum Subscription Pro forma Pro forma Historical as at Adjustments 31-Oct-20 10,745,459 11,209,937 75,369 126,149
	515,258	10,820,828 11,336,086
	936,918	- 936,918
	936,918	- 936,918
	1,452,176	10,820,828 12,273,004
	138,764	- 138,764
	138,764	- 138,764
	1,313,412	10,820,828 12,134,240
	1,655,000 283,004 (624,592)	10,949,944 12,604,944 102,310 385,314 (231,426) (856,018)
	1,313,412	10,820,828 12,134,240

(a) Impact of the offer:

Net proceeds from the offer comprise the following:

• Issue of 48,000,000 Shares at $0.25 per Share totalling $12,000,000 to investors participating in the Offer.

• Estimated costs of the Offer being $1,316,005 of which $924,661 has been recognised as a deduction to issued capital with $292,890 recognised in accumulated losses. The costs deducted from issued capital includes the share based payment to Canaccord under the terms of their Lead Manager Mandate.

• The estimated recoverable GST of $98,454 charged on the invoices associated with these costs has been recognised as a GST receivable in Other Receivables.

Issue of Options

In accordance with the Lead Manager Mandate the issue of 5,725,000. Each Broker Option will be convertible into one Share in the capital of the Company at an exercise price of $0.375 each, expiring three years from the date of Admission. The fair value per option at grant date is estimated to be $0.018 using

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Pro Forma Statement of Financial Position

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Black Scholes Option Pricing model. The total fair value of the Broker Options at grant date is estimated to be $102,310 and recognised in the share based payment reserve and recorded as share issue costs.

(b) Significant Accounting Policies

The principal accounting policies adopted in the preparation of the Financial Information are set out below. These policies have been consistently applied, unless otherwise stated. The Financial Information is prepared for the consolidated entity consisting of OzAurum Resources Limited and its subsidiary.

i. Historical cost convention

This financial information has been prepared under the historical cost convention.

ii. Basis of Consolidation

Subsidiaries

The Financial Information comprises financial information of OzAurum and its subsidiary at 31 October 2020 (“the Group”). Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

All intercompany balances and transactions, including unrealised profits arising from intragroup transactions have been eliminated. Unrealised losses are also eliminated unless costs cannot be recovered.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of financial position respectively.

iii. Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the consolidated statement of financial position.

iv. Trade and Other Receivables

Other receivables are recognised at amortised cost, less any allowance for expected credit losses.

v. Exploration, Evaluation and Development Expenditure

Exploration and evaluation costs including costs of studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities along with those for general and administrative costs are expensed in the period they are incurred. Acquisition costs of acquiring exploration tenements are capitalised until the viability of the area of interest is determined. Those acquisition costs are carried forward when the following conditions are satisfied:

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

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

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

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

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has

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Pro Forma Statement of Financial Position

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been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

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

vi. Trade and Other Payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the year end and which are unpaid. These amounts are unsecured and have 30-60 day payment terms.

vii. Contributed Equity

Ordinary shares are classified as equity.

Costs directly attributable to the issue of new shares or options are shown as a deduction from the equity proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares or options associated with the acquisition of a business are included as part of the purchase consideration.

viii. Share Based Payments

The Group measures the cost of equity-settled transactions with other parties by reference to the fair value of the goods or services received. Where the fair value of the goods or services cannot be reliably determined, or where the goods or services cannot be identified, the Group measures the cost of the transaction by reference to the fair value of the equity instruments granted.

ix. Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item.

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

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