ABN 73 644 736 247

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ANNUAL REPORT
30 June 2023
The Endeavor silver – zinc – lead mine shaft headframe, Cobar, NSW
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Polymetals Resources Ltd Corporate directory 30 June 2023

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Directors	David Sproule - Executive Chairman
	Alistair Barton - Non-Executive Director
	Matthew Gill - Non-Executive Director
	Jess Oram - Non-Executive Director
Company secretary	John Haley
Registered office and principal	Unit 1, 101 Main Street
place of business	Alstonville
	NSW 2477
	Phone: (02) 8046 2799
Share register	Link Market Services Limited
	Level 12, 680 George Street
	Sydney
	NSW 2000
	Phone: 1300 554 474
Auditor	RSM Australia Partners
	Level 13, 60 Castlereagh Street
	Sydney
	NSW 2000
Solicitors	Addisons
	Level 12, 60 Carrington Street
	Sydney
	NSW 2000
Bankers	Commonwealth Bank of Australia
	86 Woodlark Street
	Lismore
	NSW 2480
Stock exchange listing	Polymetals Resources Ltd shares are listed on the Australian Securities Exchange
	(ASX code: POL)
Website	www.polymetals.com
Corporate Governance Statement	www.polymetals.com/company/corporate-governance/

Polymetals Resources Ltd Directors' report 30 June 2023

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The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Polymetals Resources Ltd (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2023.

Directors

The following persons were directors of Polymetals Resources Ltd during the whole of the financial year and up to the date of this report, unless otherwise stated:

Current:

David Sproule - Executive Chairman (Non-Executive Chairman until 10 November 2022 and Executive Chairman thereafter)

Alistair Barton - Non-Executive Director (appointed 9 August 2022) Matthew Gill - Non-Executive Director (appointed 16 May 2023) Jess Oram - Non-Executive Director (appointed 16 May 2023)

Former:

Christopher Johnston - Non-Executive Director (resigned 8 August 2022) Christopher Schroor - Non-Executive Director (resigned 12 May 2023)

Principal activities

The principal activities of the consolidated entity during the reporting period were the exploration and development of mineral resources - in particular gold. During the year, the consolidated entity also commenced mine-restart studies on the Endeavor zinc-silver-lead mine in the Cobar Basin, NSW.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $7,799,397 (30 June 2022: $1,156,988).

The loss for the year ended 30 June 2023 includes an impairment of $5,699,119 relating to the Company’s projects in Guinea, and the expensing of $751,223 exploration and evaluation costs relating to the proposed acquisition of the Endeavor mine.

Summary

During the year, the Company's main focus has been progressing the Endeavor Mine Restart Study and in-mine exploration with the aim of re-establishing long-term silver, zinc and lead production.

The Company commenced the Endeavor Mine Restart Study (MRS) in late May 2023 immediately after a scrip acquisition of Cobar Metals Pty Ltd (Cobar). Cobar had previously secured the right to acquire 100% of the Endeavor Mine assets from CBH Resources Limited. The assets include 30km[2] of Mining Leases, a fully permitted underground mine, a 1.2mtpa flotation concentrator, a rail link to the national network, secure water supply, grid power, 42 houses plus 4 blocks of units in the Cobar township and 1,100km[2] of contiguous Exploration Licences.

During the year ended 30 June 2023, a $15 million Concentrate Pre-Payment Facility has been secured with global trading firm Ocean Partners UK Limited (Ocean Partners). The facility included a $500,000 equity contribution to the June 2023 capital raising. Further, Ocean Partners and the Company have entered into a Memorandum of Understanding (MOU) for the purpose of agreeing commercial terms to replace the Endeavor Mine Environmental Rehabilitation Bond (Bond) in the amount of $27.96 million. Replacement of the Bond is subject to a positive MRS outcome and is the final stage of the Endeavor Mine acquisition.

Mine Restart Study (MRS)

The detailed MRS aims to demonstrate the long-term economic viability of re-establishing mining and production of silver, zinc and lead at the Endeavor Mine (the Mine). The Mine has a 38-year operational history and was formally placed on Care and Maintenance (C&M) by its owner CBH Resources during January 2020.

32 million tonnes of ore have been extracted from the underground Endeavor mine since 1983 and the project remains as one of the three largest mines in the Cobar Basin. Remaining mine JORC compliant resources contain 44 Moz silver, 1.3Mt zinc and 0.73Mt lead. The focus of the Mine Restart Study is to fully investigate the remaining resources with the aim of generating sufficient Ore Reserves to recommence Endeavor Mine production.

Polymetals Resources Ltd Directors' report 30 June 2023

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The following points highlight the MRS study components and the progress with these studies:

(a) Mining

Four areas within the Mine being investigated include the Level 1 Sulphides (high grade silver area), the 6/6 Stope, the Main Ore Body and the unmined Deep Zinc Lode (Figure 1). Recent mining assessment work undertaken by external consultants has defined sufficient resources in these areas to warrant mine scheduling which is now in progress. The schedule will attempt to exploit material with the highest margins at the front end of the Mine life at a sustainable mining rate. Underground reconnaissance is also underway to determine access and rehabilitation requirements for older areas of the Mine. One of the key outputs from a positive MRS will be the delivery of JORC Ore Reserves for the Endeavor Mine.

(b) Processing

External metallurgical testwork is focussed on the recovery of silver, zinc and lead from the Level 1 Sulphide zone by standard flotation. Cyanide leaching of the flotation tailings for recovery of residual gold and silver is also being tested to determine if there is a significant benefit to add a leach circuit. The leaching testwork has also been extended to the extraction of residual gold and silver from +25 million tonnes of stored Life of Mine flotation tailings. It should be noted that there has been extensive metallurgical testwork conducted at all levels of the mine throughout the life of the Mine. These results, combined with production records of metallurgical performance, are being assessed by external consultants with their recommended metal recoveries to be incorporated into the MRS.

(c) Other

Present day capital and operating costs and relevant ESG aspects of the project are also being investigated by the Company's staff and specialist external consultants.

The Company is seeking to complete the MRS and announce the results in the December 2023 Quarter.

Subject to a positive MRS result, the Company expects that mine and mill refurbishment works will commence during the December 2023 Quarter with operational recommencement likely during H1 2024. Based on that timing, first concentrate shipments and cash flow could ensue within 3 months of re-commissioning the concentrator.

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Polymetals Resources Ltd Directors' report 30 June 2023

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Figure 1 – Endeavor Mine Restart Study: Existing areas of mineralisation

Exploration

Assessment of the enormous paper and electronic mine and exploration data base generated by various explorers over almost 50-years of exploration relating to the Endeavor Mine Leases and the 1,100km[2] of regional Exploration Licence areas progresses, and will continue for some time.

Exploration targets have been ranked as “in-mine” and “near-mine” within the Mining Leases and “regional” relating to the Exploration Licences. The in-mine and near-mine targets will be given priority over regional targets.

(a) In-Mine exploration

Initial exploration is focused on adding Mineral Resources and Ore Reserves from within the Mine, aiming to significantly extend project life. Two in-mine areas being investigated are the Deep Zinc Lode (DZL) (refer Figure 1) and the North Western Mineralisation Extension (NWM) (Figure 2 - red ellipsoid).

This assessment is a high-level introduction to the in-mine exploration potential with further detailed exploration discussion to be fully articulated in future reporting periods, suffice to say that based on the discovered available historic geology, geochemical and geophysical data, several interesting exploration targets have been identified which warrant follow up.

(b) Deep Zinc Lode (DZL)

Underground exploration drilling of the DZL during 2016 / 2017 proved challenging due to the orientation of the decline, being close to the mineralised zone. This prevented optimal drill intercept angles from being achieved due to restricted access leaving the DZL open to the north, south and at depth.

Decline development to mine the DZL will allow further drilling to determine the full extent of the DZL mineralisation.

(c) North Western Mineralisation Extension (NMW)

The Company is seeking to understand the orientation of a series of faults which have displaced mineralisation along the length of the Main Ore Body to the north. These faults provide the potential to host en-echelon (repeating) pods of mineralisation typical of the Main Ore Body. A drill hole intercept at depth, below the NWM zone, displays a similar grade profile to intercepts below the Main Ore Body. Drill testing of the NWM will likely be completed following the resumption of Endeavor operations and will be funded from cash flow.

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Polymetals Resources Ltd Directors' report 30 June 2023

Figure 2 – In-Mine target: North-Western Mineralisation

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Guinea

The Company continues to await Exploration Licence renewals for its Alahiné and Mansala gold Exploration Licences in Guinea, with no visible timeframe to renewal. Having exhausted all reasonable avenues to obtain Licence renewals, the Board has resolved to place the project on care and maintenance until such time as the project can be joint ventured, farmedout or sold.

Significant changes in the state of affairs

On 17 August 2022, 1,126,126 ordinary shares were issued to Sahara Natural Resources as part-settlement of the outstanding contract drilling fees totalling $135,135 (refer note 15).

On 31 October 2022, a related party controlled by a Director, David Sproule, agreed to provide an unsecured loan facility with a limit of $1,000,000 (refer note 14). This was subsequently increased to a limit of $1,350,000.

On 21 December 2022, $1,000,000 of capital was raised by issuing 4,000,000 ordinary shares to a sophisticated investor (refer note 15).

On 28 March 2023, the Company announced the execution of a Share Sale and Purchase Agreement (SPA) for the purchase of Orana Minerals Pty Ltd and its subsidiary Cobar Metals Pty Ltd for a total consideration of 52,000,000 ordinary shares in Polymetals Resources Ltd (refer note 15). On 12 May 2023, the 52,000,000 ordinary shares were issued to the vendor and the shares are subject to a voluntary escrow for 12 months until 12 May 2024.

On 27 June 2023, the Company entered a binding Term Sheet with Ocean Partners UK Limited (OPUK) for an unsecured US$10,000,000 concentrate pre-payment funding facility which will provide development funding and working capital for the recommencement of mining and processing operations at the Company's underground Silver-Zinc-Lead, Endeavor Mine in the Cobar basin, NSW. It is noted that the purchase of this mine had not been finalised as of 30 June 2023 (refer note 14).

There were no other significant changes in the state of affairs of the consolidated entity during the financial year.

Matters subsequent to the end of the financial year

On 3 July 2023, 39,383,434 ordinary shares relating to the initial listing of the Company's shares were released from escrow.

The Company issued 11,777,057 and 325,040 ordinary shares on 6 July 2023 and 7 July 2023 respectively, at $0.31 per share in terms of a share placement. The funds are to be applied to the Endeavor Mine Restart Study.

On 10 August 2023, the Company received $250,000 of a $500,000 grant awarded by the NSW Government Critical Minerals Activation Fund to assist with technical components of the Endeavor Mine Restart Study.

On 14 August 2023, the Company announced the signing of a non-binding Memorandum of Understanding for the replacement of the Endeavor mine Environmental Bonds by Ocean Partners UK Limited totalling $27,996,000 (note 22). Ocean Partners UK Limited have proposed to facilitate the bond replacement by providing a surety to the Company for up to 4 years. Once the Environmental Bonds have been replaced, the purchase of the Endeavor mine can be completed (note 25).

On 31 August 2023, 1,185,000 options were exercised for $0.25 per share.

No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.

Likely developments and expected results of operations

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

Polymetals Resources Ltd Directors' report 30 June 2023

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Material business risks Limited operating The Company was incorporated on 30 September 2020 and therefore has limited operating history history. Given the short operational life of the Company, there is limited historic performance to provide a sound measure to evaluate its prospects. Access to future There is no assurance that the funding required by the consolidated entity from time to time to funding meet its business requirements and objectives will be available to it on favourable terms, or at all. Regulation changes Unforeseen changes to the mining laws, regulations, standards and practices applicable may significantly affect the Exploration Licences in Guinea and the Endeavor Mine tenements in Australia and therefore the ability of the Company to operate in Guinea and Australia.

Business in Guinea Political and legal uncertainty, institutional weakness and known civil turbulence are prevalent in Guinea. Such circumstances could have an impact on the progress and development of the resource potential of the Exploration Licences. Exploration and Exploration programmes may or may not be successful and may incur cost overruns if not development risk carefully managed. The Company is exposed to a significant risk that any proposed exploration activity will be unsuccessful and will not result in the discovery of a viable mineral resource. Endeavor mine The proposed acquisition of the Endeavor Mine requires replacement of Rehabilitation Bonds of approximately A$28 million. Whilst the Company believes these bonds will be replaced (refer to matters subsequent to the end of the financial year) there is no guarantee this will occur.

Occupational health Exploration, operations and care and maintenance programs carry occupational health and safety and safety risk risks.

Environmental regulation

The mineral tenements granted, but under renewal at present, to the consolidated entity pursuant to the Guinea Mining Act 1992, are granted subject to various conditions which include standard environmental requirements. The Company adheres to these conditions and the directors are not aware of any non-compliance with environmental laws.

Information on directors

Name: David Sproule Title: Executive Chairman (from 10 November 2022, previously Non-Executive Chairman) Qualifications: BE (Hons, Extractive Metallurgy) Member AusIMM Experience and expertise: David Sproule has specialised in value creation within the minerals industry, founding and managing the private Polymetals Group which developed eight Australian gold projects over 25 years. An "owner build" model was applied to all operations significantly reducing typical mine development costs. The projects collectively returned +2,000% in fully franked dividends on initial shareholder investment. Other current directorships: None Former directorships (last 3 years): Critical Resources Limited (formerly Force Commodities Limited) (ASX:CRR) (until 6 February 2021) Special responsibilities: Chairman Interests in shares: 61,500,000 Interests in options: nil

Polymetals Resources Ltd Directors' report 30 June 2023

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Name:	Alistair Barton (appointed 9 August 2022)
Title:	Non-Executive Director
Qualifications:	Associate Diploma and Fellowship Diploma in Geology and a Graduate Diploma in
	Finance and Investment.
Experience and expertise:	Alistair has over 45 years' exploration, operational and corporate experience. Alistair
	has operated his own consultancy practice providing technical and corporate advice to
	the resources sector, carrying out numerous resource project due diligence studies,
	feasibility studies and independent experts reports for project funding and
	developments. Alistair has held the positions of Managing Director for ASX-listed Probe
	Resources, General Manager of Exploration for Barrack Mines, General Manager of
	Operations for Barrack Mines, Operations Manager for McIlwraith Minerals and various
	Project Management positions.
Other current directorships:	None
Former directorships (last 3 years): None
Special responsibilities:	None
Interests in shares:	628,983
Interests in options:	nil
Name:	Matthew Gill (appointed 16 May 2023)
Title:	Non-Executive Director
Qualifications:	B.E (Hons, Mining), M Eng Sc, FAusIMM, GAICD
Experience and expertise:	Matthew is a mining engineer with over 40 years' experience. He has a strong technical,
	operational and executive management background; having worked as an
	underground miner, mine planning engineer, supervisor, general manager and
	CEO/Managing Director in Australia, Papua New Guinea, India, Ghana and Bolivia. He
	holds three First Class Metalliferous Mine Manager's Certificates of Competency and
	has been instrumental in the development of four gold mines. He is a three-time winner
	of the Australia Mine Manager of the Year Award and received the AusIMM Leadership
	Award in 2008. Previously, CEO and Managing Director of ASX-listed White Rock
	Minerals for seven years, he has also held the role of Group Chief Operating Officer for
	Singapore-listed LionGroup Corp. Matthew has also held the position of board member
	and president of the Tasmanian Minerals Council, has been chair of the MCA Victorian
	division, and deputy chair of AMEC Victoria.
Other current directorships:	Akora Resources Ltd (ASX:AKO)
Former directorships (last 3 years): White Rock Minerals Ltd (ASX:WRM)
	Austar Gold Limited (ASX:AUL)
Special responsibilities:	None
Interests in shares:	nil
Interests in options:	nil
Name:	Jess Oram (appointed 16 May 2023)
Title:	Non-Executive Director
Qualifications:	B.Sc, (Geol), Member AIG
Experience and expertise:	Jess is an experienced exploration geologist with over 30 years' practice in mineral
	exploration and management across a variety of commodities, companies and
	countries. He has significant experience in uranium, base and precious metals
	exploration and has been involved in mineral discovery, resource delineation and
	expansion and mining feasibility studies. Jess is currently the Senior Vice President -
	Exploration for ASX-listed Paladin Energy Limited.
Other current directorships:	None
Former directorships (last 3 years): Cauldron Energy Limited (ASX:CXU) (until 31 May 2022)
	Critical Resources Limited (formerly Force Commodities Limited) (ASX:CRR) (until
	February 2021)
Special responsibilities:	None
Interests in shares:	35,000
Interests in options:	nil

Polymetals Resources Ltd Directors' report 30 June 2023

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Name:	Christopher Johnston (resigned 8 August 2022)
Title:	Non-Executive Director
Qualifications:	BAdvSci(Hons), PhD
Experience and expertise:	Christopher has over 40 years' experience in the Australian mining industry and has
	explored in most states of Australia for gold, silver and base metals for companies
	including Burdekin Resources.
Other current directorships:	None
Former directorships (last 3 years): None
Special responsibilities:	None
Interests in shares:	66,667*
Interests in options:	800,000*
Name:	Christopher Schroor (resigned 12 May 2023)
Title:	Non-Executive Director
Qualifications:	B.App.Sci (Construction Management)
Experience and expertise:	Christopher is a founding director of the Azure Development Group (Azure) and is
	responsible for all capital raising and financing aspects of Azure. In 2014, Christopher
	established a Joint Venture in Thailand with Siam Commercial Bank, Kasikorn Bank,
	True Telecommunications, SuperNAP International and the Thai Royal Family office,
	to design and deliver Super NAP Thailand, Asia's first Tier IV Data Centre.
Other current directorships:	None
Former directorships (last 3 years): None
Special responsibilities:	None
Interests in shares:	120,000*
Interests in options:	800,000*

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated.

Interests in the shares and options of the Company as at the date of resignation as a director.

Company secretary

The previous joint company secretaries, Vincent Fayad and Kurt Laney, resigned on 31 January 2023 and were replaced by John Haley from this date. John is a Chartered Accountant and has 40 years of extensive Board, company secretarial and corporate finance experience, predominantly within the mining and resources industry. John also acts as the Company Secretary for ASX-listed NewPeak Metals Limited and Clara Resources Australia Ltd.

Meetings of directors

The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2023, and the number of meetings attended by each director were:

	Full Board
	Attended	Held
David Sproule	8		8
Alistair Barton (appointed 9 August 2022)	6		6
Matthew Gill (appointed 16 May 2023)	1		1
Jess Oram (appointed 16 May 2023)	1		1
Christopher Johnston (resigned 8 August 2022)	1		1
Christopher Schroor (resigned 12 May 2023)	4		5

Held: represents the number of meetings held during the time the director held office.

There were no meetings of the Audit and Risk Committee, and the Nomination, Remuneration and Human Resources Committee during the financial year. As the Board comprised no more than four directors during the financial year, the Board considered it more effective to set aside time at the Board meetings to specifically address the matters that would have been ordinarily attended to by the respective committees.

Polymetals Resources Ltd Directors' report 30 June 2023

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Remuneration report (audited)

The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors.

The remuneration report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel

Principles used to determine the nature and amount of remuneration

The remuneration policy of the consolidated entity has been designed to align key management personnel objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the consolidated entity's financial results. The Board of Directors ("the Board") believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to run and manage the consolidated entity, as well as create goal congruence between directors, executives and shareholders.

All remuneration paid to directors and executives is valued at the cost to the consolidated entity and expensed. Shares given to directors and executives are valued as the difference between the market price of those shares and the amount paid by the director or executive. Options are valued using the Black-Scholes methodology.

During the year ended 30 June 2022, the Company commenced a Loan Funded Share Plan (LFSP) whereby limited recourse loans have been provided to directors and key management personnel to acquire shares in the Company. The limited recourse loans were provided to Christopher Johnston (former non-executive director), Christopher Schroor (former nonexecutive director) and Alexander Hanly (former Chief Executive Officer).

The Board believes that it has implemented suitable practices and procedures that are appropriate for an organisation of this size and maturity.

In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate.

Non-executive directors remuneration

The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. Fees for nonexecutive directors are not linked to the performance of the consolidated entity. The directors are not required to hold any shares in the Company under the Constitution of the Company; however, to align directors' interest with shareholder interests, the directors are encouraged to hold shares in the Company.

ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general meeting. The most recent determination was during the 2021 Annual General Meeting where the shareholders approved a maximum annual aggregate remuneration of $250,000. The amount paid to non-executive directors of the parent entity (Polymetals Resources Limited) during the year to 30 June 2023 was $112,174 excluding any remuneration from options (2022: $135,000).

Executive remuneration

Executive directors can be employed by the consolidated entity on a consultancy basis, on Board approval, with remuneration and terms stipulated in individual consultancy agreements.

The Board reviews executive packages annually by reference to the consolidated entity's performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. In addition, external consultants may be used to provide analysis and advice to ensure the directors' and senior executives' remuneration is competitive in the market place.

Polymetals Resources Ltd Directors' report 30 June 2023

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The remuneration of the executives employed by the Company for the year ended 30 June 2023 is detailed in this Remuneration Report.

Consolidated entity performance and link to remuneration

As the Company is still in the exploration and development stage, the link between remuneration, Company performance and shareholder wealth is tenuous. Share prices are subject to the influence of mineral and metals prices and market sentiment toward the sector, and as such increases or decreases may occur quite independent of executive performance or remuneration.

At 30 June 2023 the market price of the Company’s ordinary shares was $0.38 per share (30 June 2022: $0.089 per share). No dividends were paid during the year ended 30 June 2023.

Remuneration committee

During the year ended 30 June 2023, the Company did not have a separately established remuneration committee. Considering the size of the consolidated entity, the number of directors and the consolidated entity's early stages of its development, the directors are of the view that these functions can be efficiently performed with full Board participation.

Use of remuneration consultants

The Company did not engage remuneration consultants to prepare a formal remuneration report during the financial year ended 30 June 2023.

Voting and comments made at the Company's 25 November 2022 Annual General Meeting ('AGM') At the 25 November 2022 AGM, 98.9% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2022. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.

Details of remuneration

Amounts of remuneration

Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.

The key management personnel of the consolidated entity consisted of the following directors of Polymetals Resources Ltd:

David Sproule
Alistair Barton (appointed 9 August 2022)
Matthew Gill (appointed 16 May 2023)
Jess Oram (appointed 16 May 2023)
Christopher Johnston (resigned 8 August 2022)
Christopher Schroor (resigned 12 May 2023)

And the following persons:

John Haley - Company Secretary and Chief Financial Officer (appointed 1 February 2023)
Vince Fayad - Company Secretary (resigned 31 January 2023)
Kurt Laney - Company Secretary (resigned 31 January 2023)
Alexander Hanly - Chief Executive Officer (resigned 31 January 2023)

Polymetals Resources Ltd Directors' report 30 June 2023

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2023 Non-Executive Directors: Alistair Barton(a) Matthew Gill(b) Jess Oram(c) Christopher Johnston(d) Christopher Schroor(e) Executive Directors: David Sproule(f) Other Key Management Personnel: John Haley(g) Vince Fayad and Kurt Laney(g) Alexander Hanly(h)	Short-term benefits Cash salary and fees $ 31,935 8,500 4,500 3,800 31,500 128,000 31,200 61,507 120,000	Post- employment benefits Super- annuation $ 630 - - - - - - - -	Long-term benefits Long service leave $ - - - - - - - - -	Share-based payments Equity- settled $ - - - - - - - - -	Total $ 32,565 8,500 4,500 3,800 31,500 128,000 31,200 61,507 120,000
	420,942	630	-	-	421,572

(a) Alistair Barton was appointed on 9 August 2022.

(b) Matthew Gill was appointed on 16 May 2023.

(d) Christopher Johnston resigned on 8 August 2022.

(e) Christopher Schroor resigned on 12 May 2023.

(f) David Sproule was a Non-Executive Director until 10 November 2022, and Executive Chairman thereafter. (g) Vince Fayad and Kurt Laney resigned on 31 January 2023 and John Haley was appointed from this date. Vince Fayad and Kurt Laney's remuneration has been disclosed combined in their capacity as Joint Company Secretaries. (h) Alexander Hanly resigned on 31 January 2023.

2022 Non-Executive Directors: David Sproule Christopher Johnston Christopher Schroor Other Key Management Personnel: Alexander Hanly Vincent Fayad and Kurt Laney(a)	Short-term benefits Cash salary and fees $ 36,000 81,000 18,000 193,665 105,924	Post- employment benefits Super- annuation $ - - - - -	Long-term benefits Long service leave $ - - - - -	Share-based payments Equity- settled $ - 51,888 51,887 97,290 -	Total $ 36,000 132,888 69,887 290,955 105,924
	434,589	-	-	201,065	635,654

(a) Vince Fayad and Kurt Laney's remuneration has been disclosed combined in their capacity as Joint Company Secretaries.

Polymetals Resources Ltd Directors' report 30 June 2023

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The proportion of remuneration linked to performance and the fixed proportion are as follows:

	Fixed remuneration	Fixed remuneration	At risk - STI	At risk - STI		At risk - LTI	At risk - LTI
Name	2023	2022	2023	2022		2023	2022
Non-Executive Directors:
Alistair Barton	100%	-		-	-	-	-
Matthew Gill	100%	-		-	-	-	-
Jess Oram	100%	-		-	-	-	-
Christopher Johnston	100%	61%		-	-	-	39%
Christopher Schroor	100%	26%		-	-	-	74%
Executive Directors:
David Sproule	100%	100%		-	-	-	-
Other Key Management
Personnel:
John Haley	100%	-		-	-	-	-
Vince Fayad	100%	100%		-	-	-	-
Kurt Laney	100%	100%		-	-	-	-
Alexander Hanly	100%	67%		-	-	-	33%

Service agreements

All directors and key management personnel invoice the Company under their personal name, except for the following:

On 10 November 2022, David Sproule was appointed Executive Chairman (previously Non-Executive Chairman) under a contract for services (the Contract) which commenced on 10 November 2022, with no fixed term duration, for an annual fee of $120,000. No annual leave, long service or other leave is provided for under the Contract. The termination notice period is 1 month and may be paid out in lieu of notice by the Company .
Vince Fayad and Kurt Laney provided their services as Joint Company Secretaries through Vince Fayad and Associates Pty Ltd, under a contract for $84,000 per annum (including accounting services). Both Vince and Kurt resigned as Company Secretaries on 31 January 2023.
On 1 February 2023, John Haley was appointed Company Secretary and Chief Financial Officer. John is paid through a contract for services which commenced on 1 February 2023, with no fixed term duration, at a rate of $100 per hour. On 1 May 2023, the rate per hour was subsequently replaced with a fixed fee of $7,000 per month. The termination notice period is 1 month.
Alexander Hanly (former Chief Executive Officer) provided his services through Acumen Management Group Pty Limited under a contract for $180,000 per annum. Alexander resigned as Chief Executive Officer on 31 January 2023.

Share-based compensation

Issue of shares

There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2023.

Options

There were no options over ordinary shares granted to or vested by directors and other key management personnel as part of compensation during the year ended 30 June 2023.

During the year ended 30 June 2022, the Company commenced a Loan Funded Share Plan (LFSP) whereby limited recourse loans have been provided to directors and key management personnel to acquire shares in the Company. Under Accounting Standard AASB 2 Share-based Payment , the issuance of these shares has been accounted for as an in-substance option award. The in-substance options vested on the grant date and were recorded at their fair value and expensed in full on the grant date.

The in-substance share-based options granted during the year ended 30 June 2022 lapsed during the year ended 30 June 2023 as all holders resigned from the Company.

Polymetals Resources Ltd Directors' report 30 June 2023

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Summary of the in-substance share-based option awards (limited recourse borrowings):

Name Christopher Johnston Christopher Schroor Alexander Hanly	Number of Fair value in substance per option options granted Grant date Expiry date Exercise price at grant date 800,000 29/11/2021 29/11/2024 $0.25 $0.07 800,000 29/11/2021 29/11/2024 $0.25 $0.07 1,500,00029/11/2021 29/11/2024 $0.25 $0.07 3,100,000

Additional information

The earnings of the consolidated entity for the three years to 30 June 2023 are summarised below:

	2023	2022	2021
	$	$	$
Loss after income tax	(7,799,397)	(1,156,988)	(506,932)

The factors that are considered to affect total shareholders return ('TSR') are summarised below:

	2023	2022		2021
Share price at financial year end (cents)	38.0		8.9	14.5
Basic earnings per share (cents per share)	(8.7)		(1.5)	(1.7)

Additional disclosures relating to key management personnel

Shareholding

The number of shares in the Company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Ordinary shares Directors: David Sproule Alistair Barton Jess Oram Christopher Johnston Christopher Schroor Other Key Management Personnel: John Haley Vincent Fayad Kurt Laney Alexander Hanly	Balance at the start of the year 41,697,379 - - 66,667 120,000 - 16,385 15,000 100,000	Received as part of remuneration - - - - - - - - -	Additions 18,953,391 580,000 35,000 - - 198,000 - - -	Disposals/ other* - - - (66,667) (120,000) - (16,385) (15,000) (100,000)	Balance at the end of the year 60,650,770 580,000 35,000 - - 198,000 - - -
	42,015,431	-	19,766,391	(318,052)	61,463,770

Included in expired/forfeited/other is the removal from the table of the shareholdings for key management personnel who have resigned during the period or are no longer considered to be a key management person.

Polymetals Resources Ltd Directors' report 30 June 2023

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Option holding

The number of options over ordinary shares in the Company held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

Limited recourse loan options** Directors: Christopher Johnston Christopher Schroor Other Key Management Personnel: Alexander Hanly	Balance at the start of the year 800,000 800,000 - 1,500,000	Granted - - - -	Exercised - - - -	Expired/ forfeited/ other* (800,000) (800,000) - (1,500,000)	Balance at the end of the year - - - -
	3,100,000	-	-	(3,100,000)	-

Included in expired/forfeited/other is the removal from the table of the options for key management personnel who have resigned during the period or are no longer considered to be a key management person.
** All options noted above are options that have been issued under the Loan Funded Share Plan.

No other key management personnel held options.

Other transactions with key management personnel and their related parties

At the time of acquisition, Meadowhead Investments Pty Ltd, an entity controlled by David Sproule, owned 33.48% of Orana Minerals Pty Ltd. Following the resolutions voted at the extraordinary general meeting held on 12 May 2023, Meadowhead Investments Pty Ltd were issued 17,410,714 shares.

Additionally, Linden Sproule (son of David Sproule) owned 2.23% of Orana Minerals Pty Ltd at the time of the acquisition. Following the resolutions voted at the extraordinary general meeting held on 12 May 2023, Linden Sproule was issued 1,160,714 shares.

On 31 October 2022, Meadowhead Investments Pty Ltd, an entity controlled by David Sproule, agreed to provide the consolidated entity with a loan facility up to $1,350,000. The facility is unsecured, can be drawn down at any time, and incurs interest at 5% per annum (refer note 14). $1,350,000 was drawn down on this facility during the 2023 financial year. The loan balance at 30 June 2023 was $1,350,000. No interest has been paid on the loan in the year ended 30 June 2023.

Aggregate amounts of each of the above types of other transactions with key management personnel and their related entities are included in the

financial statements as follows:

Statement of financial position:

Amounts recognised as borrowings:

Related party loan: $1,350,000 (2022: $nil)

Amounts recognised as trade and other payables, being the unpaid or accrued key management personnel remuneration: Trade payables: $105,242 (2022: $nil) Other payables: $66,000 (2022: $102,000)

This concludes the remuneration report, which has been audited.

Shares under option

Unissued ordinary shares of Polymetals Resources Ltd under option at the date of this report are as follows:

		Exercise	Number
Grant date	Expiry date	price	under option
30 November 2021	30 November 2024	$0.25	1,167,000

Polymetals Resources Ltd Directors' report 30 June 2023

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No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate.

Shares issued on the exercise of options

There were 1,148,000 ordinary shares of Polymetals Resources Ltd issued on the exercise of options during the year ended 30 June 2023 and 1,185,000 issued on the exercise of options on 31 August 2023.

Indemnity and insurance of officers

The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.

Indemnity and insurance of auditor

The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor.

During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.

Non-audit services

There were no non-audit services provided during the financial year by the auditor.

Officers of the Company who are former partners of RSM Australia Partners

There are no officers of the Company who are former partners of RSM Australia Partners.

Auditor's independence declaration

A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.

Rounding of amounts

The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to 'rounding-off' of amounts in the directors’ report. Amounts in the directors’ report have been rounded off in accordance with the instrument to the nearest dollar.

Auditor

RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.

Polymetals Resources Ltd Directors' report 30 June 2023

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This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the directors

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________ David Sproule Executive Chairman

29[th] September 2023

Polymetals Resources Ltd Contents 30 June 2023

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Auditor's independence declaration 18 Consolidated statement of profit or loss and other comprehensive income 19 Consolidated statement of financial position 20 Consolidated statement of changes in equity 21 Consolidated statement of cash flows 22 Notes to the consolidated financial statements 23 Directors' declaration 49 Independent auditor's report to the members of Polymetals Resources Ltd 50 Shareholder information 54

General information

The financial statements cover Polymetals Resources Ltd as a consolidated entity consisting of Polymetals Resources Ltd and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is Polymetals Resources Ltd's functional and presentation currency.

Polymetals Resources Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Unit 1, 101 Main Street Alstonville NSW 2477

A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 29[th] September 2023. The directors have the power to amend and reissue the financial statements.

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RSM Australia Partners

Level 13, 60 Castlereagh Street Sydney NSW 2000 GPO Box 5138 Sydney NSW 2001 T +61 (0) 2 8226 4500 F +61 (0) 2 8226 4501

www.rsm.com.au

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of Polymetals Resources Ltd and its controlled entities for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.

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RSM AUSTRALIA PARTNERS

C J HUME

Partner

Sydney, NSW Dated: 29 September 2023

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

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RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036

Liability limited by a scheme approved under Professional Standards Legislation

Polymetals Resources Ltd Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2023

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Note Interest revenue Expenses Consultancy and accountancy fees Depreciation and amortisation expense 5 Employee benefits expense 5 Exploration expenses Impairment of exploration costs 12 Legal costs Professional, registry and listing related expenses Short term lease expense Write off of assets 10 Other expenses Total expenses Loss before income tax expense Income tax expense 6 Loss after income tax expense for the year attributable to the owners of Polymetals Resources Ltd Other comprehensive income for the year, net of tax Total comprehensive income for the year attributable to the owners of Polymetals Resources Ltd Basic earnings per share 29 Diluted earnings per share 29 * Refer to note 3 for detailed information on Restatement of comparatives.	Consolidated 2023 2022 Restated $ $* 1,133 1,116 (168,529) (340,079) (8,296) (2,691) (519,055) (550,729) (751,223) - (5,699,119) - (265,057) (17,933) (91,031) (59,460) (12,091) - (119,097) - (167,032) (187,212)	Consolidated 2023 2022 Restated $ $* 1,133 1,116 (168,529) (340,079) (8,296) (2,691) (519,055) (550,729) (751,223) - (5,699,119) - (265,057) (17,933) (91,031) (59,460) (12,091) - (119,097) - (167,032) (187,212)
	(7,800,530)	(1,158,104)
	(7,799,397) -	(1,156,988) -
	(7,799,397) -	(1,156,988) -
	(7,799,397)	(1,156,988)
	Cents (8.7) (8.7)	Cents (1.5) (1.5)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes

Polymetals Resources Ltd Consolidated statement of financial position As at 30 June 2023

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2023 $ 2,624,195 257,470 -	Consolidated 2022 Restated $* 1,503,426 26,719 19,200	1 July 2021 Restated $* 5,013,992 80,327 18,202
2,881,665	1,549,345	5,112,521
21,187 18,636,657 - 1,900	133,211 - 4,149,316 -	2,467 - 1,748,419 -
18,659,744	4,282,527	1,750,886
21,541,409	5,831,872	6,863,407
1,769,818 1,350,000	235,973 -	303,644 250,000
3,119,818	235,973	553,644
3,119,818	235,973	553,644
18,421,591	5,595,899	6,309,763
25,488,064 2,599,485 451,145 (10,117,103)	7,462,460 - 451,145 (2,317,706)	7,470,481 - - (1,160,718)
18,421,591	5,595,899	6,309,763

Refer to note 3 for detailed information on Restatement of comparatives.

The above consolidated statement of financial position should be read in conjunction with the accompanying notes

Polymetals Resources Ltd Consolidated statement of changes in equity For the year ended 30 June 2023

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Issued capital $ 1,248 7,469,233	Prepaid capital $ - -	Reserves $ - -	Accumulated losses $ (1,142,927) (17,791)	Non- controlling Interest $ 7,451,442 (7,451,442)	Total equity $ 6,309,763 -
7,470,481 - -	- - -	- - -	(1,160,718) (1,156,988) -	- - -	6,309,763 (1,156,988) -
- (8,021) - -	- - - -	- - 206,145 245,000	(1,156,988) - - -	- - - -	(1,156,988) (8,021) 206,145 245,000
7,462,460	-	451,145	(2,317,706)	-	5,595,899
			Accumulated losses $ (2,317,706) (7,799,397) -	Non- controlling interest $ - - -	Total equity $ 5,595,899 (7,799,397) -
- 18,025,604 -	- - 2,599,485	- - -	(7,799,397) - -	- - -	(7,799,397) 18,025,604 2,599,485
25,488,064	2,599,485	451,145	(10,117,103)	-	18,421,591

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

Polymetals Resources Ltd Consolidated statement of cash flows For the year ended 30 June 2023

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Polymetals Resources Ltd Consolidated statement of cash flows For the year ended 30 June 2023
Note Cash flows from operating activities Payments to suppliers and employees (inclusive of GST) Interest received Net cash used in operating activities 28 Cash flows from investing activities Net cash acquired in asset acquisition 25 Payments for property, plant and equipment 10 Payments for exploration expenditure 12 Payments for security deposits Payments for intangibles Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares 15 Share issue transaction costs 15 Proceeds received in advance for issue of shares 16 Proceeds from borrowings 28 Repayment of borrowings Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year 7	Consolidated 2023 2022 $ $ (1,682,543) (710,019) 1,133 1,116
	(1,681,410)	(708,903)
	4,932 (15,369) (1,549,803) (1,900) (835,635)	- (133,435) (2,319,706) - -
	(2,397,775)	(2,453,141)
	1,287,000 (36,531) 2,599,485 1,350,000 -	- (98,522) - - (250,000)
	5,199,954	(348,522)
	1,120,769 1,503,426	(3,510,566) 5,013,992
	2,624,195	1,503,426

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 1. Significant accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.

New or amended Accounting Standards and Interpretations adopted

The consolidated entity 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.

Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Going concern

The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

As disclosed in the financial statements, the consolidated entity recorded a loss after tax of $7,799,397 and had net cash outflows from operating and investing activities of $1,681,410 and $2,397,775 respectively for the year ended 30 June 2023. At 30 June 2023, the consolidated entity had net current liabilities of $238,153 and had a commitment to pay $27,996,000 in Environmental Bonds (refer note 22).

The ability of the consolidated entity to continue as a going concern is principally dependent upon raising additional capital or securing other forms of financing, as and when necessary to meet the levels of expenditure required for the consolidated entity to continue to progress the exploration of the tenements in which it has an interest and to meet the consolidated entity's working capital requirements.

These factors indicate significant uncertainty as to whether the consolidated entity will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of the financial report after consideration of the following factors:

As at the date of this report, the consolidated entity had cash on hand of $2,624,195.
Proven ability of the consolidated entity to raise the necessary funding or settle debts via the issuance of shares, as evidenced by the raising of $1,287,000 in cash (before share issue transaction costs) from shares issued during the year ended 30 June 2023, plus cash of $2,599,485 paid in advance of shares issued after 30 June 2023.
The consolidated entity has access to 2 financing facilities for $1,350,000 (working capital) and US$10,000,000 (to be used to fund the recommencement of mining and processing operation at the mine in Cobar, NSW) (refer note 14).
On 14 August 2023, the Company announced the signing of a non-binding Memorandum of Understanding for the replacement of the Endeavor mine Environmental Bonds by Ocean Partners UK Limited totalling $27,996,000 (note 22). Ocean Partners UK Limited have proposed to facilitate the bond replacement by providing a surety to the Company for up to 4 years. Once the Environmental Bonds have been replaced, the purchase of the Endeavor mine can be completed (refer note 25).
The consolidated entity has the ability to reduce exploration activities and other discretionary spending, subject to meeting the expenditure commitments disclosed in note 22.

Based on the above, the Directors are of the opinion that at the date of signature of the financial report there are reasonable and supportable grounds to believe that the consolidated entity will be able to meet its liabilities from its assets in the ordinary course of business, for a period of not less than 12 months from the date of this financial report and has accordingly prepared the financial report on a going concern basis.

Should the consolidated entity be unable to continue as a going concern, it may be required to realise its assets and liabilities other than in the ordinary course of business, and at amounts that may differ from those stated in the financial statements.

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

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 1. Significant accounting policies (continued)

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').

Historical cost convention

The financial statements have been prepared under the historical cost convention.

Critical accounting estimates

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.

Comparative information

Some comparative information has been reclassified for presentation purposes.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 24.

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Polymetals Resources Ltd ('Company' or 'parent entity') as at 30 June 2023 and the results of all subsidiaries for the year then ended. Polymetals Resources Ltd and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.

The consolidated financial statements have been prepared on the basis that the wholly-owned subsidiary, Golden Guinea Resources SARL, is the accounting parent entity.

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity 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 consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated entity.

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.

Revenue recognition

The consolidated entity recognises revenue as follows:

Interest

Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 1. Significant accounting policies (continued)

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification.

An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.

A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.

Deferred tax assets and liabilities are always classified as non-current.

Impairment of non-financial assets

Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred.

Goods and Services Tax ('GST') and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

Rounding of amounts

The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to 'rounding-off' of amounts in the report. Amounts in the report have been rounded off in accordance with the instrument to the nearest dollar.

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2023. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 2. Critical accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below.

Exploration and evaluation costs

Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made. During the year ended 30 June 2023, the consolidated entity impaired all its exploration and evaluation assets (refer note 12).

Right to acquire the Endeavor Mine

The right to acquire the Endeavor Mine (the Mine) has been valued at acquisition on 12 May 2023 at $17,276,822 (refer note 11 and note 25). After subsequent costs have been capitalised, the value of the right to acquire the Mine at 30 June 2023 was $18,636,657. Subsequent to the acquisition, care and maintenance costs relating to the Mine have been capitalised on the basis that the consolidated entity is obligated to pay these costs under the agreement to acquire the Mine. Other discretionary costs relating to the Mine have been expensed on the basis that these costs are not required to be incurred under the agreement to acquire the Mine.

At 30 June 2023, the Directors expect that the acquisition of the Mine will be finalised by 30 April 2024, and no impairment to the intangible asset is considered necessary. The Directors have applied judgement in assessing the impairment of the intangible asset and the additional costs capitalised subsequent to the acquisition of the right.

Note 3. Restatement of comparatives

Reclassification

In January 2021, Polymetals Resources Ltd ("Polymetals") acquired 100% of the share capital in Golden Guinea Resources SARL ("Golden Guinea") through a reverse acquisition. Although legally the issuing entity (Polymetals) was regarded as the parent and the private entity (Golden Guinea) was regarded as the subsidiary, the legal subsidiary is the acquirer if it has the power to govern the financial and operating policies of the legal parent so as to obtain benefits from its activities. Therefore in this acquisition Golden Guinea was considered the accounting acquirer.

Despite Golden Guinea being the accounting parent, the loss for the year ended 30 June 2021 and 30 June 2022 would be 100% attributable to the owners of Polymetals, therefore there are no non-controlling interests. Consequently, in order to more accurately reflect this transaction, the consolidated entity has restated the comparatives to reclassify results previously presented as non-controlling interests by reducing the non-controlling interest reserve and increasing the accumulated losses by the same amount. The previously reported loss attributable to non-controlling interests for the year ended 30 June 2021 was $17,791 and for 30 June 2022 was $342,261 therefore accumulated losses and the non-controlling interest reserve have been restated by these amounts.

In a reverse acquisition, the issued capital is retroactively adjusted to reflect the issued capital of the legal acquirer (Polymetals). Therefore, to more accurately reflect this, the consolidated entity has restated the comparatives to reclassify issued capital that was previously presented as relating to non-controlling interests, by increasing issued capital and reducing the non-controlling interest reserve at 1 July 2022 and 30 June 2022 by $7,469,233 and $7,461,212 respectively.

Some comparative expenses have been reclassified for presentation purposes.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 3. Restatement of comparatives (continued)

Statement of profit or loss and other comprehensive income

2022 $ Reported (77,393) (201,065) - - (539,567)	Consolidated $ Adjustment 17,933 (349,664) (2,691) (17,933) 352,355	2022 $ Restated (59,460) (550,729) (2,691) (17,933) (187,212)
(1,156,988) -	- -	(1,156,988) -
(1,156,988) -	- -	(1,156,988) -
(1,156,988)	-	(1,156,988)
(342,261) (814,727)	342,261 (342,261)	- (1,156,988)
(1,156,988)	-	(1,156,988)
(342,261) (814,727)	342,261 (342,261)	- (1,156,988)
(1,156,988)	-	(1,156,988)
Cents Reported (1.5) (1.5)	Cents Adjustment - -	Cents Restated (1.5) (1.5)

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 3. Restatement of comparatives (continued)

Statement of financial position at the beginning of the earliest comparative period

1 July 2021 $ Reported 1,248 (1,142,927)	Consolidated $ Adjustment 7,469,233 (17,791)	1 July 2021 $ Restated 7,470,481 (1,160,718)
(1,141,679) 7,451,442	7,451,442 (7,451,442)	6,309,763 -
6,309,763	-	6,309,763
2022 $ Reported 1,248 (1,957,654)	Consolidated $ Adjustment 7,461,212 (360,052)	2022 $ Restated 7,462,460 (2,317,706)
(1,505,261) 7,101,160	7,101,160 (7,101,160)	5,595,899 -
5,595,899	-	5,595,899

Note 4. Operating segments

Identification of reportable operating segments

The consolidated entity operated in two operating segments during the year - being gold exploration within Guinea, West Africa and a silver-zinc-lead mine located in Cobar, NSW. The operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments.

The consolidated entity is currently conducting an exploration of tenements considered prospective for gold. No income has been derived from the recovery of gold during the year ended 30 June 2023 (2022: nil).

The consolidated entity entered into a share sale agreement to purchase the shares in a company (Cobar Metals Pty Ltd) that currently owns a right to acquire a silver-lead-and zinc mine in Cobar, NSW. The agreement will not complete until the consolidated entity pays the Environmental Bonds (refer note 22). A drilling program has been completed in the year and, until the completion of the agreement, care and maintenance costs are payable by the consolidated entity.

The information reported to the CODM is on at least a quarterly basis.

Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to operating segments as they are not considered part of the core operations of any segment:

interest revenue;
income tax benefit;
corporate costs;
cash at bank of Polymetals Resources Ltd; and
receivables and payables associated with corporate costs.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 4. Operating segments (continued)

Operating segment information

Silver-Zinc- Lead $ (763,869) (263) -	Gold $ (5,818,216) (6,286) -	Unallocated $ (1,210,149) (1,747) 1,133	Total $ (7,792,234) (8,296) 1,133
(764,132)	(5,824,502)	(1,210,763)	(7,799,397) -
18,898,598	403	2,642,408
			(7,799,397)
			21,541,409
18,636,658	1,549,803	15,369	21,541,409
			20,201,830
1,344,538	-	1,775,280	3,119,818
	Gold $ - - -	Unallocated $ (1,155,413) (2,691) 1,116	3,119,818
			Total $ (1,155,413) (2,691) 1,116
	-	(1,156,988)	(1,156,988) -
	4,276,975	1,554,897
			(1,156,988)
			5,831,872
	2,526,280	7,828	5,831,872
			2,534,108
	3,791	232,182	235,973
		235,973 Geographical non-current assets 2023 2022 $ $ 18,659,744 7,828 - 4,274,699	235,973
		18,659,744	4,282,527

The geographical non-current assets above are exclusive of, where applicable, financial instruments and deferred tax assets.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 4. Operating segments (continued)

Accounting policy for operating segments

Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance.

Note 5. Expenses

Loss before income tax includes the following specific expenses: Depreciation Plant and equipment Motor vehicles Field equipment Total depreciation Superannuation expense Defined contribution superannuation expense Share-based payments expense Share-based payments expense	Consolidated 2023 2022 $ $ 2,010 2,467 4,637 - 1,649 224	Consolidated 2023 2022 $ $ 2,010 2,467 4,637 - 1,649 224
	8,296	2,691
	22,900	-
	-	201,065

Note 6. Income tax

Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 30% (2022: 25%) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Non-deductible expenses Current year tax losses and temporary differences not recognised Income tax expense Tax losses not recognised Unused tax losses for which no deferred tax asset has been recognised Potential tax benefit @ 30%	Consolidated 2023 2022 $ $ (7,799,397) (1,156,988)	Consolidated 2023 2022 $ $ (7,799,397) (1,156,988)
	(2,339,819) 76,756	(289,247) 124,645
	(2,263,063) 2,263,063	(164,602) 164,602
	-	-
	Consolidated 2023 2022 $ $ 2,239,332 918,180
	671,800	275,454

The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 6. Income tax (continued)

Accounting policy for income tax

The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:

When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset.

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.

Note 7. Cash and cash equivalents

Current assets Cash at bank Cash on deposit	Consolidated 2023 2022 $ $ 2,624,195 503,426 - 1,000,000	Consolidated 2023 2022 $ $ 2,624,195 503,426 - 1,000,000
	2,624,195	1,503,426

Accounting policy for 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.

Note 8. Trade and other receivables

	Consolidated	Consolidated
	2023	2022
	$	$
Current assets
BAS receivable	257,470	26,719

Accounting policy for trade and other receivables

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

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 9. Other assets

Current assets Prepayments Non-current assets Security deposits Note 10. Property, plant and equipment Non-current assets Plant and equipment - at cost Less: Accumulated depreciation Motor vehicles - at cost Less: Accumulated depreciation Field equipment - at cost Less: Accumulated depreciation	Consolidated 2023 2022 $ $ - 19,200	Consolidated 2023 2022 $ $ - 19,200
	1,900	-
	1,900	19,200
	Consolidated 2023 2022 $ $ 25,888 10,519 (4,701) (2,691)
	21,187	7,828
	- -	92,494 -
	-	92,494
	- -	33,113 (224)
	-	32,889
	21,187	133,211

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 July 2021 Additions Depreciation expense Balance at 30 June 2022 Additions Write off of assets Depreciation expense Balance at 30 June 2023	Plant and equipment $ 2,467 7,828 (2,467)	Motor vehicles $ - 92,494 -	Field equipment $ - 33,113 (224)	Total $ 2,467 133,435 (2,691)
	7,828 15,369 - (2,010)	92,494 - (87,857) (4,637)	32,889 - (31,240) (1,649)	133,211 15,369 (119,097) (8,296)
	21,187	-	-	21,187

Accounting policy for property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 10. Property, plant and equipment (continued)

Depreciation is calculated on a diminishing value basis to write off the net cost of each item of plant and equipment over their expected useful lives as follows:

Plant and equipment 10% per annum Motor vehicles 10% per annum Field equipment 10% per annum

The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.

An item of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.

Note 11. Intangibles

Non-current assets Right to acquire the Endeavor Mine	Consolidated 2023 2022 $ $ 18,636,657 -

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 July 2021 Balance at 30 June 2022 Additions through asset acquisition (note 25) Additions Balance at 30 June 2023	Right to acquire Endeavor mine $ -
	- 17,276,822 1,359,835
	18,636,657

Right to acquire the Endeavor Mine

On 12 May 2023 the Company acquired the right to purchase 3 entities holding the Endeavor lead/zinc/silver mine in Cobar, NSW (the Mine). The purchase of the Mine will not complete until the consolidated entity has paid Environmental Bonds of $27,996,000, which is expected by 30 April 2024 (refer note 25).

Since the purchase of the right to acquire the Mine, as part of the agreement, the consolidated entity has been paying for the care and maintenance of the Mine. The costs have been capitalised to the intangible asset. Any other costs incurred on the Mine that are not required in the agreement have been expensed.

Accounting policy for intangible assets

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 12. Exploration and evaluation

Non-current assets Exploration and evaluation - at cost Less: Impairment	Consolidated 2023 2022 $ $ 5,699,119 4,149,316 (5,699,119) -	Consolidated 2023 2022 $ $ 5,699,119 4,149,316 (5,699,119) -
	-	4,149,316

Reconciliations

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 1 July 2021 Additions Balance at 30 June 2022 Additions Impairment of assets* Balance at 30 June 2023	$ 1,748,419 2,400,897
	4,149,316 1,549,803 (5,699,119)
	-

This represents a full impairment of the carrying value of the Company's Guinea tenements, which are under renewal at present. Having exhausted all reasonable avenues to obtain the renewals, the Board has resolved to place Guinea tenements on care and maintenance until such time as the project can be joint ventured, farmed-out or sold.

Accounting policy for exploration and evaluation assets

Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made.

A regular review has been undertaken on each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

Note 13. Trade and other payables

Current liabilities Trade payables Other payables	Consolidated 2023 2022 $ $ 1,109,473 105,973 660,345 130,000	Consolidated 2023 2022 $ $ 1,109,473 105,973 660,345 130,000
	1,769,818	235,973

Included in Other payables is $66,000 (2022: $102,000) and in Trade payables is $105,242 (2022: $nil) payable to directors at 30 June 2023.

Refer to note 19 for further information on financial instruments.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 13. Trade and other payables (continued)

Accounting policy for trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.

Note 14. Borrowings

Current liabilities Related party loan	Consolidated 2023 2022 $ $ 1,350,000 -

Refer to note 19 for further information on financial instruments.

Financing arrangements

Unrestricted access was available at the reporting date to the following lines of credit:

Total facilities Related party loan Other loan Used at the reporting date Related party loan Other loan Unused at the reporting date Related party loan Other loan	Consolidated 2023 2022 $ $ 1,350,000 - 15,082,956 -	Consolidated 2023 2022 $ $ 1,350,000 - 15,082,956 -
	16,432,956	-
	1,350,000 -	- -
	1,350,000	-
	- 15,082,956	- -
	15,082,956	-

On 31 October 2022, a related party agreed to provide the consolidated entity with a loan facility up to $1,000,000. In April 2023 the facility was extended up to $1,350,000. The loan is unsecured and can be drawn down at any time. The keys terms of the facility are as follows:

(i) Repayment date - the earlier of the next capital raising or 18 months from the first drawdown date

(ii) Interest rate - 5% per annum, compounded monthly until the end of the loan

On 27 June 2023 the consolidated entity announced that it has entered into a binding Term Sheet with Ocean Partners UK Limited (OPUK) for an unsecured US$10,000,000 (A$15,082,956) pre-payment funding facility which will provide development funding and working capital for the recommencement of mining and processing operation at the Company's underground Silver-Zinc-Lead, Endeavor Mine in the Cobar basin, NSW.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 14. Borrowings (continued)

The key terms of the facility are as follows:

(i) Facility limit - US$10,000,000 (at 30 June 2023, this translates to A$15,082,956)
(ii) Contract - 5-year offtake of zinc and silver-lead concentrates
(iii) Interest - 12-month Secured Overnight Financing Rate + 7.0%
(iv) Term - Up to 36 months
(v) Share subscription - A$500,000 equity investment
(vi) Key conditions:
Signed Zinc & Silver-Lead Concentrate Offtake Contracts
Executed Concentrate Prepayment Facility Agreement
Third-party confirmation of Endeavor Mine Restart Study (MRS)

Accounting policy for borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

Note 15. Issued capital

Ordinary shares - fully paid	Consolidated 2023 2022 Restated 2023 Shares Shares $* 137,714,126 79,440,000 25,488,064	2022 Restated $* 7,462,460

The value and number of ordinary shares at 30 June 2022 have been restated, as detailed in note 3.

Movements in ordinary share capital

Details Date Balance 1 July 2021 Net share issue cost refund Balance 30 June 2022 Shares issued to settle debts (a) 17 August 2022 Placement (b) 21 December 2022 Shares issued to vendor of Orana Minerals Pty Ltd (refer note 25) 12 May 2023 Options exercised (c) 30 June 2023 Share issue costs Balance 30 June 2023	Shares Issue price 79,440,000 79,440,000 1,126,126 $0.12 4,000,000 $0.25 52,000,000 $0.32 1,148,000 $0.25 137,714,126	$ 7,470,481 (8,021)
		7,462,460 135,135 1,000,000 16,640,000 287,000 (36,531)
		25,488,064

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

(a) Shares issued to settle debts

On 17 August 2022, the consolidated entity issued 1,126,126 ordinary shares to Sahara Natural Resources for part-payment of its contract drilling fees at $0.12 per share. The market share price at the date of issue was $0.15 however the rate that the shares were issued was agreed between the parties.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 15. Issued capital (continued)

(b) Placement

On 21 December 2022, the consolidated entity issued 4,000,000 ordinary shares to a sophisticated investor at 25 cents per share. The issue price per share represents a 6.4% premium to the closing price on the ASX of $0.235 per share on 19 December 2022 and a 15.3% premium to the 30-day VWAP of $0.217 per share.

(c) Options exercised

On 30 June 2023, 1,148,000 options were converted to ordinary shares.

Options

As at 30 June 2023, there were 2,352,000 unissued ordinary shares of Polymetals Resources Ltd under option, held as follows:

Options on issue in Polymetals Resources Ltd Number Exercise price Expiry Share options - unlisted 2,352,000 $0.25 30/11/2024

Share buy-back

There is no current on-market share buy-back.

Capital risk management

The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

The consolidated entity is not exposed to externally imposed capital requirements.

The consolidated entity monitors capital through the gearing ratio, which is calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is defined as equity per the statement of financial position plus net debt.

The Board reviews the capital structure on an annual basis. As a part of this review the Board considers the cost of capital and risks associated with each class of capital. A high gearing ratio will be expected as the consolidated entity enters into its development stage and more debts are required to fund the operation and development activities.

The capital risk management policy remains unchanged from the 2022 Annual Report.

Accounting policy for issued capital

Ordinary shares are classified as equity.

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

Note 16. Prepaid capital

Prepaid share capital	Consolidated 2023 2022 $ $ 2,599,485 -

Prepaid capital relates to proceeds received in advance for the Endeavor Mine Restart Study share placement, which was completed on 6 July 2023 (refer to note 27). Upon the issue of the related shares on 6 July 2023, the proceeds converted to issued capital.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 17. Reserves

Share-based payments reserve Options reserve	Consolidated 2023 2022 $ $ 206,145 206,145 245,000 245,000	Consolidated 2023 2022 $ $ 206,145 206,145 245,000 245,000
	451,145	451,145

Share-based payments reserve

The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration.

Options reserve

The reserve is used to recognise the value of share options provided to other parties as part of their compensation for services.

Movements in reserves

Movements in each class of reserve during the current and previous financial year are set out below:

Consolidated Balance at 1 July 2021 Share-based payments Share options Balance at 30 June 2022 Share-based payments Balance at 30 June 2023	Share-based payments reserve $ - 206,145 -	Options reserve $ - - 245,000	Total $ - 206,145 245,000
	206,145 -	245,000 -	451,145 -
	206,145	245,000	451,145

Note 18. Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Note 19. Financial instruments

Financial risk management objectives

In common with all other businesses, the consolidated entity is exposed to risks that arise from its use of financial instruments. This note describes the consolidated entity’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

There have been no substantive changes in the consolidated entity’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous years unless otherwise stated in this note.

The consolidated entity’s financial instruments consist mainly of deposits with banks, receivables and payables.

The Board has overall responsibility for the determination of the consolidated entity’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the consolidated entity’s finance function.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 19. Financial instruments (continued)

The overall objective of the Board is to set polices that seek to reduce risk as far as possible without unduly affecting the consolidated entity’s competitiveness and flexibility. Further details regarding these policies are set out below.

Market risk

Foreign currency risk

The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations.

Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.

Apart from the Alahiné and Mansala projects in the Republic of Guinea, the consolidated entity has no significant exposure to foreign exchange risk as there are effectively no foreign currency deals outstanding. However, the likely impact of this risk is at the stage considered to be minimal due to the exploration nature of this asset.

In order to protect against exchange rate movements, the consolidated entity had entered into a forward foreign exchange contract during the 2022 financial year for US$100,000 at a rate of US$0.741 : A$1. The contract was fully redeemed on 21 July 2022 and settled on 2 August 2022 . At 30 June 2023 there were no outstanding forward foreign exchange contracts.

Price risk

The consolidated entity is not exposed to any significant price risk.

Interest rate risk

Interest rate risk arises principally from cash and cash equivalents. The objective of interest rate risk management is to manage and control interest rate risk exposures within acceptable parameters while optimising the return. The consolidated entity does not have any significant exposure to interest rate risk.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. This usually occurs when debtors fail to settle their obligations owing to the consolidated entity. The consolidated entity ’s objective is to minimise the risk of loss from credit risk exposure.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements.

Credit risk is reviewed regularly by the Board. It arises from exposure to receivables as well as through deposits with financial institutions.

The consolidated entity does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments entered into by the consolidated entity and at the reporting date.

The consolidated entity’s cash at bank is wholly held with Commonwealth Bank of Australia.

Liquidity risk

Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.

The consolidated entity manages liquidity risk by monitoring forecast cash flows for the possible need to obtain debt or equity finance.

A related party has agreed to provide the consolidated entity with a loan facility of up to $1,350,000 (refer note 14).

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 19. Financial instruments (continued)

The consolidated entity has entered into a binding Term Sheet with Ocean Partners UK Limited (OPUK) for an unsecured US$10,000,000 (A$15,082,956) concentrate pre-payment funding facility which will provide development funding and working capital for the recommencement of mining and processing operation at the Company's underground Silver-ZincLead, Endeavor Mine in the Cobar basin, NSW (refer note 14).

Remaining contractual maturities

The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

1 year or less $ 1,769,818 1,350,000	Between 1 and 2 years $ - -	Between 2 and 5 years $ - -	Over 5 years $ - -	Remaining contractual maturities $ 1,769,818 1,350,000
3,119,818	-	-	-	3,119,818
1 year or less $ 235,973	Between 1 and 2 years $ -	Between 2 and 5 years $ -	Over 5 years $ -	Remaining contractual maturities $ 235,973
235,973	-	-	-	235,973

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.

Note 20. Key management personnel disclosures

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

Short-term employee benefits Post-employment benefits Share-based payments	Consolidated 2023 2022 $ $ 420,942 434,589 630 - - 201,065	Consolidated 2023 2022 $ $ 420,942 434,589 630 - - 201,065
	421,572	635,654

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 21. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by RSM Australia Partners, the auditor of the Company:

	Consolidated	Consolidated
	2023	2022
	$	$
Audit services - RSM Australia Partners
Audit or review of the financial statements	30,500	27,000

Note 22. Commitments

Committed at the reporting date but not recognised as liabilities, payable: Within one year	Consolidated 2023 2022 $ $ 27,996,000 -

The consolidated entity is required to pay $27,996,000 of Environmental Bonds in favour of the Minister of the Government of New South Wales to meet the environmental obligations of the Endeavor Mine tenements. During the year, the entity entered into a share sale agreement to purchase the shares in a company (Cobar Metals Pty Ltd) that currently owns the rights to the Endeavor Mine tenements (refer note 25). The agreement will not complete until the consolidated entity pays the Environmental Bonds. On 14 August 2023, the Company announced the signing of a non-binding Memorandum of Understanding for the replacement of the Endeavor mine Environmental Bonds by Ocean Partners UK Limited (refer note 27).

Note 23. Related party transactions

Legal parent entity

Polymetals Resources Ltd is the legal parent entity.

Accounting parent entity

Golden Guinea Resources SARL is the accounting parent of the group.

Subsidiaries

Interests in subsidiaries are set out in note 26.

Key management personnel

Disclosures relating to key management personnel are set out in note 20 and the remuneration report included in the directors' report.

Transactions with related parties

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 23. Related party transactions (continued)

Receivable from and payable to related parties

The following balances are outstanding at the reporting date in relation to transactions with related parties:

	Consolidated	Consolidated
	2023	2022
	$	$
Current payables:
Trade payables to key management personnel	105,242	-
Other payables to key management personnel	66,000	102,000

Loans to/from related parties

On 31 October 2022, Meadowhead Investments Pty Ltd, an entity controlled by David Sproule, agreed to provide the consolidated entity with a loan facility up to $1,350,000 (refer note 14). The facility is unsecured, can be drawn down at any time, and incurs interest at 5% per annum. $1,350,000 was drawn down on this facility during the 2023 financial year. The loan balance at 30 June 2023 was $1,350,000. No interest has been paid on the loan in the year ended 30 June 2023.

The following balances are outstanding at the reporting date in relation to loans with related parties:

	Consolidated	Consolidated
	2023	2022
	$	$
Current borrowings:
Loan from other related party	1,350,000		-

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

Note 24. Parent entity information

Set out below is the supplementary information about the legal parent entity.

Statement of profit or loss and other comprehensive income

Loss after income tax Total comprehensive income	Parent 2023 2022 $ $ (13,227,674) (1,156,989)	Parent 2023 2022 $ $ (13,227,674) (1,156,989)
	(13,227,674)	(1,156,989)

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 24. Parent entity information (continued)

Statement of financial position

Total current assets Total assets Total current liabilities Total liabilities Net assets Equity Issued capital Prepaid capital Share-based payments reserve Options reserve Accumulated losses Total equity	Parent 2023 2022 $ $ 19,261,058 1,547,070	Parent 2023 2022 $ $ 19,261,058 1,547,070
	20,753,159	11,812,646
	1,775,280	232,182
	1,775,280	232,182
	18,977,879	11,580,464
	30,629,168 2,599,485 206,145 245,000 (14,701,919)	12,603,564 - 206,145 245,000 (1,474,245)
	18,977,879	11,580,464

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2023 and 30 June 2022.

Contingent liabilities

The parent entity had no contingent liabilities as at 30 June 2023 and 30 June 2022.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023 and 30 June 2022.

Legal parent entity disclosures

The above information has been extracted from the books and records of the legal parent entity, Polymetals Resources Ltd. Accordingly, the information does not relate to the 'accounting parent' - Golden Guinea Resources SARL.

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for the following:

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment.

Note 25. Asset acquisition

On 12 May 2023, the Company acquired 100% of the ordinary shares of Orana Minerals Pty Ltd (Orana Minerals) for the total consideration transferred of 52,000,000 ordinary shares at $0.32 per share, totalling $16,640,000. This is a mining exploration business and Orana Minerals' wholly-owned subsidiary, Cobar Metals Pty Ltd, has entered into a legally-binding agreement to purchase 3 entities holding the Endeavor lead/zinc/silver mine in Cobar, NSW. The purchase of the Endeavor Mine will not complete until Cobar Metals Pty Ltd has paid Environmental Bonds of $27,996,000, which is expected by 30 April 2024 (refer note 22).

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 25. Asset acquisition (continued)

The shares issued as consideration are subject to a Voluntary Escrow Agreement for 12 months from the date of issue.

The acquisition was approved by shareholders at the general meeting held on 12 May 2023.

With reference to AASB 3 Business combinations , it has been determined that the acquisition is not a business combination and the transaction has therefore been accounted for as an asset acquisition. The cost of the acquisition, including the consideration paid to the vendor, and liabilities assumed, has been allocated across the relative fair value of the assets acquired.

Details of the acquisition are as follows:

Cash and cash equivalents BAS receivable Right to acquire Endeavor mine Other loans Acquisition-date fair value of the total consideration transferred Representing: Polymetals Resources Ltd shares issued to vendor Cash used to acquire Orana Minerals, net of cash acquired: Acquisition-date fair value of the total consideration transferred Less: cash and cash equivalents Less: shares issued by the Company as consideration Net cash received	Fair value $ 4,932 110,050 17,276,822 (751,804)
	16,640,000
	16,640,000
	16,640,000 (4,932) (16,640,000)
	(4,932)

Note 26. Interests in subsidiaries

Polymetals Resources Ltd is the legal parent entity of the consolidated entity and Golden Guinea Resources SARL is the accounting parent entity.

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1:

		Ownership	interest
	Principal place of business /	2023	2022
Name	Country of incorporation	%	%
Golden Guinea Resources SARL	Guinea, Africa	100%	100%
Société Oro Tree Guinea Resources SARL	Guinea, Africa	100%	100%
Orana Minerals Pty Ltd*	Australia	100%	-
Cobar Metals Pty Ltd**	Australia	100%	-

During the year, the Company acquired Orana Minerals Pty Ltd and its subsidiary Cobar Metals Pty Ltd (refer note 25).

** Subsidiary of Orana Minerals Pty Ltd.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 26. Interests in subsidiaries (continued)

Unless otherwise stated, the subsidiaries have share capital consisting solely of ordinary shares that are held directly by the consolidated entity, and the proportion of ownership interests is equal to the proportion of voting rights held by the consolidated entity.

Note 27. Events after the reporting period

On 3 July 2023, 39,383,434 ordinary shares relating to the initial listing of the Company's shares were released from escrow.

On 31 August 2023, 1,185,000 options were exercised for $0.25 per share.

Note 28. Cash flow information

Reconciliation of loss after income tax to net cash used in operating activities

Loss after income tax expense for the year Adjustments for: Depreciation and amortisation Impairment Share-based payments Write off of assets Finance costs - non-cash Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Decrease/(increase) in prepayments Decrease in other operating assets Increase/(decrease) in trade and other payables Net cash used in operating activities	Consolidated 2023 2022 $ $ (7,799,397) (1,156,988) 8,296 2,691 5,699,119 - 135,135 446,065 119,097 - - 14,389 (120,701) 53,608 19,200 (999) 1 - 257,840 (67,669)	Consolidated 2023 2022 $ $ (7,799,397) (1,156,988) 8,296 2,691 5,699,119 - 135,135 446,065 119,097 - - 14,389 (120,701) 53,608 19,200 (999) 1 - 257,840 (67,669)
	(1,681,410)	(708,903)

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 28. Cash flow information (continued)

Non-cash investing and financing activities

Shares issued in relation to asset acquisition Changes in liabilities arising from financing activities Consolidated Balance at 1 July 2021 Net cash used in financing activities Balance at 30 June 2022 Net cash from financing activities Balance at 30 June 2023	Consolidated 2023 2022 $ $ 16,640,000 -	Consolidated 2023 2022 $ $ 16,640,000 -
		Borrowings $ 250,000 (250,000)
		- 1,350,000
		1,350,000

Note 29. Earnings per share

Loss after income tax attributable to the owners of Polymetals Resources Ltd Weighted average number of ordinary shares used in calculating basic earnings per share Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share	Consolidated 2023 2022 $ $ (7,799,397) (1,156,988)	Consolidated 2023 2022 $ $ (7,799,397) (1,156,988)
	Number 89,559,192	Number 79,440,000
	89,559,192	79,440,000
	Cents (8.7) (8.7)	Cents (1.5) (1.5)

Options are not considered dilutive as they are currently out of the money, however, may become dilutive in the future.

Accounting policy for earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Polymetals Resources Ltd, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 30. Share-based payments

A Loan Funded Share Plan (the plan) has been established by the consolidated entity and approved by shareholders at a general meeting held on 29 November 2021, whereby the consolidated entity may, at the discretion of the Nomination and Remuneration Committee, grant Restricted Shares in the Company to certain key management personnel of the consolidated entity. The Plan was established to attract, motivate and retain current and prospective directors, employees and certain contractors of the consolidated entity and provide them with an incentive to deliver growth and value to all shareholders.

Under Accounting Standard AASB 2 Share-based Payment , the issuance of these shares has been accounted for as an insubstance option award. The fair value of these equity instruments was assessed by Directors based on an independent valuation (using an option-pricing model) and are recorded in the Share-based payments reserve (note 17).

The total number of Restricted Shares that can be issued will not exceed 5% of the current issued ordinary share capital of the Company. The Restricted Shares will not carry any voting, dividend or other participation rights (except as required by law) until all performance conditions attaching to them are satisfied, as which point they will convert into fully-paid ordinary shares in the Company at the conversion rate of 1:1.

Set out below are summaries of in-substance options awarded under the plan:

2023 Exercise Grant date Expiry date price 29/11/2021 29/11/2024 $0.25	Balance at the start of the year 3,100,000	Granted -	Exercised -	Expired/ forfeited/ other* (3,100,000)	Balance at the end of the year -
	3,100,000	-	-	(3,100,000)	-

During the year ended 30 June 2023, the in-substance options expired as the directors and the CEO that held the options resigned and therefore are no longer eligible under the plan.

2022 Exercise Grant date Expiry date price 29/11/2021 29/11/2024 $0.00	Balance at the start of the year -	Granted 3,100,000	Exercised -	Expired/ forfeited/ other -	Balance at the end of the year 3,100,000
	-	3,100,000	-	-	3,100,000

The weighted average remaining contractual life of options outstanding at the end of the 2022 financial year was 2.4 years. All options expired during the year ended 30 June 2023.

The total expense arising from share-based payment transactions recognised during the year as part of employee benefits expense was $nil (2022: $201,065).

Accounting policy for share-based payments

Equity-settled and cash-settled share-based compensation benefits are provided to employees.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

Polymetals Resources Ltd Notes to the consolidated financial statements 30 June 2023

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Note 30. Share-based payments (continued)

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to settle the liability.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification.

Polymetals Resources Ltd Directors' declaration 30 June 2023

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In the directors' opinion:

the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

The directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the directors

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_________ David Sproule Executive Chairman

29[th] September 2023

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RSM Australia Partners

Level 13, 60 Castlereagh Street Sydney NSW 2000 GPO Box 5138 Sydney NSW 2001

T +61 (0) 2 8226 4500 F +61 (0) 2 8226 4501 www.rsm.com.au

INDEPENDENT AUDITOR’S REPORT

To the Members of Polymetals Resources Ltd and its controlled subsidiaries

Opinion

We have audited the financial report of Polymetals Resources Ltd (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Group's financial position as at 30 June 2023 and of its financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the 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 (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the financial report, which indicates that the Group recorded a loss after tax of $7,799,397 and had net cash outflows from operating and investing activities of $1,681,410 and $2,397,775 respectively for the year ended 30 June 2023. At 30 June 2023, the Group had net current liabilities of $238,153, net assets of $18,421,591 and had a commitment to pay $27,996,000 in Environmental Bonds (refer to Note 22). The ability of the Group to continue as a going concern is principally dependent upon raising additional capital or securing other forms of financing.

THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING

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As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that 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.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter How our audit addressed this matter

Acquisition accounting Refer to Note 25 in the financial statements

On 12 May 2023, the Company acquired 100% of the ordinary shares of Orana Minerals Pty Ltd (Orana Minerals) for the total consideration transferred of 52,000,000 ordinary shares at $0.32 per share, totalling $16,640,000. This is a mining exploration business and Orana Minerals' whollyowned subsidiary, Cobar Metals Pty Ltd, has entered into a legally-binding agreement to purchase 3 entities holding the Endeavor lead/zinc/silver mine in Cobar, NSW. The purchase of the Endeavor Mine will not complete until Cobar Metals Pty Ltd has paid Environmental Bonds of $27,996,000, which is expected by 30 April 2024 (refer Note 22).

As disclosed in Note 25, the Group’s right to acquire the Endeavor Mine asset at the time of acquisition was $17,276,822.

Our audit procedures included the following:

Obtaining Management’s accounting paper and Share Sale and Purchase Agreement in relation to the acquisition of Orana Minerals Pty Ltd, and understanding the nature of the transaction to confirm that it met the definition of an asset acquisition rather than being a Business Combination under AASB 3;
• Tracing the values for the consideration transferred to the signed Share Sale and Purchase Agreement;
• Assessing care and maintenance costs capitalised since the purchase of the right to acquire the Endeavor Mine to determine if there are any negative indicators that would suggest a potential impairment of the carrying value of the right to acquire the Endeavor Mine at 30 June 2023; and

• Reviewing the adequacy of the relevant disclosures in the financial statements.

Since the purchase of the right to acquire the Endeavor Mine, as part of the agreement, the Group has been paying for the care and maintenance of the Mine.

As disclosed in Note 11, an additional $1,359,835 of care and maintenance costs have been capitalised to intangible assets since the purchase of the right to acquire the Endeavor Mine. The carrying value of the right to acquire the Endeavor Mine of $18,636,657 as at 30 June 2023 which represents a significant asset of the Group.

We considered this transaction to be a key audit matter because of:

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the judgments involved in determining whether the transaction is an asset acquisition rather than a Business Combination;
• the material nature of the arising right to acquire Endeavor Mine asset; and
the treatment of inter-group trading operations in the consolidation process.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2023, but does not include the financial report and the auditor's report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This description forms part of our auditor's report.

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Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 9 to 14 of the directors' report for the year ended 30 June 2023.

In our opinion, the Remuneration Report of Polymetals Resources Ltd, for the year ended 30 June 2023, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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RSM AUSTRALIA PARTNERS

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C J HUME Partner

Sydney, NSW 29 September 2023

Polymetals Resources Ltd Shareholder information 30 June 2023

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The shareholder information set out below was applicable as at 1 September 2023.

Distribution of equitable securities

Analysis of number of equitable security holders by size of holding:

1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Holding less than a marketable parcel	Ordinary shares % of total Number shares of holders issued 18 4.31 62 14.83 109 26.08 159 38.03 70 16.75	Ordinary shares % of total Number shares of holders issued 18 4.31 62 14.83 109 26.08 159 38.03 70 16.75	Options over ordinary shares % of total Number shares of holders issued - - - - - - - - 2 100.00	Options over ordinary shares % of total Number shares of holders issued - - - - - - - - 2 100.00
	418	100.00	2	100.00
	28	6.70	-	-

Equity security holders

Twenty largest quoted equity security holders

The names of the twenty largest security holders of quoted equity securities are listed below:

DEERING NOMINEES PTY LTD MEADOWHEAD INVESTMENTS PTY LTD SPARTA AG AGUIBOU BAH NABLA GLOBAL LIMITED SL JACKSON CONTRACTING PTY LTD KWAN PEK LOY OCEAN PARTNERS UK LIMITED MR PAUL ROBERT MCCALLUM YONG POH WAI SHARON LIM TOMANOVIC MULTIOWN PTY LTD - AFS SUPER FUND A/C MEADOWHEAD INVESTMENTS PTY LTD DAVID WONG FUT JOON BRUCE STAINFORTH KUAN PEK WOON MR STEPHEN LEE JACKSON P & J BUTTIGIEG NOMINEES PTY LTD - BUTTIGIEG FAMILY A/C MR DREW ROBERT FOSTER MCCALLUM P & D SUPER AUSTRALIA PTY LTD - P & D SUPER FUND	Ordinary shares % of total shares Number held issued 21,499,848 14.24 19,997,431 13.24 6,450,000 4.27 3,781,358 2.50 2,354,908 1.56 1,819,846 1.21 1,708,140 1.13 1,612,903 1.07 1,563,839 1.04 1,530,286 1.01 1,512,641 1.00 1,400,000 0.93 1,392,677 0.92 1,313,150 0.87 1,224,553 0.81 1,198,203 0.79 1,083,288 0.72 1,000,000 0.66 1,000,000 0.66 983,684 0.65	Ordinary shares % of total shares Number held issued 21,499,848 14.24 19,997,431 13.24 6,450,000 4.27 3,781,358 2.50 2,354,908 1.56 1,819,846 1.21 1,708,140 1.13 1,612,903 1.07 1,563,839 1.04 1,530,286 1.01 1,512,641 1.00 1,400,000 0.93 1,392,677 0.92 1,313,150 0.87 1,224,553 0.81 1,198,203 0.79 1,083,288 0.72 1,000,000 0.66 1,000,000 0.66 983,684 0.65
	74,426,755	49.28

Unquoted equity securities

Options over ordinary shares issued

Number	Number
on issue	of holders
1,167,000	2

Polymetals Resources Ltd Shareholder information 30 June 2023

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The following person holds 20% or more of unquoted equity securities:

Name	Class	Number held
Paul McCallum	Options over ordinary shares issued	1,000,000

Substantial holders

Substantial holders in the Company are set out below:

	Ordinary	shares
		% of total
		shares
	Number held	issued
DEERING NOMINEES PTY LTD	21,499,848	14.24
MEADOWHEAD INVESTMENTS PTY LTD	19,997,431	13.24

Voting rights

The voting rights attached to ordinary shares are set out below:

Ordinary shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

There are no other classes of equity securities.

Tenements

As at the date of this report, the Company has an interest in the following tenements:

Tenement	Holder	% Interest Expiry date
	Golden Guinea
EL22123 - Alahiné	Resources SARL	- 30/04/2022
	Golden Guinea
EL22694 - Mansala	Resources SARL	- 31/10/2022

Both of the above licences are under renewal and the Board has resolved to place the Guinea tenements on care and maintenance (refer note 12).

AI assistant

POLYMETALS RESOURCES LTD — Annual Report 2023

65598_rns_2023-09-28_9d8ff88a-bdef-4728-be52-d76f4f40ce1b.pdf

ABN 73 644 736 247

Directors

Current:

Former:

Principal activities

Dividends

Review of operations

Summary

Mine Restart Study (MRS)

(a) Mining

(b) Processing

(c) Other

Exploration

(a) In-Mine exploration

(b) Deep Zinc Lode (DZL)

(c) North Western Mineralisation Extension (NMW)

Guinea

Significant changes in the state of affairs

Matters subsequent to the end of the financial year

Likely developments and expected results of operations

Environmental regulation

Information on directors

Company secretary

Meetings of directors

Remuneration report (audited)

Principles used to determine the nature and amount of remuneration

Non-executive directors remuneration

Executive remuneration

Consolidated entity performance and link to remuneration

Remuneration committee

Use of remuneration consultants

Details of remuneration

Amounts of remuneration

Service agreements

Share-based compensation

Issue of shares

Options

Additional information

Additional disclosures relating to key management personnel

Shareholding

Option holding

Other transactions with key management personnel and their related parties

Amounts recognised as borrowings:

This concludes the remuneration report, which has been audited.

Shares under option

Shares issued on the exercise of options

Indemnity and insurance of officers

Indemnity and insurance of auditor

Proceedings on behalf of the Company

Non-audit services

Officers of the Company who are former partners of RSM Australia Partners

Auditor's independence declaration

Rounding of amounts

Auditor

General information

RSM Australia Partners

AUDITOR’S INDEPENDENCE DECLARATION

RSM AUSTRALIA PARTNERS

C J HUME

Polymetals Resources Ltd Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2023

Polymetals Resources Ltd Consolidated statement of changes in equity For the year ended 30 June 2023

Polymetals Resources Ltd Consolidated statement of cash flows For the year ended 30 June 2023

Note 1. Significant accounting policies

New or amended Accounting Standards and Interpretations adopted

Going concern

Note 1. Significant accounting policies (continued)

Basis of preparation

Historical cost convention

Critical accounting estimates

Comparative information

Parent entity information

Principles of consolidation

Revenue recognition

Interest

Note 1. Significant accounting policies (continued)

Current and non-current classification

Impairment of non-financial assets

POLYMETALS RESOURCES LTD Annual Report 2023