TUNGSTEN MINING NL — Interim / Quarterly Report 2022

Mar 8, 2022

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Half Year Financial Report 31 December 2021

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Contents

Contents
	Page
Corporate directory	2
Directors’ report	3
Consolidated statement of profit or loss and other comprehensive income	5
Consolidated statement of financial position	6
Consolidated statement of changes in equity	7
Consolidated statement of cash flows	8
Condensed notes to the consolidated financial statements	9
Directors’ declaration	14
Auditor’s independence declaration	15
Independent auditor’s review report	16

1

Tungsten Mining NL • Half Year Financial Report 31 December 2021

Corporate directory

Board of directors:

Gary Lyons (Non-executive Chairman) Tan Sri Dato' Tien Seng Law (Non-executive Deputy Chairman) Chew Wai Chuen (Non-executive Director) Kong Leng (Jimmy) Lee (Non-executive Director) Teck Siong Wong (Non-executive Director) Russell Clark (Non-executive Director) Wai Cheong Law (Alternate Director)

Chief executive officer:

Craig Ferrier

Company Secretaries:

Mark Pitts Simon Borck

Principal and registered office:

Auditors:

Stantons Level 2, 40 Kings Park Road West Perth WA 6005 Telephone: +61 8 9481 3188 Facsimile: +61 8 9321 1204

Bankers:

National Australia Bank Limited Level 14, 100 St Georges Terrace Perth WA 6000

Share registry:

Automic Group Level 5, 191 St Georges Terrace Perth, WA 6000 Telephone: +61 2 8072 1400

Level 4, 46 Colin Street West Perth WA 6005

Solicitors:

Telephone: +61 8 9486 8492 Facsimile: +61 8 6117 4039 Email: info@tungstenmining.com Website: www.tungstenmining.com

Postal address:

PO Box 452 West Perth WA 6872

Bennett + Co Ground Floor, BGC Centre 28 The Esplanade Perth WA 6000 Telephone: +61 8 6316 2200 Facsimile: +61 8 6316 2211

ABN:

67 152 084 403

Issued capital as at 31 December 2021:

Fully paid ordinary shares: 786,414,272

Parent entity:

Tungsten Mining NL

Stock exchange:

Australian Securities Exchange Limited

ASX company code:

TGN

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Directors’ Report

Your directors submit their report for Tungsten Mining NL (‘the Company’ or ‘the Parent’) and for the Group, being the Company and its controlled entities, for the half year ended 31 December 2021.

Directors

The names of the Company’s Directors in office during the half-year and until the date of this report are set out below. Directors were in office for the entire period unless otherwise stated.

Gary Lyons Non-executive Chairman Tan Sri Dato' Tien Seng Law Non-executive Deputy Chairman Kong Leng (Jimmy) Lee Non-executive Director Chew Wai Chuen Non-executive Director Teck Siong Wong Non-executive Director Russell Clark Non-executive Director Wai Cheong Law Alternate Director

Company Secretaries

Mark Pitts Simon Borck

Dividends

No amounts have been paid or declared by way of dividend by the Company during the half year or in the period to the date of this report.

Principal activities

The principal activity of the Company and its subsidiaries during the course of the half year continued to be the exploration and evaluation of mining projects.

Operating results

The Group’s cash position as at 31 December 2021 was $15,560,725 (Jun 2021: $19,345,209). During the period net cash flow used in operating activities was $3,493,928 (Dec 2020: $2,531,810), with $462,448 (Dec 2020: $519,925) being received from R&D Tax & other government incentives. There were no proceeds (Dec 2020: $704,000) from the issue of shares during the period.

The net loss of the Group for the half year to 31 December 2021 was $3,555,284 (Dec 2020: $2,411,679). This net loss includes a $227,959 (Dec 2020: $Nil) impairment expense to the carrying value of plant and equipment.

Review of operations

The Group continues to implement its strategy directed at building a tungsten business of scale, with a current resource inventory of 41 million MTU’s (metric tonne units) of WO3 (tungsten trioxide), 71,000 tonnes of Mo (molybdenum), 1 million ounces of Au (gold), 44 million ounces of Ag (silver) and 92,000 tonnes of Cu (copper).

The Mt Mulgine Project remained the highest priority development project for the Group, responsible for the majority of activities. Since reporting the successful maiden Ore Reserve and positive Pre-Feasibility Study for the Mt Mulgine Project, announced to the ASX market on 29 January 2021, the Company has continued to advance the feasibility studies for this Project and seek suitable partners capable of supporting the Project’s development.

The Company announced to the ASX market, subsequent to period end, that a non-binding Memorandum of Understanding with MCC International Incorporation Ltd (MCCI), a major global engineering company, to establish a programme of collaboration between MCCI and the Company in respect to the completion of feasibility studies at Mt Mulgine.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Directors’ Report

Events subsequent to balance date

There have been no other matters or circumstances that have arisen since 31 December 2021 that have significantly affected or may significantly affect:

• (a) the Group’s operations in future years; or

• (b) the results of those operations in future years; or (c) the Group’s state of affairs in future years.

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 on page 15.

Signed in accordance with a resolution of the Directors.

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Gary Lyons Chairman Perth, 9 March 2022

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Consolidated statement of profit or loss and other comprehensive income

For the half year ended 31 December 2021

	Consolidated
	December 2021 December 2020
Note	$ $
Revenue Research & Development tax offset Interest Sale of tenements Other Total revenue Expenses Loss on sale of plant & equipment 6 Impairment of plant & equipment 6 Administration expenses Exploration expenses Remuneration expenses Loss before income tax Income tax expense/benefit Loss for the period Other comprehensive income Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income after tax Total comprehensive loss for the period after tax Loss attributable to members of the Parent Total comprehensive loss attributable to members of the Parent Basic loss per share in cents	462,448 452,231 20,214 70,381 - 118,763 20,786 76,249
	503,448 717,624 (175,638) - (227,959) - (477,513) (504,777) (1,942,364) (1,142,599) (1,235,258) (1,481,927)
	(3,555,284) (2,411,679) - -
	(3,555,284) (2,411,679)
	- - - -
	- -
	(3,555,284) (2,411,679)
	(3,555,284) (2,411,679)
	(3,555,284) (2,411,679)
	(0.45) (0.31)

Diluted loss per share is not shown as it would not reflect an inferior position.

The above statement should be read in conjunction with the accompanying notes.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Consolidated statement of financial position

As at 31 December 2021

	Consolidated
	December 2021 June 2021
Note	$ $
Current assets Cash and cash equivalents 3 Trade and other receivables 4 Other financial assets Total current assets Non-current assets Exploration and evaluation 5 Plant and equipment 6 Right of use assets Total non-current assets Total assets Current liabilities Trade and other payables 7 Lease Liabilities Provisions 8 Total current liabilities Non-current liabilities Lease Liabilities Provisions 8 Total non-current liabilities Total liabilities Net assets Equity Reserves 9 Issued capital 10 Accumulated losses Total equity	15,560,725 19,345,209 674,700 58,206 381,343 320,058
	16,616,768 19,723,473
	19,707,196 19,707,196 1,970,761 2,908,375 425,113 533,715
	22,103,070 23,149,286
	38,719,838 42,872,759
	491,765 931,735 267,809 245,879 283,210 328,741
	1,042,784 1,506,355
	270,066 410,458 454,038 447,712
	724,104 858,170
	1,766,888 2,364,525
	36,952,950 40,508,234
	7,851,718 7,851,718 82,460,127 82,460,127 (53,358,895) (49,803,611)
	36,952,950 40,508,234

The above statement should be read in conjunction with the accompanying notes.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Consolidated statement of changes in equity

For the half year ended 31 December 2021

	Issued Capital Shares to be issued Reserves Accumulated Total Losses
	$ $ $ $ $
At 1 July 2021 Loss for the period Other comprehensive income Total comprehensive loss for the period At 31 December 2021 At 1 July 2020 Loss for the period Other comprehensive income Total comprehensive loss for the period Transactions with owners in their capacity as owners: Shares to be issued on exercise of share options At 31 December 2020	82,460,127 - 7,851,718 (49,803,611) 40,508,234
	- - - (3,555,284) (3,555,284) - - - - -
	- - - (3,555,284) (3,555,284)
	82,460,127 - 7,851,718 (53,358,895) 36,952,950
	81,760,889 - 7,851,718 (45,080,956) 44,531,651
	- - - (2,411,679) (2,411,679) - - - - -
	- - - (2,411,679) (2,411,679)
	- 704,000 - - 704,000
	81,760,889 704,000 7,851,718 (47,492,635) 42,823,972

The above statement should be read in conjunction with the accompanying notes.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Consolidated statement of cash flows

For the half year ended 31 December 2021

	Consolidated
	December 2021 December 2020
	$ $
Cash flows from operating activities Payments to suppliers and employees R&D Tax & other government incentives received Interest received Other proceeds Net cash used in operating activities Cash flows from investing activities Payments for property, plant & equipment Proceeds from the sale of tenements Security deposits refunded Net cash (used in)/from investing activities Cash flows from financing activities Lease payments Proceeds from shares to be issued Net cash (used in)/from financing activities Net increase/(decrease) in cash Adjustment for restricted cash held at balance date Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	(3,974,233) (3,039,495) 462,448 519,925 17,857 79,688 - 25,347
	(3,493,928) (2,531,810)
	(127,997) (6,636) - 125,000 - 7,500
	(127,997) 125,864
	(162,559) (117,275) - 704,000
	(162,559) 586,725
	(3,784,484) (1,701,946) - (704,000) 19,345,209 22,956,290
	15,560,725 20,550,344

The above statement should be read in conjunction with the accompanying notes.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Condensed notes to the consolidated financial statements

NOTE 1: BASIS OF PREPARATION OF THE HALF-YEARLY FINANCIAL REPORT

The consolidated financial report is a general purpose condensed financial report for the half-year ended 31 December 2021, which has been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001 and this financial report was authorised for issue in accordance with a resolution of the directors on 8 March 2022.

It is recommended that the half-year consolidated financial statements be read in conjunction with the annual financial report for the year ended 30 June 2021 and considered with any public announcements made by Tungsten Mining NL during and subsequent to the half-year ended 31 December 2021 in accordance with continuous disclosure obligations of the ASX Listing Rules .

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

The half-year consolidated financial statements have been prepared on the basis of accrual accounting and historical costs.

Changes in accounting standards

The Group has considered the implications of new and amended Accounting Standards effective for annual reporting periods beginning on or after 1 July 2021 but determined that their application to the financial statements is either not relevant or not material.

NOTE 2: SEGMENT REPORTING

The Group has based its operating segments on the internal reports that are reviewed and used by the executive management team in assessing performance and in determining the allocation of resources.

The Group currently does not have production and is only involved in exploration. As a consequence, activities in the operating segment are identified by management based on the manner in which resources are allocated, the nature of the resources provided and the identity of the manager and country of expenditure. Information is reviewed on a whole of entity basis.

Based on these criteria the Group has only one operating segment, being exploration, and the segment operations and results are reported internally based on the accounting policies as described in the annual financial report for the year ended 30 June 2021 on a whole of entity basis.

NOTE 3: CASH AND CASH EQUIVALENTS

	Consolidated
	December 2021 June 2021
	$ $
Cash at bank Term deposits	2,364,251 2,154,831 13,196,474 17,190,378
	15,560,725 19,345,209

Cash and cash equivalents earn interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying period of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Condensed notes to the consolidated financial statements

NOTE 4: TRADE & OTHER RECEIVABLES

		Consolidated
		December 2021 June 2021
		$ $
Trade receivables		638,000 -
Trade receivables – associate entity		3,960 -
GST receivable		22,066 26,262
Interest receivable		6,674 4,318
Other receivables		4,000 27,626
		674,700 58,206

Trade receivables

During the period, the Company executed an agreement for the sale of an item of plant and equipment, which included cash consideration of $580,000 ($638,000 GST inclusive) (see note 6). This amount was received subsequent to the period end. None of the receivables are past due or impaired

NOTE 5: EXPLORATION AND EVALUATION

	Consolidated
	December 2021 June 2021
	$ $
Capitalised exploration and evaluation	19,707,196 19,707,196
	19,707,196 19,707,196

Mineral acquisition costs

The Group capitalises the acquisition costs in accordance with its accounting policy for exploration and evaluation expenditure. The ultimate recoupment of acquisition costs carried forward in the exploration and evaluation phases are dependent on the successful development and commercial exploitation or sale of the respective areas. There was no movement in capitalised exploration and evaluation during the period.

NOTE 6: PLANT AND EQUIPMENT

	Consolidated
	December 2021 June 2021
	$ $
Plant and equipment	1,970,761 2,908,375
	1,970,761 2,908,375

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Condensed notes to the consolidated financial statements

NOTE 6: PLANT AND EQUIPMENT (CONTINUED)

The following table illustrates the movement in carrying value of Plant and equipment.

	Processing Plant Office Equipment Exploration Equipment Computer Software Total
	$ $ $ $ $
Opening net carrying value Cost of additions Disposals Impairment Depreciation charge Closing net carrying value	2,667,347 61,167 163,746 16,115 2,908,375 - - 127,997 - 127,997 (801,163) (558) - - (801,721) (227,959) - - - (227,959) - (15,500) (15,064) (5,367) (35,931)
	1,638,225 45,109 276,679 10,748 1,970,761

Processing Plant

The processing plant above includes a dismantled mineral processing facility and an unused x-ray ore sorter, including spare parts, that were acquired in prior financial years. The processing plant is held in storage and is not currently being depreciated as it is not in use.

Disposal of Processing Plant

During the period the Company executed an agreement for the disposal of an unused x-ray ore sorter, with a carrying value of $801,163 for total consideration of $625,525. This consideration consisted of $580,000 cash and the wavier of an amount owing of $45,525 pursuant to the terms of the original acquisition agreement. This disposal resulted in a loss on sale of $175,638.

Impairment of Processing Plant

In view of the sale transaction described above, the carrying values of plant and equipment were reviewed for impairment and written down to its estimated recoverable amount of $1,638,225. The write down resulted in an impairment expense of $227,959.

NOTE 7: TRADE AND OTHER PAYABLES

	Consolidated
	December 2021 June 2021
	$ $
Trade payables Accrued expenses Other payables	205,209 507,235 163,890 352,971 122,666 71,529
	491,765 931,735

Nature of trade and other payables

These unsecured payables are non-interest bearing and are generally on 30-90 days terms. Due to the short term nature of these payables, the carrying value is assumed to approximate their fair value.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Condensed notes to the consolidated financial statements

NOTE 8: PROVISIONS

	Consolidated
	December 2021 June 2021
	$ $
Current Provision for rehabilitation Provision for employee annual leave Provision for employee long service leave Non-current Provision for rehabilitation Provision for employee long service leave Total Provisions Provision for rehabilitation	9,000 25,000 193,249 226,690 80,961 77,051
	283,210 328,741
	420,000 420,000 34,038 27,712
	454,038 447,712
	737,248 776,453

The non-current provision for rehabilitation includes an amount of $400,000 which was assumed in prior financial years as part of the Watershed acquisition.

NOTE 9: RESERVES

	Consolidated
	December 2021 June 2021
	$ $
Share option reserve Loan-funded share scheme reserve Vested and exercisable options	855,398 855,398 6,996,320 6,996,320
	7,851,718 7,851,718

There were no options issued or exercised during the period and there were no outstanding options on issue at period end.

NOTE 10: ISSUED CAPITAL

	Consolidated
	December 2021 June 2021
	$ $
Ordinary shares fully paid	82,460,127 82,460,127
	82,460,127 82,460,127
The following table illustrates the movement in ordinary shares
	$ Number
Balance at the beginning of period Movement during the period Balance at the end of period	82,460,127 786,414,272 - -
	82,460,127 786,414,272

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Condensed notes to the consolidated financial statements

NOTE 11: CONTROLLED ENTITIES

Tungsten Mining NL is the ultimate parent entity of the consolidated group. The following were controlled entities at period end and have been included in the consolidated financial statements. All shares held are ordinary shares.

Subsidiaries	Country of Incorporation	Percentage Interest Held 31 Dec 2021	Percentage Interest Held 30 Jun 2021	Date Acquired/ Incorporated
SM3-W Pty Ltd	Australia	100	100	13/12/2012
Pilbara Tungsten Pty Ltd	Australia	100	100	30/11/2015
Mid-West Tungsten Pty Ltd	Australia	100	100	30/11/2015
North Queensland Tungsten Pty Ltd	Australia	100	100	09/08/2018
Territory Tungsten Pty Ltd	Australia	100	100	01/03/2019

NOTE 12: CONTINGENT LIABILITIES

A claim for unspecified damages was filed in the District Court of Western Australia in June 2021 in relation to alleged loss and damage suffered as a result of a drilling incident that occurred at the Mt Mulgine Project in July 2019. Mid-West Tungsten Pty Ltd, a wholly owned subsidiary of Tungsten Mining NL has been named as the second defendant and is defending the claim, at the date of this report it is not possible to estimate a contingent claim amount.

The Group is not aware of any other significant contingent liabilities since the last reporting date.

NOTE 13: EVENTS SUBSEQUENT TO BALANCE DATE

There have been no other matters or circumstances that have arisen since 31 December 2021 to the date of this report that have significantly affected or may significantly affect:

• (a) the group’s operations in future years; or

• (b) the results of those operations in future years; or

• (c) the group’s state of affairs in future years.

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Directors’ Declaration

In accordance with a resolution of the directors of Tungsten Mining NL, I state that:

In the opinion of the Directors:

• (a) The financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:

• i. Giving a true and fair view of the financial position as at 31 December 2021 and the performance for the half-year ended on that date of the Group; and

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

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

On behalf of the Board,

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Gary Lyons Chairman Perth, 9 March 2022

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Auditor’s independence declaration

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Independent auditor’s review report

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Tungsten Mining NL • Half Year Financial Report 31 December 2021

Independent auditor’s review report

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Tungsten Mining NL • Half Year Financial Report 31 December 2021