UNION STAR METALS LTD — Capital/Financing Update 2021

Feb 14, 2021

Thred Limited

ACN 124 541 466

to be renamed PVW Resources Limited

SUPPLEMENTARY PROSPECTUS

1. IMPORTANT INFORMATION

This supplementary prospectus ( supplementary prospectus ) supplements, and must be read together with, the prospectus dated 4 December 2020 ( prospectus ) issued by Thred Limited ACN 124 541 466 ( company ).

This supplementary prospectus is dated 16 December 2020 and was lodged with ASIC on that date. ASIC, ASX and their respective officers take no responsibility for the contents of this supplementary prospectus or the investment to which the prospectus relates.

Other than as set out below, all details in relation to the prospectus remain unchanged.

Terms and abbreviations defined in the prospectus have the same meaning in this supplementary prospectus .

This supplementary prospectus will be issued as an electronic prospectus, copies of which can be downloaded from the website of the company at https://www.thredltd.com.au/investors/asx-announcements/.

This is an important document and should be read in its entirety. If you do not understand it, you should consult your professional advisers without delay.

PURPOSE OF SUPPLEMENTARY PROSPECTUS

The purpose of this supplementary prospectus is to increase the amount that the company may raise under the public offer from $2,500,000 to $4,500,0000 and provide updated information in the prospectus to reflect the increased capital raising.

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3.

OVERSUBSCRIPTIONS

As at the date of this supplementary prospectus , the company has received significant interest in the public offer from investors. The board considers that the strong demand for shares under the public offer is a positive endorsement of the company’s proposed acquisition of PVW Resources NL and its business strategy.

The board (in consultation with the lead manager ) has assessed this very strong demand for shares and determined that it is in the company’s best interests to increase the capital to be raised under the public offer . In making this determination, the board has considered (among other things):

• the additional funds to be available for advancing exploration activities at the projects ;

• the future availability of capital to fund the company’s working capital requirements, noting in particular the potential impediments associated with raising equity capital during the COVID-19 pandemic; and

• the additional liquidity that may be gained from introducing additional new shareholders.

The board has determined to allow for up to an additional $2,000,000 (i.e. 10,000,000 additional shares ) to be raised under the public offer . Accordingly, under the public offer , the company may issue up to a total of 22,500,000 new shares to raise up to $4,500,000 (before costs).

4.

AMENDMENTS TO THE PROSPECTUS

4.1. Introduction

The prospectus is amended on the basis set out in this Section 4 as a result of the increase in the amount to be raised under the public offer as discussed in Section 3 above.

4.2. Front cover

The details of the public offer on the front cover of the prospectus are replaced with the following:

“For the offer of up to 22,500,000 shares at an issue price of $0.20 each to raise up to $4,500,000 (before costs) ( public offer ).”

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4.3. Letter from the Chairman

The introductory paragraph in the Letter from the Chairman on page 9 of the prospectus is amended to read:

“On behalf of the directors of Thred Limited (to be re-named PVW Resources Limited) ( company ), I am delighted to invite you to participate in an issue of shares to raise up to $4,500,000 through an issue of up to 22,500,000 shares at an issue price of $0.20 per share ( public offer ).”

4.4.

Section 5 - Investment summary

The items of the Investment Summary in Section 5 of the prospectus listed below are replaced with the following:

Topic	Summary	More information
Introduction
What is the public offer?	The_company_is offering up to 22,500,000_shares_, each at an issue price of $0.20, to raise up to $4.5 million (before costs of the_offers_). The_minimum subscription_is 12,500,000_shares_to raise $2.5 million. The_public offer_is not underwritten.	SectionError! Reference source not found.
The acquisition of PVW
What approvals will be sought at the general meeting?	At the_general meeting_to be held on 22 December 2020, the_company_will seek shareholder_approval to: • the change in nature and scale of the activities of the_company; • consolidate the company’s capital on a 1- for-75 basis; • issue up to 24,242,424_consideration shares_ to the_PVW vendors_; • issue up to 22,500,000_shares_under the public offer; • issue 484,848_shares_to_CPS_in accordance with the_broker mandate_; • issue 2,400,000_director options_to the_current_ directors; • issue 3,200,000_performance rights_to the proposed directors; • appoint Messrs George Bauk and Colin McCavana as_directors_; • amend the_constitution_; and • change the_company’s_name to “PVW Resources Limited”.	SectionError! Reference source not found.

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Topic	Summary	More information
The offers
Who is the lead manager to the public offer?	The company has appointed_CPS_as lead manager to the_public offer_.CPS_has agreed to raise up to $4.5 million on a “best endeavours” basis and will receive a lead manager fee of 6% of the funds raised under the_public offer.	SectionError! Reference source not found.

4.5. Section 6 – Details of the offers

Section 6.1.1 of the prospectus is amended to read:

“By this prospectus, the company offers up to 22,500,000 shares at an issue price of $0.20 each to raise up to $4,500,000 (before the costs of the offers ) ( public offer ).

4.6. Section 7 – Purpose and effect of the offers

(a) Section 7.1.1 of the prospectus is amended to read:

“The purpose of the public offer is to raise up to $4,500,000 (before the costs of the offers ) to provide the company with additional working capital to assist in the funding of the company's future business activities.”

(b) The table in Section 7.1.2 of the prospectus is replaced with the following:

Sources of funds	subscription amount	%	subscription amount	%
	$2,500,000		$4,500,000
Cash on hand of the_company_and_PVW_	2,300,000	47.9	2,300,000	33.8
Funds raised under the_public offer_	2,500,000	52.1	4,500,000	66.2
Total funds available	4,800,000	100.0	6,800,000	100.0
Use of funds
Exploration of Leonora Gold Project	1,175,000	24.5	1,750,000	25.7
Exploration of Tanami Gold Project	1,750,000	36.5	2,450,000	36.0
Exploration of Kalgoorlie Gold Project	500,000	10.4	700,000	10.3
Administration expenses	800,000	16.7	1,150,000	16.9
Working capital	100,000	2.1	150,000	2.2
Expenses associated with the_acquisition_	475,000	9.9	600,000	8.8
(including expenses of the_offers_)
Total use of funds	4,800,000	100.0	6,800,000	100.0

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• (c) Section 7.2 (Effect of the offers) of the prospectus is amended to read:

“The principal effect of the offers , assuming the public offer is fully subscribed, will be to:

• (a) increase the company's cash reserves by approximately $4.0 million (after adding PVW’s cash holdings and deducting the estimated expenses of the offers ) immediately after completion of the offers ;

• (a) increase the number of shares on issue from 23,858,545 as at the date of this prospectus (on a post-consolidation basis) to 71,085,818 shares immediately after completion of the offers ;

• (b) increase the number of options on issue from nil as at the date of this prospectus to 2,400,000 options immediately after completion of the offers ; and

• (c) increase the number of performance rights on issue from nil as at the date of this prospectus to 3,200,000 performance rights immediately after completion of the offers .”

• (d) The table in Section 7.3.2 of the prospectus is replaced with the following:

	ordinary shares	options	performance rights
currently on issue	23,858,545	-	-
public offer	22,500,000	-	-
vendor offer	24,242,424	-	-
CPS offer	484,848	-	-
director offer	-	2,400,000	-
rights offer	-	-	3,200,000
total after offers	71,085,818	2,400,000	3,200,000

4.7. Section 9 – Company and PVW overview

• 4.7.1. The table in Section 9.5 of the prospectus is replaced with the following:

Exploration by project

Activity	Year 1	Year 2	Total
Leonora Gold Project	700,000	900,000	1,600,000
Tanami Gold Project	1,100,000	1,300,000	2,400,000
Kalgoorlie Gold Project	450,000	450,000	900,000
Total Costs	2,250,000	2,650,000	4,900,000

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4.8. Section 11 – investigating accountant’s report

A supplement to the investigating accountant’s report is annexed to this supplementary prospectus as Annexure A.

4.9. Section 12 – Risk factors

• (a) Section 12.2.3 (Potential dilution) of the prospectus is amended to read:

“Upon implementation of the offers , assuming the public offer is fully subscribed, the number of shares will increase from 23,858,545 currently on issue (on a post- consolidation basis) to 71,085,818. This means that each existing share will represent a lower proportion of the ownership of the company .

It is not possible to predict what the value of the company or a share will be following the completion of the offer being implemented and the directors do not make any representation as to such matters.”

• (b) Section 12.2.4 (liquidity risk) of the prospectus is amended to read:

“On completion , the company proposes to issue shares to the PVW vendors (i.e. consideration shares ) and to CPS under the CPS offer . The company understands that ASX will treat at least some of these securities as restricted securities in accordance with Chapter 9 of the listing rules .

The company has made submissions to ASX for “look-through relief” in respect of consideration shares to be issued to most of the PVW vendors (based on the time those PVW vendors subscribed for PVW shares ). In the absence of this relief, all consideration shares will be escrowed for a period of either 12 or 24 months (depending on the relevant PVW vendor’s relationship with the company ).

However, if look-through relief is granted, the number of consideration shares that will be subject to ASX -imposed escrow will be reduced those held by PVW vendors who are related parties of the company , or associates of those related parties – in effect, Messrs Bauk and McCavana.

Based on the post- acquisition capital structure (assuming no further shares are issued), the consideration shares will equate to approximately 34.1% of the issued share capital on an undiluted basis (assuming the public offer is fully subscribed). This could be considered an increased liquidity risk as a significant proportion of issued capital may not be able to be traded freely for a period of time.”

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4.10. Section 13 – material contracts

Section 13.2.3 of the prospectus is amended to read:

“The material terms of the broker mandate are as follows:

• (a) CPS has been engaged to provide corporate advisory and capital raising services on an exclusive basis, including acting as lead manager to the public offer ;

• (b) CPS has agreed to place, on a best endeavours basis, up to 22,500,000 shares at an issue price of $0.20, to raise up to $4,500,000.

• (c) The company must pay CPS :

• (i) a capital raising fee equal to 6% on all funds raised under the public offer ; and

• (ii) a monthly corporate advisory of $5,000 for a period of 12-months from execution of the broker mandate .

• (d) The broker mandate otherwise contains terms and conditions considered standard for agreements of this nature.”

4.11. Section 14 – additional information

• (a) Section 14.5.5 of the prospectus is amended to read:

“CPS will be paid a lead manager fee of $270,000 in respect of the public offer (assuming the public offer is fully subscribed). CPS has also acted as the company’s corporate advisor since April 2018 and is entitled to an introduction fee of 484,848 shares pursuant to the terms of the broker mandate , subject to completion occurring. It has not otherwise been paid fees by the company during the 2 years prior to the lodgement of this prospectus with ASIC .”

• (b) Section 14.8 (Expenses of the offers) of the prospectus is replaced with the following:

In the event that the public offer is fully subscribed, the total expenses of the offers (inclusive of the costs associated with the other elements of acquisition ) are estimated to be approximately $630,000 (excluding GST) and are expected to be applied towards the items set out in the table below:

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	$
ASIC lodgement fees	4,008
ASX listing fees	81,473
lead manager’s fee	270,000
legal, accounting and consultants’ fees	257,000
printing & distribution	5,000
miscellaneous	12,519
total	630,000

4.13. Appendix A – independent geological report

An updated independent geological report is annexed to this supplementary prospectus as Annexure B.

5. DIRECTORS’ AUTHORISATION

This supplementary prospectus is issued by the company and its issue has been authorised by a resolution of the directors . In accordance with section 720 of the Corporations Act , each director and proposed director has consented to the lodgement of this prospectus with ASIC .

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David Wheeler

Non-Executive Chairman

for and on behalf of

Thred Limited

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Annexure A – supplement to investigating accountant’s report

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Appendix 4

THRED LIMITED AND ITS SUBSIDIARIES AUDITED CONSOLIDATED STATUTORY HISTORICAL STATEMENT OF FINANCIAL POSITION AND UNAUDITED CONSOLIDATED PRO FORMA HISTORICAL STATEMENT OF FINANCIAL POSITION

The unaudited pro-forma consolidated statement of financial position represents the audited consolidated Statutory Historical Statement of Financial Position of the Company as at 30 June 2020 adjusted for subsequent events and pro-forma transactions outlined in Note 1 of Appendix 4. It should be read in conjunction with the notes to the historical and pro-forma financial information.

Note Current assets Cash and cash equivalents 4 Trade and other receivables 5 Other assets Non-current assets Property, plant & equipment 6 Total assets Current liabilities Trade and other payables 7 Provisions 8 Borrowings Non-current liabilities Provisions 8 Total Liabilities Net Assets Equity Share capital 9 Reserves 10 Retained earnings Equity attributable to the owners of Thred Limited Non-controlling interest Total Equity	Actual 30 June 2020 Unaudited Pro-Forma 30 June 2020 A$ A$ 2,288,868 6,444,665 17,503 29,014 39,190 39,190
	2,345,561 6,512,869
	- 7,714
	- 7,714
	2,345,561 6,520,583
	96,353 131,935 - 8,010 28,859 28,859
	125,212 168,804
	- 300,000
	- 300,000
	125,212 468,804
	2,220,349 6,051,779
	35,758,537 12,908,793 760,579 419,100 (34,298,770) (7,276,114)
	2,220,346 6,051,779 3 0
	2,220,349 6,051,779

Investors should note that past results are not a guarantee of past performance.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

1. The Preparation of the Unaudited consolidated Pro-Forma Historical Statement of Financial Position

The 30 June 2020 audited consolidated statement of financial position of THD has been adjusted to reflect the impact of the following proposed transactions or actual transactions which have taken place subsequent to 30 June 2020:

• The acquisition by THD of 100% of the issued share capital of PVW, satisfied by the issue of 24,242,424 THD shares at A$0.20 per share (on a post-consolidation basis). As the acquisition is required to be accounted for as a reverse acquisition the pro-forma financial information has therefore been prepared as a continuation of the business and operations of PVW.

• The consolidation of the Company’s capital on the basis that every 75 shares be consolidated into 1 share.

• Pursuant to the Supplementary Prospectus, a capital raising of A$4,500,000. For the purposes of the pro forma, we have assumed A$4,500,000 will be raised via the issue of 22,500,000 ordinary shares for A$0.20 per share (on a post consolidation basis). If more capital was to be raised then the impact would be to increase cash and cash equivalents and issued capital by the amount of the additional cash raised, net of additional costs incurred in raising this additional capital.

• The payment from cash of estimated total expenses of the offer of A$630,000 of which A$533,814 has been debited to issued capital as share issue costs and the balance of A$96,186 expensed to accumulated losses.

• The issue of 2,400,000 options to the Directors with an exercise price of A$0.30 per option and an expiry date of 3 years after the issue date. These options have been valued using the Black Scholes method at A$0.1067 per option to give a total value of A$256,092. This has been expensed in full to accumulated losses.

• The issue of 484,848 ordinary shares for A$0.20 per share (on post consolidation basis) totaling A$96,970. This expense has been fully netted off against share capital.

• The issue of 3,200,000 performance rights to the Directors, with below vesting conditions. These performance rights have been valued and will be expensed on a straight-line basis across the vesting period. Nil expense has been allocated to these as at 30 June 2020, therefore no expenditure has been allocated to accumulated losses as at 30 June 2020.

• 800,000 performance rights vesting on completion of a minimum of 3,000m of drilling;

• 800,000 performance rights vesting on a project having a minimum of 3 significant drilling intersections of at least 5m at 5g/t or equivalent up to 25m @ 1g/t in 3 holes at a minimum step out of 50m x 50m;

• 800,000 performance rights vesting on the company achieving a JORC-compliant resource of at least 500,000 ounces with a minimum grade of 1g/t; and

• 800,000 performance rights vesting on the completion of a scoping study on a project.

• The issue of 4,950,278 ordinary shares of PVW in settlement of outstanding fees payable to Directors and the company Secretary, at a deemed issue price of $0.06, totaling $297,017. This expense has been fully netted off against share capital.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

2. Basis of Preparation

The consolidated Statutory Historical Financial Information has been prepared in accordance with the recognition and measurement principles prescribed in Australian Accounting Standards (“AAS”) (including the Australian Accounting Interpretations), issued by the Australian Accounting Standards Board, which are consistent with International Financial Reporting Standards (“IFRS”) and Interpretations issued by the International Accounting Standards Board.

The Pro Forma historical Financial Information has been prepared in accordance with the recognition and measurement requirements of AAS, other than that it includes certain adjustments which have been prepared in a manner consistent with AAS, which reflect the impact of certain transactions as if they had occurred on or before 30 June 2020

The Financial Information is presented in an abbreviated form and does not include all of the disclosures, statements or comparative information required by AAS applicable to annual financial reports prepared in accordance with the Corporations Act.

Accounting policies have been consistently applied throughout the periods presented. Significant accounting policies of the Company, relevant to the Financial Information are set out in Section 9 below.

Acquisition of PVW

The Company has agreed to acquire 100% of the issued share capital of PVW. Under the terms of AASB 3 “ Business Combinations ”, PVW is deemed to be the accounting acquirer in the business combination. Consequently, the transaction has been accounted for as a reverse acquisition.

The pro-forma financial report has been prepared as a continuation of the business and operations of PVW.

Going concern

This financial information has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The ability of the Company to meet its existing and future obligations will depend on its ability to raise funds pursuant to the Prospectus or from other sources and to complete the acquisition of PVW.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

3. Business Combination

Reverse acquisition of THD by PVW

Under the terms of AASB 3 “Business Combinations”, PVW is deemed to be the accounting acquirer in the business combination. Consequently, the transaction has been accounted for as a reverse acquisition.

PVW, as the deemed acquirer, will account for the acquisition of THD. Accordingly, the pro-forma consolidated statement of financial position of THD as at 30 June 2020 incorporates the net assets of THD and PVW as if the group was headed by PVW.

30 June 2020 has been deemed as the acquisition date for the purposes of the pro-forma, with the net assets of PVW as at 30 June 2020 being recorded at their book value and the net assets of THD as at 30 June 2020 being recorded at their fair value.

Details of the fair value of assets and liabilities acquired, and excess consideration are as follows:

Purchase consideration: Being the deemed fair value of consideration paid for THD Less: fair value of net identifiable assets acquired on reverse acquisition (see below) Premium paid	A$ 4,771,709 (2,220,349)
	2,551,360

The premium paid has been expensed in the statement of profit or loss and other comprehensive income as a cost of listing.

Details of the fair value of identifiable assets and liabilities of THD as at 30 June 2020 (deemed acquisition date) are as follows:

Assets Cash and cash equivalents Trade and Other receivables Other current assets Liabilities Trade and other payables Borrowings Net liabilities	Book carrying value Actual 30 June 2020 A$ Fair value Pro-forma 30 June 2020 A$ 2,288,868 2,288,868 17,503 17,503 39,190 39,190 (96,353) (96,353) (28,859) (28,859)
	2,220,349 2,220,349

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

Appendix 4 NOTES TO THE CONSOLIDATED FINANCIAL POSITION
4. Cash and Cash Equivalents CURRENT Cash at bank and on hand The movements in cash at bank are as follows: Actual – THD holding as at 30 June 2020 Actual – PVW holding as at 30 June 2020 Pro-forma adjustments: Issue of shares by THD pursuant to Prospectus before costs (assuming minimum is raised) Costs of the offer and the acquisition 5. Trade and Other Receivables CURRENT Trade and other receivables The movements in trade and other payables are as follows: Actual – THD holding as at 30 June 2020 Actual – PVW holding as at 30 June 2020 6. Property, Plant and Equipment NON – CURRENT Total Plant and Equipment The movements in provisions are as follows: Actual – THD as at 30 June 2020 Actual – PVW as at 30 June 2020 (Computer Equipment and Motor Vehicles)	Actual 30 June 2020 A$ 2,288,868	Pro-Forma Consolidated 30 June 2020 A$ 6,444,665
	17,503	2,288,868 285,797 4,500,000 (630,000)
		6,444,665
		29,014
	-	17,503 11,511
		29,014
		7,714
		- 7,714
		7,714

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

Appendix 4 NOTES TO THE CONSOLIDATED FINANCIAL POSITION
7. Trade and Other Payables CURRENT Trade and other payables The movements in trade and other payables are as follows: Actual – THD holding as at 30 June 2020 Actual – PVW holding as at 30 June 2020 Pro-forma adjustments: Subsequent events – PVW issued 3,630,278 ordinary shares in settlement of outstanding fees payable to Directors and the Company Secretary at an issue price of $0.06. 8. Provisions CURRENT Annual leave provision The movements in provisions are as follows: Actual – THD as at 30 June 2020 Actual – PVW as at 30 June 2020 NON - CURRENT Provision for rehabilitation The movements in provisions are as follows: Actual – THD as at 30 June 2020 Actual – PVW as at 30 June 2020	Actual 30 June 2020 A$ 96,353	Pro-Forma Consolidated 30 June 2020 A$ 131,935
	-	96,353 253,399 (217,817)
		131,935
		8,010
	-	- 8,010
		8,010
		300,000
		- 300,000
		300,000

The provision for rehabilitation relates to the estimated cost of rehabilitation work to be carried out in relation to the Jungle Well tenement.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

Appendix 4 NOTES TO THE CONSOLIDATED FINANCIAL POSITION
9. Share Capital Movements in ordinary share capital Ordinary issued and paid up share capital Actual balance as at 30 June 2020 Consolidation on a 12 for 1 basis Balance as at 30.06.2020 on a post consolidation basis Pro-forma adjustments: Reverse acquisition adjustment to reverse opening share capital value in THD Reverse acquisition adjustment to recognise opening share capital value in PVW Deemed consideration for the issue of ordinary shares by THD as purchase consideration for PVW Shares issued pursuant to current prospectus to raise A$4,500,000 at $0.20 per share on a post consolidation basis Shares issued to Advisors at $0.20 per share on a post consolidation basis Transaction costs relating to capital raising Issue of 4,950,278 PVW ordinary shares in settlement of fees payable to Directors and the company Secretary, at $0.06 per share Pro-forma balance as at 30 June 2020 10. Reserves Total Reserves Foreign currency translation reserve Option reserve The movements in reserves are as follows: Actual – THD holding as at 30 June 2020 Actual – PVW holding as at 30 June 2020 Pro-forma adjustments: Reverse acquisition adjustment to reverse opening reserves value in THD Options issued to Directors Performance Rights issued to Directors Pro-forma balance as at 30 June 2020	Actual 30 June 2020 A$ No. of shares Legal parent (THD) 1,789,390,870 (1,765,532,325)	Pro-Forma Consolidated 30 June 2020 A$ A$ Legal parent (THD) 35,758,537 -
	23,858,545 - - 24,242,424 22,500,000 484,848 - -	35,758,537 (35,758,537) 3,776,911 4,771,709 4,500,000 96,970 (533,814) 297,017
	71,085,817	12,908,793
	(81,672) 842,251	- 419,100
	760,579	419,100
	- 2,400,000 3,200,000	760,579 163,008 (760,579) 256,092 -
		419,100

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

11. Significant Accounting Policies

a) Principles of consolidation

A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The financial statements of subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control described in the accounting policy for subsidiaries below. A change in the ownership interest of a subsidiary, without loss of control, is accounted for an equity transaction.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any investment retained and (ii) the previous carrying amounts of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. The Group’s share of components previously recognised in other comprehensive income is reclassified to income statement or retained profits, as appropriate, on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

Reverse acquisition

A reverse acquisition occurs when the acquirer is the entity whose equity interests have been acquired and the issuing entity is the acquiree. This might be the case when a private entity arranges to have itself ‘acquired’ by a smaller public entity as a means of obtaining a stock exchange listing. Although legally the issuing entity is regarded as the parent and the private entity is 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.

b) Exploration, Evaluation and Development Expenditure

Exploration, evaluation and acquisition costs are expensed in the year they are incurred. Development costs are capitalised. Development expenditure is recognised at cost less accumulated amortisation and any impairment losses. Exploration and evaluation expenditure is classified as development expenditure once the technical feasibility and commercial viability of extracting the related mineral resource is demonstrable. Where commercial production in an area of interest has commenced, the associated costs together with any forecast future capital expenditure necessary to develop proved and probable reserves are amortised over the estimated economic life of the mine on a units-of-production basis.

Changes in factors such as estimates of proved and probable reserves that affect unit-of-production calculations are dealt with on a prospective basis.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

c) Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation and any impairment in value.

Cost includes expenditure that is directly attributable to the acquisition of the asset.

Depreciation is calculated on a diminishing value basis based on the estimated useful life of the asset as follows:

Motor Vehicles 10 years Computer Equipment 4 years

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued used of the asset.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit and loss in the period the item is derecognised.

d) Borrowing costs

Borrowing costs are recognised as an expense when incurred, unless they relate to qualifying assets.

e) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

f) Impairment of assets

At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the Statement of Comprehensive Income.

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

g) Employee Entitlements

Salaries, wages and annual leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within twelve months of the reporting date are recognised in other creditors in respect to employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

h) Equity settled transactions

The Group provides benefits to employees (including senior executives) of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).

There is currently one plan in place to provide these benefits:

• the Employee Performance Rights and Option Plan, which provides benefits to Directors and senior executives.

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black Scholes model, further details of which are given in Note 8 above. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares (market conditions) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period).

The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

If the terms of an equity-settled award are modified, a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of loss per share.

The Group expenses equity-settled share-based payments such as share and option issues after ascribing a fair value to the shares and/or options issued. The fair value of option and share plan issues of option and share plan shares are recognised as an expense together with a corresponding increase in the share based payments reserve or the share option reserve in equity over the vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital when options are exercised.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

i) Trade and other receivables

All trade receivables are recognised at the amounts receivable as they are due for settlement no more than 30 days from the date of recognition.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. An allowance for doubtful debts is raised where some doubt as to collection exists.

j) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period which are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

k) 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.

l) Revenue Recognition

Amounts disclosed as revenue are net of duties and taxes paid. Revenue is recognised as follows:

(i) Interest

Interest earned is recognised as and when it is receivable, including interest which is accrued and is readily convertible to cash within two working days. Accrued interest is recorded as part of other debtors.

• (ii) Sundry income

Sundry income is recognised as and when it is receivable. Income receivable, but not received at balance date, is recorded as part of other debtors.

m) Critical accounting estimates and judgements

The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.

Key Estimates

Impairment

The Group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

m) Critical accounting estimates and judgements (continued)

Key Estimates (continued)

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using the Black and Scholes model, using the assumptions detailed in Note 20.

The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the Black and Scholes model taking into account the terms and conditions upon which the instruments were granted, as discussed in Note 20.

This fair value is expensed over the period until vesting with recognition of a corresponding liability. The liability is re-measured to fair value at each balance date up to and including the settlement date with changes in fair value recognised in profit or loss.

Provision for restoration and rehabilitation

A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of development activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the provision can be measured reliably. The estimated future obligations include the costs of abandoning sites, removing facilities and restoring the affected areas.

The provision for future restoration costs is the best estimate of the present value of the expenditure required to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at each balance date.

The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and amortised on the same basis as the related asset, unless the present obligation arises from the production of inventory in the period, in which case the amount is included in the cost of production for the period. Changes in the estimate of the provision for restoration and rehabilitation are treated in the same manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the related asset.

n) Adoption of new and revised standards

Changes in accounting policies on initial application of Accounting Standards

In the year ended 30 June 2020, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Company’s operations and effective for annual reporting periods beginning on or after 1 July 2019. As a result of this review, the Directors have determined that there is no material impact of the new and revised Standards and Interpretations of the Group and, therefore, no material change is necessary to Group accounting policies.

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Appendix 4

NOTES TO THE CONSOLIDATED FINANCIAL POSITION

n) Adoption of new and revised standards (continued)

Standards and Interpretations in issue not yet adapted

The Directors have also reviewed all new Standards and Interpretation that have been issued but are not yet effective for the year ended 30 June 2020. As a result of this review the Directors have determined that there is no expected impact, material or otherwise, of the new and revised Standards and Interpretations on the Company and, therefore, no change necessary to Group accounting policies.

o) Loss per share

Basic loss per share is calculated as net loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted loss per share is calculated as net loss attributable to members of the parent, adjusted for:

• costs of servicing equity (other than dividends) and preference share dividends;

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

12. Events After the Reporting Date

On 27 August 2020, PVW issued 3,630,278 ordinary shares in settlement of outstanding fees payable to Directors and the company Secretary, at a deemed issue price of $0.06.

On 14 October 2020, PVW issued 1,320,000 ordinary shares in settlement of outstanding fees, at

a deemed issue price of $0.06.

We are not aware of any other significant events subsequent to 30 June 2020, other than those mentioned above.

Annexure B – letter from Indeport Pty Ltd

23

Indeport

15 December 2020

Mr David Wheeler

Non-executive Chairman Thred Limited 26/ 140 St Georges Terrace Perth WA 6000

Reference: Increased Budget for Thred

This letter is provided to you to acknowledge that Thred’s proposed exploration expenditure for the 2 year period following the capital raising, has been increased from that detailed in Table 10 of the IGR prepared by Indeport Pty Ltd dated 6 November 2020, to the following amounts.

Project	Year 1	Year 2	Total Budget
Leonora Gold Project	700,000	900,000	1,600,000
Tanami Gold Project	1,100,000	1,300,000	2,40,000
Kalgoorlie Gold Project	450,000	450,000	900,000
Total	2,250,000	2,650,000	4,900,000

Indeport understands that the revised budget will be incorporated into a supplementary prospectus to be issued by Thred.

Indeport considers that this revised budget is consistent with the mineral potential and status of the projects. The proposed expenditure is sufficient to meet the costs of the exploration programs proposed and to meet statutory tenement expenditure requirements.

Yours faithfully

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Neal Leggo Director Indeport Pty Ltd